Carbon negative construction: the case for mass timber?

The construction industry accounts for 10% of global CO2, mainly due to cement and steel. But mass timber could become a dominant new material for the 21st century, lowering emissions 15-80% at no incremental costs. Debatably mass timber is carbon negative if combined with sustainable forestry. This could disrupt global construction. This 17-page note outlines the opportunity and who benefits.

CO2 emissions of the construction industry are disaggregated on pages 2-3. Some options have been proposed to lower CO2 intensity, but most are costly.

Sustainable forestry also needs an outlet, as argued on pages 4-7. Younger forests grow more quickly, whereas mature forests re-release more CO2 back into the atmosphere.

The case for cross-laminated timber (CLT) is outlined on pages 9-11, describing the material, how it is made, its benefits, its drawbacks, and its CO2 credentials.

CLT removes CO2 at no incremental cost, illustrated with specific case studies and cost-breakdowns on pages 12-13.

CLT economics are attractive. We estimate 20% IRRs are achievable for new CLT production facilities on page 14.

Leading companies are described on pages 15-16, including large listed companies, through to private-equity backed firms and growth stage firms.

Our conclusion is that CLT could disrupt concrete and steel in construction, helping to eliminate 1-5GTpa of CO2 emissions by mid-century.

The future of offshore: fully subsea?

Offshore developments will change dramatically in the 2020s, eliminating new production platforms in favour of fully subsea solutions. The opportunity can increase a typical project’s NPV by 50%, reduce its breakeven by one-third and effectively eliminate upstream CO2 emissions. We have reviewed 1,850 patents to find the best-placed operators and service providers, versus others that will be disrupted. Overall, the theme supports the ascent of low-carbon natural gas, which should treble in the energy mix by 2050. This 22-page note presents the opportunity.

The offshore oil and gas industry’s progress towards ‘fully subsea’ developments, without any platforms or surface infrastructure being necessary, is reviewed in detail in pages 2-5, covering key projects and milestones from 1985-2000.

30% economic savings in both capex and opex are quantified line-by-line, across c50 cost lines, in pages 6-9.

1.5x NPV uplifts and 4pp IRR uplifts are quantified by modelling a representative fully greenfield gas-condensate project on pages 11-12.

CO2 emissions can be virtually eliminated by a fully subsea development solution. Pages 12-13 add up the impacts of higher efficiency, power from shore, fewer materials and the elimination of PSV/helicopter trips.

The key engineering challenges for fully subsea systems, which remain to be resolved, are summarized on page 14.

Who benefits from the trend toward fully subsea systems, is described from page 15 onwards after reviewing 1,850 patents around the industry. This includes both the leading service companies and operators (primarily Equinor, but also TOTAL, Shell).

The leaders in subsea compression technology are assessed on pages 16-17.

The leaders in subsea power systems are described on pages 18-19.

The leaders in next-generation subsea robotics are assessed on pages 20-21.

Others are disrupted, as is described in detail in page 22.

Covered service companies in the report include ABB, Aker, Eelume, GE, Kraken, Oceaneering, OneSubsea, Saipem, Siemens, Technip-FMC, Wood Group, the PSV and helicopter sector, and c20 early stage companies in next-generating subsea robotics.

Copyright: Thunder Said Energy, 2022.