Ferg's Finds
This is a short weekly email that covers a few things I’ve found interesting during the week.
Article
I won’t have guessed this before reading it, I had thought US was still in the lead in terms of critical technologies.
ASPI’s two-decade CriticalTechnology Tracker: The rewards of long-term research investment
Now covering 64 critical technologies and crucial fields spanning defence, space, energy, the environment, artificial intelligence (AI), biotechnology, robotics, cyber, computing, advanced materials and key quantum technology areas, the
These new results reveal the stunning shift in research leadership over the past two decades towards large economies in the Indo-Pacific, led by China’s exceptional gains. The US led in 60 of 64 technologies in the five years from 2003 to 2007, but in the most recent five years (2019–2023) is leading in seven. China led in just three of 64 technologies in 2003–20074 but is now the lead country in 57 of 64 technologies in 2019–2023, increasing its lead from our rankings last year (2018–2022), where it was leading in 52 technologies
Podcast/Video
Money of Mine: Index Inclusions: Opportunity for Alpha?
I love the show; the newsletter is also well worth your time.
Quote
“I've always said, the key organ here isn't the brain, it's the stomach.”
-Peter Lynch
Tweet
Do as I say, not as I do…
Germany pledges funds to help South Africa ditch coal
South Africa's Coal Export to the EU up 582.7% During 2022
Germany Seeks Clarity on South Africa’s Coal-Closure Slowdown
Charts
The portfolio is definitely reflecting the below.
Something I'm Pondering
I’m pondering what transition technologies can stand on their own feet once subsidisation and mandates to use them are removed?
Green steel, green nickel, green hydrogen are all dead in the water in my view (granted they’ll hang around for a while to burn the subsidies/Inflation reduction act).
The companies that will pay the premium for “Green” are also in trouble when considering how uncompetitive ESG, DEI and every other regulation is making them vs competitors who couldn’t care less i.e. China producing ammonia, synthetic soda ash, synthetic graphite and silicon with coal.
Take this example:
Most of the businesses that could run on hydrogen would need expensive new equipment to use it, a leap they’re reluctant to make. Hydrogen produced using clean energy costs four times as much as hydrogen made from natural gas, according to BNEF.
What sort of company has the economics to allow it to outlay high CAPEX to then pay 4x the going rate?
The below is a pipe dream.
Unless SMRs are used to produce the hydrogen, which Tata Steel in India is considering.
Tata Steel wants to go nuclear for green steel, mulling 200 BSRs
Tata Steel, one of the world’s largest steel producers, is examining the option of going nuclear for producing green steel. According to sources in the atomic energy sector, the company is looking at the feasibility of putting up about 200 Bharat Small Reactors (BSRs), of 220 MW each, totalling about 45 GW of capacity.
Yes, very early stages, but worth keeping an eye on.
Cheers,
Ferg
P.S. If you’re interested in my story and why I started this Substack, you can read the story here.
I think you are right, it's not even clear Hydrogen is going to be an effective fuel, let alone green hydrogen at 4x the cost. in fact, it appears that the greening of industry is not yet ready for prime time