1 00:00:02,680 --> 00:00:06,080 Speaker 1: Welcome to Zero. I'm Oscar Boyd. Today a milestone for 2 00:00:06,160 --> 00:00:10,039 Speaker 1: clean tech. Hello Aksha Hi. So everyone listening will know 3 00:00:10,080 --> 00:00:12,640 Speaker 1: that you usually host this podcast, but they might not 4 00:00:12,760 --> 00:00:16,040 Speaker 1: know that you also regularly write a newsletter for Bloomberg Green. 5 00:00:16,720 --> 00:00:19,680 Speaker 1: And your most recent newsletter caught my eye. It's all 6 00:00:19,720 --> 00:00:23,439 Speaker 1: about China's energy exports. China is the leading export of 7 00:00:23,480 --> 00:00:25,439 Speaker 1: clean tech, as something we've discussed a lot of times 8 00:00:25,440 --> 00:00:28,400 Speaker 1: on Zero, and the US is one of the largest 9 00:00:28,400 --> 00:00:31,440 Speaker 1: exporters of fossil fuels globally. But you're the first person 10 00:00:31,440 --> 00:00:34,199 Speaker 1: that I've seen doing a comparison of the actual numbers 11 00:00:34,320 --> 00:00:37,040 Speaker 1: of these two countries exports. That was the subject of 12 00:00:37,080 --> 00:00:38,760 Speaker 1: your newsletter. What did you find? 13 00:00:39,159 --> 00:00:42,479 Speaker 2: Yes, So this is a weekly podcast. The newsletter is 14 00:00:42,560 --> 00:00:45,320 Speaker 2: daily and has a lot more ideas, so I hope 15 00:00:45,320 --> 00:00:49,239 Speaker 2: people will subscribe. Look, we cover climate tech on this 16 00:00:49,280 --> 00:00:53,400 Speaker 2: podcast fairly regularly, and we know that China is the 17 00:00:53,440 --> 00:00:57,200 Speaker 2: biggest producer of climate tech. But what I hadn't seen 18 00:00:57,480 --> 00:01:00,560 Speaker 2: was a comparison between these two numbers. Because we also 19 00:01:00,680 --> 00:01:05,120 Speaker 2: know that the US under this Donald Trump administration is 20 00:01:05,160 --> 00:01:08,679 Speaker 2: trying to boost its fossil fuel experts. Druill, Baby Drill, 21 00:01:08,880 --> 00:01:12,200 Speaker 2: not just that though, because Joe Biden was also helping 22 00:01:12,319 --> 00:01:14,760 Speaker 2: increase oil and gas exports. So we know that there 23 00:01:14,840 --> 00:01:18,000 Speaker 2: was an upward trend in US oil and gas exports, 24 00:01:18,240 --> 00:01:21,400 Speaker 2: but do they compare? And actually they do. I was 25 00:01:21,480 --> 00:01:24,039 Speaker 2: kind of surprised. So what I did was I picked 26 00:01:24,160 --> 00:01:28,000 Speaker 2: data that spoke to the strategic goals that the two 27 00:01:28,080 --> 00:01:32,080 Speaker 2: administrations were laying out. Donald Trump was saying, we would 28 00:01:32,240 --> 00:01:35,680 Speaker 2: like our allies or sometimes force them to buy our 29 00:01:35,800 --> 00:01:39,080 Speaker 2: fossil fuels, and China was saying, look, we have all 30 00:01:39,120 --> 00:01:42,200 Speaker 2: this clean tech. They will never say overcapacity, but you 31 00:01:42,200 --> 00:01:44,600 Speaker 2: know we have more production than we can consume. We 32 00:01:44,640 --> 00:01:47,800 Speaker 2: would like to export it to you. Who is buying what? 33 00:01:48,320 --> 00:01:51,440 Speaker 2: And China wins out like there's a clear winner, which 34 00:01:51,480 --> 00:01:52,080 Speaker 2: surprised me. 35 00:01:52,480 --> 00:01:54,160 Speaker 1: And this is where we get into the narrative of 36 00:01:54,400 --> 00:01:56,920 Speaker 1: petro state versus electro state. Do you just want to 37 00:01:56,960 --> 00:01:58,800 Speaker 1: define what we mean by those two terms. 38 00:01:58,840 --> 00:02:02,120 Speaker 2: Yeah, these terms are becoming more used, which is fun, 39 00:02:02,800 --> 00:02:06,480 Speaker 2: but definitions are important. A classic petro state definition is 40 00:02:06,600 --> 00:02:11,120 Speaker 2: a country that depends, for majority or like a heavy 41 00:02:11,200 --> 00:02:14,600 Speaker 2: percentage of their gross domestic product on fossil fuels, so 42 00:02:15,000 --> 00:02:17,840 Speaker 2: thirty percent or so you would typically think of a 43 00:02:17,840 --> 00:02:21,480 Speaker 2: Middle Eastern country as a petro state. But petro states 44 00:02:21,480 --> 00:02:25,960 Speaker 2: also have a certain characteristic They behave in a way 45 00:02:26,040 --> 00:02:29,360 Speaker 2: that they would like more people to buy their fossil fuels. 46 00:02:29,639 --> 00:02:32,000 Speaker 2: So the US doesn't fall in the category of having 47 00:02:32,040 --> 00:02:35,280 Speaker 2: a very large percentage of its GDP dependent on fossil fuels, 48 00:02:35,320 --> 00:02:38,200 Speaker 2: but it does fall in the category of wanting other 49 00:02:38,280 --> 00:02:41,320 Speaker 2: countries to buy fossil fuels, So the US is being 50 00:02:41,360 --> 00:02:45,560 Speaker 2: now more commonly called a petro state. Electrostate is a 51 00:02:45,600 --> 00:02:49,960 Speaker 2: new term. It's the term that says that that country 52 00:02:49,960 --> 00:02:54,040 Speaker 2: doesn't want to depend on petroleum, typically oil and gas, 53 00:02:54,800 --> 00:02:57,839 Speaker 2: but on electricity. That electricity may come from all sorts 54 00:02:57,880 --> 00:03:03,600 Speaker 2: of sources, may come from coal, but because electricity is 55 00:03:03,680 --> 00:03:06,440 Speaker 2: a form of energy that can be converted more efficiently 56 00:03:06,480 --> 00:03:10,480 Speaker 2: into other things, that country is making the bet that 57 00:03:10,600 --> 00:03:14,000 Speaker 2: electricity is what's going to power their economic growth, and 58 00:03:14,240 --> 00:03:18,480 Speaker 2: perhaps the electricity industries will become the export driver for 59 00:03:18,600 --> 00:03:22,080 Speaker 2: that country. And China is referred to as an electro state. 60 00:03:22,280 --> 00:03:25,720 Speaker 2: You could also think of Iceland or Norway, which are 61 00:03:25,800 --> 00:03:29,960 Speaker 2: heavily electric in their energy consumption total energy consumption, as 62 00:03:30,000 --> 00:03:32,480 Speaker 2: electro states, though they don't export that much. 63 00:03:32,760 --> 00:03:34,360 Speaker 1: So you said you found a clear when in between 64 00:03:34,360 --> 00:03:36,400 Speaker 1: the two you said it was China. Give me the numbers. 65 00:03:36,520 --> 00:03:39,000 Speaker 2: So the numbers really did surprise me. If you look 66 00:03:39,040 --> 00:03:41,600 Speaker 2: at twenty twenty five data, as of July, because that's 67 00:03:41,640 --> 00:03:44,720 Speaker 2: the latest data that we could find, China had exported 68 00:03:44,720 --> 00:03:48,320 Speaker 2: about one hundred and twenty billion dollars worth of clean 69 00:03:48,400 --> 00:03:51,880 Speaker 2: tech exports. And in that I'm counting batteries, electric cars, 70 00:03:51,920 --> 00:03:58,040 Speaker 2: solar panels, even electrical devices like transformers, wind turbines, and 71 00:03:59,320 --> 00:04:02,880 Speaker 2: US fuel exports just oil and gas, because we can 72 00:04:03,000 --> 00:04:07,280 Speaker 2: measure that pretty clearly, was about eighty billion dollars until July, 73 00:04:07,800 --> 00:04:11,280 Speaker 2: and actually China hit a record in August in its 74 00:04:11,320 --> 00:04:14,280 Speaker 2: clean tech exports almost twenty billion dollars. 75 00:04:14,640 --> 00:04:17,040 Speaker 1: So China exported in the first half of this year 76 00:04:17,080 --> 00:04:19,760 Speaker 1: alone forty billion dollars more in green tech than the 77 00:04:19,880 --> 00:04:23,280 Speaker 1: US did in fossil fuels. And you have a great 78 00:04:23,360 --> 00:04:25,760 Speaker 1: graph in your newsletter showing this. We'll put link in 79 00:04:25,800 --> 00:04:27,600 Speaker 1: the description for anyone who wants to see it, wants 80 00:04:27,600 --> 00:04:29,839 Speaker 1: to read it. Is this a new trend? 81 00:04:29,960 --> 00:04:33,279 Speaker 2: Well, I thought it was new, but even twenty twenty four, 82 00:04:33,760 --> 00:04:37,760 Speaker 2: China just eked out ahead of the US in this comparison, 83 00:04:38,160 --> 00:04:40,400 Speaker 2: So China sold about one hundred and eighty billion dollars 84 00:04:40,440 --> 00:04:43,480 Speaker 2: worth of clean tech last year, whereas all of US 85 00:04:43,520 --> 00:04:45,480 Speaker 2: oil and gas exports came up to one hundred and 86 00:04:45,520 --> 00:04:49,200 Speaker 2: fifty billion dollars and worth. Noting oil was at a 87 00:04:49,320 --> 00:04:51,720 Speaker 2: much higher price in twenty twenty four than it is 88 00:04:51,760 --> 00:04:55,279 Speaker 2: this year. Is this difference between the US and China? 89 00:04:56,000 --> 00:04:57,560 Speaker 2: Is it going to stay or are we going to 90 00:04:57,600 --> 00:05:00,280 Speaker 2: see kind of the US now go turbomode and try 91 00:05:00,320 --> 00:05:03,080 Speaker 2: and increase its fossil fuels exports even further. So this 92 00:05:03,240 --> 00:05:06,279 Speaker 2: remains to be seen. There are different ways to count 93 00:05:06,320 --> 00:05:09,400 Speaker 2: the numbers that I have done. You could include uptree 94 00:05:09,480 --> 00:05:13,880 Speaker 2: midstream oil products. You could also include fossil fuel car exports, 95 00:05:13,920 --> 00:05:16,159 Speaker 2: which the US does export in quite a few numbers, 96 00:05:16,200 --> 00:05:20,400 Speaker 2: like many millions of cars, and that way you could 97 00:05:20,440 --> 00:05:23,159 Speaker 2: see that the US eeks out ahead of China. It 98 00:05:23,200 --> 00:05:27,359 Speaker 2: could also with this drill Baby drill mantra, just increase 99 00:05:27,360 --> 00:05:29,920 Speaker 2: a lot more of its oil and gas exports. There's 100 00:05:29,960 --> 00:05:33,479 Speaker 2: a limit because ramping that up, you know, requires private 101 00:05:33,480 --> 00:05:36,240 Speaker 2: industry to do it, whereas in China sometimes you can 102 00:05:36,279 --> 00:05:39,000 Speaker 2: get the government to decide that yes, we need to 103 00:05:39,040 --> 00:05:42,960 Speaker 2: export more and private industry follows. In the US, you'll 104 00:05:43,000 --> 00:05:45,400 Speaker 2: have to coax them to do it, and we have 105 00:05:45,480 --> 00:05:48,359 Speaker 2: seen that the oil and gas industry doesn't always play 106 00:05:48,360 --> 00:05:51,000 Speaker 2: ball with the administration. It does need to make money, 107 00:05:51,040 --> 00:05:53,040 Speaker 2: and so if the price of oil is too low, 108 00:05:53,360 --> 00:05:56,760 Speaker 2: we might not see that much rise in oil exports 109 00:05:56,760 --> 00:05:59,800 Speaker 2: from the US. But clearly there is a goal from 110 00:05:59,800 --> 00:06:03,599 Speaker 2: the administration to try and become a bigger fossil fuel exporter. 111 00:06:04,120 --> 00:06:06,840 Speaker 1: And you noted earlier that the US is trying to 112 00:06:06,880 --> 00:06:10,440 Speaker 1: make its allies purchase its fossil fuels. Who's buying China's 113 00:06:10,480 --> 00:06:10,920 Speaker 1: green tech? 114 00:06:11,160 --> 00:06:15,160 Speaker 2: Yes, so fossil fuels are consumed widely and that means 115 00:06:15,360 --> 00:06:17,919 Speaker 2: a lot of people by those fossil fuels. But for 116 00:06:18,080 --> 00:06:21,960 Speaker 2: the US, European Union is the biggest client for especially 117 00:06:22,000 --> 00:06:24,839 Speaker 2: liquified natural gas, but it's trying to sell it even 118 00:06:24,880 --> 00:06:28,599 Speaker 2: to China, Whereas for China, the customer base is also 119 00:06:28,640 --> 00:06:33,640 Speaker 2: pretty vast. Because developing countries are quite interested in clean 120 00:06:33,720 --> 00:06:37,320 Speaker 2: tech these days. We've talked about how Pakistan imported something 121 00:06:37,400 --> 00:06:40,560 Speaker 2: like twenty five percent of their entire power grid's capacity 122 00:06:40,640 --> 00:06:43,239 Speaker 2: in solar panels in one year in twenty twenty four. 123 00:06:43,080 --> 00:06:45,479 Speaker 1: They're doing something similar with batch uses. Yeah right, that's right. 124 00:06:45,720 --> 00:06:48,520 Speaker 1: And this kind of story gets repeated in different countries 125 00:06:48,520 --> 00:06:50,960 Speaker 1: around the world. So the other chart that I was 126 00:06:51,240 --> 00:06:53,760 Speaker 1: pretty pleased to see in the story was this chart 127 00:06:53,839 --> 00:06:57,600 Speaker 1: of electric car exports to different parts of the world 128 00:06:57,839 --> 00:07:02,120 Speaker 1: coming from China, and how they start small and they 129 00:07:02,240 --> 00:07:07,599 Speaker 1: all super charge soon. So Asian about a billion dollars 130 00:07:07,640 --> 00:07:12,680 Speaker 1: worth of Chinese electric cars, Latam another billion dollars, Middle 131 00:07:12,680 --> 00:07:16,360 Speaker 1: East half a billion dollars, Africa two hundred million dollars 132 00:07:16,440 --> 00:07:19,800 Speaker 1: last year, but from really almost zero a couple of 133 00:07:19,920 --> 00:07:22,720 Speaker 1: years back. So we see from this data that China's 134 00:07:22,840 --> 00:07:25,000 Speaker 1: exporting this massive amount of clean tech around the world, 135 00:07:25,480 --> 00:07:28,840 Speaker 1: but actually primarily it's using a lot of it at home. 136 00:07:29,200 --> 00:07:32,440 Speaker 1: So most of the solar that it produces is installed 137 00:07:32,480 --> 00:07:34,560 Speaker 1: in China, most of the wind turbines that it produces 138 00:07:34,600 --> 00:07:37,120 Speaker 1: are installed in China. And last week we saw another 139 00:07:37,160 --> 00:07:39,280 Speaker 1: report from Member which made headlines, and this was talking 140 00:07:39,320 --> 00:07:42,400 Speaker 1: about the amount of electricity produced globally by renewables. What 141 00:07:42,440 --> 00:07:43,320 Speaker 1: did that report say? 142 00:07:43,680 --> 00:07:48,520 Speaker 2: So, we have had a few times a day or 143 00:07:48,600 --> 00:07:52,480 Speaker 2: a month when the total amount of electricity made from renewables, 144 00:07:52,520 --> 00:07:56,119 Speaker 2: which is solar, wind, and hydro exceeded that from coal. 145 00:07:56,960 --> 00:08:00,000 Speaker 2: Coal for a very long time has been the large 146 00:08:00,240 --> 00:08:04,200 Speaker 2: source or fuel for electricity production. But Ember's support says 147 00:08:04,320 --> 00:08:07,760 Speaker 2: this first half of the year, so for six months 148 00:08:08,320 --> 00:08:14,360 Speaker 2: the renewables production exceeded coal, and if that continues for 149 00:08:14,480 --> 00:08:17,680 Speaker 2: the second half of the year, which it might, then 150 00:08:17,800 --> 00:08:21,120 Speaker 2: this becomes the first year when renewables will have produced 151 00:08:21,360 --> 00:08:25,440 Speaker 2: more electricity than coal, and it's what they call a 152 00:08:25,520 --> 00:08:30,040 Speaker 2: secular trend. This is likely to continue because renewables are 153 00:08:30,040 --> 00:08:33,400 Speaker 2: getting cheaper, are getting deployed much faster, even as we 154 00:08:33,480 --> 00:08:35,600 Speaker 2: do know that India and China and a few other 155 00:08:35,640 --> 00:08:37,160 Speaker 2: countries are building coal power plants. 156 00:08:37,240 --> 00:08:39,199 Speaker 1: And this is really good news because obviously the other 157 00:08:39,360 --> 00:08:41,959 Speaker 1: thing about coal is it is the dirt is fuel. 158 00:08:42,240 --> 00:08:45,000 Speaker 2: Yeah, of course, so coal for every unit of electricity 159 00:08:45,040 --> 00:08:48,640 Speaker 2: producers say x amount of missions, gas produces half that, 160 00:08:49,240 --> 00:08:53,040 Speaker 2: and renewables produce almost none of the carbon emissions, even 161 00:08:53,240 --> 00:08:55,760 Speaker 2: after accounting for all the carbon emissions that go into 162 00:08:55,800 --> 00:08:59,199 Speaker 2: production of renewables. So that is a very good story. 163 00:08:59,440 --> 00:09:02,679 Speaker 2: Some of it is, of course, gas swapping out coal, 164 00:09:03,120 --> 00:09:06,000 Speaker 2: and that doesn't mean it's going all clean, but it 165 00:09:06,080 --> 00:09:09,080 Speaker 2: is going slightly cleaner, and that story is something we 166 00:09:09,120 --> 00:09:11,080 Speaker 2: covered on the POT recently when we talked about the 167 00:09:11,080 --> 00:09:12,520 Speaker 2: gas turbine shortage. 168 00:09:12,120 --> 00:09:14,200 Speaker 1: And there was another really interesting start in that report, 169 00:09:14,240 --> 00:09:16,200 Speaker 1: and that was saying that growth in solar and wind 170 00:09:16,240 --> 00:09:20,560 Speaker 1: generation outpaced the rise in global electricity demand. Why is 171 00:09:20,559 --> 00:09:21,240 Speaker 1: that important? 172 00:09:21,600 --> 00:09:23,720 Speaker 2: One way in which people have talked about the energy 173 00:09:23,720 --> 00:09:26,680 Speaker 2: transition is to go from fossil fuels to clean energy. 174 00:09:27,120 --> 00:09:29,520 Speaker 2: But if you look at the numbers, it really has 175 00:09:29,559 --> 00:09:32,600 Speaker 2: been energy addition for most of it, because it's not 176 00:09:32,679 --> 00:09:35,040 Speaker 2: like the world is swapping out fossil fuels and using 177 00:09:35,040 --> 00:09:38,000 Speaker 2: renewables instead. It was just using all of it a 178 00:09:38,000 --> 00:09:41,160 Speaker 2: little more so now that renewables are growing faster than 179 00:09:41,240 --> 00:09:46,400 Speaker 2: electricity consumption growth overall, means renewables are starting to replace 180 00:09:46,559 --> 00:09:51,880 Speaker 2: fossil fuels in the entire global mix. Obviously, it happens 181 00:09:51,960 --> 00:09:54,720 Speaker 2: in rich countries. You know, the UK now has seventy 182 00:09:54,720 --> 00:09:57,880 Speaker 2: five percent of its electricity coming from renewables. Coal got 183 00:09:57,880 --> 00:10:00,400 Speaker 2: shut in twenty twenty four, So replacement has been happening 184 00:10:00,559 --> 00:10:03,400 Speaker 2: in many countries, but at a global level it was 185 00:10:03,440 --> 00:10:08,199 Speaker 2: an addition story. Now it might become a substitution story finally. 186 00:10:08,360 --> 00:10:12,240 Speaker 1: So previously countries as they were developing. Their electricity demand 187 00:10:12,400 --> 00:10:14,760 Speaker 1: was growing, and solo was basically filling in that gap, 188 00:10:14,840 --> 00:10:17,719 Speaker 1: or renewables were basically filling in that gap, and some 189 00:10:17,800 --> 00:10:21,000 Speaker 1: fossil fuels and some fossil fuels. But now this report 190 00:10:21,040 --> 00:10:24,760 Speaker 1: is saying renewables are eating the lunch of fossil fuels, 191 00:10:24,840 --> 00:10:29,080 Speaker 1: starting to maybe nibbles, maybe little nibbles. Well, actually, thank 192 00:10:29,080 --> 00:10:31,640 Speaker 1: you very much for joining me on this special bonus 193 00:10:31,679 --> 00:10:32,920 Speaker 1: episode of Zero. 194 00:10:33,080 --> 00:10:34,240 Speaker 2: This was a good fun chat. 195 00:10:36,960 --> 00:10:39,400 Speaker 1: We'll put links to actac's newsletter and the Ember report 196 00:10:39,400 --> 00:10:41,360 Speaker 1: in the show notes. Thank you very much for listening, 197 00:10:41,400 --> 00:10:43,160 Speaker 1: and we'll be back later this week with a regular 198 00:10:43,200 --> 00:10:44,080 Speaker 1: episode of Zero.