The Top Public Companies for an Energy Transition

This data-file compiles all of our insights into publicly listed companies and their edge in the energy transition: commercialising economic technologies that advance the world towards ‘net zero’ CO2 by 2050.

Each insight is a differentiated conclusion, derived from a specific piece of research, data-analysis or modelling on the TSE web portal; summarized alongside links to our work. Next, the data-file ranks each insight according to its economic implications, technical readiness, its ability to accelerate the energy transition and the edge it confers on the company in question.

Each company can then be assessed by adding up the number of differentiated insights that feature in our work, and the average ‘score’ of each insight. The file is intended as a summary of our differentiated views on each company.

The screen is updated monthly. At the latest update, in May-2022, it contains 260 differentiated views on 140 public companies.

Glass fiber: the economics?

This data-file models the economics of producing glass fiber, the key component in fiberglass, which is used in wind turbine blades and the light-weighting of transport; but also an insulation material used in the construction industry.

We have broken down the costs across a dozen different input variables, such as capex, opex, energy and materials, based on technical papers, in order to calculate the economics and CO2 intensity of the material.

Some Chinese-made product can undercut Western-made product by c50% on price, but it will likely also embed about 2x more CO2.

Backup data, market sizing and notes from technical papers follow in the subsequent tabs of the Excel.

Carbon fiber: energy economics?

This data-file captures the economics of producing carbon fiber. We estimate a marginal cost of $25/kg for a 10% IRR at a new world-scale carbon fiber plant, however the production process will likely emit 30 tons of CO2 per ton of carbon fiber if powered by a mixture of gas and electricity.

The data-file also contains technical data across the entire value chain leading up to carbon fibers (e.g., polyacrylonitrate), tensile strength versus weight properties, and our detailed notes from technical papers.

A screen of leading companies in the carbon fiber industry is also provided, reviewing production volumes and market positioning (below).

Please download the data-file to stress test input assumptions such as capex costs, electricity costs, gas prices and CO2 costs.

Carbios: plastic recycling breakthrough?

Carbios is a French company, founded in 2011 and listed on Euronext, Growth Paris, with €430M market cap (Jun-21) and c40 employees. It has developed an enyzmatic process to recycle 90% of PET within 10-hours, which has been described in Nature.

“This highly efficient, optimized enzyme outperforms all PET hydrolases reported so far”. This has attracted partnerships with Nestle and PepsiCo. In November-2020, Carbios produced the first clear bottles containing 100% recycled PTA from textile waste, without downcycling, at lab scale.

The first full-scale plant will produce 40kTpa, costing €100M to construct, starting up in 2025, and saving 48kTpa of CO2. We believe economics could be extremely exciting, compared to conventional plastics and ethane cracking.

There are four challenges, based on our review, outlined in the data-file, and hard to de-risk from our analysis of Carbios’s patents. These challenges may therefore be worth exploring  with the company.

Danimer: bio-plastics breakthrough?

Danimer Scientific is a producer of polyhydroxyalkanoates (PHA), a biodegradable plastic feedstock, sold under the brand-name Nodax, derived from the bacterial metabolism of vegetable oils (e.g. canola oil).

There are still commercial challenges and uncertainties preventing a full de-risking of PHA bio-plastics. They include slow processing (especially long crystallization times), lower tensile strength, higher brittleness and 4-5x higher costs than conventional plastics (screen here).

Nevertheless Danimer scores a solid 3.5/5 on our technology framework. Our review of its recent patents shows specific and reasonably intelligible innovations, which are especially focused upon improved processing, high-quality copolymers and boosting demand for PHA products.

Our conclusions and underlying details are laid out in the data-file.

Polymers and higher olefins: the economics?

This data-file captures the economics of polymerizing or oligomerizing unsaturated feedstocks (such as ethylene), in order to make plastics and higher olefins.

Our base case for producing high density polyethylene (HDPE) from ethylene requires pricing of $1,250/ton for a 10% IRR on a new greenfield plant.

CO2 intensity runs at 0.3 tons of CO2 per ton of product, and can be c80-90% lower than the prior step of ethane cracking.

However conditions can vary vastly, from 50-300C and 50-25,000 psi, for different polymers and processes. Different options can be stress-tested in the model, backed up by technical data, past projects and our notes.

Next-generation plastics: bio-plastic, bio-degradable, recycled?

This data-file captures c10% of the plastics market that is derived from mechanical recycling, from biologically-sourced feedstocks or that is bio-degradable.

The largest and most attractive option today is conventional mechanical recycling, which tends to reduce CO2 by 50% and cost less than virgin plastic. But only c25% of plastic is well-suited to mechanical recycling.

Bio-degradable plastic derived from biomass is likely c30% lower in CO2 than conventional plastics, but around 2x more costly.

The data-file reviews seventeen distinct  plastic products, estimating the market sizes, CO2 levels, costs, production processes, uses and other notes from technical papers.

Ethane cracking: the economics?

This data-file captures the economics of ethane-cracking in order to produce ethylene, the most basic building block of the petrochemical industry.

We estimate that a typical US Gulf Coast facility could generate 15% IRRs at typical capex cost of $1,135/Tpa and selling ethylene close to $1,000/ton.

CO2 intensity can be as high as 1.7T of CO2 per ton of ethylene, or potentially lower depending on the facility’s use of energy recovery and heat re-capture.

Please download the model to stress-test sensitivities.

Construction materials: a screen of costs and CO2 intensities?

This data-file compares different construction materials, calculating the costs, the embedded energy and the embedded CO2 of different construction materials per m2 of wall space.

The file captures both capex and opex: i.e., the production of the materials and the ongoing costs associated with heating and cooling, as different materials have different thermal conductivities.

Covered materials include conventional construction materials such as concrete, cement, steel, brick, wood and glass, plus novel wood-based materials such as cross-laminated timber. Insulated wood and CLT are shown to have the lowest CO2 intensities and can be extremely cost competitive.

The data-file also compares different insulation materials, including their costs, thermal conductivities (W/m.K) and the resultant energy economics of insulation projects.

Cross-laminated timber: the economics?

This data-file captures the economics of cross-laminated timber, a fast-growing construction material that is c80% less CO2-intensive when substituted directly for traditional building materials such as concrete and steel, and results in buildings with 15-35% lower embedded CO2.

The economics are exciting. We find potential to generate 20% IRRs purchasing $25/ton timber and converting into $500/m3 CLT in newbuild production facilities costing $800/m3 pa.

The economics can be stress-tested in the model. Underlying capex, opex and case studies and companies are profiled in subsequent tabs.

Copyright: Thunder Said Energy, 2022.