The latest insights from the We Mean Business coalition

April 21, 2023

Net zero transition – the latest signals of change: April 21, 2023

We Mean Business Coalition

Signals of change in the net zero transition this week include EU reforms of its carbon market and deforestation laws, and a $1 billion wind project in Laos.

Net Zero Economy

Following calls by the We Mean Business Coalition for the G7 to accelerate the transition from fossil fuels to clean energy, the countries’ Energy and Environment Ministers have agreed for the first time to speed up their phaseout of fossil fuels. Gillian Nelson, the Coalition’s Policy Director, said redirecting fossil fuel subsidies is “the most efficient way to ensure a smooth and just transition to a clean energy system.” Other headlines include a target to collectively increase solar power capacity by 1 terawatt and offshore wind by 150 gigawatts by 2030.

The EU parliament has approved a deal – agreed late last year – to reform its carbon market. Shipping emissions will be added to the CO2 market for the first time from 2024, and a new EU carbon market covering emissions from fuels used in cars and buildings will launch in 2027. An €87 billion fund to support households affected by the costs was also approved, alongside a world-first plan to phase in a levy on companies importing high-carbon goods from 2026, known as the carbon border adjustment mechanism.

Vodafone has teamed up with CDP to develop a reporting and best practices framework to help telecoms businesses address greenhouse gas emissions in their supply chains. The scheme is linked to a new financing program from Citi, allowing telecoms suppliers to access preferential supply chain financing rates if they disclose accurate emissions data and take steps to reduce their environmental impact. Initially offered to Vodafone’s suppliers, the framework aims to open to others later this year.

Energy

A new report from the American Clean Power Association has shown that more clean energy investment has been announced in the US since last summer’s Inflation Reduction Act than in the previous five years combined. The trade group said more than $150 billion in investment had been tabled since August, totaling 96 GW of new power capacity. Investments also include 26 solar factories, 10 battery factories and 10 plants producing wind power components across the country.

ACEN, a subsidiary of Ayala, has joined a $1 billion wind power project under construction in Laos. With existing partners including Japan’s Mitsubishi and Thailand’s Bangchak, the 600 MW plant will start operations in 2025, and supply electricity to Vietnam under a 25-year power purchase agreement. ACEN has to date invested in wind and solar projects across Australia, India and the Philippines in pursuit of its goal to produce 20 GW of electricity from clean energy by 2030.

Chipotle has announced a new all-electric restaurant design, utilizing 100% renewable energy through certified credits, and maximizing efficiency. The company said that the design pilot will help it achieve its SBTi-approved goal to cut absolute emissions in half across its value chain by 2030. The concept includes rooftop solar panels, all-electric equipment and systems to replace gas power, heat pump water heaters, and EV-charging.

Transport

EV100 member IKEA has confirmed a £4.5 million investment to install almost 200 EV chargers across the UK and Ireland to serve its last-mile delivery fleet. The company partnered with charging solutions provider Mer to install the charge points, the electricity for which will come from renewable sources. IKEA aims for 60% of deliveries in the UK and Irish markets to be zero-emission by the end of Summer 2023.

In California, companies including real estate firm CBRE and investment manager BlackRock Inc are driving investment in electric heavy goods vehicle charging infrastructure. The push could remove the “chicken-and-egg” electric truck adoption lag ahead of a 2035 deadline for phasing out heavy duty diesel trucks in the state. CBRE announced a $400 million joint venture with Forum Mobility in January to build electric charging infrastructure to support the drayage industry, while BlackRock is part of another group investing $650 million to build chargers along freight routes.

Australia will introduce its first fuel-efficiency standards by the end of the year, as part of the government’s plans to encourage the use of EVs and cut carbon emissions. Passenger cars produce about 10% of Australia’s emissions, and the introduction of fuel standards could cut at least 3 million tons of CO2 by 2030.

Land & Nature

The EU this week approved a landmark deforestation law aimed at tackling the bloc’s contribution to the 10% of global greenhouse gas emissions linked to destruction of the world’s forests. The rules will ban imports of coffee, beef, soy and other commodities if their supply chains are linked to deforestation. Once the law is officially approved by countries, large companies will have 18 months to comply with new due diligence and verification requirements, and smaller firms 24 months.

PwC has announced a series of initiatives aimed at boosting its global nature and biodiversity capabilities. The firm plans to launch a new Centre for Nature Positive Business, double the size of its team of nature specialists over the next year, and upskill all 330,000 employees to work with clients on nature-positive outcomes. The company has also launched an assessment of which of its offices are in or adjacent to key biodiversity areas, to identify nature-related impacts in its supply chain.

Canopy – the non-profit working with more than 900 businesses including Fast Retailing and Inditex to tackle deforestation in supply chains – has received a $60 million boost as part of TED’s Audacious Project. The funding will be used to scale solutions that enable industries including packaging and fashion to use alternative fabrics to virgin viscose, such as those made using food industry byproducts and waste.

Built Environment & Heavy Industry

Holcim has announced the launch of a new circular technology platform aimed at recycling construction demolition materials into new building solutions. The solution, called ECOCycle, will enable concrete, cement and aggregates to contain between 10% and 100% recycled construction demolition materials, reducing environmental impacts without compromising performance.

A report from the Energy Transitions Commission has revealed that the financial gap for ramping up green steel production is smaller than previously thought. The report authors estimate that the pipeline for near-zero emission steel projects needs to triple within the next three years, but that recent landmark policy frameworks, including the low-carbon hydrogen production tax credit under the US Inflation Reduction Act, have created new viable investment cases for steel.

And Apple has opened a new, sustainably designed store in Mumbai, India this week. The company says the store – its first in the country – is operationally carbon neutral and will run on 100% renewable energy thanks to a dedicated solar power array. It comes as Apple shared progress and updates on its environmental goals at the US Climate Action Summit this week, including a pledge to use 100% recycled cobalt by 2025.

Company Commitments

1 company committed to 100% renewable energy through RE100:

CAE – Canadian aviation company

Total number of companies committed to RE100: 402

Total number of companies committed to EP100: 126

Total number of companies committed to EV100: 127

Total number of companies committed to SteelZero: 31

Total number of companies committed to ConcreteZero: 28

Total number of companies and SMEs committed to SBTi: 4,844 (2,334 committed, 2,510 approved)

Total number of SMEs committed to SME Climate Hub: 5,728

Total number of companies committed to The Climate Pledge: 400

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