Vertical greenhouses: what future in the transition?

Vertical greenhouses achieve 10-400x greater yields per acre than field-growing, by stacking layers of plants indoors, and illuminating each layer with LEDs. Economics are exciting. CO2 intensity varies. But it can be carbon-negative in principle. This 17-page case study illustrates how supply chains are localizing and more renewables can be integrated into grids.


The first rationale for vertical greenhouses is to grow food closer to the consumer, which can save 0.6kg of trucking CO2 per kg of food. Eliminating freight is much simpler than decarbonizing freight (pages 2-4).

The second rationale for vertical greenhouses is that they are 10-400x more productive per unit of land, hence they can free up farmland for reforestation projects that absorb CO2 from the atmosphere (pages 5-6).

The third rationale for vertical greenhouses is that their LED lighting demands are flexible, which means they can absorb excess wind and solar, in grids that are increasingly laden with renewables. They are much more economical at achieving this feat than batteries or hydrogen electrolysers (pages 7-10).

The overall CO2 intensity of vertical greenhouses depends on the underlying grid’s CO2 intensity, but the process can in principle become carbon negative (pages 11-13).

The economics are exciting. We model 10% IRRs selling fresh produce at competitive prices, with upside to 30% IRRs if fresher produce earns a premium or operations can be powered with low-cost renewables when the grid is over-saturated (pages 14-15).

Leading companies in vertical greenhouses and in their supply chain are discussed on pages 16-17.

Methanol: the next hydrogen?

Methanol is becoming more exciting than hydrogen as a clean fuel to help decarbonize transport. Specifically, blue methanol and bio-methanol are 65-75% less CO2-intensive than oil products, while they can already earn 10% IRRs at c$3/gallon-equivalent prices. Unlike hydrogen, it is simple to transport and integrate methanol with pre-existing vehicles. Hence this 21-page note outlines the opportunity.


The objectives and challenges of hydrogen are summarized on pages 2-3. We show that clean methanol can satisfy the objectives without incurring the challenges.

An overview of the methanol market is given on pages 4-5, to frame the opportunity, particularly in transportation fuels and cleaner chemicals.

Conventional methanol production is described on 6-8. We focus upon the chemistry, the costs, the economics and the CO2 intensity.

Bio-methanol is modelled on pages 9-10. We also focus upon the costs, economics and CO2 intensity, including an opportunity for carbon-negative fuels.

Blue methanol is outlined on pages 11-15. Converting CO2 and hydrogen into methanol is fully commercial, based on recent case studies, which we also use to model the economics and CO2 credentials.

Green methanol is more expensive for little incremental CO2 reduction, and indeed some routes to green methanol production are actually higher-CO2 (pages 16-18).

Companies in the methanol value chain are profiled on pages 19-20. We focus upon leading incumbents, technology providers and private companies commercializing clean methanol.

Our conclusion is that methanol could excite decision-makers in 2021, the way that hydrogen excited in 2020. This thesis is spelled out on page 21.

Could new airships displace trucks?

In 2019, TOTAL co-filed two patents with an airship-technology company, Flying Whales, aiming to lower the logistical costs of moving capital equipment into remote areas. An example is shown above. The LCA60T is envisaged to carry up to 60T of cargo (c4x the capacity of a truck), with a range of 100-1,000km. This short note assesses the opportunity, and whether these new airships could displace trucks, or lower diesel demand. We are most excited by the impact for onshore wind.


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The Ascent of LNG?

Gas demand could treble by 2050, gaining traction not just as the world’s cleanest fossil fuel, but also the most economical. The ascent would be driven by technology. Hence this note outlines 200MTpa of potential upside to consensus LNG demand, via de-carbonised power and shipping fuels. LNG demand could thus compound at 8% pa to 800MTpa by 2030, justifying greater investment in unsanctioned LNG projects.


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LNG in transport: scaling up by scaling down?

Next-generation technology in small-scale LNG has potential to reshape the global shipping-fuels industry. Especially after IMO 2020 sulphur regulations, LNG should compete with diesel. Opportunities in trucking and shale are less clear-cut.

This note outlines the technologies, economics and opportunities for LNG as a transport fuel, following a three-month investigation.


  • Why technology matters. Pages 2-4 of the note describe incumbent technologies in small-scale LNG, and the need for superior solutions.

  • The cutting edge . Pages 5-7 draw on patents and technical papers to describe next-generation technologies, at the cutting edge of small-scale LNG. We model that they are economic. They can can provide LNG to the market at $10/mcf.

  • Potential to transform shipping-fuels. Pages 9-13 find strong economic upside for novel LNG technologies in the shipping industry, with potential to create 40-60MTpa of incremental LNG demand, looking across the global shipping fleet.

  • Less positive on LNG as a trucking fuel. Pages 14-15 explain why the economics are more challenging for LNG use in land-transportation, i.e., trucking.

  • Less positive on LNG use in shale. Page 16 explains, similarly, why LNG is less advantageous in the shale patch than converting rigs and frac spreads to piped gas.

  • Other technologies. Page 17 notes other companies with interesting offerings in small-scale LNG liquefaction, including advances by Exxon and Shell.

Have further questions? Please contact us and we’ll be happy to help: [email protected]

Is gas a competitive truck-fuel?

We have assessed whether gas is a competitive trucking fuel, comparing LNG and CNG head-to-head against diesel, across 35 different metrics (from the environmental to the economic). Total costs per km are still 10-30% higher for natural gas, even based on $3/mcf Henry Hub, which is 5x cheaper than US diesel. The data-file can be downloaded here.

The challenges are logistical. Based on real-world data, we think maintenance costs will be 20-100% higher for gas trucks (below). Gas-fired spark plugs need replacing every 60,000 miles. Re-fuelling LNG trucks requires extra safety equipment.

Specially designed service stations also elevate fuel-retail costs by $6-10/mcf. Particularly for LNG, a service station effectively ends up being a €1M regasification plant (or around $250/tpa, costs below).

We remain constructive on the ascent of gas (below), but road vehicles may not be the best option.

To flex our input assumptions, please download our data-model, comparing LNG, CNG and other trucking fuels across 35 different metrics .