NET ZERO TRANSITION – THE LATEST SIGNALS OF CHANGE: October, 9, 2023
We Mean Business Coalition
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A just transition from fossil fuels to clean solutions
Sector-wide business action and enabling government policy to phase out fossil fuels and phase up clean solutions.
Energy
With storage of renewable energy increasingly important to countries’ net zero ambitions, the US Department of Energy has announced its selection of nine proposals for long-duration energy storage test projects backed by $325 million USD of funding. This buoys up company action that has already seen $122bn USD committed by business to clean energy projects – including battery storage – following incentives and targets set by the Biden administration.
There’s been more collaboration between countries on power interconnection this month too. Greece and Saudi Arabia are beginning work to link up their power grids – which is expected to supply Europe with cheaper green energy. Ireland and the UK have also deepened cooperation on a joint interconnector project which will see the countries better able to share renewable energy.
In a move to reduce its reliance on fossil fuel-generated electricity, US concrete supplier, Holcim US, is installing new solar arrays at its Fort Totten ready mix concrete plant in Washington, D.C..
And the European Commission has indicated that it wants to keep the Just Transition Fund for European Coal regions beyond 2027, dependant on the success of the current programme which focuses on 18 coal regions across seven member states. Meanwhile, Bulgarian Prime Minister Nikolay Denkov has put forward proposals worth €1.8 billion to help the three regions most affected by the energy transition to transform their coal-dependent economies towards renewable sources, with the aim of preserving tens of thousands of jobs.
Transport
First to green shipping, where plans for the first trans-Pacific green shipping corridor have been announced. It is a collaboration between The Ports of Los Angeles, Long Beach, and the City ofShanghai along with C40 Cities. Companies including Maersk have joined as carrier participants, committing to deploy reduced- or zero-lifecycle carbon-capable ships on the corridor by 2025.
Carmakers spoke up this month in response to the UK government’s plans to water down its net zero targets, including to push back the ban on internal-combustion engine sales from 2030 to 2035. Ford led the charge with the car giant’s UK chair saying business “needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.”
Automaker Nissan said that it will keep to the 2030 timeline for electrification, despite the UK petrol ban delay, with a commitment that all vehicles sold in Europe with be electric by 2030. The firm cited this action as “the right thing to do”.
Meanwhile, Volvo Cards declared at Climate Week in New York that it would end diesel car production by early 2024, and reaffirmed its commitment to selling only electric cards by 2030. Sales of diesel cars have been on the decline in Europe, making up just over 14% of sales in July 2023, compared to 50% in 2015.
Staying in Europe, French President Emmanuel Macron is planning a €100 per month EV leasing scheme for EU-made cars only, starting from November 2023. The initiative is aimed at lower-income households and intends to shift mobility habits from ICE vehicles to EVs.
While in Germany, government incentives for EVs worth €300 million – to help householders install solar panels, storage and charging points – sold out within a day as 33,000 people claimed.
Industry
European steelmaking giant Salzgitter Group is working with technology group ANDRITZ to build a 100 MW electrolysis plant. Operational by 2026, the plant will produce 9kt of green hydrogen per year for green steel production, making it one of the largest green hydrogen plants in Europe.
From growing supply to signalling demand, as IKEA owner Ingka Group has signed a purchase agreement with H2 Green Steel to supply low-carbon steel for its warehouses. The green steel will be deployed from 2026 onwards.
On Carbon Capture, Utilisation and Storage (CCUS), Indonesia’s state energy company PT Pertamina has signed four agreements to explore CCUS storage facilities in cooperation with several Japanese energy companies. Citing studies, Pertamina said Indonesia has the potential to store up to 400 GT of CO2 in its depleted oil and gas reservoirs and saline formations.
Finally, the UK and German governments have signed a new agreement to accelerate the development of low carbon hydrogen projects. Both parties intend to demonstrate the potential ofhydrogen to decarbonize their energy mixes and its role in the net zero transition.
Built environment
New research from Oxford University and Regulatory Assistance Project thinktank has found that heat pumps were between two and three times more efficient than oil and gas heating systems in cold temperatures. It recommends their suitability for almost all homes in Europe, including the UK.
So it’s good news for UK consumers that renewable energy firm Octopus Energy has just announced its own heat pump, costing around £3,000 to install with government grants. The ‘Cosy 6’ will be available from December.
In the US, a coalition of 25 state governors have announced a major push to reach 20 million deployed heat pumps by 2030 – a quadrupling of the number of heat pumps installed in 2020. According to the IEA, having a heat pump can save customers in the US about $300 USD per year.
From heating to materials, as a zero-emissions cement project has completed its first trial melt using an electric arc furnace at the Materials Processing Institute in Teesside, UK. Cement2Zero aims to advance the decarbonization of the construction, cement and steel sectors.
Staying with green cement, Hoffmann Green has signed its first licensing agreement in Saudi Arabia.The firm’s first clinker-free cement plant will be built in Saudi Arabia in 2024 and will provide green cement to help decarbonize the country’s construction industry.
Finance
At Climate Week New York, the US Department of the Treasury announced the publication of a set of principles for net zero financing and investment, a move welcomed by the Glasgow Financial Alliance for Net Zero (GFANZ). The principles will support financial institutions to take consistent approached the implementation of their net zero commitments.
Along with leading carmakers and energy companies, investors and financial institutions also added their voices to calls on the UK government to rethink its net zero U-turn, calling for ‘certainty, consistency, clarity, and continuity’.
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Protecting and restoring nature
Business action on land and nature – which can deliver 1/3 of the climate solutions needed by 2030
Food and beverage multinationals Nestlé, Danone, Unilever, and PepsiCo have committed to a new global regenerative agriculture framework developed through the Sustainable Agriculture Initiative Platform (SAI Platform). They will work alongside 30 agriculture cooperatives, industry players, and the platform’s other 166 members to improve soil health, support biodiversity, conserve water in the soil, reduce water consumption and prioritise the financial viability of farmers.
Spanish company Iberdrola has launched an initiative called Carbon2Nature which will develop high-impact nature-based solutions. The firm expect to capture and store more than 61 million tonnes of CO2 through ecosystem conservation and restoration projects across 100,000 hectares including forests, coastal ecosystems and soil – with 80% of projects located in Latin America.
The Taskforce on Nature-related Financial Disclosures (TNFD) published its final set ofrecommendations at Climate Week in New York. Intended to harmonize reporting on nature-related risks and impacts, the framework is expected to ‘facilitate holistic decision-making’ by business. Companies including Natura&Co, Holcim and Reckit have been trialling the framework in private, reports Edie, and GSK has said it intends to produce a TNFD-aligned report in 2026.
Lastly, a new report from the University of Cambridge Institute for Sustainability Leadership has found that nature restoration for EU businesses could result in €1.8bn worth of benefits. This guidance outlines practical steps that business can take to restore nature across their operations, with case studies from EDF Energy and Cemex.
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Decarbonizing global supply chains
Business action to engage suppliers and address Scope 3 emissions – which account for more than 70% of a typical company’s carbon footprint
The COP28 Presidency has partnered with the SME Climate Hub and the We Mean Business Coalition to develop a specialized programme for small and medium-sized enterprises (SMEs) in the Middle East and North Africa region (MENA). 90% of all businesses in the MENA region are SMEs.
Zero-Emissions Maritime Buyer Alliance members including Amazon, Nike and Patagonia have put forward a request for proposals for 600,000 20-foot shipping containers to be transported over a period of three years from 2025. To meet the requirements shipping providers will need to prove they can achieve at least a 90% reduction in lifecycle emissions compared to the use of traditional fossil fuels.
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Latest from the We Mean Business Coalition
Fossil to Clean is a multi-year global campaign led by the We Mean Business Coalition and supported by partners to mobilize business and policymakers for the decisive action needed to transition from fossil fuels to clean solutions. At the heart of the campaign are the Fossil to Clean principles, which are designed to inform the transition plans and strategies of fossil fuel producers, consumers and finance — and the policy choices made by governments.
The Supplier Cascade gives businesses a manageable way to address Scope 3 emissions through supplier engagement. Built from best practice, it focuses on enabling action in the areas that are within a business’s control: their Tier 1 suppliers.
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Companies taking action
As of this month, over 13,000 companies are taking action through Coalition partner initiatives. See all companies who committed in the past month on the We Mean Business Coalition website.
Companies setting their ambition for net zero include:
- 6,194 companies are working to cut their emissions in line with science through SBTi
- 6,860 small and medium-sized enterprises are working to cut emissions with the SME Climate Hub
- 437 companies are working to reach net zero by 2040 through the Climate Pledge
Meanwhile, companies are driving down emissions through the following demand-side initiatives:
- 419 companies have committed to 100% renewable energy with RE100.
- Japan-based manufacturer Amada, Taiwan-based Chicony Electronics Co Ltd, France-based healthcare equipment company Namera and China-based manufacturer YFY are all recent joiners of RE100
- 130 companies are accelerating the transition to electric vehicles with EV100, and 5 companies are kickstarting the transition to zero-emission medium- and heavy-duty vehicles with EV100+.
- Zomato Ltd, an India-based online food ordering and delivery company, recently joined both EV100 and EV100+
- 126 companies are committed to improving their energy efficiency through EP100.
- 32 companies have joined ConcreteZero to create a market for net zero concrete
- 38 companies have joined SteelZero to create a market for net zero steel
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Events
- 10 October – WEBINAR: EM Insights Briefing | Report Launch: The Role of Carbon Credits in Corporate Climate Strategies – register here
- 10 October – IN-PERSON/ONLINE: CISL/CLG Europe Green Growth Summit 2023 – register here
- 17 October – LINKEDIN LIVE: Why your company should join The Climate Pledge – register here
- 24-25 October – FT Moral Money Summit Americas – register here, use code WMBC for 20% off