Climate change has made ESG issues even more pressing and time sensitive for boards, executives and policy makers – environmental issues being a major component. Decarbonisation of the world’s economy is increasingly acknowledged as an imperative given the evident impact of climate change. The result is that manufacturers and companies are looking for new ways to leverage technology to reduce their environmental footprints. Reflecting this urgency, organisations are under increasing pressure to report on their ESG impacts and this of course includes their environmental impact.
Several technologies which have been emerging for years which lend themselves to enhancing sustainability. This includes the Internet of Things (IoT), Artificial Intelligence (AI) and general data collection. Monitoring usage remotely can drive efficiencies – providing real-time data to improve usage and supply chain efficiency. There are therefore clear gains that can be made in the environmental context.
This article explores the innovations that may help the businesses of today and in the future, along with discussing the legal challenges these innovations might bring.
1. Green Hydrogen – the fuel of the future?
Hydrogen is expected to play a substantial role in the decarbonisation of economies. Hydrogen’s potential as a replacement for fossil fuels has been encouraged by governments and organisations alike. The advantages are clear. Once produced hydrogen can generate electrical power while emitting only water vapor and warm air. Its potential use is wide, including as an alternative to natural gas or as a fuel for industries that are traditionally difficult to decarbonise (examples of this are shipping and aviation).
Unsurprisingly, scaling up the infrastructure necessary for hydrogen production will take time and significant investment. However, Goldman Sachs has estimated that the green hydrogen market could be worth over $10 trillion by 2050 in Asia, Europe and the US.
Despite those advantages, there are still technical issues to address and not all hydrogen is created equal. Hydrogen must be extracted and the way this is achieved determines the environmental benefits from hydrogen.
- “Green hydrogen” is the gold standard in carbon emissions terms. It is extracted from water using power generated by renewable resources. In this way, no carbon is emitted from production through to consumption.
- This is contrasted with “blue hydrogen” and “grey hydrogen”. “Blue hydrogen” is produced from natural gas with the carbon emissions captured and put to use. “Grey hydrogen” derives from natural gas and is produced from fossil fuels – it is therefore the least renewable form of hydrogen.
In terms of future legal issues arising from the above, green hydrogen cannot compete currently in costs terms with fossil fuels or other types of hydrogen. It may be that we see increased government support from some countries to level the playing field for green hydrogen. We are already seeing this in the UK:
(i) the government’s Ten Point Plan for a Green Industrial Revolution proposed a target of having 5GW of low carbon hydrogen production capacity by 2030 (and 1GW by 2025).
(ii) Further, the Energy White Paper set out the UK’s strategy for the energy transition over the next decade, with point 2 on that plan “Driving the Growth of Low Carbon Hydrogen”.
(iii) Finally, in August 2021, the first ever UK Hydrogen Strategy was published.
The widespread use of hydrogen will require development of new rules and standards governing the production, transportation, storage and the use of hydrogen. Like many other jurisdictions, the UK does not have a well-defined legislative framework for hydrogen projects. Without specific legislation relating to hydrogen, we are left with the existing legislative landscape that applies to gasses more generally. In the coming years we are therefore likely to see changes relating to hydrogen in respect of:
(i) planning law. In particular, currently hydrogen projects require planning permission or a development consent order (DCO). This will depend on the nature of the proposal in terms of use, location and scale. This is an area which will no doubt be considered to bring clarity to the process.
(ii) Health and safety laws – existing laws will evidently apply. However, existing laws were not developed with hydrogen in mind and so it may be that coupled with regulatory developments we see specific rules relating to hydrogen develop.
(iii) We can expect to see regulatory responsibility becoming clearer and being assigned in more distinct ways (the current position is that a number of regulators have responsibilities depending on the nature of the activity).
2. Floating offshore wind
Approximately 80% of the world’s offshore wind resource potential is in waters deeper than 60 metres. The difficulty is that fixed-based wind is not viable in water depths of 60 metres or more.
Floating offshore wind has the potential to open up vast ocean tracts for development as it makes access to the deep water parts of the ocean possible. Wind power is stronger in the ocean than it is on land. However, until recently offshore wind turbines were based on fixed structures – this of course was limiting because it meant that they could not be installed in very deep or complex seabed locations. This has changed with the development of floating structures – meaning that wind turbines can be installed on platforms, anchored to the seabed by means of steel cables, flexible anchors or chains.
The potential impact of floating offshore wind is therefore considerable: (i) floating offshore wind could play important role in decarbonisation; and (ii) countries that have previously not been able to utilise deep water offshore wind resources could become net-exporters of clean electricity.
The UK has a well-developed legal framework for offshore wind, by comparison to other countries.
This is perhaps unsurprising given the UK number of offshore windfarm – including Dogger Bank Wind Farm which will become the world’s largest offshore wind farm and be capable of powering up to 6 million homes. However, Boris Johnson’s cabinet has been split over proposals to ease planning rules in England to enable more onshore wind farms.
With new developments inevitably come legal challenges. As the UK expands into further offshore wind projects there will be increasing new technology – this naturally leads to IP challenges as well as different planning and regulatory considerations.
In terms of legal developments:
(i) like most things, costs fall rapidly when technology is deployed at scale. However, regulatory checks need to be adapted to ensure that economic benefits from offshore wind is not lost due to unnecessary obstacles.
(ii) Health and safety law again arises in this context, equipment can either be maintained in-port or offshore. Of course, operational experience is needed to determine the most efficient and effective maintenance procedures. In both cases the project operators will need to think carefully about their selection of contractors and subcontractors.
3. 5G-based smart grids
This is perhaps an example less about technology doing something entirely new for the environment, but rather helping existing technology and infrastructure do better. A smart grid is an electricity network that enables a two-way flow of electricity and data – in this way it is possible to detect and react to changes in usage.
The benefit of 5G-based smart grids is that it would allow vast amounts of data to be used to connect billions of data points – think wind turbines communicating with solar panels, to electric car batteries and IoT. If the data can be processed (alongside other new tech like AI-led weather predictions) it could help utilise renewable energy as cheaply and efficiently as possible. One can also see the application in cities and in the built environment – 5G-based smart grids could measure and make things more accountable in the built environment.
The legal challenges are in many ways similar to those face by IoT and Artificial Intelligence models focusing on privacy issues and how data is harvested and used. Furthermore, as with any IoT connected device, a major challenge is security. Interconnected systems naturally give rise to increased vulnerability to cyber-attacks. The nature of the benefits from smart grids can also become their weaknesses – cyber-attacks on smart grids would have devastating effects on reliability of widespread infrastructure.
Compliance becomes even more important in this context. The ways to deal with these threats from a regulatory perspective are varied and include considering:
(i) standards for network components; and
(ii) compulsoriness of security controls. As 5G based smart grids move to being an integrated part of many systems, increased regulation is likely and indeed with assist with security.
An additional point from a legal perspective is that smart grid technology collects large amounts of data on consumers and their energy needs. This data sharing, depending on the circumstances, might conflict with data protection laws and individual customer contracts. Careful contractual drafting and information security will be central to ensuring breaches do not occur.
4. Lab grown food
Science and technology will continue to influence consumer choices.
Lab grown or cultured meat is another area of technology that could lighten the carbon load. According to the Agri-climate Report 2021 published by the Department for Environment, Food and Rural Affairs in 2019, when compared to total emissions from all sectors, agriculture was the source of:
- 10% of total GHG emissions in the UK
- 68% of total nitrous oxide emissions
- 47% of total methane emissions
- 1.7% of total carbon dioxide emissions
Lab grown meat would not cut all of these figures, however it would contribute to reducing some of them. The biggest challenges facing lab grown meat are: (i) scalability; (ii) consumer acceptance; and (iii) regulation.
By way of example in terms of regulation, it takes several months and indeed, realistically, years for ‘novel foods’ to move through the European Food Safety Authority’s process. In contrast food production in the US is overseen by the Food & Drug Administration (FDA) and the US Department of Agriculture (USDA). The Food Standards Authority (FSA) in England, Wales and Northern Ireland, and regulators across the world, will likely want to consider standards that are being developed by other regulators. Safety standards and labelling requirements will be increasingly important. As lab grown meat involves evolving technology, many of the ingredients used for lab grown meat have not yet been reviewed or approved for consumption. All of this will take time and increased regulatory attention.
Other difficulties surround the naming of products, the growing popularity of plant-based protein products has demonstrated this – with some jurisdictions restricting terms like ‘meat’ or ‘burger’ to products derived from livestock.
These issues of course arise separately to the more chef focussed questions of will it pass the taste test!
5. Bees
Now this may be a surprising one. This is an example less of a technology driven solution and more of a technology enabled system to help nature.
The World Bee Project and Oracle have teamed up for the Hive Network – using cloud tech, Artificial Intelligence and smart sensors to collect data to try and understand the reason for the decline in honey bee populations globally. The aim of the project is to predict the impact of certain events on the honeybee population and on the basis of that information or any conclusions that can be drawn, provide alerts to beekeepers of potential threats.
What is interesting about this project, is that this is not a commercial endeavour for Oracle. However, it is of course a way for Oracle to showcase its cloud technology platform.
Given bees are at heart of this project rather than people it should hopefully give rise to less knotty legal issues than when humans are monitored for data! However, what it does show is that even the more straightforward projects in the ESG world can give rise to legal issues that we need to be mindful of – new technologies might inadvertently store unnecessary data and, of course, legal issues surrounding AI/Intellectual Property.
Conclusion
Both cultural and economic factors will help push environmental, social, and governance issues. Previously living and working more sustainably has been the work of environmentalists, but now those objectives are firmly in the business and technology world.
On many occasions throughout history innovation has stepped forward to tackle some of the biggest challenges faced by humanity. This is no exception. Climate technology, innovation and entrepreneurship will offer solutions to some of the environmental threats we are facing – but of course they are unlikely to be, by themselves, enough.
These growing technologies in the environmental space give us reason for optimism and hope – while reminding us of the major changes that will need to be made to our behaviours and resource usage.
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Notes & Sources
[1] Green Hydrogen The next transformational driver of the Utilities industry: https://www.goldmansachs.com/insights/pages/gs-research/green-hydrogen/report.pdf
[2] Available here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/936567/10_POINT_PLAN_BOOKLET.pdf
[3] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/945899/201216_BEIS_EWP_Command_Paper_Accessible.pdf
[4] Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1011283/UK-Hydrogen-Strategy_web.pdf
[5] Citation reference: https://www.windpowerengineering.com/offshore-wind-industry-heading-out-to-deeper-water/#:~:text=About%2080%25%20of%20Europe’s%20potential,Taiwan’s%20Ministry%20of%20Foreign%20Affairs.
[6] Citation reference: https://doggerbank.com/
[7] Citation reference: https://www.bbc.com/news/uk-politics-60837170
[8] Available at: https://www.gov.uk/government/statistics/agri-climate-report-2021/agri-climate-report-2021
[9] See for example: https://www.efsa.europa.eu/sites/default/files/applications/apdeskapplworkflownutrinovel2018.pdf
Ruth Keating is a barrister 39 Essex Chambers. She is an editor of the Sweet & Maxwell Environmental Law Bulletins and is a contributing author to ‘Climate Change Litigation: Global Perspectives’.
