200 CEOs and politicians today urged that priority be given to the "green deal" , stressing the mobilization of the investment packages linked to it. They are not the only ones who are resolute about this. In the United States, the left wing is not considering how to build universal health care following Covid, but rather how to resurrect the "Green New Deal" because it is " an idea big enough to revive the economy ", that is, to transfer income from labor to capital on a massive enough scale to revive capital.
There is certainly no shortage of meaningful movements. Just this week the EU hired Blackrock, the largest investment fund in the US and, incidentally, the largest vulture fund in Spain, to design post-Covid economic policies as an extension of the green deal. In other words, it entrusts the definition of a very ambiguous " Climate Neutrality Law ", the core of the "Green Deal", to the world's largest representative of speculative capital.
However, the assignment should not initially worry those who were suspicious of the oil companies' lobby and its pressure to "buy time". Black Rock is a reference shareholder of many of them - among which is Repsol - but the oil companies are increasingly supporting the green deal. And in fact it seems that the greater their record of environmental disasters the more they are willing to commit themselves to the task.
Undoubtedly, the fact that the oil companies' margins have been falling for decades is helping. And with the pandemic, so does gross revenue. Today, with oil usage at 1995 levels, market saturation is such that there is no capacity to store the extracted oil. But we are beginning to see the underlying causes in Germany.
A breath of fresh hydrogen for the oil companies
Readers of the Asian press have been finding ads for months about the launch of "green" cars and trucks powered by hydrogen fuel cells . Nothing unusual, if these were imminent launches, but the earliest of them will be on the market in 2023. It is not that current electric models or battery research are being abandoned, but it seems clear that the Asian automotive industry is securing its own options in the face of a "green transition" that is accelerating to the point of not even allowing a glimpse of what the dominant energy carriers will be.
Part of the credit goes to the European " decarbonization " plans, which not only propose hydrogen for clean transport, but also propose the use of hydrogen on a large scale for all heavy industry that cannot be electrified. Until now, they insisted on the use of "green hydrogen", obtained from hydrolyzing water with renewable energies. The port of Hamburg had already begun planning the world's largest electrolysis plant to take up this position. But even with huge investments, clean hydrogen production capacity was still marginal to the needs of Europe's industrial giant. In theory, hydrogen was going to be a minor element in the general framework of the transition to clean energy.
But that perspective is changing. On the one hand, Europe's plans run up against Germany's powerful industrial employers, who are betting on converting natural gas rather than water into hydrogen. In its different variants - it can also be obtained by igniting underground heavy oil reserves - the production process is based on recycling a relatively cheap 100-year-old process: methane gas (CH4) is mixed with steam (H2O) at high pressure and temperature with a catalyst, which generates hydrogen (H2) and CO2, filtering the output so that CO2 is "captured" and buried and hydrogen can be harvested. The idea of German capital is to make this "blue hydrogen" the transition tool for at least a decade and a half "to provide more security in investment planning".
German industry association BDI opposes ruling out the use of so-called "blue" hydrogen made with natural gas using controversial carbon capture and storage (CCS) technology, according to the report. BDI argues that insisting on "green" hydrogen made with renewables would delay technology development for years given that sufficient volumes won't be available by 2030. It also insists on an interim 2025 target for electrolysis capacity, and a 2035 target for green hydrogen imports to create more investment planning security. Because Germany will not have the enormous renewable capacities required to make large quantities of green hydrogen, it will probably have to import much of the CO2-neutral fuel from other countries.
But oil companies are also experimenting with systems to produce cheap "green hydrogen". The technique they propose, pyrolysis , only produces hydrogen and coal. And they claim that the price would be low, competitive with "blue hydrogen" if you take into account the costs of storing CO2 from it.
An ecological transition through gas and blood
It is clear that the acceleration of technological development in these areas, to the point of producing real uncertainty, is not the result of a magical appearance of new technological alternatives, but of the increases in investment, both by oil companies and by states, in R&D over the last few years. And that this R&D had a clear objective: to make the "green deal" viable.
The change in the power, transport and agricultural production models entails the implementation of a technological shift. But it is crucial to understand that it is not technology per se that will magically enable accumulation, but the transfer of income from labor to capital. Technology is purely instrumental and is developed not by the ingenuity of solitary researchers but by the demand and investment of self-serving capital. This is why new, supposedly more “sustainable” technologies are required to be, above all, more productive. This does not mean physical productivity, the amount of product obtained per hour of average work, but productivity for capital: the sum of profit produced by each hour of work contracted. That is why comprehensive state regulation is central to the “ecological transition”: taxes and regulations do not change the physical production capacity but do change the expected profit per hour of exploited social work.
This is the logic of every “technological revolution” in capitalism. The reason is not that capitalism “adapts to new technologies”, but that technologies are not considered viable if they do not increase productivity from the perspective of profit, that is, if they do not serve to increase the percentage of capital’s income over total production.
This new momentum has come about because, as we have been stressing, the Covid crisis is an accelerator of the trends that have been manifesting themselves strongly in recent years. The passage into open recession breathes new life into the "green deal" because big industry and investment funds are convinced that it is the best way to organize the greatest transfer of income from labor to capital since World War II. Moreover, from the perspective of European capital - and part of the US bourgeoisie - it is the way to establish a new kind of non-tariff barriers to stop a Chinese competition that will probably take longer to "decarbonize" its industry.
What they don't count on is that every step forward also pushes up imperialist tensions. Without leaving Europe, the fact that the "ecological transition" is based on natural gas as a transitional energy source is excellent news for the oil companies, but for Germany it means dependence on Russia and for Turkey an incentive to increase military pressure both in Syria and in the Eastern Mediterranean, against Greece and Egypt, and through different channels, in Libya.