Item — HN Reader

India [0], Indonesia [1], Australia [2] (thanks to India [3]), and others are also doing this. And other states like Vietnam [4] and Brazil [5] are also expanding their coal footprint.

A number of high value industrial products like fertilizers and steel have a carbon dependency that cannot be alleviated and which most of those states are expanding.

If current intensity holds til 2050 (and based on infrastructure and manufacturing dealflow in ASEAN, India, and the GCC it will), we are breaking the 2.1*C threshold by then.

It is NOT fatalistic or doomerism to accept that. This needs to be assumed as the base case because most climate projections are heavily optimistic.

[0] - https://www.reuters.com/business/energy/india-clears-4-billi...

[1] - https://www.reuters.com/business/energy/indonesia-offer-ener...

[2] - https://www.energymining.sa.gov.au/industry/energy-resources...

[3] - https://www.pm.gov.au/media/collaborating-india-energy-and-r...

[4] - https://vnexpress.net/viet-nam-se-khai-thac-thu-nghiem-be-th...

[5] - https://www.reuters.com/business/energy/why-coal-still-cling...

2 comments

The difference between China and India,Indonesia,Australia,Vietnam,Brazil,South Africa is the scale of Coal-to-Liquids expansion.

"The sector last year turned 276 million tons of coal - equivalent to almost a year of European coal use - into chemicals, oil and gas, according to the China National Petroleum and Chemical Planning Institute."

https://www.reuters.com/sustainability/climate-energy/chines...

Ammonia based fertilizers don't have carbon dependency, they have hydrogen dependency. Steel can be manufactured from iron oxide by reducing with carbon or hydrogen.

The problem is that the cheapest source of hydrogen is steam methane reforming. Therefor 98% of hydrogen production uses the steam reforming method.

Regarding "fatalistic or doomerism", in Europe we hear from many politicians, that we need to invest more in renewables and phase out coal, oil and gas. When asked for reason why we need to do this investment, the usual answer is "to save the climate". So on hand we have Europe decreasing it's CO2 emissions and mostly Asia increasing it's CO2 emissions, so that Europe's decreases are canceled out.

> The difference between China and India,Indonesia,Australia,Vietnam,Brazil,South Africa is the scale of Coal-to-Liquids expansion

China began their buildout in 2008-09 following the oil shock due to the Iraq Civil War. India, Indonesia, Vietnam, and others are now starting the same kind of buildout at a similar scale over the next decade.

> Ammonia based fertilizers don't have carbon dependency, they have hydrogen dependency. Steel can be manufactured from iron oxide by reducing with carbon or hydrogen

Grey Ammonia remains 2x as expensive as Green Ammonia. This is changing (eg. as I mentioned elsewhere, India the price difference is only 10% now), but at global scale green hydrogen buildouts that will make it significantly cost competitive won't be finished until 2035 to 2040 depending on the country.

The IP for Green Steel (ie. Low carbon steel) as scale is tightly held by 3-4 Western European steelmakers, and India and the ASEAN countries I listed are all dramatically expand their steel production capacity.

And those European steelmakers and their customers like Volkswagen, Saab, and Volvo are uninterested in transferring their IP as it would destroy their CBAM advantage within the European market and Asia is not interested in using European steel as it would make infrastructure buildouts unneccesarily expensive.

This is why China [0][1], India [1], Saudi Arabia [1], and ASEAN states like Vietnam [2] are all treating CBAM as a discriminatory tariff and pushing back.

> Regarding "fatalistic or doomerism", in Europe we hear from many politicians, that we need to invest more in renewables and phase out coal, oil and gas. When asked for reason why we need to do this investment, the usual answer is "to save the climate". So on hand we have Europe decreasing it's CO2 emissions and mostly Asia increasing it's CO2 emissions, so that Europe's decreases are canceled out.

Yep. And frankly, the EU-27 is not in a position to pressure Asia. Much of the steel, grey ammonia, and other industrial products being manufactured with heavy carbon intensity is not intended for export to the EU-27 or the products manufactured using them are easily financed by the EU's carbon credit scheme or domestic export tax credits made to alleviate the CBAM tariff.

We modeled this standoff back in the late 2000s and early 2010s and it's happening exactly to the dot.

[0] - https://www.bloomberg.com/news/articles/2026-01-01/china-cal...

[1] - https://www.ft.com/content/5675563c-b1d5-47b5-858b-69653248e...

[2] - https://eastasiaforum.org/2026/03/06/vietnams-carbon-market-...

I found only that in 2026 grey ammonia costs about 250–400 USD/tonne (key cost drivers: Natural gas price), green ammonia (India solar) 600–900 USD/tonne (key cost drivers: electrolyser CAPEX, renewable electricity).

https://ammoniagas.com/green-ammonia-vs-blue-amonia-key-diff...

The future price of green hydrogen is uncertain because of electrolyser CAPEX:

"Electrolyser system costs — the central input that 2020-era forecasts assumed would fall steadily — instead rose by a median of 57% since 2022, according to BloombergNEF's electrolyser price survey. "

https://www.greenfueljournal.com/post/green-hydrogen-cost-ec...

Coupling PV to electrolyzers and efficient hydrogen production using solar energy is still open research problem. Batteries will be probably needed.

"The low efficiency of PV-electrolyzer systems can be attributed to several factors: intrinsic losses in both the PV and electrolyzer units, energy consumption by balance-of-system components (e.g., inverters, thermal management), and, most critically, ineffective electrical coupling. Although some researchers advocate for direct coupling as a cost-effective solution, variable solar input remains a major challenge. Fluctuations in solar irradiance can cause the power delivered to fall outside the acceptable operating range of electrolyzers, leading to frequent shut-downs and start-ups. These cycling events can accelerate degradation, particularly in PEM electrolyzers, and also affect the purity and yield of hydrogen"

"Recent studies also highlight the integration of battery energy storage systems (BESS) into large-scale PV-CSP hybrid plants as a strategic enhancement. With anticipated declines in battery costs, this integrated approach may become increasingly viable in the near future."

https://link.springer.com/article/10.1007/s44373-025-00080-4

> Yep. And frankly, the EU-27 is not in a position to pressure Asia. Much of the steel, grey ammonia, and other industrial products being manufactured with heavy carbon intensity is not intended for export to the EU-27 or is easily financed by the EU's carbon credit scheme.

If Asia and US are not willing to decrease their CO2 emissions, Europe should also decrease it's efforts in CO2 emission reductions, because this efforts are quite expensive. Personally, I'm in favor of world wide CO2 emission tax, simply because a tonne of CO2 emitted in Europe has the same climate effect as a tonne of CO2 emitted in Asia.

> If Asia and US are not willing to decrease their CO2 emissions, Europe should also decrease it's efforts in CO2 emission reductions...

Already happening [0].

India (Tata, AccelorMittal, JSW Group) also lobbied for this with Netherlands (Tata), Luxembourg (AccelorMittal), France (AccelorMittal), Italy (JSW Steel Piombino), and Czechia (TŽ) as their steel manufacturers don't have access to green steel IP and German and Swedish manufacturers are uninterested in losing their competitive advantage - especially after the JSW Group (India) and ThyssenKrupp Steel deal collapsed because Germany wouldn't allow layoffs [3].

> I'm in favor of world wide CO2 emission tax

But Asia, the Middle East, LatAm, and Africa isn't because they want to industrialize as much as they can over the next 10-15 years.

> Coupling PV to electrolyzers and efficient hydrogen production using solar energy is still open research problem

India has already started doing this (hence the Solar PV overproduction [1] and preferential financing for electrolyzers [2]) but most electrolyzer manufacturing projects won't be completed until 2030.

And other countries will then inevitably put tariffs on India for this expansion, just like how India has tariffed Chinese expansion and China has tariffed Indian expansion.

Like I mentioned, every country knows that there is a 10-15 year window left to expand where possible, and every national and subnational climate plan or infra project now assumes 2C-2.4C by 2050 as a given.

> I found only that in 2026 grey ammonia costs about 250–400 USD/tonne (key cost drivers: Natural gas price), green ammonia (India solar) 600–900 USD/tonne (key cost drivers: electrolyser CAPEX, renewable electricity).

Here's a good overview of India's current grey and green ammonia market by India's primary GreenTech and CleanTech advisory firm [4].

[0] - https://www.ft.com/content/c3c33e7b-8faf-4f06-b281-112117aee...

[1] - https://www.bloomberg.com/news/articles/2026-02-17/india-s-s...

[2] - https://www.spglobal.com/energy/en/news-research/latest-news...

[3] - https://www.reuters.com/business/thyssenkrupp-jindal-agree-p...

[4] - https://jmkresearch.com/green-ammonia-is-only-10-costlier-th...

I've been wondering about that, South Africa has a lot of coal to gasoline/diesel. Developed during the apartheid era to bypass international oil embargoes.

Places with good insolation could probably use green hydrogen + coal to produce fuels. Considering how much gasoline is taxed they probably could make it pencil out by adjusting fuel taxes.

> industrial products like fertilizers and steel have a carbon dependency that cannot be alleviated and which most of those states are expanding.

When I run the numbers I don't see that. Ammonia is about 18% Hydrogen. Using green hydrogen would cost $500 per ton of ammonia. Putting it in perspective world production of ammonia is about 25kg per capita.

They are trying, and Green Hydrogen will become a reality with a decade for ammonia production, but steel, cement, and other industrial products still have hard carbon fixation dependencies.

Based on dealflow and ongoing projects, most countries are basically assuming 2.1*C by 2050 is the reality and as such, they have an incentive to maximize capacity into the late 2030s and early 2040s.

Think of it like the NPT - those who rushed nuclear weapons capacity by 2000 succeeded with little-to-no ramifications.

You have to remember that we're halfway through 2026, so 2040 is only a little over 13 years away now, and any global consensus will only begin to seriously be negotiated around then add-subtract 5 years.

> When I run the numbers I don't see that. Ammonia is about 18% Hydrogen. Using green hydrogen would cost $500 per ton of ammonia. Putting it in perspective world production of ammonia is about 25kg per capita.

Green Ammonia is still 2x the cost of Grey (coal) Ammonia [0]. This difference is starting to fall (eg. in India the price difference is now 10% [1]), but it will stil take a decade for Green Ammonia to definitively become cheaper than Grey Ammonia, and most National Green Hydrogen strategies don't expect mass domestic capacity to finish being built out until the early-to-mid 2030s.

And this ignores the fact that non-alloy steel (which is the primary steel used for most domestic infra projects across the world from ASEAN to India to Iran to the GCC to Turkiye to Russia to China) cannot be forged without carbon, and the cheapest input for that is metallurgical grade coal.

Everyone is trying to rush as much production capacity as they can before everyone is forced to reach an agreement like the Montreal Protocol even though CFCs impact were know well before it.

[0] - https://www.sciencedirect.com/science/article/pii/S2666352X2...

[1] - https://jmkresearch.com/green-ammonia-is-only-10-costlier-th...

Iron can be produced without coal, because hydrogen can be used for reduction of the iron oxide.

https://en.wikipedia.org/wiki/Green_steel#Hydrogen_reduction

The IP is tightly held by a handful of European steelmakers who aren't interested in transferring it abroad as it would remove their CBAM advantage against Asian exporters and completely destroy them and Germany (ThyssenKrupp), Sweden (LKAB, HYBRIT), and Austria (Voestalpine) would lose their temporary competitive advantage.

And all the Asian countries I listed (excluding Australia - who is Asia's Chile) are planning on dramatically expanding domestic steel production over the next decade to help with their infrastructure buildouts, so are primarily using domestic non-alloy steel and cement.

The Asian steelmakers will eventually figure and scale it out, but that will take an additional decade because they also won't transfer IP to their competitors. By that point it will be the late 2030s and in some cases the 2040s.

Intellectual property in making green steel is not the big competitive advantage of European steelmakers. Green steel making is not ultra high-tech product like the ASML photolithography machines. If it would be a big competitive advantage then Thyssenkrupp would not need €2 billion German government state aid for its new green steel plant in Duisburg.

https://www.reuters.com/business/environment/thyssenkrupp-ad...

"Most of Asia's steelmaking capacity is blast furnace-based, accounting for around 90% of output in China, 73% of output in Japan, 69% in South Korea and 46% in India, according to World Steel. With many of the region's blast furnaces at an early stage in their life cycles, it is unlikely that they would be phased out soon, and so many of the decarbonization efforts are based on the continued use of this production route."

"Overall, the path to decarbonization in the Asian steel sector is fraught with challenges, requiring significant investment and regulatory support to ensure the transition to sustainable practices is both feasible and economically viable."

https://www.spglobal.com/energy/en/news-research/blog/metals...

So steelmakers in Asia are concentrating on low production costs, steelmakers in Europe are concentrating on low carbon emissions.

> Intellectual property in making green steel is not the big competitive advantage of European steelmakers

It is for ThyssenKrupp (Germany), LKAB (Sweden), HYBRIT (Sweden), and Voestalpine (Austria). Chinese, India, Vietnamese, Saudi, and other steelmakers cannot export their steel and steel products competitively to Europe and their European operations were about to get hit by CBAM related violations (until the EU backed down on carbon emissions regulations a couple weeks ago), which made the EU-27 a captive market for those 4.

> steelmakers in Europe are concentrating on low carbon emissions

Only German, Swedish, and Austrian steelmakers can. Dutch, French, Luxembourgish, and Italian steelmakers (who are all now owned by Asian steelmakers) cannot.

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And this is why nothing will happen with regards to climate change - sovereign corporate interests will always trump global interests.