The latest insights from the We Mean Business coalition

March 17, 2023

Net zero transition – the latest signals of change: March 17, 2023

We Mean Business Coalition

Signals of change in the net zero transition this week include the EU’s Net Zero Industry Act and the Canadian logistics company embarking on a $1 billion vehicle fleet electrification.

Interested in joining We Mean Business Coalition at Ceres Global in NYC next week? You can now attend the Friday afternoon session – featuring US Climate Envoy John Kerry, among others – free of charge by using this link.

Net Zero Economy

The 27 EU countries have agreed a common position on climate and energy diplomacy ahead of COP28 this year, which includes a unified push for “the global phase-out of unabated fossil fuels” well ahead of 2050. The position was approved by the EU Council, which also called for an immediate end to international financing for coal. Observers commented that while the move formalizes the position taken by the bloc at COP27, there remains room for improvement.

The UK government announced its Spring Budget this week, including an extension of energy efficiency-related tax breaks for businesses and a £20 billion investment in carbon capture, utilization and storage. The Climate Change Agreement, under which businesses receive a discount on their energy bills if efficiency targets are met, has been renewed until 2025.

And this year’s Global Supply Chains Report from CDP has shown which companies took the necessary action on supply chain emissions in 2022. Of the more than 18,500 companies disclosing to CDP in 2022, roughly 7,000 said that they engaged their suppliers on climate change issues. The report notes that engagement from members of CDP’s Supply Chain program is driving action globally. 16,462 suppliers disclosed to CDP at the request of their customers, reporting total annual savings of 70 megatonnes of CO2, equivalent to the energy use of 9.8 million homes.

Energy

In Ivory Coast, telecoms firm Orange has signed a partnership with SolarX to install solar plants to power Orange’s data centers in the country, as well as neighboring Burkino Faso. Once completed, half the power for the Ivorian data center and a third of that for the Burkino Faso center will be provided by the plants. SolarX estimates that the solar systems installed in Orange’s Balkuy and Assabou data centers will reduce their emissions by 453 tons of CO2 equivalent per year.

German energy giant E.ON has signalled its €33 billion infrastructure investment plans across Europe for the coming four years, positioning itself as a key player in the continent’s clean energy transition. More than 95% of the company’s investment will be in line with the EU’s green taxonomy. “The [energy] crisis makes it clear that decarbonization, the energy transition, and the expansion of infrastructure must be massively accelerated,” CEO Leonhard Birnbaum said.

Meanwhile, there was positive news from India, which saw open access solar capacity installations almost double last year to hit a new record. The country added 2.5 GW in 2022, up from 1.3 GW the previous year, with a cumulative total of 7.7 GW now installed. The state of Karnataka is currently out in front, accounting for almost 36% of existing solar capacity.

Transport

To Canada, where freight and logistics services provider Purolator announced that it will invest approximately $1 billion over the next seven years to electrify its fleet. The company plans to purchase more than 3,500 fully electric last-mile delivery vehicles, and electrify more than 60 of its terminals. Purolator has committed to submit its decarbonization targets to the Science Based Targets initiative for approval, and hopes its measures will avoid 80,000 tons of CO2 by 2030.

Elsewhere in North America, the Biden administration is making good on a promise to create a vastly bigger electric vehicle (EV) charging network across the US, particularly in lower-income or rural regions. The government is opening up access to $2.5 billion in additional federal funds as part of a push to cut automotive carbon emissions, targeting underserved regions in its plans for 500,000 new charging stations across the country. EVs topped 5% of new vehicle sales in the US for the first time in 2022

And in Switzerland, solar startup Sun-Ways is piloting an innovative scheme to lay solar panels along railway tracks. While Germany’s Deutsche Bahn has also experimented adding solar cells to railway sleepers, the Swiss project is a world-first in its use of removable panels that can be rolled out “like a carpet.” If all of the country’s 5,317 km of railway track could be covered by the panels, Sun-Ways estimates the network could produce around 2% of Switzerland’s total energy consumption.

Land & Nature

Danish brewing giant Carlsberg has confirmed that three of its brands in Finland, France and the UK will begin sourcing barley from regenerative farming practices. Last year, the company set a target to ensure that 30% of raw materials are sourced using regenerative agricultural practices by 2030 – and 100% by 2040.

Patagonia Provisions – the food division of clothing company Patagonia – has purchased Moonshot, a startup that makes snacks with a low-carbon footprint. The company works with organic and regenerative farmers, using methods such as planting cover crops, reducing tillage, and rotating crops, which build up healthy microbes in the soil and sequester carbon. The startup’s crackers will join 28 other food products already sold by Patagonia.

Supermarket chain Lidl, meanwhile, has signed up to WWF’s initiative to halve the environmental impact of UK customers’ shopping baskets by 2030, compared to a 2019 baseline. The initiative’s impact is measured on a life-cycle basis relating to emissions, deforestation, food waste and packaging waste. Lidl is the first discount retailer to sign up to the initiative and joins existing signatories Tesco, Co-op, M&S, Sainsbury’s and Waitrose.

Built Environment & Heavy Industry

The EU has agreed a deal aimed at reducing energy consumption. The EU Parliament approved a new stance on strengthening the Environmental Performance of Buildings Directive, in a bid to increase energy efficiency amid the ongoing energy crisis. The vote in favor followed campaigning by CLG Europe and others for the bloc to increase its ambition. Negotiations with the 27 member countries will now begin.

This comes in the same week that the EU launched its proposals for a Net Zero Industry Act aimed at scaling clean technology deployment across the bloc under the Green Deal Industrial Plan. Measures include targets of at least 40% of the EU’s clean energy technologies to be manufactured domestically by 2030, and plans for annual carbon storage capacity addition of 50 megatons. A Net Zero Europe Platform will also be set up to help member states establish new industrial partnerships focused on decarbonization.

Finally, the green steel market size, which accounted for under $200 million globally in 2022, is predicted to reach $6.2 billion by 2032, according to a study by Precedence Research. The research points to solar as the fasting growing energy source for green steel during that time, pointing to current projects like Tata Steel’s 41 MW solar facility, aimed at powering its furnaces in India. Market size in Europe is expected to expand at the fastest rate.

Company Commitments

15 companies committed to set science-based targets through the SBTi Net Zero pathway:

Actavo (Group) Limited – Irish engineering company

Capricórnio Têxtil – Brazilian textile company

Clas Ohlson AB (publ) – Swedish homeware company

Corporacion Favorita C.A. – Ecuadorian retailer

Indian Hotels Company Limited – Indian hotel company

Italmobiliare – Italian investment company

Johnson Electric – Hong Kong-based electronics company

Kolektor Mobility d.o.o. – Slovenian auto component company

Leo Group LTD – UK-based biotech company

Medtronic PLC – Irish healthcare equipment company