Any other business

Could hydrogen power turn air travel green?

17 July 2021

9:00 AM

17 July 2021

9:00 AM

Have you been scanning airline websites for exotic destinations to which your double-jabbed status might allow you to slip away in August? I certainly have, but I’ve ruled out the parts of Canada and the United States that are stricken by record-breaking heatwaves and forest fires — and I’m wondering what impact such extreme climate events will have on the aviation industry as it struggles back to life after the pandemic. Having survived a year of near-total shutdown, I suspect it will now face an onslaught of green rhetoric to which governments — positioning for November’s COP26 climate conference in Glasgow — will be forced to respond.

A recent Financial Times headline, ‘Brussels targets aviation fuel tax in drive to cut carbon emissions’, was one indicator. In the UK, Greenpeace has been calling for a ‘frequent flyer tax’ — a graduated version of the existing Air Passenger Duty, rising according to the number of flights taken per year — to reflect the fact that 15 per cent of the population take 70 per cent of international flights. Such a virtue-signal might be popular because it would hit the rich first, but airlines say it would be hell to administer as well as raising the cost of essential business travel.

Economists point out that APD (introduced by Ken Clarke in 1993 as an extra revenue-raiser) was never conceived as a green measure, as which it is largely ineffective. Far better would be to penalise the airlines with the highest CO2 emissions per passenger kilo-metre, though most of the worst offenders turn out to be Asian carriers. And better still would be to learn from the electrification of the car industry, of which I’ve written much lately, and divert part of the £4 billion annual APD receipts to support faster development of clean aero engines.

One industry veteran warned recently: ‘I wouldn’t ever go up in an electric aircraft if I were you.’ But hydrogen-powered flight, tested in the UK last year by a venture called ZeroAvia at Cranfield, is a serious possibility. Frequent flying will be no sin when it leaves no emissions behind.

China’s chip quest

A global shortage of microchips continues to disrupt the automotive and electronics industries. China, under Xi Jinping’s hardline leadership, continues to pursue a quest for hi-tech ‘self-sufficiency’ so ruthless that some watchers fear it might extend to an assault on Taiwan, motivated (in part) by the urge to seize control of Taiwan Semiconductor Manufacturing Co, which makes many of the world’s most advanced chips.

So the sale for £63 million of ‘the UK’s largest microchip plant’, Newport Wafer Fab, to a Dutch subsidiary of Wingtech Technology of Shanghai, is a cause for concern, both in terms of our global market position and the protection of the Newport factory’s intellectual property. No wonder the Prime Minister has ‘asked the national security adviser to look at it’ — but no wonder also, given his cabinet’s desperation to sign trade deals, that his remarks to a House of Commons committee contained a classic Johnsonian back-pedal: that he did not want ‘anti-China spirit’ to ‘lead to us trying to pitchfork away every investment from China’.

But, you’re probably thinking, how come the UK’s biggest microchip asset is a small factory in south Wales worth just £63 million? The answer is that successive governments have already allowed our best ventures in this field to be sold to foreign owners — some £30 billion worth since 2010, including world-leading chip designer Arm Holdings, acquired by SoftBank of Japan in 2016 for £24 billion, and Imagination Technologies, sold for £550 million in 2017 to a Chinese-backed US private equity firm.

The fact is that we produce plenty of top scientists but very little of their work in any field stays under UK ownership for long. In a world of unfettered free trade and abundance, that didn’t seem to matter. In a world of aggressive protectionism and scarcities, it clearly does.

And there’s another twist to this tale, which is that the £29 billion onward sale of Arm by SoftBank to the US gaming-tech firm Nvidia may be vetoed by China — whose regulators have a say because Arm’s chip designs are widely licensed there, not least to the controversial telecoms giant Huawei. And if Arm comes under US control, those licences will be threatened by a White House ban on exports to blacklisted Chinese companies. Brussels is nervous too in case Nvidia restricts supply of Arm products to EU manufacturers; many industry watchers now think the Nvidia deal won’t happen.

In which case, I’m sure there will be no shortage of state-backed Chinese investors eager to take Arm off SoftBank’s hands — and the fate of little Newport Wafer Fab will be a forgotten sideshow.

Does Didi matter?

On a similar theme, how excited am I that citizens of Salford and Sheffield will soon be the first in the UK to have access to a Chinese taxi-hailing app called Didi, which claims more than half a billion users in its home country? Not excited at all, to be frank, unless anyone can offer a conspiracy theory to the effect that Didi is another channel of state cyber-surveillance — as Huawei was alleged to be —with plans to transmit damaging data to Beijing on the social habits of our northern towns.

But that seems unlikely given that Xi’s regime has just ordered its own investigation into Didi and a clampdown on its activities, shortly following Didi’s listing on the New York stock exchange. Apparently Xi does not like his nation’s rising tech entrepreneurs getting too uppity, which was also why he blocked the flotation last year of Ant, an online payment business spun out of billionaire Jack Ma’s Alibaba group. So Didi turns out to be a hot name for Beijing watchers but a cold one for investors, the shares having slumped since the IPO. At least it suggests the existence of cracks in the edifice of Chinese state control; but whether it will offer a cheaper ride from Salford to Sheffield remains to be seen.

Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments