Ep126: Marco Alverà "Subsidies Everywhere All at Once"

Michael Liebreich  So, Marco, thank you very much for joining me here on Cleaning Up.

Marco Alverà  Thank you for having me.

ML  Always a great pleasure to see you. What I think we should do is, we should start - I usually do this - with you giving a thumbnail bio - and because you've done so much, it will need to be the short version - of who you are. How did you get to do what you're doing?

MA  Okay. Well, very quickly, I started working at Goldman Sachs private equity, did a telecom startup during the tech boom, and then joined Enel when it was very trendy to join electricity companies, big Italian state-owned electricity company, back in 2002, 21 years ago. And then from Enel I moved to Eni and from Eni, I became CEO of Snam, which is Europe's largest gas grid and storage and LNG operator. So, big experience in electrons at Enel and then in gas. And in Snam, I became really passionate about bio-methane and hydrogen; like how we could make renewable molecules to help not only the electrification, and the "electrify everything" part of decarbonisation, but also the molecule piece. And we invested a lot of money on hydrogen, I got to know Paddy Padmanathan, the CEO of ACWA Power; we were selling electrolyzers into the NEOM project in Saudi Arabia, got to know Paddy. And we decided that I would leave Snam with some colleagues, and he left ACWA, and we started a company called Zhero, to invest in renewable energy. And the project I'm fully dedicated to, where I'm CEO, is TES. TES wants to be the Tesla of hydrogen, and we supercharge hydrogen by converting it into a special molecule called ENG. And we're racing to build projects, both to produce the ENG upstream, and to receive the ENG downstream in Germany. So, that's a short version.

ML  Very good. Now, let me just gloss that with a few touch points for our listeners. They will definitely want to know more about what ENG is, this magic molecule. But first of all, at Enel, I suspect you will have worked with one of our previous guests, that's Francesco Starace. He's in the process of leaving Enel, I believe. But that was... I don't know the episode number, we spoke to him and it was one of our very popular episodes, somebody of incredible clarity of thought and leadership. And then Paddy Padmanathan, whom I've known for well over a decade, I call him the Usain Bolt of solar because he kept on breaking his own world records.

MA  He loves that title, by the way. We use it when we talk to investors and people, we use the word you coined.

ML  Yeah, and we're going to get him on Cleaning Up, sometime in the near future. And so, you know, as I understand it, Zhero; you've got these two things, Zhero and TES. zeros, Z-h-ero, if I've got it right, is really about doing very cheap projects; world-class, cheap projects in renewables, in hydrogen, in whatever. I think we'll focus on TES, partly because that's what you do full time, but also because I've got Paddy coming on the show, and I'll get him to talk us through the rest of the Zhero portfolio if that's okay?

MA That's perfect.

ML  Okay, so let's focus on TES. So, at what stage is it? You've raised some money; we might as well start there. You've raised some money?

MA  We've raised money from EON, from UniCredit, from HSBC, from Zodiac, which is one of the world's biggest shipping companies, and from Andrew Forrest from FFI, Fortescue. Andrew is a very well-known in the industry leader in hydrogen, pushing hard on the hydrogen agenda. Plus a number of other family offices.

ML I've tried, I've reached out to Andrew. And you know, if all goes well, today, maybe you'll reinforce that I would absolutely love to get him on Cleaning Up. But he won't get an easy ride as of course, you're not going to get, and you know that already, right?

MA That's what we expect from you.

ML  Exactly. How much have you raised?

MA  We don't disclose the number, but over $200 million, but we're just at the beginning, I mean, these projects are going to require a lot of capital. So, we've raised what we call development capital, seed capital.

ML So, let's start at the end of the story if you want, because you have published where you want to be with TES in 2045. So, what are your three bullet points, let's see if you can recall them? I've got them off the web, but I want them in your words.

MA  So, we want to be the biggest producer in the world of ENG. We want to be a first-mover; we're not holding on to our IP, we're sharing it. We believe in a partnership model, so we're inviting IOCs, NOCs, utilities, to produce the upstream with us, and to work downstream with us. This is going to be we think a big market, it's going to require a lot of skills, a lot of capital. The three bullet points are: becoming the world's largest producer of ENG; closing the cycle, so we want eventually, as we scale up to be able to capture the CO2 that we need to generate the ENG; and we want to help ENG become a global commodity, like we're doing in Japan and Korea, and in Europe. So, this is not about our own IP and selling a license or selling a technology; we want to be a fully integrated energy company.

ML Okay, now, give me the definition of ENG, and then we'll come back to your three bullet points; I'll mark your homework and see if you've got the same ones as are on the web. What is ENG?

MA  So, ENG is renewable synthetic methane. So, it's a molecule that's chemically indistinguishable from normal natural gas. So, it's CH4 for the experts. And it's made by combining green hydrogen, made from renewable energy, and CO2. So, we put the green hydrogen and the CO2 in a reactor, in a catalyst called Sabatier. This is named after the guy who won a Nobel Prize in 1912 because he invented this reaction, which is an exothermic reaction, so it's very energy efficient. You put in H2, you put in CO2, you get CH4 out. So, it's basically a way to bridge this gap between the world of electrons and renewable energy and the intermittency of solar and wind, and the very stable, huge world of natural gas, which with LNG is a global commodity traded everywhere. So, the product is acting as a connector between two worlds that are normally separated everywhere. They're separated in China, between the state grid of China on electricity, and PetroChina. They're separated in the US, with Exxon and Conoco and Chevron on the one side, and the utilities on the other. You mentioned Enel and Eni here in Italy, you could argue, you know, EDF and Total in France... Everywhere in the world there's a huge gap between the world of electrons and the world of molecules. What we're trying to do here with hydrogen and with ENG, is to bridge that gap, and create a molecule that you can use seamlessly exactly like natural gas, but it's made entirely from renewable sources. That's the bottom line.

ML  Okay, now those companies are of course, bridging the gap by investing in renewables, but you're talking about physically bridging it. So, you're gonna have molecules that go between the clean space and the legacy space. So that's ENG, just to recap: it's CH4, which is methane, which is essentially natural gas, but the H is from electrolysis. So, you've started with renewable electricity, and then you've electrolyzed to get the H, and then the C, you're taking out of CO2, and then you've got various different places to get that. But that's the core of what you're calling ENG, correct?

MA  Yeah.

ML   Now, on your website, to go back to your three bullet points, you said, you've got green gas, 250 terawatt hours - I suspect the numbers don't mean much to many in the audience, but that's a lot - of green gas. Do you mean also in that... Did it used to mean biogas? Or bio-methane? And now you only want to do this ENG thing? Or is it still the same plan?

MA   So, that's our 2045, let's call it, aspiration. What I'm really focused on now is 2030. For 2030, we want to produce 1 million tonnes of ENG.

ML  Okay, so you're going to start with that. So just for the audience, then, because I did mention 2045. Do you want to give us the 2045, the rest of the 2045, then we'll come straight back to the kind of here and now?

MA   I think the 2045 [piece] is a time in the future when German law prohibits fossil fuel. Now, we can argue whether that's a good law or bad law, or necessary law. But in 2045, what we've done is we've said, we're building this large LNG receiving terminal that we will gradually fill in with ENG to replace the fossil LNG. We won't be able necessarily to produce those molecules; we need other people who buy capacity in our terminal to go and produce their own molecules. But by law, the terminal can no longer operate as a fossil terminal. So, the capacity of that terminal if 100% of the fossil were to switch from LNG to ENG, would be 250 terawatt hours, which is a huge number - it's about 10% of Germany's entire energy needs. But to be clear, that's not what we intend to produce, because that would be like $600 billion of CapEx. But that's the capacity that the terminal could import, if the law is confirmed, and if everyone were to transition from LNG to ENG.

ML  Okay, so the three elements that you've got for 2045, what that translates into is, producing your piece of that, is the first one. The second one is hydrogen, you've got 5.5 million tonnes of hydrogen. And then the third one is the Wilhelmshaven green energy hub, which will export CO2.

MA  So the Wilhelmshaven hub can export CO2.So those numbers are related to the Wilhelmshaven piece of our story. So, Wilhelmshaven is one piece, which is the downstream piece, and those numbers relate to what Wilhelmshaven can enable. So, Wilhelmshaven can enable up to 250 terawatt hours of green imports, which is equivalent to about five and a half million tonnes. And it enables the export of CO2, if Germany decides to go ahead with CCS. If you do CCS, our argument is you're better off using the carbon instead of storing it underground because it's cheaper. But our core business is to be a producer of ENG upstream where our 2030 goal is 1 million tons of ENG, which is already a very ambitious target.

ML Okay, but just sticking with Wilhelmshaven for a moment. You are building it, it is an LNG terminal, you are building it. And some people are unhappy with LNG terminals, because they think we should be going straight to something cleaner. What do you say to them?

MA   I've been, as I said, both in the world of electrons and in the world of molecules. Germany consumes six times more energy in the winter than it does in the summer. So, if you try to worry about the seasonal, extra demand for heating, with electrons, you're never going to get there. So, you need to store molecules; those molecules can be LNG, can be ENG, can be bio-ENG. But we have the reservoirs underground, we need to fill them up with something.

ML   But there are those who would say, that it could also be hydrogen, or it could be ammonia. And in the context of Wilhelmshaven, there have been various political statements about, oh, it doesn't matter that we're building an LNG terminal, because it's going to bring in hydrogen later. But that's not your plan, is it? Or is it?

MA   So, it gets a little technical, but that is the plan, because what you do is you import the ENG. And ENG is essentially hydrogen; it's a hydrogen-based fuel the same way ammonia is or E-methanol is; any e-fuel essentially starts from hydrogen. A fuel is a combination of hydrogen and carbon, so you need the hydrogen, you need the carbon, and then you can produce E-diesel, E-kerosene, E-petrol, ENG, ammonia, methanol; they're all hydrogen-based fuels. So, when you import ENG, you're importing hydrogen. If it's grey hydrogen, that's not so good. If it's made with green hydrogen, that's a green hydrogen import. For clients who want pure hydrogen, we can separate the ENG back into hydrogen, which is not without cost, but we can do that if someone wants pure hydrogen. This is going to be a very cheap way to bring hydrogen, let's say, from Australia, or Texas into Germany. But most of our clients are saying, why should I take the pure hydrogen if I can take the EMG because that, for me is a much more interesting molecule. Because the carbon in the CH4 has some calorific value, by definition, like fossil carbon has it. So, you can do both: you can produce green hydrogen, converted to ENG, and import the ENG; you can produce green hydrogen convert it to ENG, import it and then re-separate it, and you're left with pure green hydrogen.

ML   Let's get into some of those pathways. I just wanted to touch on Wilhelmshaven because the point is, you're never going to be importing ammonia, right? And I wanted to sort of cover that because there are those who think we're going to get an LNG terminal and somehow convert it, and I'm skeptical because just so much of the engineering has to be essentially ripped out and replaced.

MA  I have nothing against ammonia, to be clear; I think if you're producing fertilizers in Europe with grey ammonia, you may as well switch to green ammonia, it's a low hanging fruit in terms of a switch from grey to green. I don't really see a lot of ammonia molecules going outside of the current ammonia pool, which is a huge pool. So, I think there's a lot of work for people to convert grey ammonia to green ammonia, but to think of putting ammonia on trucks, I'm not a huge fan of. So, our terminal is hydrogen-ready without going through the ammonia path.

ML But always via the ENG molecule. It always goes via the ENG molecule?

MA  It's very expensive... I mean, I've studied a lot of hydrogen, I've written books on this: it's very hard to liquefy hydrogen. That's why everyone's converting it into something. And so, you won't find pure hydrogen ships moving around because it's just very hard to liquefy.

ML  Well, so for the listeners for whom this is their first episode, they may not know that one of the recent episodes was an audioblog that I did of a piece I wrote for BloombergNEF, and it was called The Unbearable Lightness of Hydrogen. And it just takes the physics of things like liquid hydrogen, and just says well it's so bulky, just the sheer number of ships that you would need, and then the energy loss liquefying, and then the temperature that you have to stick to, and the boil off and the embrittlement, and I agree. I have said in the past that no more than homeopathic quantities of liquid hydrogen will be shipped. So, I love to hear what you've just said, it's exactly right.

MA  I remember, I remember you saying that.

ML  Let's take this pathway. I mean, you have... Ultimately, you want to get to this sort of fully circular pathway where you're bringing in ENG, but the CO2 is then going back to carry more hydrogen, essentially, into Europe. But I'm just wondering, is that the easiest pathway to start with? Or should we just step through a simpler pathway? What's your first project?

MA   So, the first project which we will be announcing in a matter of days is in the US, because there's a lot of Inflation Reduction Act - I don't know if it's going to really reduce or augment inflation, but that's the name they've given to this act - there's a lot of money there to be made in layering all the different subsidies. So, you get a subsidy for capturing CO2, you get a subsidy for producing the renewables, you get a subsidy for producing the hydrogen, and guess what, you can export that molecule, so we may even be able to get additional subsidies in Europe. But that's not been decided yet. But even without the European subsidies, you create ENG at a price which is cost competitive to fossil natural gas, which is really... I mean, this whole IRA brought my cost reduction curve five years forward. So, to your point, we use locally available CO2. So, in Texas, there's a lot of CO2 available, a lot of CO2 has already been captured. For those who don't know, in the US, they're using CO2, captured, to enhance the recovery of oil. So, they're being incentivized in America to capture the CO2, put it underground and produce more oil. What we're saying is that same CO2, with the same subsidies, don't put it underground to produce more fossil fuel, give it to us, because that's a perfect... we have the perfect home for that, which is our hydrogen. Hydrogen in our model is a carbon absorber, it's a carbon sink. So, we get that CO2, we don't store it underground, we don't use it to enhance oil recovery; we merge it with a hydrogen, and use that to carry the hydrogen into Germany. That's step one. Then as we grow, as Germany or other countries, Italy....

ML   Stick with that project, if you could, before we do the growth and the vision and so on. That CO2 that you're using, that has been captured, is fossil CO2. So, you import that into Wilhelmshaven, then it gets used and emitted, that's not net zero, right? That's emitting?

MA   No, because that CO2 is captured. So, by definition, we absorb the same amount of CO2 we emit. We couldn't produce ENG if we weren't absorbing CO2.

ML  Where is the CO2 being captured from in America?

MA  It doesn't matter, because it's a global problem, CO2. So, I could capture it in Japan, bring it to America; I could capture it in America, I could capture it in Germany.

ML For that project, let me make sure we've all understood. So, somewhere in the US there's a power station that is producing CO2 from natural gas. And then the CO2, you're capturing it from that exhaust stream, shipping it, binding it with its hydrogen via Sabatier. And then in Europe, it's then being burnt and emitted to the air.

MA Yeah.

ML So, it has gone from fossil, it's gone from underground, and gas, it's gone through two power generation cycles, but it has ended up in the air. So, if we all did that, we're not net zero and the planet is kind of screwed, right?

MA  No, if we all did that, you'd have two power plants at the price of one in terms of CO2.

ML Oh, yes. But you'd still be emitting CO2?

MA  Yeah, but what do we want to do? Because that plant, we assume, wouldn't be capturing it, otherwise, they wouldn't sell it to us. So, we capture it in America, and we emit it in Germany. So, let's assume there's only one power plant as a customer. Let's assume this power plant is in America, just for argument's sake; we sell them the first ENG, which is made from... we've captured their fossil CO2, we merge it with our green hydrogen, and we produce ENG. Then they shut off their fossil pipe - so no more fossil fuel. They emit the CO2, they give it to us, we merge it with the hydrogen, we give it to them; they emit the CO2, they give it to us, and we give it back to them. So, it's a circular carbon loop. There's no emissions generated from our loop.

ML But that's just a question of attribution. They could say, well, you're the one that's burning it, we're capturing it, what you do with it is up to you. And Marco, what you are doing is buying CO2 and emitting it. I mean, that's what you're doing.

MA   I'm capturing it.

ML They're capturing it, you're just buying it.

MA  That's semantics. But from a climate point of view, and from the UK and European regulatory point of view, I'm capturing it and burning it. So, right now the EU doesn't let me do that unless I capture biogenic CO2. That's just semantics. I mean CO2 is CO2, it doesn't matter if it's biogenic or anthropogenic. So, we will start by capturing biogenic CO2. But from an environmental point of view, which is what really ultimately matters, is the carbon intensity of the product. Our product is carbon neutral, by definition, because it absorbs, it will always absorb, as much CO2 as it emits. Because if I emit more than I absorb, I will lose product, my volumes will decline.

ML So, even if I concede that, as opposed to thinking there'll be some negotiation about who gets the benefit, then you are essentially, this system only works as long as somebody in the US is prepared to simply emit the CO2, right? They have to be prepared to emit it, because then you come along and say, well, since you're emitting it anyway, I can be carbon neutral. As soon as they don't want to emit that, that system doesn't work. So, if that's the first project, what's the next step?

MA  But to put it into perspective, one of my projects, which is a two to three-billion-dollar project, needs 300,000 tonnes of CO2. The world is emitting 40 billion tonnes of CO2. So, the scale which we're talking about... I need tiny amounts of CO2 for my product. My product is 100% CO2 neutral, and we have of course lifecycle analysis to show that. I'm urging my own customers to capture the CO2, because I think we should race to capture as much CO2 as we can. And so, my vision is what I told you before about the closed loop. Now, the closer the customer is to the hydrogen, the more intelligent and efficient that loop is. And until we get to a point where people start seriously abating carbon, and there's little carbon available, which is probably going to be 20, 30, 40 years from now, unfortunately, there's all the merit in the world in capturing the cheapest CO2 available. We start with biogenic CO2, because of European rules, there's a lot of literature... The rules allow you today, but I'm sure that will change over time, to capture biogenic CO2 in the US and not be paying the ETS tax in Europe. In Switzerland, for example, I was yesterday in Switzerland, they don't care whether it's biogenic or anthropogenic, nor do they care in Japan. So, it's more of a bureaucratic point. But from a climate point of view, ENG is by chemical definition, 100% carbon neutral, because you need as much carbon captured  as you release.

ML  As long as, by definition, you can buy the CO2 from somebody who doesn't care that it's not being captured, right? But this is regulatory arbitrage. Because what you're actually doing is getting the IRA to pay you to capture the carbon, and then you're sneaking off to Europe, and then you're emitting it, and helping somebody to avoid a carbon price in Europe. So, you're double-dipping, but the CO2 is ending up in the air, let's be absolutely clear - the CO2 is ending up in the air.

MA It's CO2 that was ending up in the air anyway; I'm just getting twice the amount of power for the same amount of CO2.

ML  Why is the IRA paying you to capture it and put it in the air? Why would they continue to allow that subsidy if what you're doing is taking that CO2, which is for capture, but not capturing it? Which you're not.

MA   Because right now, they're paying people to put it underground to produce more oil that produces exponentially more CO2; we're keeping it in a loop. The CO2 that's not released in the air, is not stored underground, because it's cheaper to absorb it with hydrogen, and use it to carry the hydrogen from A to B. So... this is how the science of this product works. This is why Japan has committed to going to 90% ENG by 2050; so, they will replace all their LNG with 90%, ENG, 5% biomethane and 5% CCS. And this is a decision they've taken, they've announced it at the G7 energy gathering in Sapporo, they're going to confirm this in the G7 in two weeks.

ML I would love to think that was because I have done a good job of explaining just how foolish importing ammonia is, and co-firing, and then going to pure firing of ammonia.

MA I think you did play a role in this, you did play a role. Because there has been a change in sentiment since you started getting people to wake up that it's not the best use of renewable energy to merge it with coal in a coal-fired plant.

ML  Right. Look, to the point about, you claim this as the science of this, but it's not - these are all about how you define boundaries of who's emitting what. And I would love to be in the meetings with the Treasury lawyers in the US, who will try to stop paying the IRA to people who are simply not actually capturing at all. But let me come back to, I want to come back to... Let's do a really simple one, which is just hydrogen, right? Because you've said the Sabatier process is so efficient, but you've also said that it's endothermic.

MA  Exothermic.

ML   Exothermic, which means that energy effectively is being thrown off by that process. And it means that if you start with a kilo of hydrogen, and you then Sabatier it, and then you get to the other end, and you extract it from the ENG, you don't end up... Let's start with the electricity. You start with 55 kilowatt hours, 50 kilowatt hours of renewable electricity, you'll get one kilo of hydrogen; but by the time you've gone through your process, you've actually only got half a kilo when it arrives in Europe, is that not correct?

MA  So, I think it's much better to look at the energy balance and the mass balance, because the Sabatier is even worse than what you're saying, because I even produce water. So, I produce heat and I produce water,

ML   Very expensive water,

MA   Very expensive water, and so people are telling me all over the world, even technical engineers and big oil companies, they're saying, why should we put hydrogen into a process where we get water out? And we get heat out? Which is, I think your question. If you look at the energy efficiency, though, what doesn't come across in this mass balance but comes across in energy balance, is that carbon, that carbon that you're using has calorific value. So, the CH4 molecule is just - and I'm sure you agree with this - it's so much easier and more beautiful than an H2 molecule. No, embrittlement, much harder leakage if it's done right, and more energy intensity, to your point about lightness. And not poisonous, like ammonia. So this process, if you start with an electron, it's about 55% energy efficiency delivered to the customer in Germany, which is a horrible thing if you're looking at it from an engineering point of view - you're wasting 45% of the energy. But if you look at it from an economic point of view, it's the most beautiful arbitrage that I've seen in my life. And I've been twenty years in energy, because I can make...

ML  I don't agree with those numbers, by the way. Because that's going from... If you're starting with renewable electricity, and you're trying to get renewable electricity at the other end.

MA  No, I'm not trying to get...

ML  That's because you don't want to take ownership of what they do with the LNG or the ENG or whatever at the other end. But that is, in practice: once that ENG arrives at Wilhelmshaven, somebody is going to take some of it and generate electricity, correct?

MA  Some people are going to use in a fuel cell, some people are going to use it to make steel. So, what we look at is the calorific value.

ML  For the piece that goes electricity to electricity, let's be absolutely clear. Let's not try and... This is a bit like...

MA   ... [inaudible] If I want to make steel? Steel has carbon in it.

ML Okay, I want to come back to hydrogen, I will come back hydrogen. But since we've gone down the calorific value... If you started with renewable electricity in let's say Texas, and your goal is to get electricity in Germany, the efficiency end to end is 22%...

MA  And I'm not trying to get electricity necessarily. So, Germany is getting out of diesel. And Germany is getting out of fossil energy. So, Germany is a country now reliant on coal, on diesel, and until last year on Russian gas. Germany has 80% of its energy is now coal, diesel or liquid products and natural gas. They want to get out of all of these by law by 2043. So I'm saying: those products which have a calorific value, I replace with products made from renewable electricity. So, I lose about 30% when I make the hydrogen. So, I start with 100%, I lose 30% when I make the hydrogen; I lose another 10% in the Sabatier; if I'm smart enough to recover the heat, and I can use the heat to do carbon capture, if I'm close to my clients, I can I can move that up from 10% to 5% energy losses. Then I'm an EMG molecule, exactly like LNG, I lose about 4% to liquefy, 1% or 2% to transport, another percent to re-gasify. And that's how I get to my end to end electron to molecule delivered in Germany 55% efficiency, which is hard to beat, it's impossible to beat. It's better than ammonia, better than methanol, better than any other conversion.

ML   And let me tell you, the reason I have slightly different figures is I think that the Sabatier is less efficient, and I'm happy to go off, and that will be my homework, to look at the Sabatier because I have figure that's more like 25% loss on the Sabatier process, rather than your 5% to 10%...,

MA   We have 325,000 hours of engineering, we're ready to take an FID, so I have all the literature to share with you...

ML  But it's somewhere between 40% and 50% or 55% calorific retention in that process. Since we're on that process, I want to come back to the hydrogen mass balances, I will come back to those. But you've also got, when you do that, you've got the potential for methane leakage; you can't have methane and not have the potential for methane leakage. And methane is a very, very powerful greenhouse gas.

MA It's horrible. It's a horrible, horrible, nasty greenhouse gas, much more potent than CO2. And hydrogen is even worse than methane.

ML  Correct, but electricity is much better, right? If you just do electricity, then obviously, you don't have that issue.

MA  I agree. So, I invested hundreds of millions of euros to reduce and combat methane leakage when I was at Snam. And we got from 0.16%; we had, because I left the company, to get to zero leakage. A lot of the leakage is upstream, of course; if you look at these videos in Texas, when people get fire coming out of their water tap in their kitchen sink. And a lot of that is just by design, because people don't put any casing around the wells that they drill, which should be regulated. And a lot of the leakages in the old transport pipes from Eastern Europe, and some of the leakages in the distribution pipes absolutely need to be fixed. I commend EDF: they do some great work with the satellites, you can now see where the leakage is, put heavy fines on it, and get that sorted out. Our product is going to be so expensive to make in relative terms, and so controlled, that we will have no leakage. Even the LNG engines of the LNG ships are being upgraded to minimize the leakage. It's a completely different system from the fossil gas.

MA  I agree, you won't have the upstream and the midstream leakage, but you will be, your process, maintains the lives of the distribution; the ENG then arrives in Wilhelmshaven, goes into the network, and whatever downstream leakage there is, you are prolonging. So, you've got the CO2 that ends up in the air, and you've got the leakage that you're prolonging. That's pretty hard to argue against, to?

MA We are selling to industrial customers, that's our core business. And I think heating will be... A lot of the heating will be electrified, there's going to be a huge push for heat pumps. What we can do is we can supply the backup power for that heating when it's very cold. So, people don't realize it, and I know this from my previous jobs: when you get the beast from the east, when you get a week of super cold weather, that kind of doubles demand for energy, maybe just for a week. So, that's when you need the molecules to kick in, which doesn't mean that every home gets their molecule of hydrogen or ENG; that means there's a centralized extra energy available to produce the heat, whether it's district heating, whether it's heat pumps, whether it's extra demand. But you need those molecules stored in the UK, in Germany, in Europe, for when it's very cold. So, we're building a system for zero methane leakage. And we're going to be very stringent on that. And the world should go to zero methane leakage.

ML  A lot of what you say I agree. We need hydrogen storage, we need storage. That does not mean for the times when it's not windy and sunny, that doesn't mean that the hydrogen would go to the homes, that's a stupid thing to do. But you do need it to be centrally stored and used, or LNG, ENG, something, some molecule needs to be stored. I want to come back to this question of the mass balance of hydrogen, because it unlocks a discussion about some of the finances. If you take your 50 kilowatt hours of electricity in the US, and you make one kilo of hydrogen, and then you do the Sabatier process, and then you go through at the other end, you then compress and carry the ENG across the Atlantic, you then gasify it, and you end up, let's stop at hydrogen, right? I want to come back to the circular, the full circular in a moment. But let's stop at hydrogen: you're basically getting about half a kilo of hydrogen out. For that 50 kilowatt hours, which has produced one kilo, you're ending up with half a kilo at the other end. Do you recognize that?

ML  I think you need you need more than 50 kilowatt hours to make half a kilo of hydrogen.

ML A kilo now, because you're making a kilo in the US, but then you're methanating, and by the time you've methanated, and the water, and the etcetera, etcetera. And then you've done the autothermal reforming in Europe, you get just over half a kilo.

MA  Yeah, I'm saying renewable to energy, it's about 55% efficient. So, you're seeing 50%, we're saying similar things.

ML But now let's map that onto... The IRA is going to give you $3 per kilo in the US, right? But you only end up with a half a kilo in Europe. So, it's effectively giving you $6 a kilo, isn't it? Because it's giving you the IRA based on the input hydrogen that comes out of the renewables, before you methanate it, right? So, you're getting $6 a kilo of IRA for the hydrogen, then you're getting IRA for the carbon capture. Then you're gonna get, I mean... This is a subsidy hoover. I mean I'm sure it's an enormously efficient process at absorbing subsidies, no?

MA  Look, we started this way before the I left SNAM and started this before... and I joined Paul van Poecke, and Marcel, who were the guys who had the original idea, Paul in particular... I joined them before the invasion of Ukraine, when no one in Germany was talking about LNG, and so we didn't do Wilhelmshaven to fill a gap of Russian gas, we designed it from the outset as an ENG terminal because of this idea; and we did this way before the IRA. So, the IRA is a pleasant surprise that I think brings our cost curve... bridges that gap to when my electrolyzer costs are going to go down. So, it's just accelerating...

ML It doesn't work without the IRA, it doesn't work. When you say a pleasant surprise, it's the difference between it working and not working, surely?

MA  So my plan, as I said, 1 million tonnes, that's a lot of CapEx, that's about five of my projects; each of my projects is, two to three billion that I do in partnership. So, that's not my equity and my leverage, every project has different equity investors in it: off-takers, oil companies, national oil companies. So, my success is getting, by 2030, to one million tonnes of EMG. That's half a million tonnes of hydrogen, equivalent, okay? Europe has an ambition by 2030 of having 20 million tonnes. Now, we may argue that's the wrong ambition, and that's never going to be achieved. But I have Japan with an ambition of getting to 30 million tonnes of LNG by 2050; Europe with an ambition of equivalent 40 million tons of LNG by 2030, and much more by 2040 and 2050; Korea with an ambition; and even the US wants to buy ENG. There's a big company that's in a dispute now with a governor in one of the states with a theme park: they have a ship, and that ship runs on LNG, and ENG is the perfect drop-in fuel for that US ship that wants to tell its customers you're floating around on hydrogen. So, my success is one million tonnes. This doesn't require a lot of CO2, doesn't require the IRA... It's going to be a drop in the ocean of the Japanese, the European, the Korean and the US hydrogen ambitions.

ML Right, and Marco, where this may go is that, the fact that you can do this is an indictment of those targets, and of some of those regulations, that's entirely possible. But I want to go back to that kilo of hydrogen that gets made, that earns you $6, that ends up with half a kilo of hydrogen in Europe. But it collects... that's not the only subsidy that it gets along the way, right? Because the CO2 is also subsidized under the IRA. And I don't know what else... are you getting also some subsidies to build in Wilhelmshaven, presumably because its's going to be importing ENG, so it presumably gets some subsidies there from whichever state, or Germany? And then of course, you're selling this. And because you've got some consultant to sign off on the lifecycle emissions, you're going to sell this to help people not pay the carbon price, the EU-ETS price. So, you're essentially getting a European subsidy as well? I mean, I calculated, I get a carbon price for that chain, of just doing hydrogen via ENG from the US, I get a carbon price that's nearly $1,000 per tonne.

MA  I don't know how you backward-calculate that. Look, the subsidies are designed, to my surprise, allowing exports. How long that is going to last, I don't know, because at some point, someone is going to say, why should the US taxpayer pay for a subsidized price into Europe? ENG stands up without subsidies for those who want a green fuel, either because they avoid the ETS, or because there's a Carbon Border Adjustment Mechanism, or because there's a Contract for Difference. So, I'm saying, if we want to continue with fossil fuels, that's fine; if we want to electrify everything, that's also fine: the world will need green molecules. And I've studied green molecules for 20 years: this is the cheapest, the most resilient, the easiest green molecule to produce. Then the subsidy is generous? Let it be so. This is just going to help accelerate the building up of electrolyzers, which is really the key bottleneck; is getting that technology to cost less and less and less, because it's still too expensive.

ML   But do your investors understand that you're getting $6 per kilo subsidy from the IRA? And that for every kilo of hydrogen sold in Europe, you're getting $6 of US taxpayers money? And that surely somebody in the US figures this out and puts the kibosh on this, and just stops it?

MA  Let me tell you that we speak a lot with legislators all over the world, and the US Department of Energy is fully aware that they're subsidizing an export product, and they think this will give them a competitive edge in making electrolyzers made in the USA and starting the economy. At some point, it will stop, a) because it has a fixed duration, and also, as I said, I expect the political pressure to ramp up as people see this kind of leakage. But I may ask you to come to some of our investors presentations, because I hadn't framed it like that. But now that you got me thinking about backward-calculating the carbon subsidy equivalent, that may be an interesting number.

ML  [inaudible] very high carbon number. It either makes this a fantastic business, because this is the most efficient process at hoovering subsidies out, right the way along the value chain from the US to Europe, or it makes a very bad business, because it absolutely puts it in the crosshairs of various regulators.

MA  So, this is our strategy... We're out here to build a very large organization, a very large company, I wouldn't be putting my whole career behind this if I didn't believe that to be the case. And no sustainable business has ever survived on subsidies: they're too risky, they can be changed, they can be cut off. So, what the subsidy does in our strategy is to transfer this subsidy to customers, to convince them to, early on, sign up to getting the off-takes, to get these FIDs going. That's what's going on in the market right now. And I don't think there will be hundreds of projects that will get the subsidy, but once a project is sanctioned, with that subsidy locked-in, that's what's happening. But that wasn't the business model; that isn't the business model, that's a pleasant surprise, as I said, to bring a significant acceleration in the deployment of this technology.

ML  So, let's talk about that sort of end-point where you've gone circular, right? Because at some point, not only does the $6 per kilo of hydrogen probably go away, but also the ability to sort of piggy-back on US CO2 emissions - that are otherwise not abated, that are getting IRA money, but actually then being admitted in Europe - that will go away, and you'll have to go circular. So, at that point, your ENG arrives in Wilhelmshaven, and you're going to build auto-thermal reformers to separate the CO2 again, correct?

MA   So, we're seeing several things. So, first of all, we're going to start in the US because of the speed of doing business in the US, the availability of renewables, and the IRA. We also have teams flat-out working in the Middle East, and in Australia. There's local markets; so, as of October, Europe will have a Carbon Border Adjustment Mechanism. So, if you're bringing steel into Europe, or aluminum into Europe, you'll have to pay a carbon tax if it's not green steel. So, if you're in the Middle East, and you're producing aluminum, and you have a lot of sun and wind, and you have a lot of CO2, ENG is the perfect product to help you produce 1-5%, a certain percentage of your aluminum that you want to sell to Europe and make that green. So, that's a closed loop, without any shipping, any transport, anything; it's just capturing CO2 from an aluminum plant, bringing it to the Sabatier, getting the renewables and [inaudible]; we call it domestic closed loop, or even industrial park closed loop. What we then have, if we want to do big projects in Australia, to your point, there's no CO2 in Australia, or not where we want it to be. So, that's when we get our customers - and they don't have to be in Germany, they can be in Japan, they can be in Korea - we incentivize our customer to say, are you planning to do CO2 capture and CCS? They say yes; we say, once you've captured it, don't store it underground in a reservoir - because about 60% of the cost of CCS is to store it underground - give it to me, and I will capture it and give it back to you in the form of ENG. So, we keep the carbon in a loop. You can do that with pipes, you can do that with trains, you can do that with ships if you have an ocean in between. It can be two ships, one ship bringing the CO2, one ship bringing the hydrogen; it's still cheaper than CCS, because you have the carbon capture, you have the transport, but you don't have the storage which is the expensive part. It's more environmentally friendly than the CCS, because you don't have to monitor for the next however many thousands of years that there's not going to be any leakage from that reservoir, and all of that hassle. And it's just a great way to use the carbon to deliver the hydrogen.

ML  Let me try and unpack that, because there's a number of different models being mixed there. You talked about, the one you called it domestic closed loop. Where is this? That might be from the Gulf, if I understood you correctly?

MA We're talking to an India steel plant, for example. They've built a DRI, they want to make carbon-neutral steel to sell to Europe and not pay the CBAM.

ML So, what you're saying is, so they are going to make the steel, but capture the CO2 from the steel process?

MA  So, the DRI is a direct reduction; it's a process where you put now methane, instead of the coke, and you produce steel from the methane. And part of the carbon ends up in the steel itself, it's called...

ML The rest otherwise would be emitted, and you're saying they're going to capture it.

MA   That's a very neat carbon to capture, because it comes pure out of the...

ML   Then you're going to take that, ENG it, and deliver it to Europe....

MA   No, no, no, no, in that case, it's a domestic closed loop. So, renewables are in India, the electrolyzer is in India, the Sabatier is in India. We just keep it within either that country or that region, or even that industrial site, if it's...

ML  The CO2 will then make more; you'll Sabatier for more methane, and then it goes back into that same steel process, so it's going round and round. So, I like this. That's good. Okay. The one with the ships, though, we're going to have to get into that one. Because what you've then got is, you've got the CO2, which you then have to re-liquefy, compress and take back on another ship, correct? Without losing any of it?

MA Yeah.

ML  And so, that means the only way to do it without really losing any is autothermal reforming at the far end, right?

MA  No. So, what happens is you... say you take it from a DRI plant again. So, this time, the DRI, the steel plant is in Germany, and it's not in India. So, we're producing it in Texas, the hydrogen, and we have a steel plant in Germany that wants to do CCS. And all the steel plants are thinking about CCS. So, this steel plant in Germany today...

ML   And that will produce a nice pure stream of CO2, so you don't have the need to do autothermal reforming.

MA So, this steel plant is producing a clear stream of CO2, and their current plan before we knocked on their door was to build a carbon capture, build a train system, bring it by coincidence to Wilhelmshaven, because there's multiple projects in Wilhelmshaven, not in our project, and pipe it to Norway. And then for the next 20 years depend on Norway, who may gradually increase the prices, or whatever; you're piping CO2 to a point, you're tied to that point for the next 20 years...

ML  So, instead, you would be taking that CO2 off to somewhere, adding some hydrogen to it, and then bringing it back, for use again, in the steel process.

MA  We're saying once you get to Wilhelmshaven, which is what they have to do anyway to go into Norway, or come to the UK, or wherever they want to go. We have a nice coincidence: we have a ship of LNG or ENG coming in at minus 160. I need to warm up that LNG, and typically I consume gas to warm up the LNG to put it into the pipe from liquid to gases. With a thermal exchanger, I run it through the CO2, and I liquefy the CO2 - for free, because CO2 travels at minus 50 - so I save a lot of energy that I would otherwise use to heat up the LNG. So, I have an industrial synergy.

ML It's fabulous, because then you send the CO2 over to the US to collect more subsidies before it comes back.

MA  But forget about the subsidies, that's just a hiccup, that's a pleasant hiccup. I mean, we're building a 50-year business.

ML  You say that it's a pleasant hiccup, but it isn't, because in that process when you've done all the clever stuff - which I've no doubt you can do - at the end of the day, it's only got that 50% yield by the time you've Sabatiered it, and brought it back and so on. And that means that German steel, doing its DRI, will be twice as expensive as somebody doing the clean stuff elsewhere, in a renewable superpower, where you don't have to do all this complicated stuff. So, how does Germany then compete - with Brazil, compete with Australia, compete with the US, compete with India, compete with China, - doing this monstrously complicated thing that you want to do, that only works because you get the IRA subsidy on the hydrogen?

MA I'm not the European Energy Minister. I have seen, and have been surprised, like many, that Europe has already lost a lot of gas consumption because of the crisis. There has been about 18%, some people say 22%, reduction in consumption. It's been a very warm winter, as we know. And we can't have weather determine the strategy because we've been lucky. But I'm with you. The super low-value-added, very base conversions of gas to something, are going to be gone forever. Whether that's base chemistry, whether that's making ammonia. Why should anyone make ammonia in Europe? It's going to be made in the US, where there's cheap gas, or where there's a lot of sun like Australia. Now, when it comes to steel, if you visit a factory like Thyssen, Mittal, Salzgitter, that we visited, these are huge sites built over hundreds of years, they're seamlessly integrated. So, you have the trains coming in going directly from Salzgitter to Volkswagen. Now, when I have... Because your 50% is if I go back to electricity, hydrogen-hydrogen,

ML No, no, it's 20% if you go to electricity...

MA You're saying my hydrogen in Germany is 50% more expensive than the hydrogen in the US. I'm saying a steel plant loves CH4 much more than hydrogen; no embrittlement, they use the carbon, they keep the same facility. The cost of moving the CH4, the ENG molecule - which the steel makers love in America, if they want to make green steel, and they love it in Germany, or Australia or the Middle East - the cost of shipping ENG from the Middle East, or the US, to Germany is only about 10% of the product. So, the question isn't, a steel maker pays twice as much as a steel maker in the US. The question is, does the value added of having all that technology integration - of having all that heat integration, of having the logistics rails going from Salzgitter to Volkswagen - is that worth the 10% extra cost? For some products, yes, for others, no.

ML  But it's not 10%, right? Let's take a very simple example of a steel maker in the US that produces CO2, right? They can take that CO2, stick it underground, they've got clean steel, and they can sell it without a CBAM into Europe, done.

MA   They're making fossil fuel. It's fossil.

ML  It doesn't matter, they're capturing the CO2 and putting it underground.

MA   But it's fossil.

ML   It doesn't matter. Why does that matter?

MA   Well, because in Germany, fossil fuels are banned.

ML  But then Germany will... Fine, but the point is into all of Germany's export markets, that US steel maker could make clean steel based on carbon capture, and it costs that, right?

MA   I completely agree.

ML  What you're saying is take the CO2 out of that steel maker, do this really complicated thing, bring it into Germany, and then a German steel maker has to make steel in competition with that incredibly cheap, clean steel from the US. And it's not 10% more expensive, it's 50%-100% more expensive...

MA If you want to have renewable products made without fossil fuels. Of course, if you're in Qatar, if you're in Iran, if you're in Siberia, even if you're in the US, you can never beat natural gas. So, natural gas in Iran, natural gas in Russia, is always going to be cheaper than renewable energy.

ML Are we talking about natural gas with carbon capture? It's going to undercut all of this complicated stuff enormously. I don't want to go too far down that, because we're not quite done with the subsidies that you're targeting. Because there's also the renewable, the RFMBO obligation in Europe. Renewable fuels of a non-biological origin, right?

MA  That's correct. That's much better than a subsid, because that's going to be quota.

ML  That's a quota. That's a quota. And if you cut through all of the Brusselsese, the goal is 1% of fuels in Europe has to be this RFNBO - renewable fuels of a non-biological origin. Which means they essentially have to be hydrogen-based, correct?

MA  That's just the start, it's gonna grow. 1% is just the start.

ML And it's supposed to grow, it's supposed to grow. And that 1% is an absolutely colossal market, because the 1% of this colossal market is absolutely colossal. And what price do you think a liter of RFNBO would be coming through your process?

MA   A litre will be... So, RFMBOs started as a transport product, but is now being applied, not for litres in cars, but is being applied across. So, there's going to be RFMBO quotas for industry, industrial gases, RFNBO quotas for heavy transport, for shipping, for aviation, for mobility, for heating. And so it's going to cut across. So, the 1% target I think you're referring to: mobility. So, if you have to make E-diesel; to make E-diesel is very expensive - it's going to be like four or five times the cost of conventional diesel, because you have to take the hydrogen, take the CO2, create CO, then with the CO, you add another hydrogen, you put it through the Fischer-Tropsch, and you get to various distillations...

ML   And CO2 for this in Europe must be either bio... No, it can't even be bio, because this is the NB, this is the non-bio. So, it actually has to be captured, direct air capture.

MA  So, the RFMBO liquid fuels, like diesel, made through the Fischer-Tropsch are going to be expensive. The RFMBO ENG is going to be the king, and the cheapest of RFMBOs, because it's very easy, doesn't need any refining, doesn't need any upgrading. Once I've done Sabatier...

ML  The CO2 will have to be direct air capture, correct?

MA  The CO2 can be biogenic.

ML   But then how is it of non-biological origin? The vast bulk of the weight of the molecule, which is not the hydrogen, is the carbon, and that's going to be biological carbon.

MA   So the rules, as you know, are being written. There's a heavy debate going on, and some people are saying that if it's not biological, it's going to be fossil, so it better be biological. Other people are saying we have to wait for DAC, but DAC won't be economical for another five or ten years at least. So, there's a heavy debate going on right now in Europe around this very topic. I think we'll know in July what the outcome is.

ML  Just by the way, I'm very supportive of it being biological in certain circumstances. Because right now, when we bio-digest 20%, 30%, 40%, 50% of what comes out is actually CO2, which is currently vented to the air, in most bio-digesters. So, capturing that and upgrading it to an RFNBO, seems like not a stupid thing to do.

MA   That's the argument I've heard, and that we're making to some degree.

ML  But what will the price...? Even if you do that, what will the price be per litre? What will be the multiplier?

MA   I think it's going to be half the price of conventional, liquid Fischer-Tropsch-based processes that kind of start from our product, to then end up with a diesel liquid product. So, it's half of that. So, I think it's about two times more expensive than current petrol. But what we have to keep in mind, Michael, is that - and we have a lot of literature on this - electrolyzer costs are falling rapidly. I mean, I've visited seven or eight of the leading electrolyzer producers in the world in the last few months; I visited twelve when I wrote my books two years ago. It's still in its infancy. Where the government should put their money is building the AirBuses of electrolyzers, scaling this stuff up, standardizing it, simplifying it, using steel instead of platinum - and it can be done. And so, we're looking at a trajectory where all these products will cost less than fossil fuels today.

ML  You know, if only they could apply that same focus not just to electrolyzers, but also to changing the laws of thermodynamics, we could really get somewhere.

MA  No, but the laws of thermodynamics are inefficient if you look at your mass balance, but if you look at the economics; you mentioned Paddy before at the beginning. His last world record is one cent (€) per kilowatt hour; or €10 per megawatt hour - in Europe, we use euros per megawatt hour. So right now, what's the price of wholesale power in the UK? £200? £180? The price of making the cheapest wholesale power in the UK? £150. Was £300. When there's no wind goes up...

ML £37 per megawatt hour from offshore wind, but yeah.

MA  Just take the £70 per megawatt hour. If you can make solar in Portugal at £10. And people before Paddy made it at £13, Paddy brought it to £10 in Dubai... And that cost will continue to go down, not so quickly. But if you can make solar at £10, and I have offshore wind at £70. Even if I lose 30%, 40%, 50% to create that molecule that I keep underground in the UK for when there's no wind - that's a no brainer.

ML Well, you say it's a no-brainer, but of course if you've started with the hydrogen...you started with electricity. Remember this is for transport, right? You've started with electricity, then you've gone to hydrogen and you've lost your 20%, let's say. Then you've lost... you've done the Sabatier, and you've lost another 20%, 30%, 40%, right? And then you've got your, you could call it ECNG, which you can put into a CNG truck. Okay, that's fine. But remember your alternative there is just... All the things you said about Paddy, right - the Usain Bolt of making world-record cheap electricity, that electricity could have gone straight into the truck,

MA  And it should, wherever you can it should.

ML  So, to put some numbers on this: 1% of Europe's fuel costs €6.7 billion per year. €6.7 billion. So, if you double the price of 1% of European fuel, that is a subsidy, that is a cost to the customer, of €6.7 billion. Consumers have to pay that right? The people in Brussels don't pay it, you're certainly not going to pay it, you're going to be earning it. But it's a cost of €6.7 billion per year, every year thereafter, just for 1%. And you know, you can sit there and smile and say, well, you know, I'm taking advantage of this, I'm the subsidy harvester, that's all fine. But you know, at some point, isn't that just incredibly risky to build your business on that?

MA  What do you think of a country that has decided to abandon coal, abandon nuclear, abandon diesel, to switch entirely to Russian gas, and now has to get out of Russian gas? What's the cost of that transition in billions? I mean, your former colleagues at Bloomberg tried to calculate it: they put it at a trillion dollars just to get to 2030; just for the power sector. And you know, how many... I mean, BNEF, you set that up, I mean, this is like the smartest researchers out there. You must have seen this paper, it's brilliant. Germany needs 43 soccer fields a day built from now through 2030. So, is it better to build 43 soccer fields a day in Germany? Or is it better to build them in Australia, and spend only 10% of the cost to move that energy from Australia to Germany? I say we do both.

ML  As long as somebody's paying me $6, effectively, per kilo of hydrogen in the US, I would build them in the US. But the thing is, I don't think that what Germany is doing... I'm not taking what Germany is doing as either smart or even as a given, right? I've been very clear: I think shutting existing operating nuclear power stations in Germany was a climate crime; it's a crime against anybody who's got respiratory disease.

MA  That's what people want. I'm spending a lot of time in Germany, that's what the consumers want. That's what 30% of the people... I mean, if you look at what people want, that's what they want.

ML  Interestingly enough, interestingly enough, public opinion in Germany has changed. That's just nuclear. But then, you know, I guess the question is, at some point, will there be... Maybe there won't be in Germany, maybe Germany is immune from yellow-vest type protests, or from a pushback from people on whom this is being loaded. The problem is, of course, that Germany is exporting some of these approaches through the EU, into countries which simply can't afford this sort of subsidy level. I'm thinking of Southern Europe... Most of Europe simply can't afford it. But that's the direction of travel. And it's very healthy for your business, but it worries me very, very deeply.

MA  So, I have a path. We summarized in here, in my book, that's heavily-researched, that's backed by the Department of Energy with their moonshot - you may have seen this, and the Green Hydrogen Catapult - to get green hydrogen to below $1 a kilo. And we hit that tipping point... $1 kilo is about $25 a megawatt hour, it's about the cost of coal, it's half of the price of oil. We think we can get there.... We used to think we could get there by 2035, we now think we may get there by 2032, 2031, because of the IRA. So, we're trying to fill a gap here to a world where electrolyzer costs come down, solar costs come down, and electrification takes huge market share, and molecules just need to take care of whatever can't be electrified: a ship, heating when it's very cold, steel, that's what we're talking about. And of course, a lot of heavy industry will move to where it's sunny and windy; of course, a lot of places like Iran and Russia and Qatar are going to be hard to beat because they have free natural gas. But our job is to give a small contribution, by building 1 million tonnes, which is a drop in the drop of the drop of the ocean, in the context of a European system that put a thousand billion euros of subsidies on solar - that's how we got to $10, from $800 to $10. A thousand billion euros - UK, Germany, Spain, Italy - these four countries, heroically, 15 years ago put 1000 billion euros of subsidies on people's bills; it's the most regressive form of taxation. That resulted in China building six factories - cost of a factory is about half a billion dollars, so, $3 billion. These factories competed, solar went from $800 down to $10. Now, hopefully this time around, the subsidies are targeted at manufacturing, at building these AirBuses of electrolyzers, of electrifying whatever can be electrified. And I'm confident that we will build a cheaper, safer, cleaner and more resilient energy system. And I'm confident that in that decarbonized energy mix, ENG can have a 5%, 10%, 15% market share. Even if it ends up being a 1% market share, to your point, for us, it's a huge industry. So, this is not the solution to everything; we believe in nuclear, we believe in ammonia, we believe in green hydrogen. This is just a very cheap way of moving $10 energy into countries that are now spending $200 for the same energy. So, we're just helping reduce the cost of energy, reduce the cost of energy, when there's no wind. When there's tonnes of wind, there's going to be negative prices, because that's just the way the market works, it's boom and bust.

ML  And along the way, you're ending up with an LNG terminal in Wilhelmshaven

MA  That's gonna become an ENG terminal.

ML   Maybe, maybe not. Marco, it's a huge pleasure, and you've done very well. I will say, I really, I really respect you for doing this, because you know it's not going to be easy with one of these conversations.

MA  I always enjoy talking to you, still remember the conversation we had at COP26 in Glasgow.

ML  Exactly. When I rented the castle, filled it with all the smartest people, and then actually, as it happened, my wife came to visit and had COVID, and so I was evicted from the castle. So, we didn't get to really do this in real time two years ago, but it's a great pleasure catching up.

MA   Okay. Thanks a lot. Good to see you.

ML  1:11:54 All right. Thank you.