Zero-Carbon Transition – April signals of change
We Mean Business coalition
Here are just some of the signals of change from the past month across transport, energy, industry, land use and the whole economy, demonstrating the transition to a resilient and inclusive zero-carbon future is accelerating.
Zero-Carbon Economy
In response to calls from the private sector, investors, scientists, states, cities and citizens for climate ambition, U.S. President Joe Biden announced an increase to the country’s 2030 emission reduction target to 50-52% below 2005 levels. The Nationally Determined Contribution (NDC) update follows an open letter to the Biden administration organized by the We Mean Business coalition and Ceres and signed by over 400 businesses and investors with a footprint in the United States. The Business Ambition for 1.5°C campaign has reached the milestone of over 500 companies – headquartered in 46 countries and spanning 48 sectors, including some of highest emitters such as air transportation, power, chemicals and mining️. Amazon and Global Optimism have announced that more than 100 companies are now committed to The Climate Pledge, while almost a fifth of FTSE 100 companies, with a market capitalization of about $987 billion, have committed to the Race to Zero campaign. The UK government has increased its emissions reduction target to 78% by 2035, while the UK chancellor has called to radically overhaul the Treasury’s response to the climate crisis. The EU has reached a provisional agreement to increase its net GHG emissions target to at least 55% by 2030, setting the bloc on course to be the first climate neutral continent by 2050. Japan committed to reduce emissions by 46% from 2013 levels by 2030 and aspires to a 50% reduction. New Zealand has introduced a law that will require financial firms to report the impacts of climate change on their business. Leading finance firms with more than $70tn assets have signed up to the newly launched Glasgow Financial Alliance for Net Zero, pledging to set targets to cut the carbon content of their assets by 2030, while 43 banks have announced the formation of the Net-Zero Banking Alliance, which will work to align the industry with Paris targets. The Vanguard Group and BlackRock – the world’s two largest asset managers – pledged to achieve net zero across their investment portfolio by 2050, while Reinsurance company Swiss Re committed to net-zero emissions by 2050 with an interim reduction target of 35% by 2025 for its investment portfolio. Two-thirds of economists say the benefits of reaching net zero by 2050 outweigh the costs. And UN deputy secretary general Amina Mohammed urged the G7 countries to double their financial support to poor countries to help them cut GHG emissions and cope with the impacts of climate breakdown.
Zero-Carbon Energy
The Climate Group’s RE100 initiative has reached the milestone of 300 member companies, committed to buying 100% renewable electricity. All but three of the 22 largest power and gas utilities in Europe have now set net-zero emissions targets. The US is decarbonizing faster than expected and is already halfway to a carbon-free power sector. Seven European countries have committed to stop public export guarantees for fossil fuel projects. Coal financing costs have surged as investors demand returns four times as high as the payoff from clean energy investment to justify the escalating risk. Replacing coal with renewables in China would achieve a net saving of $1.6tn. A group of US power companies has expressed support for a clean electricity standard that would reduce the sector’s emissions by 80% in less than a decade, while the country’s top miners’ union will back the White House’s plan to transition fossil fuel industries to renewable energy production if the US administration can guarantee the preservation of jobs. Norway’s $1.3tn sovereign wealth fund – the world’s largest state-owned investor – has made its first direct investment in renewable energy as part of a plan to invest around $12bn between 2020 and 2022. Stanwell Corporation, Australia’s largest power generator and third-largest GHG emitter, plans to transition from fossil fuels to renewables. Oil trader Gunvor will invest at least $500m in renewables over the next three years as it prepares for a shift in the world’s energy mix. Ikea plans to accelerate its investment in renewable energy by spending an extra $4.8bn by the end of the decade to build wind and solar farms, while fitting its stores with EV charge points. Amazon has announced plans for nine new “utility-scale” wind and solar energy projects, making it the largest corporate purchaser of RE globally. Facebook has reduced its GHG emissions by 94% in the last three years and is now powered by 100% renewable energy. And a record 260 GW of new renewable capacity was added worldwide in 2020, up 50% from the year before.
Zero-Carbon Transport
Car manufacturers Volvo Cars and Jaguar Land Rover and UK transport group FirstGroup plc have joined the Business Ambition for 1.5°C campaign. Toyota will introduce 15 battery electric vehicle models globally by 2025, expanding its EV line-up, and has pledged to achieve ‘carbon neutrality’ by 2050. Volvo Trucks has announced it is aiming for half its European sales to be electric by the end of the decade. Daimler will accelerate its shift to EVs, aiming hybrid or all-electric cars to make up more than 50% of its car sales sooner than their previously announced 2030 target. Chinese car makers, including Geely, Nio and Xpeng, have launched more than a dozen new EV models to appeal to the younger customers in the country. EVs could make up 45% of the global car market by 2040, with China and the EU ahead of the pack thanks to strong incentives. Advances in technology and battery costs should allow all new cars and trucks sold in the US to be powered by electricity by 2035, while Washington State is the first state in the country to plan ICE vehicles phase-out by 2030. Electric heavy trucks will soon be able to compete economically with diesel trucks as battery technology rapidly improves. Shipping companies that represent more than 90% of the global fleet have called on the world’s governments to tax its carbon emissions, saying the measure is needed to tackle climate change and could incentivize ship owners to invest in new technology. And French lawmakers have approved a measure that will abolish domestic flights on routes than can be covered by train in under two-and-a-half hours.
Zero-Carbon Built Environment & Heavy Industry
UK steel construction company Severfield has joined the Climate Group’s SteelZero initiative. Indian cement company J.K. Cement, German engineering and construction company Exyte, Norwegian chemical company Yara International ASA, Indian pharmaceutical company Glenmark Pharmaceuticals, Canadian fertilizer company Limited Nutrien Ltd. and Swedish chemicals group Perstorp Holding have committed to set a science-based target. German copper manufacturer Wieland Group, Italian metal industry provider Danieli & C. Officine Meccaniche engineering companies WSP Global, Trelleborg, Worley Ltd, French civil engineering construction company Eiffage, construction companies Story Contracting and Odinsa, and UK chemicals group Johnson Matthey have joined the Business Ambition for 1.5°C campaign. Major industries across south Wales – including steel, oil refining, cement and chemical companies – have joined forces to cut their carbon emissions over the next 20 years. Steelmaker SSAB, together with truck maker Volvo, will start producing the world’s first vehicle made of fossil-free steel, using hydrogen produced from renewable energy. And following a court ruling revering a Trump-era rule, the US Environmental Protection Agency will be able to set GHG limits on polluting industries such as oil and gas production and iron and steel manufacturing.
Zero-Carbon Land Use & Nature Based Solutions
Japanese companies Asahi Group Holdings and Suntory Holdings Limited, Dutch beverage company and Heineken, UK food service company Compass Group UK&I, Swedish food retailer ICA Gruppen and UK food packaging company Hilton Food Group have joined the Business Ambition for 1.5°C campaign. US supermarket chain Albertsons Companies, Japanese food and drink company Kagome Co., Polish food retailer Żabka Polska and food manufacturers Griesson – de Beukelaer GmbH & Co. KG and HKScan Corporation have committed to set science-based targets. JPMorgan Chase has agreed to expand its policies addressing deforestation, with upcoming requirements from its clients in the palm oil sector as well as around timber, pulp and paper and mining. Apple is launching a $200 million “Restore Fund” that will make investments in forestry projects to remove carbon from the atmosphere. Nestlé has announced its support for the protection and restoration of over 500,000 hectares of tropical forest landscapes in Southeast Asia. Netflix has set a target for net zero emissions by 2022 through offsets purchasing and conservation projects funding, such as grassland restoration. BMW, Volvo, Google and Korean battery maker Samsung SDI signed up to a WWF call for a moratorium on deep-sea mining. British farmers are increasing investments in soil health, tree planting, renewable energy generation and energy efficiency to help align their practices with the net zero transition. New report from the Consumer Goods Forum Forest Positive Coalition outlines a strategy to end commodity-driven deforestation. Panama – which boasts rainforests on about 65% of its land, as well as mangrove and cloud forest ecosystems – is ramping up its efforts to stop the illegal logging of forests largely driven by the expansion of agriculture. And Indonesia and Malaysia were rare bright spots in WRI 2020 Global Forest Review, with forest loss declining from 2019 – marking the fourth year in a row for Indonesia and the first time the country fell out of the top three since the report first came out two decades ago.