Net zero transition – the latest signals of change (06.01.23)
We Mean Business Coalition
Here are the latest Signals of Change, demonstrating the transition to a resilient and inclusive net zero economy.
Net Zero Economy
Firstly to France, where the finance ministry has shared its proposal for a new ‘green industry bill’ to accelerate low-carbon production. The move is a response to the USA’s Inflation Reduction Act, which last year created numerous new subsidies and tax incentives for companies across industries including automotives, energy and infrastructure. “The aim is for climate change to result in the re-industrialization of France,” said French Finance Minister Bruno Le Maire.
Meanwhile, Brazil’s newly sworn-in President Lula has wasted no time in enacting measures to combat deforestation and protect the Amazon. “Brazil does not need to deforest in order to maintain and expand its strategic agricultural frontier,” Lula said during his inauguration speech. Actions taken include recreating the Amazon Fund to finance conservation projects and establishing a Ministry of Indigenous Peoples.
A draft ‘evolution roadmap’ from the World Bank moots a stronger strategic focus on climate action. The document proposes to broaden its mission to “emphasize the importance of sustainability and resilience to reflect more clearly that our mission includes global public goods, such as climate change”. The changes would pave the way towards the bank lending more money to enable polluting middle-income countries to reduce emissions, but some argue it does not go far enough.
Energy
In China, work has begun on an $11 billion renewables project in the Inner Mongolia region, aimed at creating an eventual 12 GW of wind and solar power. The project claims to be the largest photovoltaic installation to be developed in a desert area. China plans to roughly double its already world-leading renewable energy base to include 1,200 GW of wind and solar capacity by 2030.
In the UK, energy storage startup Gravitricity has received government funding to develop its technology to store green hydrogen underground. Its aim is to provide storage capacity for heavy goods vehicles or backup energy supply. The company has signed a memorandum of understanding with VSL Systems UK to develop its prototype within the next two years.
Elsewhere in Europe, EU carbon emissions defied expectations by dropping to a 30-year low. According to the Centre for Research on Energy and Clean Air, high gas prices pushed down demand for fossil fuels, while wind and solar energy set production records (for winter) to make up the difference.
Transport
South-Korean automaker Hyundai is now selling only fully electric, zero emissions cars in Norway. Since January 1, the Scandinavian country is the first market where Hyundai sells exclusively electric models, a move encouraged by the government’s decision to end the sale of all non-electric cars by the end of 2025. Rival carmaker Volkswagen had also previously announced its intention to sell only electric cars in Norway by the start of 2024.
In the car rental market, US company Hertz has attributed its strong growth in 2022 to its acceleration into electric vehicle use. After finding that electric cars are more than 50% cheaper to maintain than their non-electric equivalents, the company signed a string of deals with EV manufacturers last year, including GM, Tesla and Polestar.
Looking ahead more broadly into 2023, there are numerous encouraging EV trends. Around 20 new EV models are expected to launch in the US over the next year, from smaller models to luxury SUVs and trucks. Manufacturers from Nissan to Mercedes and even Lexus have new models on the way, despite some ongoing supply issues.
Land and Nature
In Brazil, regenerative agriculture projects are hoping to scale up operations to combat the issue of degraded agricultural land. One initiative in the Mata Atlantica area – the Preta Terra agroforestry consultancy – aims to combine the restoration of natural ecosystems with regenerative food production over 2,500 acres by 2025. Funding has been secured from companies including Nestlé and Natura.
According to observers, investor interest in nature-based solutions is set to further grow in the new year. Online information hub ESG Investor points to partnerships like Canadian Pension Plan Investment’s deal with Conservation International, which targets around 300,000 metric tonnes of emissions removal through carbon sinks in Peru. Nature tech in India and regenerative farming in Kenya are other areas where investment could be set to grow.
Wired rounds up several other signals of change going into 2023 in the area of land use and nature, from producers diversifying their crops to innovative upcycling of ingredients. Brazilian coffee producer Guima Café, supported by Nespresso and reNature, is becoming a regenerative coffee farm, while British food company Hodmedod is seeking out less-well-known but lower-impact foods like the fava bean and black badger peas.
And with food waste a significant contributor to land-based emissions, there was welcome news from German supermarket chain Aldi, which has extended its food waste reduction scheme across its UK warehouses. The company’s collaboration with Community Shop Group (CSG) since 2015 has already prevented 14,700 tons of food from going to waste by selling it at discounted prices at CSG’s nationwide locations.
Built Environment and Heavy Industry
In India, a new $2.1 billion incentive plan for green hydrogen aims to reduce carbon emissions from the country’s fertilizer, refining and iron and steel units by 50 million tonnes by 2030. India plans to ramp up electrolyzer capacity, bring down production costs and set mandatory targets for green hydrogen use across several industries.
Japan’s Nippon Steel Corporation, meanwhile, has new plans to meet growing demand for green steel. Nippon will start making low-carbon raw materials, such as reduced iron produced using hydrogen. The world’s number four steel producer is also exploring joining an iron ore project that has its own green hydrogen plant.
Finally, back to Scandinavia, where Norway’s Blastr Green Steel announced plans for a $4.3 billion investment to construct a low-carbon steel factory in Inkoo, Finland. The company signed a letter of intent with Fortum Oyj to construct a facility that will include integrated hydrogen production, employ up to 1,200 staff and produce 2.5 million tonnes of green steel per year from 2026.
Commitments
3 companies committed to renewable energy through RE100:
Flipkart – Indian retailer
Qisda – Taiwanese electronics manufacturer
VIS – Taiwanese electronics manufacturer
Total number of companies committed to RE100: 397
Total number of companies committed to EP100: 126
Total number of companies committed to EV100: 127
Total number of companies committed to EV100+: 5
Total number of companies committed to SteelZero: 29
Total number of companies committed to ConcreteZero: 20
Total companies committed to SBTi: 4,237 (2,157 committed, 2,080 approved)
Total number of companies committed to SME Climate Hub: 5,390
Webinars & Events
BSR at 30: January 10
World Economic Forum Annual Meeting: January 16-20
Coalition Jobs
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