Bill Gates urges need to reduce 'green premium' in energy transition

by Reuters
Monday, 1 March 2021 15:41 GMT

FILE PHOTO: Bill Gates, Co-Chair of Bill & Melinda Gates Foundation, gestures as he speaks during the World Economic Forum (WEF) annual meeting in Davos, Switzerland January 25, 2018. REUTERS/Denis Balibouse/File Photo

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Higher costs for many eco-friendly products known as 'green premiums' are holding back adaptation, said Bill Gates

By Stephanie Kelly and Jessica Resnick-Ault

NEW YORK, March 1 (Reuters) - Investor and philanthropist Bill Gates said at a virtual conference on Monday that cheap green hydrogen would be a "huge deal" in helping the energy transition but added that its so-called green premium will factor into its use.

The green premium is the extra cost a consumer pays to buy a fuel or technology that emits fewer greenhouse gases. It is especially significant in sectors such as sustainable aviation fuel and cement, Gates said.

"The green premium is the metric that says are you on your way to success in 2050," Gates said at IHS Markit's CERAWeek.

This year's CERAWeek oil and gas conference is increasingly focused on how to target cutting emissions to reach net zero carbon by 2050. Gates spot as the first major keynote in the program highlighted the conference's dominant theme of carbon reduction technologies.

Gates said that while he was the biggest customer of aviation biofuels in the United States, the lower-carbon fuels to power aircrafts costs three times as much than traditional petroleum-based jet fuel.

"It'll be interesting to see how we can scale that up and can you get that green premium down from 300%, which for the aviation industry, their ticket prices would have to be a little higher," Gates said.

In the energy transition, oil and gas companies can play a role and bring a particular skillset to help reduce carbon emissions, such as sequestering carbon and burying nuclear waste, Gates said.

Gates has spoken about tackling climate change before and has touched on the difficulties of lowering emissions from the manufacturing sector. The software-developer-turned-philanthropist has invested some $2 billion toward the development of clean technologies. (Reporting by Stephanie Kelly and Jessica Resnick-Ault Editing by Marguerita Choy)

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