In his address, Sinha spoke about the initiatives that have been proposed and are being considered by the government, including as part of the plan for the G20. He noted that greater climate investments would greatly benefit the Global North, Global South, and the planet, saying that “net zero is net positive for the Global South.” He observed that solar energy could be a third crop for Indian farmers and, saying that the time for incrementalism regarding addressing climate change is gone, he urged the members of the PE-VC industry to engage with the idea of climate investing.

He discussed that the vast opportunity presented by climate financing for the PE-VC industry: “We also, at the same time, need to do two important things from an enabling point of view – one, is we need to get global standards on what is green and what is not green and then we need to get these sectoral pathways lined up. At the same time, we need to make sure that there is enough capital flowing into these blended finance instruments so that we can really get these trillions of dollars of private sector capital flow. But we are not talking about substantially more budgetary resources. Budgetary resources from the Global North are limited and will remain limited. It’s all about mobilizing private sector capital, mobilizing effectively what you all do. So, this is going to be, I think, for the entire venture capital private equity industry the story of the next decade, which is green investing and unlocking the resources to pursue green investment. The kind of capital flows that we are going to see, I think, are really going to be much bigger than the ones that we’ve seen in the digitization, digital space.”

On climate investing being a significant way to attract global capital, Sinha said, “I am a believer in carbon trading and carbon markets, but to my mind, it’s not low-hanging fruit. I think we could put a hundred billion dollars into India and other industries where we have, enormous low-hanging fruit, but as in electric mobility, rooftop solar, solar in agricultural applications, whether it is energy conservation, we have so many opportunities where we could easily put a hundred billion dollars towards, with really high-quality commercial returns, even today.”

Climate tech is a sunrise sector in India. Despite it being a nascent and emerging sector, it is growing at a fast pace. The sector attracted ~1.2 Bn in investments between 2016 and 2020, and over the past five years, 120 climate tech startups raised over 200 funding rounds from 272 unique investors in India. In the first two quarters of 2022 alone, 70 Indian climate-focused startups raised $839 Mn over 75 transactions. Moreover, achieving India’s target of net zero emissions by 2070 can lead to the creation of ~USD 11 trillion in economic value in India. This is an unprecedented and unmissable opportunity that should be taken advantage of by Indian investors.

A veteran of Indian politics and policy-making, Shri Jayant Sinha is the Chairperson of the Parliamentary Standing Committee on Finance and the BJP Lok Sabha MP from Hazaribagh, Jharkhand. As Chairperson of the Standing Committee on Finance, Sinha leads a 31-member Parliamentary panel that has oversight of the Ministries of Finance, Corporate Affairs, Statistics & Program Implementation, and the Niti Aayog. Additionally, the panel has parliamentary responsibility for the Reserve Bank of India, the Securities & Exchange Board of India, the Insolvency & Bankruptcy Board, and the Insurance and Pension regulatory authorities. Sinha is also very active in the Parliament, having opened the debate on India’s Annual Budget on multiple occasions as well as having introduced important Private Member Bills. In the 2021 Budget session, he introduced the Climate Change (Net Zero Carbon) Private Member Bill 2021.

Source : mybigplunge

The fact is that decarbonizing the transport sector will be essential for India’s clean energy transition and its journey to achieve net-zero emissions by 2070. EVs are the key technology in this process. Although more and more people across India are adopting EVs, they still comprise a marginal component of all new sales. EVs share in total vehicle sales grew from 1.7% in 2021 to 4.7% in 2022, driven by faster adoption in the two-wheeler and three-wheeler segments. Boosting government spending and adopting favorable policies is therefore crucial to truly unlock the country’s electric mobility potential.

A recent study by the International Institute for Sustainable Development (IISD) and its partners showed that the uptake of subsidies for EVs remains the lowest across energy technologies. Although EV subsidies rose around three times between 2021 and 2022—driven by a concessional Goods & Services Tax (GST) rate on EVs and the FAME-II scheme that supports the electrification of public and shared transportation—they accounted for only 1% of India’s total energy subsidies. Policymakers need to significantly increase spending to support the creation of charging infrastructure across the country, extend the FAME-II scheme’s duration beyond 2024, secure critical mineral supply chains in the medium-term, and support R&D investment into alternate battery technologies, such as solid-state batteries…Read More…

Source: PTI

How leaders can invest in a sustainable future and navigate near-term energy pressures successfully.

Net zero doesn’t have to mean zero sum. In this episode of The McKinsey Podcast, McKinsey partner Anna Moore and senior partner Humayun Tai talk to global editorial director Lucia Rahilly about the “devilish duality” leaders have faced since the outbreak of the war in Ukraine—and about how to follow through on longer-term decarbonization commitments while managing short-term energy disruptions successfully.1

After, hear how investors can use their capital and influence to help reverse the impact of climate change, from Columbia professor Bruce Usher. He spoke with us about his book, Investing in the Era of Climate Change (Columbia University Press, October 2022), as part of our Author Talks series.

The serpentine path to net zero

Lucia Rahilly: A little more than a year ago, leaders around the globe gathered at COP26 and made clear commitments to reach net-zero emissions goals. How disruptive do you expect the war in Ukraine to be, in terms of those commitments and, by extension, our collective progress toward net zero?

Humayun Tai: The long-term direction doesn’t change: the commitment is to net zero.

The Ukraine crisis does bring into question this “duality” we talk about: on the one hand, we’re pushing toward net zero; on the other, we ask how the system can function in terms of affordability, energy security and supply, and system resiliency, when fully pushed into renewables and other kinds of alternative energy.

Another issue would be around the macro shocks—inflation, short-term supply chain constraints—that many companies and governments are experiencing. We’re being asked, “Can you actually still progress on net zero while trying to address those issues?”

There’s definitely a disruption right now. We knew this path moving to net zero would never be linear, that we would have setbacks and step forwards—technology, innovation, regulation, and the like.

Anna Moore: We have to ask ourselves, can we continue to allocate capital in a way that still makes that long-term trajectory Humayun was describing a reality? We need to be sure we’re continuing to allocate capital toward decarbonization investments. The economics of green-hydrogen projects have come forward as a result of comparative investments and conventional fuels looking more expensive now. That doesn’t mean that you necessarily have capital inflows shifting. These are long-term projects, so we need to be sure that we’re actually allocating capital accordingly.

This also highlights a broader point around trade-offs along the path to net zero. We have trade-offs between different sustainability goals—for instance, decarbonization versus water consumption. We have trade-offs, of course, with respect to job creation and job preservation. We have this near-term trade-off in the context of the Ukraine crisis. But I think it highlights a broader set of trade-offs and decisions we need to make at the company and society level about, “What does ‘good’ look like?”

Humayun Tai: The 2020s is a critical decade. Because those investments, to Anna’s point, are going to last a long time; the outcome will lead to decarbonization over the next 20 to 30 years. The longer these investments get delayed—and we do see live investments getting delayed—the harder it will be to hit the 2050 net-zero number. So when we think about long term versus short term, this is quite material. What happens now is not just about the short run; it sets the path to a long-term target for 2050.

Balancing change with practicalities

Lucia Rahilly: Let’s take up this issue of short- versus long-term trade-offs. As you said, we’ve talked about affordability as an example of the tension between short-term shocks and longer-term imperatives, when gas prices spiked as an effect of the war. How do you view the economic calculus for leaders? Does net zero really have to be “zero sum”?

Anna Moore: In the long term, of course not. We’ve published research about the $9 trillion to $12 trillion a year we believe will be created by the 2030s in new green value pools.3 That covers everything from carbon management to sustainable materials to new energy and new-energy infrastructure, et cetera. We believe that for companies, the window of opportunity on many of these areas is time bound.

I’ll take sustainable materials as one example: we see a 50 percent to 60 percent supply–demand gap for low-carbon steel by 2025. That gap will close to about 35 percent by the 2030s and, by the end of the 2030s, close entirely because we’ll have more capacity online. So steel producers who want to scoop up that additional margin and capture that green value pool will be those who bring investments online now.

We would say, as we advise clients typically, to invest during a downturn. That’s particularly acute right now, especially because so many investments are being delayed. That doesn’t mean that you don’t also need to keep the lights on in the core business while we go through this transition. We explore in our article what this means, practically, for CEOs. I would highlight, recognizing that there’s not going to be one successful technology pathway, for instance, that we will need to invest in maintaining and preserving the core business while also investing in the new. The article puts particular emphasis on the CEO’s role in balancing those investments.

Lucia Rahilly: The transition to net zero, as you’re saying, requires massive up-front investment in a variety of areas. Where can CEOs look to find that capital?

Anna Moore: Part of this is investors changing their investment criteria and capital allocations toward more sustainable technologies. The most famous example, of course, is Mark Carney and GFANZ [Glasgow Financial Alliance for Net Zero], and the $130 trillion of assets under management that are committed to a net-zero pathway: fantastic. And in the first half of 2022, we saw $120 billion in net new money going to sustainable funds.

So we indeed have capital that’s flowing toward the green transition, as well as to new green investments. In the spirit of introducing and acknowledging some of the nuance, we also continue to have capital flows toward conventional technologies and energies.

So where is the capital coming from to fuel the transition? It’s coming from investors focusing more on sustainability and shifting their asset allocation. But we will continue to have capital flows toward conventional technologies as well, and it becomes a question of how we manage that balance over time.

So where is the capital coming from to fuel the transition? It’s coming from investors focusing more on sustainability and shifting their asset allocation – Anna Moore

Lucia Rahilly: Anna, can you share a client example of a green transition?

Anna Moore: I work with a client in cement and building materials. Cement is a notoriously high emitter of global greenhouse-gas emissions.

In the cement world, there’s a real trade-off between new materials, alternatives to cement, versus decarbonizing existing production. And so, as a management team, this client has needed to think through, one, “What does this mean for our M&A strategy?” And two, “What does it mean for the scale of decarbonization investments that we make in our existing facilities? If it costs us hundreds of millions for every asset to decarbonize, how do we do that? Over what phasing?”

And three, “How do we think about cannibalizing ourselves or not? If there are real alternatives and substitute materials, do we do that to ourselves now? Do we wait for others to bring this to the market?” And, “Do we grow some of that internally through our own R&D? Or do we buy in or partner with existing, exciting start-ups that are coming from the wider ecosystem? That also means a shift in how we think about our workforce and in the types of skills and partnerships that we need.”

This is an illustration of how one business is thinking about this, but it also gives you a sense of the range of areas where these kinds of trade-offs show up in the decisions the management team needs to make.

Humayun Tai: The step-up on both the public and private side will be important. There’s a whole public-sector theme here as well, particularly when we talk about Global North and Global South. From a Global South perspective, policy and governments are stepping in to really push decarbonization investments, as well as, of course, the conventional investments that are needed. On the private side, there are certainly dedicated funds toward decarbonization that are increasing. There has been a lot of debate and controversy recently around ESG [environmental, social, and governance] funds, and this is quite different regionally. When you talk about North America, the nuance is different than when you talk about Europe or Japan, for example.

Another source is private-sector funds. That incumbent source of capital, using those balance sheets, is going to be another large piece of the capital infusion that’s going to come into new-growth businesses or decarbonization businesses. So this is traditional businesses reinvesting in new businesses.

From a Global South perspective, policy and governments are stepping in to really push decarbonization investments, as well as, of course, the conventional investments that are needed – Humayun Tai

And, of course, there’s the VC [venture capital] private equity infrastructure of fund financing and sovereign-wealth capital that is really now focused on green investing, decarbonization investment—that’s another slug of capital that will come in. So at the end of the day, there will be blends of public–private funding—again, very nuanced by region.

How to play offense

Lucia Rahilly: What does what we’re calling “playing offense” look like in this context?

Anna Moore: One signifier is making long-term investments while preserving the short term. Another is capturing a green premium and being laser focused on where there truly is market share gain, or green premium to be had, from new, sustainable value pools.

We see a premium for steel. We don’t see such a premium, for instance, for green copper, simply because the existing market is already quite tight. Companies need to be quite granular in assessing, “Where do I truly have premium or market share gain as a consequence?” And then steer their strategy around that.

I would call out, for instance, carbon management as a fundamentally new sector in the economy that we estimate will be $100 billion to $200 billion a year. You also see tooling and machinery companies shifting from serving oil and gas to serving renewables. It’s tweaking the existing asset base to match where the direction of travel is around sustainability.

The final marker of playing offense successfully is building the partnership muscle. There’s so much uncertainty that the best way to manage it is to share it with your supply chain partners. Take automotive OEMs. They’ve been increasingly working with steel producers, aluminum producers, and plastics manufacturers to design decarbonized cars and share a little of the risk: signing long-term supply agreements, redesigning together what they want the automobile to look like, what it’s going to be made out of, how they’re going to price it, what they think consumer willingness to pay looks like, and how they share that value across their value chain. So it’s about getting quite specific with your supply chain partners to share the risk and the benefit.

Humayun Tai: Think about some of the traditional oil and gas companies seeing long-term decline in the need for oil in various forms. They are now turning to a real balance sheet commitment to a clean-fuels build-out and assessing different businesses in the clean-fuels broader spectrum. We see utilities that have now committed completely to going from building fossil to renewables. And in many cases, it’s a bit of a blend, particularly in regard to the Global South.

Other examples are technology companies on the chip side and advanced-electronics companies committing more capital and resources to building out services and technologies for energy transition. Smart investors are building that before the full demand gets there, taking that kind of risk and going on the offense.

Risk versus reward

Lucia Rahilly: Humayun, how should CEOs think about risk and reward when they’re allocating investments to this green transition?

Humayun Tai: There are a couple of different elements to consider. The first is purely financial: “If I decarbonize and shut down my coal power plant, and now I’m building a renewables power plant, what’s the economics of that, given the marginal cost?” So that’s clear.

Second, what are the policies that then shape stranded-asset risk? In many different jurisdictions, there are subsidies or funds—for example, government funding that companies can access to ameliorate the challenge of the stranded asset. In many cases that ecosystem pushes policy to at least negotiate what that stranded-cost transition is.

Third is when you lean forward and say, “It may not make financial sense right now in the short run. But when we do our calculations, and we look at the uptick in the market demand for green steel, for example—customers willing to pay a premium in ten to 15 years—it actually makes sense.”

That’s not a cost-of-capital issue, necessarily; that’s a revenue line issue is the way I would think about modeling the cash flows of that investment. That then requires foresight, intuition, and some risk taking to say, “How will markets shape up, how will customer demand shape up, how will policy shape up to actually create that level of offtake, to create the policy conditions in which we or others that rely on our products will have to build muscle and understanding to actually buy a zero-carbon, or close-to-zero-carbon, product?”

Anna Moore: As companies think through risk–reward trade-offs, there’s clearly a question around timing, scale, and return on green investments, but also questions around, more fundamentally, “How does the business model need to shift?” And “How do my skills to support that need to adjust?” And “Where could I have stranded-sustainable-asset risk in addition to carbon-asset risk?”

Let’s take an example from telecoms: previously, many cell phone manufacturers effectively built their business around replacing your phone every year or two. If you think forward to 2050, where we’re consuming fundamentally less, that business model needs to change. “How I get value” needs to fundamentally shift.

If you consider the built environment, of course we need to decarbonize cement and concrete, and we also need to despecify buildings. That also means getting engineers and regulators to be comfortable with using less cement and concrete. And that means changing professional liability, it means reskilling.

The second area of uncertainty is around competition between different decarbonization investments or pathways. Humayun mentioned the stranded-asset risk for many existing carbon assets. I think we’re also going to have stranded-sustainable-asset risk. You can think through areas where there’s competition between different decarbonization pathways: for example, cross-laminated timber versus green cement and concrete. We will presumably have a mixture of both, but to what extent? You’re going to have competition between those different materials and potentially stranded-asset risk.

In Europe there’s a huge debate around using biomass, and surely, at least in the near to medium term, we’re going to use biomass as an energy source. But ultimately, we will evolve beyond that, and so you also end up with stranded-transitional-technology risk.

The stakes of stagnancy

Lucia Rahilly: When you’re talking to CEOs, does the notion of declining consumption and declining demand resonate? How do CEOs respond to that potentiality?

Humayun Tai: There’s no longer any doubt that fossil-based energy will decline. That is now table stakes conversation. The question is when. Is this a 30-year transition? Is it a 50-year transition? We’re back to timing.

Anna Moore: Those who don’t grapple with the way we need to reduce consumption risk are finding that they haven’t made the progress they need to. We’re starting to see more acute changes in the climate and in the livability of our world. Such changes will lead to much sharper and more challenging policy shifts. Then they will end up with a disorderly transition.

Companies can get ahead of that by thinking through, “What does a sustainable 2050 business model look like, and what would it look like in order to fundamentally reimagine my business?”

Humayun Tai: We know the Global South is going to bear more of the cost of this transition. So adaptation is important, and it becomes an opportunity in some ways.

The other thing is biodiversity—water and some of the nature-based capital aspects. How do we get ready for impacts on biodiversity and water? What opportunities are there for companies to play an increasingly important role there, as the carbon budget may fall short?

Lucia Rahilly: Great discussion. Anna and Humayun, thank you so much for joining us today.

Humayun Tai: Thank you, this was fun.

Anna Moore: It was a pleasure.

Roberta Fusaro: Now, let’s hear from Columbia professor Bruce Usher, author of the book Investing in the Era of Climate Change, about how investors should leverage their capital and influence to reverse the impact of climate change.

Bruce Usher: The most valuable companies globally are tech companies. Now let’s forward 30 years, because that’s what matters to investors. What will impact business and investors more than anything in the next three decades? My answer is climate change.

We’ve got three decades to completely rebuild this entire global economy that we just spent the last 300 years creating. That’s going to require extraordinary amounts of investment capital. Estimates are $100 trillion to $150 trillion dollars. Investing that capital is going to create, for investors, new risks and new opportunities.

The actions that investors take over the next few decades are going to change the planet. They’re going to remake that global economy and reduce emissions to meet those science-based targets. How they go about doing that, how quickly that capital is invested and how effectively it’s invested is going to make all the difference in terms of allowing us to avoid catastrophic climate change. The reality is that the capital exists, but mobilizing and investing that capital is a pretty significant challenge. In the context of many of the other great challenges that society faces, we actually have at hand the ability to solve this one.

In the past with electric vehicles, there was nothing we could put on the highway, so golf carts were about as far as you could go. Today that situation has completely changed. We have technologies and business models that already exist to reduce more than half of global emissions, and those products are commercial, and they are scalable today.

We also already have technologies to reduce the other half of the emissions we need to get down to zero. Those technologies exist, but they didn’t a couple decades ago. They’re not yet commercial, but they’re under development and many of them are already being financed by venture capitalists and other early-station investors.

So, for investors, understanding how different sectors of the economy are going to change, and which companies are going to be successful as those changes manifest themselves, is challenging. I would recommend that investors follow five different tactics.

The first recommendation: take the long view. Bill Gates famously said a number of years ago, we tend to overestimate the changes that are going to occur in the next two years, and we underestimate the changes that are going to occur in the next ten.

The second recommendation I have is, beware of greenwashing. A lot of companies are making promises that they cannot meet or do not intend to meet. The third recommendation is a phrase I learned years ago when I worked as a trader in finance: “The trend is your friend.”

The fourth recommendation is to avoid businesses that anticipate a change in human behavior. Human behavior is very set in its ways. Beyond Meat does not try to say to people, you shouldn’t eat meat. It’s saying, we’ve got a product for you that tastes an awful lot like meat. And the last piece of advice, which is similar to the first one, is that it’s better to act early than late.

What I found in researching for the book was that the connections between these sectors are really important. Renewable energy, electric vehicles, energy storage, green hydrogen, and carbon removal: these are very separate industries. But, in fact, they’re very closely connected. And more important, as we see growth in one sector, it has serious ramifications for these other sectors. In fact, they turbocharge growth in the other sectors for both technology reasons and having to do with capital and how these sectors work together.

And that’s really important because, ultimately, we have to move all of this in the same direction.

Source: mckinsey

Heavy investment, hydrogen and carbon capture & storage can help keep the temperature increase to 1.7 degrees Celsius

It is still possible to keep the temperature increase to 1.77 degrees Celsius with determined action, according to a new energy economy analysis. But investments in the clean energy sector must triple that of fossil fuel to reach Net Zero by 2050.

Greenhouse gas emissions from developing economies, particularly India, will continue to rise until the end of the present decade and will only begin to decline by the early 2030s, according to the 2022 New Energy Outlook report.

The report by global, clean energy research provider BloombergNEF analysed Net Zero scenarios or pathways that limit global warming to 1.77 degrees Celsius above pre-industrial levels by 2050, with a 67 per cent assurance.

Emissions in Europe, the United States, Australia and Japan have already peaked this year and will decline rapidly after that, according to their projections. However, China’s drop takes a blended approach; emissions peak this year and stabilise for a while before they realign with developed countries’ trajectories.

Limiting global temperature increases to 1.5 degrees Celsius will not be easily achieved, found the researchers’ modelling. Nevertheless, “there are still plausible pathways to stay within 1.77 degrees Celsius of warming in our Net Zero scenario,” the report said.

“Our modelling suggests emissions need to fall by 30 per cent by 2030 and overall by 6 per cent a year to 2040,” the study added. “Even then, a revolution will be needed in the energy sector to increase momentum and accelerate emissions reductions.”

On the contrary, if no new policies were carried out to transition to a low-carbon economy, the emissions would fall on average at a rate of 0.9 per cent every year, as per the economic transition scenario. This aligned with 2.6 degrees Celsius temperature warming by 2100.

Switching the sources of power generation from fossil fuels to renewable energy is the need of the hour, the report highlighted. This would account for nearly half of the reductions in carbon emissions, according to the author’s net zero calculations.

About 25 per cent of total emissions can be reduced using low-carbon electricity in the transport sector and industrial processes. The rest of the emissions can be abated by hydrogen and carbon capture and storage (CCS) by 6 per cent and 11 per cent, respectively.

Hydrogen and carture capture needs push

CCS is the process of using technology to capture carbon emissions from industrial processes or power generation, from where it is transported and stored underground for posterity.

Using CCS results in 11 per cent of all emissions being reduced from 2022-50. “The annual rate of emissions captured by CCS grows from very low levels today to 1.7 gigatons of carbon dioxide in 2030, 4.9 gigatons in 2040 and 7.3 gigatons by 2050 — a volume comparable to the combined power sector emissions of China, the US, and Europe in 2021,” the report read.

The usage of hydrogen grows five-fold in the Net Zero projection for 2050 from 90 million tonnes now to 501 million tonnes in 2050. It is driven by the energy industry (163 million tonnes), steel making (144 million tonnes) and transport (88 million tonnes) sectors for either aviation or shipping.

Net Zero scenario requires a global investment of $194 trillion by 2050 to make this large-scale clean energy transition. “The ratio of investment in clean-energy supply to fossil sources (excluding demand areas) must average 2.9 in this decade, and then rise to 4.9 in the 2030s and 9.7 in the 2040s,” the report said.

“This means that, for every dollar invested in fossil-energy supplies between now and 2030, $2.9 should be invested in clean energy supplies such as renewable energy, clean hydrogen and carbon capture, rising to nearly $10 after 2040,” it added.

Net Zero projections are not reflective of their assessment of countries’ internal measures and responsibilities, the authors clarified. They mention that the findings are only an analysis of the carbon budget of various sectors, including aviation, petrochemicals, power, rail and road. It also takes into account economic growth and demand factors.

While the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) did not result in decisive actions toward phasing out fossil fuels, governments and the public sector could still work closely together to transition to low-carbon energy technologies, the authors said.

Source: PTI

Financial institutions in Asia need to work closely with government and regulators to establish policies, standards, and incentives to achieve net-zero goals.

McKinsey talked to Ahmad Siddik Badruddin, chief risk officer at Bank Mandiri, about the role that banks can play in aiding Asia’s sustainability transition. They also discussed the challenges around regulatory risk and mobilizing capital and resources into sustainable finance.

McKinsey: What role does the banking sector play in driving the region’s transition to net zero?

Ahmad Siddik Badruddin: The banking sector plays a critical role in encouraging clients to run their businesses responsibly and in promoting sustainable finance practices. We support our clients by providing financial solutions that can help them to gradually decarbonize. We also look deeper at clients’ supply chains, and tailor financial solutions to help them transition into low-carbon businesses.

As of 2021, green bonds were the most developed green instruments, with broad acceptance from the global investor base. Globally, volume of green bond and loan issuance has sharply risen from $71 billion in 2018 to $269.5 billion in 2020, and $5 billion in 2018 to $29.4 billion in 2020 for ASEAN cumulative issuance. But there’s still a big financing gap. There’s a lot more cooperation required between governments and banks: we all need to work together to fill the funding gap.

McKinsey: One of the challenges is around regulatory risk. What do you feel needs to happen in this area?

Ahmad Siddik Badruddin: To achieve net zero, financial institutions need to work very closely with government and regulators to set up policies that align with climate and sustainability goals. First, the government needs to provide guideline incentives and disincentives to boost interest and demand for sustainable-finance instruments. For example, there’s a basic need to set up a carbon market to facilitate the trading of carbon allowances and offsets. Regulators also need to provide the appropriate framework to motivate increased interest and participation from banks and other financial institutions.

In addition, the government and government-supported entities can work together with financial institutions such as the World Bank or the Asian Development Bank (ADB) to develop a financing platform. How do we de-risk green projects with guaranteed mechanisms, credit enhancement, or insurance? We need to come together quickly with all stakeholders to set up the right infrastructure policies, regulations, standards, and incentives.

McKinsey: What is the role of a leading Indonesian institution like Bank Mandiri in promoting sustainable finance to help bridge this significant funding gap?

Ahmad Siddik Badruddin: We are highly committed to developing and promoting sustainable-finance practices, including efforts to help achieve a low-carbon economy. This commitment translates into our sustainable-finance framework and strategy, which consists of three pillars—the sustainable-banking pillar, the sustainable-operations pillar, and the sustainable-CSR and financial-inclusion pillar.

For the sustainable-banking pillar, we have strict criteria for our sustainable credit portfolio. In the 2nd quarter of 2022, we already had IDR 226 billion or 25.4 percent of our total loan portfolio that qualified as sustainable loans, some of which was in green sectors and some in the micro, small, and medium enterprise (MSME) segment. We also have initiatives to implement sustainable financing in the retail banking segment—for example, auto loans for electric vehicles, subsidized mortgage loans for affordable housing projects, and government-subsidized productive micro loans.

On the funding side, Bank Mandiri successfully issued its first sustainable bond in April 2021, with an issuance size of $300 million. This bond issue has been recognized as the best sustainability bond by The Asset in that year. In the first quarter of 2022, Bank Mandiri conducted two ESG repo transactions, totaling USD 500 Mn, the first ESG repo in Indonesia. We also actively support our corporate banking clients with high carbon footprints, such as those in the coal industry, to help them transition into green operations and businesses. We prioritize clients, existing or potential, who have transition strategies and action plans in the context of climate-related risk management. We will continue to develop products and services that align with sustainable finance, such as Sustainability-Linked Loan (SLL) and Transition Loans, to offer to potential clients to transition to green operations or adapt to climate risk. On the regulatory side, we believe that there will be opportunities to align our portfolio to the new green taxonomy and help clients meet these criteria.

For our sustainable-operations pillar, we continue to minimize our own carbon footprint by increasing the use of efficient, renewable energy and lighting, and developing eco-friendly offices. So, whenever we build new offices, we make sure that they qualify to be recognized as green buildings. With the launch of digital super app Livin’ and digital super platform Kopra, Bank Mandiri not only supercharges its digital banking operations but also helps minimize carbon footprint in its clients’ activities and Bank Mandiri’s own operations.

And for the sustainable-CSR and financial-inclusion pillar, we are focused on community empowerment programs and expanding our financial-inclusion programs.

McKinsey: What are the challenges for mobilizing capital and resources into sustainable finance?

Ahmad Siddik Badruddin: I believe there are three main challenges. The first one definitely would be the financing gap—the transition into a lower-carbon economy requires significant capital for the development of the green infrastructure and ecosystems. By the ADB estimation, Asian developing countries need around $1.7 trillion per year to support climate-resilient infrastructure. Indonesia alone requires around $74 billion per year, with an annual financing gap of around $51 billion.

The second challenge is the lack of investment-ready projects, where green projects typically require new technology, large capital, and long-term financing—special structured finance is really needed here, which is usually more costly and sometimes less viable than the traditional forms of finance. Many of the green finance projects are also viewed as not bankable due to the lack of quality in project preparation, structuring, and planning. So, these factors contribute to the perception of the higher risk profile of the projects.

The third challenge is regulatory and policy uncertainty. Regulations and policies related to green finance are still in the early development phase and have not been standardized in regions and across agencies. This uncertainty can increase financing risk, resulting in questions on project viability, and also potential lack of interest from the investor side. The reporting and disclosure standards among countries vary widely, and there is no standard regulation that has been set among regions. This results in inconsistency of data disclosure, which makes it difficult for investors to make objective comparable assessments between countries and regions.

So, I think some of the things that we can do to overcome the challenges is for private capital and investment to be supported by the appropriate incentives or policies from government, and technical assistance from development financial institutions. We need to understand how we can overcome these top three challenges, otherwise progress will be slow and difficult.

Source: mckinsey

How do governments across the region ensure that local industries are part of the solution?

McKinsey chatted to Joan Larrea (CEO of Convergence Blended Finance), John Murton (UK government’s COP26 envoy), and Dominic Waughray (senior advisor to the CEO, World Business Council for Sustainable Development) about the role of governments in facilitating the investment required to move to net zero.

Joan Larrea

McKinsey: What can governments of Asian economies do to contribute to getting to net zero—how do they ensure that their local sectors and industries understand the weight of the problem, and are part of the solution?

Joan Larrea: What governments can do in these places is help domestic investors focus on the problem. For one thing, no matter how poor the country, there is local capital—and it’s probably more adept at gauging risk and reward than somebody in the United States or Europe. It’s also operating in the right currency. Host governments in these nations really should be helping to develop domestic capital markets, and thinking through the regulations that allow, say, the sovereign wealth fund to invest in alternatives. Some of this may need blending of concessional and non-concessional resources. But it’s incredibly important, partly because interest of foreign direct investors is fairly low in some of these places.

McKinsey: Are there certain sectors or areas of the economy that you feel lend themselves more naturally to “catalytic capital”?

Joan Larrea: You could flip that around to say, where can blended finance be particularly helpful to sectors? There are a couple of places where capital has a hard time forming around investment opportunities. For example, where you don’t have investment scale.

I’ll give you an example from our design-funding portfolio, where we issue early-stage grants—that’s at proof-of-concept and feasibility stage—to ideas that one day will become investable. One of the transactions we’re helping right now is in Fiji, and it’s being run by the Glasgow Financial Alliance for Net Zero (GFANZ). They’re trying to support all these very small, off-grid power-plant developers. These are profitable [efforts], but they’re just too small and the developers involved can only do one at a time. They don’t have any capital. So GFANZ is creating a fund that will supply output-based or milestone-based funding to these developers, which basically accelerates the process of putting out off-grid clean-energy plants. In doing that, they must work with the regulator, they have to figure out the tariffs—it’s a lot of work. It’s an example of somebody taking these very, very small opportunities and financing them in a way that you have an aggregated structure that one day possibly could be invested in.

McKinsey: Singapore in particular has seen a dramatic rise in the movement of private capital—especially through family offices—from different parts of the region, and also globally. How can a family office approach this large, complex topic on the transition to net zero, and play a critical role?

Joan Larrea: There are a number of different paths. Family offices have unique flexibility because they’re managing private money. Many family offices have at least two modes they operate in already: one is the charitable mode, and the other is the investing mode.

If you think about the mission-based deployment of capital, it’s not return seeking. If a family office is thinking about having a big impact per dollar for that money that doesn’t need a return, they could start to aim some of it into structures where they are the catalytic money, and others will come in behind them with purely commercial money. This takes a certain field-building mindset: “I’m going to put my money out the door, maybe seeking an inadequate return, because I see that my dollar will be joined by four or five other dollars.”

You also have your investment side, which seeks to make a long-term return of x percent or maintain a certain liquidity. Here you have all the normal rules of any fiduciary—that money can also be invested in things that have to do with climate change.

We’re much more interested in that first area of family-office operations: thinking through how to do more with the capital they have at hand. I really do think that that mindset switch between putting it out the door alone and putting it out the door as something that will attract other investors is an important shift.

John Murton

McKinsey: What do you see as the top three challenges in Asia’s transition to net zero?

John Murton: I would put them into three categories: Policy inertia, technical and grid inertia, and finance. When looking at policy inertia, energy ministries have historically been committed to delivering a steady, predictable supply of energy that’s available when required. The whole net-zero agenda is introducing a new policy vector of emissions that governments around Asia are grappling with. We have to overcome a degree of the hesitancy about some of the technology that’s required to get to net zero.

That brings us to technical inertia, particularly in transmission grids. Around Asia, a lot of grids are designed to link up a few large thermal power stations, whereas to get to zero we need to turn grids upside down and shift to a more distributed form of generation. That requires considerable investment and know-how to deliver.

That then takes you to finances: How will you finance the investments in the distributed generation that’s going to be required to get Asian economies to net zero? There’s a lot of links back to policy and policy reform in order to make investment bankable. This will be required in many countries, where the vast majority of the funds will have to come from the private sector.

McKinsey: With these significant challenges for the region, what are your thoughts on what the unlocks or enablers to address these challenges for Asia will need to be?

John Murton: The country-platform prism that we’re adopting in a number of economies we’re working in—Vietnam, Indonesia and elsewhere—is a very useful way of grappling with the problem. Firstly, having a country platform process generally involves setting up a forum through which you can get senior political-level focus on the policy problems that are confronting economies on the way to net zero; it enables environment ministries to work alongside energy ministries, finance ministries, and others to unlock the policy challenges.

That doesn’t happen easily without some form of forcing mechanism. The country platform mechanism is very helpful for overcoming inertia, so we can give support to ministries on how to deliver a policy environment that enables investment in the energy grid. That political direction allows a discussion about how to align financial incentives with policy goals.

And that links us then to the financial again: creating a clear investment plan at the country level, setting out what investment is required to move a grid to net zero. This enables financials to come together to align their investment and site it within a broader investment plan. It also enables donor partners like the United Kingdom and others to make sure that we’re cooperating and not competing.

McKinsey: Could you tell us more about the role of regulators in governance in mobilizing sustainable finance, and blended finance in particular?

John Murton: If you look at the experience of the United Kingdom, we’ve mobilized over £90 billion of investment over the last decade in offshore wind through creating a private-sector environment that enabled this. We’re working with the South African government to identify barriers to a similar environment there. The returns on investment may not be purely commercial, and so you need to blend in a bit of concessional capital, to enable the private-sector investors to have the rate of return that’s required to make project finance simple.

Dominic Waughray

McKinsey: What are the top three challenges in achieving net zero in the Asian context?

Dominic Waughray: The first challenge, which is not unique to financing, is that time is against us. So it’s more like creating a software product than a perfect kind of financing policy or framework design: what is the best viable product to put into the marketplace now, on which we can get feedback and iterate to improve step by step, rather than waiting for the perfect solution?

The second thing is that we’re all coming together and collaborating—across the private sector, across financial systems, across regulators, across science, and across NGOs who’ve got target-setting mechanisms to develop things in an area where there isn’t regulatory clarity. We don’t have the answers, so we’re having to build as we go. That can be a very comfortable space for people who are intrinsically entrepreneurial, but an uncomfortable space for people who feel they have fiduciary duties. It’s quite a unique moment in time that requires a leap of faith and, more importantly, trust.

McKinsey: Do you think it’s a matter of reframing? Do the institutions themselves and the roles they play need to change?

Dominic Waughray: We don’t have time, and we need to lean out from different areas to make this work. We have enough intellectual capability to fix the situation, but we have to assemble different pieces of the jigsaw.

Cooperation and trust in this assembly are crucial now because the region is the centre of a global fragmentation. The world needs to recognise that Asia’s successful transition is pivotal to a global transition. Delivering on commitments for a just transition is a prerequisite for restoring trust and supporting developing economies in Asia as they transition.

Take the challenge for blended finance in Asia: on the one hand, you might have an Association of Southeast Asia Nations (ASEAN) Secretariat, which has key goals for net zero; you have an Asian Development Bank, a multitude of private-sector players, sovereign-wealth funds, and people who are experts on the transaction that might need to take place. What you do not have is the connective tissue that allows talented actors to come together, shed the isolated-projects mindset, and iterate with a purpose towards a single outcome.

For example, Japan’s prioritization of the decarbonization of its manufacturing and retail industries is driven by the cooperation between the corporate sector, government, and international stakeholders, with an aim to focus technology innovation on net zero. This is a new type of development agenda, tapping into a wealth of diverse human capital to illuminate the path toward a net-zero framework on a grander scale. What’s unique about the ASEAN context is that there’s an understanding between state and market. There’s great expertise and it’s highly digitalized. There’s desire for innovation. However, to drive the agricultural net-zero transformation, there’s a need to establish infrastructure to unlock the biobased economy.

What’s also interesting is that we have a new generation of wealth creators coming through, that defy the stereotype of Indonesian or Malaysian old-school family businesses. The next generation of leadership in business across the ASEAN region is very focused on social-development goals, and on outcomes that combine technology, education, and entrepreneurship.

McKinsey: When we talk about a project mindset that sets up very niche instruments that are only relevant to that particular project, how do we combat that?

Dominic Waughray: There’s an art and a science to it. To explore what we need at a national or regional level to fix a number of problems, we can create a roadmap over the next four years: all the things we’ll need to put money into. It becomes more holistic; it becomes a multi-ministerial discussion.

It’s a very interesting arena for small island states, applicable to the (ASEAN) context, because they’re quite hermetically sealed. Economies rely on fuel imports and tourism, but they have 200 nautical miles of sea, which is a massive economic opportunity if done right and sustainably.

Source: mckinsey

Actions from policymakers, manufacturers and consumers are already having an impact, avoiding almost 1.7 million barrels of oil per day in 2022

Sharm El-Sheikh : Adoption of zero-emission vehicles accelerated in the past year across almost all markets and vehicle segments, according to the 2022 Zero-Emission Vehicles Factbook published by research company BloombergNEF (BNEF)at COP27 in Egypt.

The ZEV Factbook finds that global momentum toward zero-emission road transport has continued to accelerate in 2022, with passenger electric vehicle sales on track for more than10 million units, up from 6.6 million in 2021. Over 13% of new car sales globally in the first half of 2022 were electric, rising from 8.7% for all of2021. Global lithium-ion battery manufacturing capacity also increased 38% since 2021and overall spending on clean road transport worldwide is set to exceed $450 billion this year.

The ZEV Factbook has been produced by BNEF in cooperation with the Accelerating to Zero Coalition and in partnership with Bloomberg Philanthropies, to coincide with COP27 – the2022 United Nations Climate Change Conference. The first Zero-Emission Vehicles Factbook was released at COP26 in Glasgow and the updated 2022 publication tracks the progress that has been made toward achieving global net-zero emission in the road transport sector.

The adoption of zero-emission vehicles has already reduced oil consumption and carbon dioxide emissions. Electric vehicles of all types – including cars, buses, motorcycles, scooters, vans and trucks – are expected to avoid almost 1.7 million barrels of oil use per day in 2022, up from 1.5 million barrels per day in 2021.These vehicles are currently eliminating 152 million metric tons of CO2 per year, with the biggest contribution coming from the large fleet of electric two- and three-wheelers in Asia.

The ZEV Factbook was warmly welcomed byAlok Sharma, COP26 President. “The BNEF Factbook shows that, despite the global energy crisis, the zero-emission vehicle transition has continued to accelerate since we launched the ZEV declaration at COP26. It also highlights that the ZEV transition is key to permanently ending our dependence on oil,” said Sharma.

However, the report also sounds a note of caution as progress on new commitments to ZEVs from both automakers and governments has slowed over the past year. National ZEV targets and internal combustion engine (ICE) phase-out targets cover nearly 41% of the global passenger vehicle market by 2035, similar to a year ago. Automakers with 2035 ICE phase-out targets account for 23% of the market, as light increase from 19% a year ago. This increases to 30% if automakers’ targets for 2040 are included.

Aleksandra O’Donovan, lead author of the report and the head of BNEF’s electric vehicle research team, noted that there is a growing gap between wealthy and emerging economies on ZEV adoption. “While many of the indicators in this report are pointing in the right direction, most countries still have a long way to go before we can be confident that we are on track for a net-zero emission transport sector by mid-century,” stated O’Donovan.

The report concludes that national, regional and local governments must continue to raise ambition and implement stable, long-term policies that induce the growth of zero-emission transport and manage the phase-out of polluting vehicles.

Nigel Topping, UN Climate Change High-Level Champion for the UK, COP26added:“We call on more actors to come forward next year and make and implement ambitious commitments to transition to zero emission vehicles and reap the benefits of cleaner air, jobs, economic growth, and keeping our Paris Agreement goals within reach.”

About Bloomberg on Climate

Led by Michael R. Bloomberg, a global climate champion and Special Envoy to the UN Secretary-General on Climate Ambition and Solutions, Bloomberg Philanthropies and Bloomberg L.P. are tackling the climate crisis from every angle. Bloomberg Philanthropies is at the forefront of US and global efforts to fight climate change and protect the environment, bringing together mayors and other government and business leaders, grassroots partners, and environmental advocates across a key array of issues. These philanthropic efforts are accelerating the transition from coal to clean energy, improving air quality and public health, advancing city and local climate action, protecting and preserving ocean ecosystems, and helping unlock billions of dollars in sustainable finance. At the same time, Bloomberg L.P. is providing the global financial community with data-driven insights, news, and analysis to help integrate an ESG lens across the investment process. As a company, Bloomberg L.P. is also leading by example, including committing to 100% renewable energy by 2025 and taking action in the communities where its employees live and work. And through Bloomberg’s stewardship of the Glasgow Financial Alliance for Net Zero and the Task Force on Climate-related Financial Disclosures, Bloomberg is using the power of the capital markets to address climate change and support the transition to a net-zero economy.

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.

About Bloomberg Philanthropies

Bloomberg Philanthropies invests in 941 cities and 173 countries around the world to ensure better, longer lives for the greatest number of people. The organization focuses on five key areas for creating lasting change: the Arts, Education, Environment, Government Innovation, and Public Health. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s giving, including his foundation, corporate, and personal philanthropy as well as Bloomberg Associates, a pro bono consultancy that works in cities around the world. In 2021, Bloomberg Philanthropies distributed $1.66 billion.

Cummins Inc., a global power solutions and hydrogen technologies provider, and Tata Motors, the largest commercial vehicle manufacturer in India, today signed a Memorandum of Understanding (MoU) to collaborate on the design and development of low and zero-emission propulsion technology solutions for commercial vehicles in India, including hydrogen-powered internal combustion engines, fuel cells, and battery electric vehicle systems.

The MoU was signed in the presence of N Chandrasekaran, Executive Chairman, Tata Sons, and Tom Linebarger, Executive Chairman, Cummins Inc., on November 14, 2022, at the Tata Sons Headquarters – Bombay House, in Mumbai, India. Senior officials and dignitaries from Cummins India and Tata Motors were also present during the MoU signing ceremony.

On this occasion, Mr. N Chandrasekaran, Executive Chairman, Tata Sons and Chairman, Tata Motors said, “The shift to sustainable mobility is irreversible and Tata Motors is committed to be amongst the leaders of green mobility. We are taking definitive steps to drive this global megatrend forward in each of our businesses. Working with partners who share the same vision is essential for this transition and we are delighted to strengthen our long-standing relationship with Cummins for their next generation, hydrogen propulsion systems. We are excited to indigenize the cutting-edge hydrogen technology to offer our customers an expanded portfolio of green and future ready commercial vehicles, accelerate the adoption of sustainable mobility in the country, and to contribute towards India’s ‘net zero’ carbon emission goals.”

Commenting on the strategic collaboration, Mr. Tom Linebarger, Executive Chairman, Cummins Inc., said, “Climate change is the existential crisis of our time, and this collaboration between Cummins and Tata Motors accelerates our ability to address it. Cummins is well-positioned to help our customers successfully and seamlessly transition to economically viable decarbonized solutions. Cummins and Tata Motors have a strong history of partnership, and the next step into low and zero-emissions technologies is an exciting development for zero-emissions transportation. Our collaboration in India is an important milestone for Cummins and Tata as we work together to accelerate the shift to a carbon-free economy and a zero-emissions world. We strongly believe that this collaboration is a significant step forward to achieving India’s Green Hydrogen Mission. I am excited to enable powering a cleaner and greener India.”

In 1993, the two engineering companies came together to fulfill their goal of introducing best-in-class cleaner vehicle technology solutions to the Indian market – Tata Motors to deliver best-in-class mobility solutions in India and Cummins to power that vision through their products and services. Driven by a shared ideology, common vision, and values of Integrity, Teamwork, and Excellence, this partnership has grown from strength to strength over the last three decades. This MoU further solidifies their association and is aligned with India’s vision of ‘Energy for Sustainable Growth’ and achieving net zero carbon emissions by 2070. India will be one of the first markets to receive Cummins’ Hydrogen engines, an important technology to help drive decarbonization.

CUMMINS LOW AND ZERO EMISSION PRODUCTS

Cummins B6.7H hydrogen engine with up to 290 hp (216 kW) output and 1200 Nm peak torque is an all-new engine platform featuring cutting-edge technology to enhance power density, reduce friction losses and improve thermal efficiency. As a result, performance is transparent and compatible with the same transmissions, drivelines, and cooling packages. The B6.7H hydrogen engine is being derived from Cummins fuel-agnostic platform offering the benefit of a common-base architecture and low-to-zero carbon fuel capability.

Cummins zero-emission product portfolio also includes its fourth-generation hydrogen fuel cell engine. Designed to meet the duty-cycle, performance and packaging requirements of medium and heavy-duty trucks and buses, the fuel cell technology is available in 135 kW single- and 270-kW dual modules. The systems have strong operating cycle efficiency and durability for a lower total cost of ownership.

Cummins battery portfolio includes both Lithium Iron Phosphate (LFP) and Nickel Manganese Cobalt (NMC) battery packs, each of which targets a different duty cycle and use case.

Destination Zero is Cummins’ strategy to go further and faster to reduce the greenhouse gas (GHG) and air quality impacts of its products and reach net-zero emissions by 2050. Cummins is pursuing a dual-path approach, meaning the company is reducing emissions from internal combustion engines while simultaneously investing in new, zero-emissions products. The company spends approximately $ 1 billion annually on research and development of future technologies.

Cummins’ approach lowers emissions today; incorporates well-to-wheel emissions reductions by matching technology readiness with infrastructure readiness; drives wide-scale adoption due to affordability by using the right technology at the right time; and will achieve net-zero emissions by 2050.

About Cummins Inc:

Cummins, a global power technology solutions provider is a corporation of complementary business segments that design, manufacture, distribute and
service a broad portfolio of power solutions. The company’s products range from internal combustion, electric and hybrid integrated power solutions and components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, electric power generation systems, microgrid controls, batteries, electrolyzers and fuel cell products.

About Cummins Group in India:

Cummins in India is a group of complementary business units that design, manufacture, distribute, and service engines and related technologies, including fuel systems, air handling, filtration, emission solutions, and electrical power generation systems. Its technology and pioneering initiatives are bringing innovative solutions and dependable services at the best possible value to users across the country. Its high-performance outlook is based on customer focus, integrity, and capability of its people. Part of the $24 billion Cummins Inc. USA. Cummins in India is a Group of seven legal entities across 200 locations in the country with a combined turnover of ₹17,900 crores in 2021 and employing over 10,000 individuals.

About Tata Motors:

Part of the USD 128 billion Tata group, Tata Motors Limited (NYSE: TTM; BSE: 500570 and 570001; NSE: TATAMOTORS and TATAMTRDVR), a USD 37 billion organization, is a leading global automobile manufacturer of cars, utility vehicles, pick-ups, trucks and buses, offering extensive range of integrated, smart and e-mobility solutions. With ‘Connecting Aspirations’ at the core of its brand promise, Tata Motors is India’s market leader in commercial vehicles and amongst the top three in the passenger vehicles market.

Tata Motors strives to bring new products that fire the imagination of GenNext customers, fueled by state-of-the-art design and R&D centers located in India, UK, US, Italy, and South Korea. With a focus on engineering and tech enabled automotive solutions catering to the future of mobility, the company’s innovation efforts are focused to develop pioneering technologies that are sustainable as well as suited to evolving aspirations of the market and the customers. The company is pioneering India’s Electric Vehicle (EV) transition and driving the shift towards sustainable mobility solutions by preparing a tailor-made product strategy, leveraging the synergy between the Group companies, and playing an active role liasoning with the Government in developing the policy framework.

With operations in India, the UK, South Korea, Thailand, South Africa and Indonesia, Tata Motors’ vehicles are marketed in Africa, Middle East, South & South East Asia, Australia, South America, Russia, and other CIS countries. As of March 31, 2022, Tata Motors’ operations include 86 consolidated subsidiaries, two joint operations, four joint ventures and 10 equity-accounted associates, including their subsidiaries, in respect of which we exercise significant influence.

About Cummins Inc.

Cummins Inc., a global power technology leader, is a corporation of complementary business segments that design, manufacture, distribute and service a broad portfolio of power solutions. The company’s products range from internal combustion, electric and hybrid integrated power solutions to components including filtration, aftertreatment, turbochargers, fuel systems, controls systems, air handling systems, automated transmissions, electric power generation systems, microgrid controls, batteries, electrolyzers and fuel cell products.

Headquartered in Columbus, Indiana (U.S.), since its founding in 1919, Cummins employs approximately 59,900 people committed to powering a more prosperous world through three global corporate responsibility priorities critical to healthy communities: education, environment and equality of opportunity. Cummins serves its customers online, through a network of company-owned and independent distributor locations, and through thousands of dealer locations worldwide and earned about $2.1 billion on sales of $24 billion in 2021.

• Corporate Coalition for Innovation & Technology toward Net Zero (CCITNZ) to partner with governments, international organizations and others in industry to help countries meet decarbonization and climate change goals.

• Founding members include Bechtel, GE, GM, Honeywell, Invenergy and Johnson Controls.

Sharm El Sheikh, Egypt : A coalition of six global companies today announced the public launch of the Corporate Coalition for Innovation & Technology toward Net Zero (CCITNZ), a cross-sector business alliance dedicated to helping countries meet decarbonization and climate change goals through innovation and technology. CCITNZ has been working behind the scenes since its creation in late 2021.

CCITNZ intends to serve as an accelerator for industries across sectors and geographies to innovate and develop breakthrough technologies to help achieve these goals. Founding members include Bechtel, GE, GM, Honeywell, Invenergy and Johnson Controls.

The objectives of CCITNZ include:

Innovation and Technology: Promote concrete, practical and cost-effective technology solutions to tackle emissions and decarbonization challenges;
Partnership: Promote strong partnerships with stakeholders in the private, public and social sectors across international venues and forums to enable solutions beyond what any one stakeholder can realize;
Energy Security: Partner with governments and other stakeholders to advance energy security, decarbonization and sustainable development needs;
Policy: Support sound public policies that are consistent with improving environmental effectiveness and foster innovation; and
Resource: Provide expertise and thought leadership to governments and other stakeholders on technology and innovation as they seek to achieve their decarbonization and climate change goals.

“CCITNZ provides a forum and network to help to develop solutions that help governments and other customers to reduce emissions and achieve their climate goals,” said Stu Jones, Bechtel’s president of regions and corporate relations. “We have a successful test case here in Egypt. The collective commitment we bring can be a resource, especially to emerging economies.”

“The ‘Implementation COP’ is the perfect venue to launch CCITNZ as Egypt is showcasing how countries are putting promises into action and delivering on the commitments made at COP26,” said Roger Martella, GE’s chief sustainability officer. “CCITNZ will play a pivotal role in advancing the technology and innovation needed to reach net zero.”

“GM is proud to join CCITNZ as we work to drive from commitment to action,” said Kristen Siemen, GM’s chief sustainability officer. “We look forward to strengthening our relationships with this coalition of diverse stakeholders as we help build the infrastructure the world needs to meet our collective climate goals.”

“We are proud to be a part of the CCITNZ coalition and help industries and nations around the world achieve their near- and long-term decarbonization goals,” said Ben Driggs, Honeywell’s president of global high growth regions. “This initiative reflects the aim of COP27 to drive meaningful action against sustainability pledges being made around the world and highlights the clear benefit of cross-industry partnership in support of these goals.”

“We are living in an exceptional time defined by unprecedented levels of focus on and investment in the global transition to clean energy,” said Jim Murphy, Invenergy’s president and corporate business leader. “Our collective impact and efforts are the key to reaching global net zero goals, and Invenergy is proud to join our CCITNZ partners and share its expertise as a leading clean and renewable energy developer with global leaders who share our common vision for a sustainable world.”

“We are at an inflection point when it comes to our planet’s health. Buildings account for 40% of the world’s greenhouse gas emissions, so it is clear that we have to act now. The good news is technology exists now to check climate change while growing economies and bringing prosperity, health and well-being for all,” said Katie McGinty, Johnson Controls’ vice president and chief sustainability and external relations officer. “At Johnson Controls we are committed to working across industries and governments to deliver progress on climate change in a way that lifts everyone up and works for people all around the world. We are pleased to amplify our effort as a member of the CCITNZ coalition and support its mission to advance the innovation and partnerships needed to reach net zero.”

CCITNZ members are already working together to help governments advance their decarbonization journeys. For example:

Bechtel: A coalition of energy transition leaders – Baker Hughes, Bechtel, Enppi, GE Digital, HSBC, the National Bank of Egypt and Petrojet – is providing construction, technology and financing expertise to support decarbonization of select downstream facilities in Egypt, aligning plans with the country’s leadership of COP27.

GE: GE is partnering with the Egyptian Electricity Holding Company to explore the application of carbon capture and storage, hydrogen blended fuels, upgrade solutions and the conversion of simple cycle power plants to combined cycle. GE also recently signed an agreement to run a GE LM6000 gas turbine at the Sharm el-Sheikh Power Plant on a hydrogen-natural gas fuel blend. These initiatives build upon the strong legacy of over 45 years of GE’s contributions to strengthening critical infrastructure across Egypt.

Honeywell: Honeywell has a 60-year legacy in Egypt, supporting both public and private sector development by helping position the country at the leading edge of innovation and technology in key areas from energy to smart city development. Honeywell UOP is working with ENPPI to develop carbon reduction opportunities at a number of Egypt’s refineries. Honeywell is also the technology provider for the City Operations Center of the Egyptian Government’s New Administrative Capital for Urban Development (ACUD), to optimize the efficiency, safety and security of the new city.

Invenergy: Invenergy works around the globe, bringing clean energy innovations to life to help countries meet decarbonization and climate change goals. Most recently, Invenergy began commercial operations of a $1 billion liquefied natural gas (LNG) and electric infrastructure project in El Salvador. This project shifts a significant amount of the country’s power supply to natural gas, providing up to 30% of El Salvador’s power needs with clean, reliable electricity and offsetting 600,000 tons of carbon dioxide emissions per year. Invenergy commissioned a first of its kind hybrid solar and energy storage project in Mexico that is providing clean and reliable power to the nation. Building upon this track record Invenergy will continue to work with governments and other stakeholders to deliver affordable, clean energy, and sustainable economic development.

Johnson Controls: Johnson Controls is the global leader for smart, healthy and sustainable buildings and was among the earliest industrial companies to report emissions and pledge emission reductions. Since 2000, Johnson Controls has helped save customers more than 35 million metric tons of CO2e and $7.2 billion through guaranteed energy and operational savings The company has reduced carbon emissions intensity by more than 70% since 2002 and pledged to achieve net zero carbon emissions before 2040 and announced science-based targets for 2030. Locally, Johnson Controls provided more than 130 high-efficiency indoor packaged units to the COP27 venue in Sharm el-Sheikh, which are 35% more energy-efficient than competing units in the region.

Source: ge

Growing demand for semiconductors means industry emissions are likely to increase. Semiconductor companies are making sustainability commitments, but more is needed to achieve net zero.

For the past few years, semiconductor companies have focused on addressing the chip shortage and directed their energies into increasing supply. But another customer imperative, as well as the health of the planet, now requires increasing attention: the need for greater sustainability. Many end customers are already asking their suppliers, including semiconductor companies, to step up their efforts to reduce greenhouse-gas (GHG) emissions to achieve net-zero carbon emissions along their entire supply chain (see sidebar “Semiconductor companies respond to global warming with ambitious sustainability commitments”). Suppliers are taking heed of these requests, both to retain business and to join in the fight against global warming.

The urgent need to increase sustainability efforts comes just as semiconductor production ramps up to meet growing demand and more sophisticated chip designs are required for leading-edge mobility, computing, and connectivity applications. As production increases, however, so do emissions. Even with major semiconductor companies’ latest commitments, which are more stringent than past measures, the industry is not on track to limit emissions to the extent required under the 2016 Paris Agreement, which aims to restrict the mean rise in global temperature to 1.5°C from preindustrial levels.

Some semiconductor companies have recently set more aspirational emissions-reductions targets, but getting the industry to net zero will require more comprehensive action. This article offers a coherent, industry-wide road map that could be considered by semiconductor device makers seeking to achieve a 1.5°C trajectory by 2030 and net-zero emissions by 2050.1 In addition to describing how companies can apply existing levers to reduce emissions, the road map highlights the importance of developing new or improved decarbonization technologies—a lengthy process—and increasing the supply of renewable energy. Our analysis builds on the findings in a related McKinsey article, “Sustainability in semiconductor operations: Toward net-zero production,” which describes the decarbonization levers for semiconductor front-end fabs.

A multifaceted emissions problem

Emissions from semiconductor device makers fall into different categories:

Scope 1 emissions arise directly from fabs, primarily from process gases with high global warming potential (GWP) that are used during wafer etching, chamber cleaning, and other tasks; they can also come from high-GWP heat-transfer fluids that may leak into the atmosphere when fabs use them in chillers.
Scope 2 emissions arise directly from purchased electricity, steam, heating, and cooling equipment; the major sources include production tools and facilities/utilities.
Scope 3 emissions include all other indirect emissions in a company’s value chain; upstream emissions are those generated by suppliers or their products, while downstream emissions are related to the usage of products containing semiconductors.

By aggregating emissions data from key semiconductor device makers, the percentage of emissions classified as Scope 1, 2, or 3 upstream can be determined (Exhibit 1).2 Our research revealed that 35 percent of emissions at a typical semiconductor fab fall into the Scope 1 category, compared with 45 percent for Scope 2, and 20 percent for Scope 3 upstream. This breakdown can vary by fab, however, based on various factors, including the amount of renewable energy used and the extent to which process-gas-abatement systems have been implemented.

This article focuses on reducing Scope 1 and 2 emissions at semiconductor device makers, since these represent the largest share of emissions and are under direct control of semiconductor fabs. In a separate article, we will investigate how the semiconductor industry can reduce Scope 3 emissions.

Modeling of Scope 1 and 2 emissions

The steps that semiconductor companies are now taking will not be enough to get the industry on a 1.5°C trajectory by 2030. In fact, Scope 1 and 2 emissions may rise significantly above current levels as semiconductor production volume increases and the industry moves to advanced nodes with higher expected emissions intensity. To gain more clarity about the extent of the increase, we created three different scenarios to estimate future emissions. The assumptions underlying each scenario are as follows:

Scenario 1 (conservative). All semiconductor companies continue their current decarbonization efforts and do not pursue more ambitious goals or initiatives, even if they have publicly announced plans to do so.
Scenario 2 (optimistic). All companies that have announced decarbonization goals deliver on their commitments, while companies that have not announced decarbonization ambitions continue business as usual.
Scenario 3 (ambitious). All companies undertake the actions needed to achieve 1.5°C trajectory by 2030.

In the conservative scenario, carbon dioxide equivalent (CO2e) would increase from 93 million tons in 2020 to 183 million tons by 2030, reaching 73 million tons for Scope 1 and 110 million tons for Scope 2 (Exhibit 2).3 In the more optimistic scenario, where some companies step up their decarbonization efforts as announced, Scope 1 and 2 emissions increase at a slower rate and reach 116 million tons by 2030. In the ambitious scenario, emissions are at 54 million tons that year—lower than the levels recorded in 2020. (For more information on our model, see sidebar “Our methodology for projecting Scope 1 and 2 emissions.”)

A potential road map to help the semiconductor industry reach a 1.5°C trajectory by 2030

Based on our modeling, Scope 1 and 2 emissions would amount to 89 million tons of CO2e in 2030, even if companies apply all levers to the fullest extent now possible (Exhibit 3). While this is about half of the 183 million tons projected in the conservative scenario, it would fall short of the 54 million tons needed to remain on track for net zero.

Near-term actions

To get on a net-zero trajectory by 2030, the semiconductor industry would benefit from a coordinated effort to apply current strategies in full while simultaneously developing and adopting new technologies. These steps would be required to reach net-zero emissions by 2050—a goal that would call for the industry to reduce Scope 1 and 2 emissions by 95 percent from the 2020 level depicted in the conservative scenario.

For Scope 1 emissions, all semiconductor players would need to double down on their commitment to reduce emissions. This goal would require them to implement existing technologies to a significant extent. Consider the following:

Process gas. Semiconductor fabs could feasibly install gas-abatement systems that cover 90 percent of tools on average. Processing gas chemistry would have to be optimized to lower GHG usage, such as by replacing nitrogen trifluoride (NF3) and tetraflouromethane (CF4) with fluorine (F2) gas, which has zero global warming potential.
Heat transfer fluid (HTF). At least 70 percent of HTF would need to be replaced with low GWP options. Semiconductor fabs would also need to reduce chiller leakage.
Fuel consumption. Semiconductor companies would need to replace the current fuel supply with clean options, such as hydrogen/biomass.

With Scope 2 emissions, all players would need to continue reducing energy consumption per wafer year over year, but they can also go beyond that by increasing their share of renewable energy. Overall, the industry would need to increase its renewable-energy share to a level that is 1.4 times higher than the current share in local grids. In many geographies, this will require ambitious and truly breakthrough approaches, such as importing renewable energy or building renewable-energy-generation plants.

Long-term steps

To stay on a net-zero pathway until 2050, every semiconductor company would need to shift toward a more proactive and innovative approach—and that means making a greater investment in decarbonization and showing a willingness to experiment. For instance, the semiconductor industry can learn from other industries by introducing innovative solutions to fabs as they become available. As noted earlier, companies would benefit from investigating new solutions now, given development timelines, and some key players have already done so. Companies could also develop early-stage decarbonization technologies in partnership with leading start-ups and academic labs. Innovation will involve some risk, since not every idea will lead to real solutions that meaningfully reduce emissions.

For Scope 1 emissions, companies could continue to develop and implement alternative gas chemistry. New abatement solutions could also be implemented to enable more efficient gas removal. Simultaneously, companies could explore innovative technologies for recycling and reusing process gas that cannot be eliminated because of technical challenges.

With Scope 2 emissions, companies could increase the use of renewable energy. To do so, the industry would need to continue implementing the innovation solutions to increase supply, such as importing energy to locations with supply constraints.

The benefits of greater collaboration

To implement a road map for net zero, collaboration among semiconductor companies and other players along the value chain may be critical.

When reducing Scope 1 emissions, for instance, companies would benefit by reducing process-gas emissions in fab operations. Achieving this goal might be easier if they work with various specialty suppliers—gas/material, equipment, and abatement—to improve existing solutions and develop innovations, including those related to replacement, abatement, and recycling. Companies could also look for collaborative opportunities along the value chain to identify future gas/material requirements and define a common road map to chart their course forward. For example, chemical and tool suppliers could work jointly with semiconductor fabs to optimize processing recipes to lower emissions. Similarly, abatement tool suppliers could work closely with manufacturing equipment suppliers, fab operations, and chemical suppliers to ensure that they fulfill new abatement requirements.

To reduce Scope 2 emissions, companies would benefit from addressing challenges in sourcing renewable energy, and a joint effort with local electricity consumers could help increase availability.

Source: mckinsey

• ReNew avoids over 11 million tons of carbon emissions in FY22, i.e. 0.5% of India’s total emissions

• Produces 14,263 GWh of clean energy in FY22, enough to power 4 million Indian households annually

• Saves over 216,000 kiloliters of water in FY22, enough to serve the daily water consumption of 1.6 million Indians

• Discloses its Scope 3 greenhouse gas (GHG) emissions for the first time

Gurugram, India : ReNew Energy Global PLC (“ReNew” or “the Company”, RNW, RNWWW: NASDAQ), India’s leading clean energy company, today announced its ESG targets including a commitment to hit net zero by 2040 through its latest sustainability report for FY 2021-22. The 2040 commitment is 30 years ahead of India’s 2070 target and more ambitious than the net zero targets of many global energy companies.

ReNew intends to achieve this through a comprehensive programme of measures. This will include energy efficiency improvements across offices and sites, clean energy procurement, electrification of fossil-fuel-based equipment, encouraging suppliers for setting SBTi aligned targets, evaluating low carbon footprint raw materials, and exploring green logistics for transportation.

The company is also pledging to meet a broader range of ESG goals including water positivity, renewable energy procurement for its operations, zero waste to landfill, positively impacting 2.5 million lives through CSR initiatives, 30% women in the workforce, and ESG risk management. ReNew will monitor the progress on these targets through internal governance mechanisms and external audits – results will be reported through its annual sustainability report.

These targets were declared as a part of the recently released sustainability report, titled “Partnering for transition, Progressing sustainably, Prospering together”. The report was launched by the Board of the Company along with the community representatives in Jaisalmer, Rajasthan. The report outlines how ReNew avoided over 11 million tons of carbon emissions through its clean energy operations over the past year.

Further, the company generated 14,263 GWh of clean electricity which is enough to power 4 million Indian households and helps India avoid 0.5% of its annual carbon emissions. ReNew’s carbon intensity of electricity generation is just 32.83 gCO2/KWh, which is 95% less than the Indian power sector’s average and 94% lower than the global average.

As a part of the report, ReNew has declared its Scope 3 GHG emissions, making it a part of the select group of companies that transparently and publicly disclose its GHG emissions, including supply chain emissions. ReNew, in line with its ESG target of being water positive, said that it saved over 216,000 kiloliters of water by deploying robotic cleaning equipment, an increase of over 225% from last year.

Speaking on the report launch, Sumant Sinha, Chairman, and CEO ReNew Energy Global PLC, said “In the recent context of global economic and political uncertainty and the increasing impact of climate change, ReNew has been working tirelessly towards addressing India’s energy and climate security. We have amplified our efforts with global partnerships including business partners for global decarbonization in the areas such as energy storage, green hydrogen, and carbon markets. We have also built strong relationships with academia, think tanks and industry associations for innovative research and development.”

Vaishali Nigam Sinha, Chief Sustainability Officer and Chair, ReNew Foundation, said “ReNew’s core purpose is to address climate change, and we strongly believe that this cannot be achieved without an inclusive and equitable society. This report puts in perspective not only the positive impact that ReNew has been able to create from an environmental standpoint, but also from a social angle and the value it has co-created with its stakeholders. With a model, all women site at the ground level, a majority independent board, and 30% gender diversity at the board level, ReNew is clearly walking the talk.”

With the goal of enabling a just transition that is inclusive, holistic, and sustainable, and addresses the marginalized, youth, and women, ReNew has taken up multiple initiatives such as providing clean energy access in schools, climate literacy, water conservation, women empowerment and infrastructure development. ReNew has impacted 650,000 lives through its CSR initiatives spread across 10 states and 250 villages.

With the objective of educating the next generation which would be impacted the most by climate change, ReNew launched the ‘ReNew Young Leaders Climate Curriculum’ for 20,000 students across 100 schools. ReNew launched a reskilling program for women saltpan farmers who used to operate under challenging scenarios. Within its business, ReNew has grown its employee strength by 38% to over 1,600. During the year, ReNew will be conducting mandatory ESG training for all its employees, equipping them with knowledge and converting them into sustainability ambassadors for the society at large.

To scale up ReNew’s initiative across the social and environmental front and to draw upon the power of the collective, ReNew has partnered with like-minded institutions such as Fluence, L&T, Indian Oil Corporation, World Economic Forum, UNEP India, UNDP India, UN Global Compact Network India, Associated Chambers of Commerce and Industry, South Asian Women in Energy and IIT-Delhi.

ReNew’s sustainability report is prepared in line with the requirements of the Global Reporting Initiative (GRI) Standards, Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Disclosures (TCFD), United Nations Global Compact’s 10 Principles and UN Women Empowerment Principles. This report highlights ReNew’s performance across the three pillars of Environment, Society, and Governance (ESG), with external assurance by DNV Business Assurance India Private Limited (DNV).

Key highlights of the report:

Achieved carbon neutral status for the second consecutive year for its scope 1 & 2 GHG emissions

Aligned its net zero targets in line with the Science-Based Targets initiative (SBTi)

Near term target of reducing GHG emissions by 29.4% across all scopes by 2027

Net zero target of reducing GHG emissions by 90% across all scopes by 2040

Aim to become water positive and zero waste to landfill company by 2030

To lead the energy transition in the world, the company has forged collaborations across stakeholders’ groups, including academia and international organizations working for clean energy

Setting a high standard of corporate governance and exceeding the requirements for global foreign listed entities, ReNew maintains a majority of independent directors on its board.

About ReNew Power

ReNew is one of the largest clean energy companies in India and globally. ReNew develops, builds, owns, and operates utility-scale wind, solar and hydro energy projects for utilities, as well as for its corporate clients. It has also entered the battery storage and green hydrogen segments. As on October 10, 2022, ReNew had a gross total portfolio of ~13.4 GW of renewable energy projects across India, including commissioned and committed projects.

For more information please see below link:

Steve Howard, chief sustainability officer of Temasek, shares why stakeholders urgently need to go all in with a net-zero transition plan.

McKinsey talked to Dr. Steve Howard, chief sustainability officer at Temasek. The conversation explored the ways in which investors can help corporates transition to green, and how investing in transitioning infrastructure can contribute to alleviating poverty. Temasek, based in Singapore, is a global investment company that places sustainability at the core of their investment process.

McKinsey: On the topic of transition finance, what do you see as some of the challenges for Asia’s transition toward net zero?

Steve Howard: We have an economy that is in transition, and a rising middle class. It’s projected that Indonesia will have the fourth-largest middle-class population in the world by 2030. Simultaneously, you have a large number of people living in poverty. The burgeoning middle class has growing energy, industrial, infrastructure, and consumer needs.

Another challenge is that we still have a fossil-fuel based economy. Six out of the top-ten coal-using countries are in Asia, led by China. In this carbon-emitting heavy economy, the transition is intense, so too the pressures on growth. In many countries, you still have state-owned utilities that progress slowly and are not open to regulation. This is not a conducive environment for investment. I’m upbeat, though, as there is a tremendous amount of innovation and business engagement on this topic and we see government starting to really lean into it as well.

McKinsey: Given these pressures, how would you frame the urgency for energy transition, and why is the mobilization of capital so critical in this space?

Steve Howard: This is a tens-of-trillions-of-dollars energy transition. Without the capital markets, there is no energy transition. A handful of countries are slow to act, but the vast majority of them are now lining up to adopt net zero as the norm. Understanding net zero means you understand climate risk. There are no returns on a dead planet.

McKinsey: What is the unlock to increase the level of understanding, and consequently, capital channeled towards green finance or transition finance?

Steve Howard: Investors should look for opportunities, put strategies in place, and get their homes in order. Then look across all the different sectors or markets they’re operating in for low- or zero-carbon opportunities. Climate, energy transition, innovation, and investment all depend on good government policy and incentives. To get to scale, we need those two things in tandem, and for governments to set long-term targets. Businesses and investors want policies and regulations to be long term, clear, practical, investable, and have legal policy frameworks; that will unlock the trillions.

McKinsey: Returning to the link between consumer energy needs and the growing middle class: how do we address the issue of poverty when financing the transition towards net zero? Is blended finance an important dimension to the investment that’s needed in the transition, especially in Asia?

Steve Howard: This is a global challenge with two dimensions. One is using frequently policy-driven changes to move from fossil-fuel based energy to clean energy. The other is ensuring that people in impacted communities have access to training and the skills and jobs of the future, so that you’re not leaving desolated communities behind.

This is not just a transition for the middle class. We need to figure out how to lift people out of poverty and create a pathway for the hundreds of millions of people, across South Asia and Southeast Asia in particular, who do not have access to reliable, secure energy. You need blended finance to disrupt the risk. The development banks of the future need to be sitting alongside commercial capital, de-risking this unreleased capital, scaling, and planning how we can get hundreds of millions of people into the modern energy system.

McKinsey: How is Temasek approaching investing in this area?

Steve Howard: Temasek is a trend-aligned investor that identified sustainability as a trend. The two trends that have shaped my thinking the most are decarbonization and digitization. Our Agri-Food team has been focused on this, and we’ve made multiple investments into alternative-protein companies.

One of the inevitable outcomes we’ll see is a big shift to plant-based foods. The last count listed 624 global startups in that sector, compared to fifty a couple of years earlier. We were early investors into companies such as Impossible Foods, and a company called Perfect Day that can produce milk without cows. We’ve gone deep on energy and mobility, looking at critical markets.

For decarbonization, the clock is ticking. We have to decarbonize our entire portfolio fully by 2050 and must have halved emissions by 2030. We have a pool of dedicated capital and a team looking for early-stage tech risk. We look for technology that’s disruptive and has the opportunity to scale and transform all industries—advanced materials, low-carbon cement, and things like advanced geothermal technologies to tap the tremendous heat that sits beneath us.

In looking for late-venture, early-growth companies that are coming through in this space, we’ve partnered BlackRock to set up Decarbonization Partners. This collaborative platform brings BlackRock’s huge global reach, scale, and analytics capabilities together with our deep-tech and growth-equity experience.

Recently, we established GenZero, a five-billion Singapore dollar carbon investment platform company that aims to accelerate accelerate decarbonization globally. There is huge potential in nature-based solutions. About 20 to 40 percent of all the mitigation we can achieve over the next couple of decades could be from reforestation, regenerative agriculture, blue carbon, bio-charge, and other sectors.

There are many economic debates about how we calculate the social cost of carbon. We saw the sharp end of extreme weather in the last two, three years—not to mention the forest fires, floods, droughts, and heat waves that have racked the northern hemisphere in 2023, from China across Europe to America. We’re in the era of extreme weather and it’s getting worse. The social cost of carbon is there. We know carbon pricing is going to increase. We know that regulators, and others that put carbon in the voluntary market, will scale. GenZero is our strategic investment in that space.

McKinsey: Could you share some examples of how investors could support brown-sector corporates in their transition to green?

Steve Howard: Today, many carbon-intensive companies, or those with a fuel-heavy footprint, will find the transition has opportunities if you do it right. It’s also full of risk if you do it wrong. We have collaborated with Singapore Airlines and Changi Airport on how to get ready for a sustainable aviation-fuel future. The energy company, Sembcorp, has been making real progress in the shift from brown to green, and has ramped up their renewable share of assets In fact, they’ve recently announced a proposal to divest their coal assets in India, so their footprint can radically change.

It’s not just about managing an energy transition or greening your profile. It is about future-proofing the business and being a long-term investor. You need to let the companies that you’ve invested in know that you’re with them in the energy transition. And you expect the same of them: it’s a real commitment.

McKinsey: Do you have any final words or takeaways that you’d like to share with investors out there?

Steve Howard: Once you’re clear on what the future looks like, you need to align yourself wholeheartedly with it. If you have only one foot in the carbon-heavy economy, you’re tentatively in the future. Go in with all. The future is at risk, and the tailwinds for a clean economy are blowing as fast as a typhoon or hurricane.

Source: mckinsey

]]> https://www.eqmagpro.com/net-zero-many-india-inc-majors-could-be-net-zero-by-2050/?utm_source=rss&utm_medium=rss&utm_campaign=net-zero-many-india-inc-majors-could-be-net-zero-by-2050 Mon, 17 Oct 2022 09:22:32 +0000 https://www.eqmagpro.com/?p=296071

From investing in improving operational sustainability through greater efficiencies and responsible sourcing of materials, to improving disclosure, India’s top companies are increasing their sustainability quotient, but much more effort is needed to reach the net-zero targets set for the country .

Several Indian corporations have set internal decarbonization targets to become carbon neutral by 2050 or sooner. These include Vedanta, Aditya Birla Group, JSW Group, Adani Transmission, Mahindra & Mahindra and Dalmia Cement, among others. Reliance Industries, India’s most valuable company by market cap, aims to reach net zero by 2035.

Companies have also set internal carbon prices, which are referenced in all business decisions. For example, Vedanta has set a carbon price of £1,125 per tonne of CO2 emissions while Mahindra & Mahindra have set it at $10 (Rs 824).
Indian companies have increased investment in areas such as renewable energy, waste heat recovery systems, more efficient machinery and renewable fuels to reduce their carbon footprint. For example, JSW Steel is building a 175 megawatt waste heat boiler this year. Meanwhile, Ultratech Cement added 121 megawatts of solar capacity and 42 megawatts of waste heat recovery system in FY22. Tata Steel is targeting one million tonnes per year steel recycling capacity by 2025 through less carbon intensive electric arc furnaces in India.

Companies have also increased supplier screening and oversight to ensure sustainable practices throughout their value chain, as shown by sustainability claims from top companies.

Up to 100 companies have voluntarily disclosed information for FY22 under the Corporate Responsibility and Sustainability Reporting Standards (BRSR) recommended by Indian market regulator Sebi. BRSR will become mandatory for the top 1,000 Indian companies from FY23.

“Companies have made significant efforts to improve sustainability disclosures, build the capacity of their teams, define and quantify indicators for environmental, social and governance aspects, conduct their businesses in an ESG-centric manner and Make commitments to net zero targets,” said Rahul Prithiani. Senior Director – Sustainability, Energy and Resources, CRISIL.

To date, about 100 Indian companies have committed to the Science-Based Target Setting Initiative (SBTi), he said. More than 30 Indian companies have also made commitments to SBTi to achieve net-zero emissions by 2050 or sooner.

SBTi is a collaborative initiative involving CDP, the United Nations Global Compact, the World Resources Institute and the Worldwide Fund for Nature, and provides companies with methodologies for setting environmental sustainability goals and guidance.

According to a CDP report, over Rs 5,400 crore was spent in 2021 by leading Indian companies linked to SBTi to reduce around 5.5 million tonnes of carbon emissions.

There is a particularly strong focus on cement, iron and steel, refineries, non-ferrous metals and chemical industries as these sectors account for nearly 70% of India’s total industrial emissions, according to a Crisil report.

For metals companies, the adoption of green hydrogen as an energy source is the polar star for their net-zero journey. While the technology to produce and consume green hydrogen on a large scale is still a few years away, companies such as Tata Steel, JSW, Vedanta and SAIL are already testing the feasibility of implementing new technologies by forging technical links with other industrial value players Chain.

According to experts, the sustainability efforts of Indian companies have been driven in part by the volume of global capital chasing green investments. For example, last year Tata Motors raised $1 billion from TPG Rise Climate, a dedicated climate investment fund.

Businesses are also keen to take out Sustainable Loans (SLL) to fund their expansion plans to take advantage of the slightly lower interest rates that this debt brings. Recently, JSW Cement, Birla Carbon and Glenmark Pharmaceuticals are some of the companies that have launched SLLs in India.

However, the pace of fundraising in this area needs to increase given the sheer volume of capital required to reach net-zero targets. According to a CEEW study, as part of the net-zero path, India would need a total investment of US$10.1 trillion (over 830 lakhcrore) by 2070. This equates to an annual investment of over US$200 billion for India.

“Therefore, both action and sustainable finance need to be significantly accelerated to reach the net-zero targets,” Prithiani said. According to an estimate by Crisil, India would need nearly 20 lakhcrore of green investment by 2030.

This article is part of a series on sustainability in collaboration with BCG. BCG played no role in the editorial decision-making.

Source : localtoday

A net-zero project management framework aligns project performance with current trends in asset valuation and energy transition goals.

lthough the advice to “do well by doing good” (attributed to Benjamin Franklin) has influenced business leaders for generations, it is likely more relevant today than ever.

In an effort to move toward net-zero greenhouse gas (GHG) emissions, asset owners of all types are increasingly recognizing that the goals of business and global sustainability have become inextricably linked. Investors in publicly traded companies now consider climate change to be the most pressing environmental, social, and governance (ESG) issue.¹ Institutional investors are similarly engaged: an international group of 236 asset managers has formed the Net Zero Asset Managers initiative in support of reaching net-zero emissions by 2050.² And private-equity general partners are integrating ESG into due diligence and strategy, increasing transparency, and working to improve ESG performance in portfolio companies.

While conventional financial metrics clearly remain important, the value of investments in new assets is also dependent on how well they support ESG goals. For example, internal carbon pricing (ICP)—an internally set, hypothetical cost per metric ton of emitted CO₂—is increasingly used to guide capital investment decisions.³

Today, achieving corporate goals depends on achieving climate goals—and vice versa. The most viable path from net-zero goals to results requires developing and delivering $9.2 trillion in projects each year through 2050.

Changing definitions of asset value require a new framework for developing and delivering net-zero projects

Historically, project managers have focused on creating asset value by meeting safety, cost, quality, and schedule objectives. Environmental regulations and permits set the conditions under which the project could proceed, and project organizations, work processes, and best practices evolved in accordance with these priorities.

Today, creating asset value requires expanding project responsibilities to meet net-zero objectives. This in turn affects organizational strategies, which asset owners must use to deliver the net-zero project portfolio as well as the project development and delivery plans for each project.

A new approach, net-zero project management, expands on current best practices to account for the additional responsibilities associated with decarbonization. In doing so, net-zero project management recognizes three sources of carbon emissions associated with a typical capital asset:

• Emissions from operations are associated with operating, maintaining, and eventually decommissioning the asset.
• Emissions from manufacturing (also known as embodied carbon) are associated with the energy required to produce the materials from which the asset is built.
• Emissions from construction are associated with the energy required to perform direct and indirect construction activities.

Broadening the scope of net-zero engineering
Site selection factors into the use of renewable power sources, while transportation methods for feedstock and product are evaluated to reflect GHG emissions. As the project progresses to focus on facilities engineering, the design focuses on minimizing GHG emissions from operations and can also include the optimization of product specifications. In some cases, industry consortiums can support the application of new technologies. For example, a coalition of companies is helping Singapore achieve its net-zero emissions pledge by accelerating the development of carbon capture, utilization, and storage (CCUS) technologies to create the country’s first end-to-end decarbonization process.4
Specifications for engineered equipment and materials now prioritize minimizing GHG emissions associated with manufacturing and power consumption, and new design tools can help engineers reduce operating emissions.5 For example, to help design buildings for energy efficiency, the US Department of Energy’s Building Technology Office, a division of the National Renewable Energy Laboratory, provides EnergyPlus, an open-source program that models energy consumption.6
Engineering can also consider emissions in addition to conventional measures of asset value. Value engineering (VE) has long been used as a design optimization process to reduce capital and life cycle costs. A conventional VE workshop results in an A-list of ideas clearly worth implementing, a B-list of those that may or may not add sufficient value, and a C-list of those that are tabled for consideration on later projects (Exhibit 2). These same techniques can be applied to increasing value by reducing GHG and other emissions.

Engineering can also play a role in working with procurement as new approaches to setting supplier expectations for addressing manufacturing emissions are incorporated into supply chain management.

Finally, constructability has long been an important aspect of engineering. Now, in addition to reducing cost, time, and risk, constructability studies can also include means to reduce construction emissions through design decisions that influence productivity.

Expanding the role of net-zero procurement

Previously, supplier and service provider contracts stressed cost, quality, and schedule performance. Net-zero procurement still emphasizes these factors, but it also prioritizes decarbonization as well as new ways to allocate commercial risk. Additionally, each step of the procurement process can now be reviewed to incorporate GHG emission requirements in contractor or supplier prequalification, bidding requirements and evaluation, and contract terms and conditions.

Given that 70 to 80 percent of most organizations’ GHG emissions are related to the supply chain, it is no surprise that global organizations are already working closely with suppliers to enable the energy transition.7 According to a 2022 World Economic Forum paper, supply chain sustainability has shifted from being “niche and public-relations focused … to a core business and global competitiveness concern, notably in the past three to four years.” Companies are increasingly setting ESG targets for their supply chains or deploying direct interventions such as supplier capacity building and “preferred-supplier” lists.8

Until now, buyers have found it challenging to assess embodied carbon from alternate suppliers. For example, two identical steel beams may have very different levels of embodied carbon, with one manufactured using energy from coal-fired sources and the other using renewable energy sources. To meet this challenge, a nonprofit consortium has developed the Embodied Carbon in Construction Calculator (EC3), a free, opensource tool that gives design engineers the means to turn their 3-D building model into an interactive carbon heat map. This enables designers and procurement specialists to easily identify low-carbon supply alternatives.9
Procurement may also have a similar role in working with construction management, design, and administration contracts, defining expectations for construction emissions along with the means to ensure compliance.

Decarbonizing with net-zero construction management

Net-zero construction management begins with constructability planning that considers GHG emissions as they relate to site layout, commuting to the jobsite, and construction productivity and fuel consumption. Emissions from construction equipment are also being addressed in several innovative ways. Gammon Construction Ltd., a Hong Kong–based contractor, is using a new type of battery energy storage system (BESS) to deliver power only when needed, thereby reducing carbon emissions by 80 to 85 percent when compared with conventional diesel generators.10
In addition, the HS2 project—Britain’s new highspeed rail line and the largest infrastructure project in Europe—recently announced its first diesel-free construction site. The operation uses a 176-metric-ton electric crawler crane, biofuels to power machinery on-site, and 100 percent renewable energy.11

HS2’s Innovation Accelerator aims to create opportunities for new technologies focused on productivity and the environment. For example, Nodes & Links is pioneering the use of AI in project management systems to track and control carbon emissions (see sidebar, “An interview with Greg Lawton, cofounder and CEO of Nodes & Links”).

Net-zero assurance is essential for stakeholder confidence
The goal of project assurance is to assure financial and nonfinancial stakeholders that a project’s objectives will be met. Traditionally associated with cost, schedule, and quality, assurance can expand to include net-zero objectives as well (Exhibit 3).

Risk and uncertainty management now considers environmentally driven business risks, including reputation, investor sentiment, market factors, and regulations. In addition to conventional risk management tools such as Monte Carlo simulation and risk registers, scenario planning can also help assess the resilience of project designs and plans. That said, contingency funding, previously used primarily to cover design changes and estimate uncertainties, may need to be increased to account for the potential impact of decarbonization-related risks and uncertainties.

Decision making now involves decarbonization by redefining how front-end investment decisions are staged. For example, the timing of investment decisions can now be aligned with emissions-driven decisions such as site selection, technology selection, or product specifications. Decision support packages at each gate can be expanded to include fully defined emission-reduction plans that are explicitly tied to the asset’s carbon-based value calculations.

Stakeholder alignment now ensures alignment of financial and nonfinancial stakeholders on the net-zero implications of key strategic planning and investment decisions. Net-zero projects tend to have higher visibility than conventional projects, as well as a larger group of nonfinancial stakeholders. Although there is general agreement on the end goal of net-zero actions, agreement on the means is far from universal, and independent parties can be useful in facilitating the necessary alignment.

Transparency is essential for alignment and accountability, and it is the primary focus of net-zero assurance. That said, it requires timely, accurate, and useful information on all sources of carbon, as well as key plans and decisions to reduce emissions and the results achieved.

Independent validation can help assure that sustainability goals are met. Methods for this include instituting independent reviews of emissions calculations, validating evaluations of potential new decarbonization technologies, ensuring conformity to the latest industry standards regarding GHG emissions, and engaging independent third parties as needed for key design and planning reviews.

Accountability is perhaps the most significant potential change to conventional project management because it redefines performance metrics for project managers and teams. With project objectives now expanded to include sustainability, the conventional performance metrics can also be expanded.

Project and team performance now considers aspects such as capturing real-time emissions data and trends, calibrating internal and external organizational performance, and periodically resetting emissions targets across the project portfolio.

Project managers will likely agree with French statesman Charles Alexandre de Callone, who once said, “The difficult is done at once, the impossible takes a little longer.” Indeed, millennia of amazing infrastructure achievements stand as proof that seemingly insurmountable challenges can eventually be overcome.

The urgency of climate change is no different. Leaders are setting goals, markets are mobilizing, and skilled people worldwide are engineering and building the assets that will drive the transition to net-zero emissions. Strengthened project delivery organizations can help ensure that millions of project managers are able to deliver the infrastructure needed to make net-zero emissions a reality.

Source : mckinsey

Voluntary carbon markets aren’t working, but get the rules right and they can make a positive contribution to Net Zero, say the CCC in its latest report.

Businesses are increasingly turning to voluntary carbon offsetting as they aim to reach Net Zero. But recent market growth is premature. Offsets can mask insufficient efforts from firms to cut their own emissions, they often deliver less than claimed, and they may push out other environmental objectives in the rush to capture carbon.

The Climate Change Committee has reviewed the evidence on the impact of voluntary carbon markets and offsetting. Their current shortcomings can be overcome with stronger governance to ensure high-integrity carbon credits and clearer guidance for businesses to encourage them to cut their own emissions first and foremost, before turning to offsets.

Many businesses have named ambitious ‘Net Zero’ dates but achieving them through an over-reliance on offsets is undermining the economy-wide transition. The development of a clearer definition of a ‘Net Zero Business’ in the UK will help businesses pursue a strategy that complements the national targets – prioritising action to cut emissions ahead of offsetting.

Given better governance and standards, voluntary carbon markets can help deliver finance and funding to areas that need it. The UK already has some of the leading examples of good governance with the Woodland Carbon Code and the Peatland Code. Using these more widely can direct private investment towards new forestry and peatland restoration – two of the largest policy gaps in the UK Government’s current Net Zero Strategy. These codes can also be further improved to deliver wider improvements in biodiversity.

Globally, voluntary carbon markets can also help to pay for nature recovery or more permanent forms of ‘engineered’ greenhouse gas removal technologies, but prices would need to increase considerably to be effective and it’s unlikely that offsets alone can fill the funding gap.

The global market for voluntary carbon offsets has grown rapidly (up over threefold in 2020-2021 to $2 billion). The Government has an important role in raising standards:

• Government should provide a clear definition of a ‘Net Zero’ business, which can be used reliably. A business or organisation should only be considered to be Net Zero when it has reduced its emissions as far as possible to be at or close to zero and permanently removed CO2 from the atmosphere to compensate for any remaining emissions. Beginning to reduce emissions and using carbon credits to cover the rest requires another term, such as ‘Offset Zero’ or ‘On the pathway to Net Zero’.
• Government should use the forthcoming ‘Net Zero transition plan standard’ to require UK businesses to disclose their reliance on carbon credits and improve transparency.
• Government should continue work to improve existing standards for carbon credits in the UK, and to influence and advocate for stronger global standards.

Ultimately, if voluntary carbon markets are genuinely to complement the transition to Net Zero, businesses must be supported to directly decarbonise their operations and supply chains. The role of a carbon credit should be to support, not discourage the reduction of actual emissions.

Source: theccc

The opening remarks by Ms Diedrah Kelly made the intentions clear that net zero has to be our next and best initiatives out of all. Indian-Canada partnership has put up an opportunity for everyone in the Renewable Energy industry. The discussion would tell about how Canada can be a part of this environmental solution that the Indian companies or partners are seeking to provide.

She also mentioned bilateral trade increase. The Paris Agreement which was signed by the Canadian Government was also one of the discussion topics. NetZero and Decarbonizing was the foremost aspect of the conference.

Mr. Savio Monteiro, director – Deloitte presented about Opportunities for Renewable Energy in the Indian Industry.

Mr. Debmalya Sen, manager – KPMG India then discussed Opportunities of Energy Storage in Indian Industry.

Alacrity Canada is a non profit organization – founded in 2009 – that works to promote technological entrepreneurship and training, as well as facilitate regionalized investment. Alacrity has worked directly with the province of B.C. and the federal government, delivering a total of eight successful programs to date.

Alacrity works to provide integrated end-to-end solutions, including both large scale foreign infrastructure projects and localized projects.

Amp Energy India is India’s first truly balanced RE company. with a current portfolio of about 2 GWp+ spread across 15 states of the country. Amp Energy India provides complete RE solutions in solar, wind, hybrid, storage, floating solar to customers on a short-term, medium-term and long-term basis.

BLUWAVE-AI formed in 2017 around the idea of bringing innovations in artificial intelligence, edge computing, and cloud-based supercomputing to the world of distributed renewable energy. Their solutions apply AI cloud software to optimize the cost, carbon footprint and reliability of different energy sources, both renewable and non-renewable, in real-time.

Growing Greener Innovations is an award winning Canadian energy technology company. The GGI smart BESS containerized system is designed to fit into 20’ or 40’ standard shipping containers. The system consists of BMS/system controller, a smart switch, HVAC system, etc.

HYDROSTOR, a private company founded in 2010 and based in Toronto, Canada, is the world’s leading developer of utility-scale energy facilities. Hydrostor believes substantial growth potential lies in the development, construction, operation, and ownership of A-CAES facilities due to its high-valued grid applications and the growing need for long duration energy storage to enable the low carbon energy transition.

HYGGE Energy is a cleantech company headquartered in Toronto that has found a way to unlock the monetary potential of renewable energy. In order to accommodate the load of EV charging, there is a need to upgrade grid infrastructure. Hygge energy’s EV charging platform not only allows seamless integration of rooftop solar to eliminate pressure on the distribution grid, but also enables non-performing RE assets to be utilized to provide grid parity rates.

PLUGZIO is a Vancouver based hardware and software company in the electric mobility scale. Plugzio’s technology was created to facilitate the development of efficient, fair and accessible electric vehicle charging infrastructure in urban environments as a result. The company’s device makes it possible for property owners to track and control.

QUADRICAL-AI helps improve solar generation by 2-4% / O&M efficiency by 15% with a digital twin based platform. It offers proprietary digital twin AI technology, that results in industry leading performance benchmarking and most accurate combination of prediction detection AI productized of solar asset operations.

India is now the fourth-largest emitter after China, United States and the European Union, and as per IPCC’s Sixth Assessment Report released on August 9, it will be among the most severely affected countries

India can achieve ‘net zero’ carbon emissions by 2065-70 as its greenhouse emissions will peak by 2035 and if it caps coal usage in the next 10 years, said a new study co-authored by the former vice-chairman of the erstwhile Planning Commission, Montek Singh Ahluwalia. But he said this will also depend on rich countries doubling climate finance to US $200 billion per year in the next few years.

The paper titled ‘Getting Net Zero Approach for India at CoP 26’ strongly advocates that India should declare its ‘net zero’ target year at the 2021 United Nations Climate Change Conference or CoP 26 starting from October 31 in Glasgow, United Kingdom. It said that India’s traditional argument that it has to emit for its own development no more holds “diplomatic ground” as there are viable non-emitting energy alternatives available.

Net zero is the state in which a country’s greenhouse emissions are removed from the atmosphere by carbon absorption or sequestration. This is the most hotly debated proposal for CoP 26 as the Intergovernmental Panel on Climate Change (IPCC) had said achieving net zero by 2050 was a must to keep global temperature rise to 1.5 degrees Celsius, to pre-industrial level by the end of 2100.

India is now the fourth-largest emitter after China, United States and the European Union, and as per IPCC’s Sixth Assessment Report released on August 9, it will be among the most severely affected countries. India has committed to reducing the emission intensity of its gross domestic product by 33-35% by 2030 and having 175 gigawatt renewable energy capacity by 2030 under the Paris Agreement of 2016. There is renewed pressure on India to enhance its renewable commitment under the Paris deal to 450 GW by 2030 and phase out coal.

India’s environment minister Bhupendra Yadav, before going for the special UN meeting on climate change on Friday had said that net zero is not enough to keep the global temperature rise below 1.5 degrees Celsius. He said developed countries need to reduce emissions to provide carbon space to developing countries to exercise their right to grow and eradicate poverty.

“While public announcements of 2050 as a net zero target date helps to focus public attention on the need to reduce emissions, it is important to recognise that having a common net zero emissions date for all countries is not the best way of tackling global warming,” the paper said.

It said net zero target years can be given to countries based on the remaining available carbon budget with the least allocation to G20 (richest) countries, which account for close to three-quarters of global emissions. “A trajectory that gets to net zero by the time committed but exceeds the country’s carbon budget is much worse than following a trajectory which keeps within the budget but reaches net zero later,” the paper written for Centre for Social and Economic Progress said.

Based on the above argument, the paper said that China and Indonesia have already announced that they will reach net zero by 2060. “The studies reviewed in this paper suggest that India could reach a peak around 2035 and get to net zero sometime between 2065 and 2070. We could offer something along these lines at CoP 26,” Ahluwalia said in the paper co-authored with Utkarsh Patel, who is an associate fellow at Centre for Social and Economic Progress, an independent public policy think tank.

To achieve the net zero target, the paper said, India needs short-term decarbonisation targets along with trajectories for the next three decades. The best short term target, the study said, would be a planned phasing out of coal-based power generation as India has already adopted expanding renewable energy capacity to 450 GW by 2030. However, the Indian government has opposed phasing out coal saying it is needed for the country’s developmental imperatives.

The paper outlined several implications for phasing out coal, including huge revenue loss for poorer Indian states such as Chhattisgarh, Odisha, Jharkhand, West Bengal, Madhya Pradesh and Uttar Pradesh. For states such as Chhattisgarh and Jharkhand, close to 15% of the state revenue comes from the mining sector. Further, these states would lose out on employment, the paper said, as new employment in the renewable sector would be created in western and southern India which has better solar and wind resources.

India has about 210 GW of coal-based capacity, 39 GW is under construction and another 25 GW is under different stages of approval. If the coal-based power plants have a life of 40 years, India will have the capacity to generate 200 GW thermal power by 2050 and achieving net zero status by 2070 will not be possible. “Reducing life of plants to 25 years can helping in achieving net zero,” Ahluwalia said.

The close aide of former Prime Minister Manmohan Singh, in the paper, strongly argued that India should not commit to a net zero target without enhanced international financial support, saying the IPCC’s assessment of $600 billion per year as the amount of additional energy sector investment needed in developing countries should be the starting point.

He added that the finance could be divided into internet finance, private flow responding to market conditions, and additional bilateral and multi-lateral inflows. “The additional funding of around $100 billion per year through multi-lateral components should be a good starting point,” Ahluwalia said in the paper. The paper said that another US $ 100 billion can come from the private sector and market-based incentives such as carbon trading.

Former special climate envoy Shyam Saran did not agree with Ahluwalia and said he was “pessimistic” that the funds could come from the developed countries to ease energy transition for developing countries.

Saran, who has repeatedly advocated the traditional position that India should insist on emission reduction targets for the developing world, said any energy transition for the developing world would be costlier than the developed world as patents of almost all technologies are with the West. “The rich world has absolved itself from its climate responsibilities and passed on the buck to the developing world. Net zero is an example of that,” he said.

Sunita Narain, director general of Centre for Science and Environment, said India should reject net zero targets put out by the West since they are flawed and inequitable for developing countries. “The target of 2050 is too far away. We need to keep our focus on 2030, with sharp and real targets. India should seek enhanced emission reduction from the developed world and finance for energy transition,” she said. “We need disruptive action, not disruptive technology.”

Navroz Dubash of Centre for Policy Research said various studies have shown why net zero was important for India and it can achieve the target by 2065, which Ahluwalia said was equitable. “The emergence of new economic opportunities and technologies could dramatically change the landscape, and there may be space for an aspirational statement towards net zero. But given the information we have today, it would be gambling with the developmental future of India to lock ourselves into a hard net-zero deadline,” he had said in an article published in HT in March.

Ahluwalia admitted that the approach could face resistance and economic gains should be considered. “There will be understandable resistance to making such a major break. However, the issue needs to be examined in the context of the enhanced warnings about the impact of global warming and the technological changes that have taken place which allow for making a shift to renewables, both feasible and economic,” he said.

Source: PTI

New Delhi : India has submitted its updated Nationally Determined Contribution under the Paris Agreement to the UN Framework Convention on Climate Change, emphasising that it is a step forward towards its long-term goal of reaching net-zero by 2070.

In a cover letter accompanying the Nationally Determined Contribution (NDC) document submitted to the UN Framework Convention on Climate Change (UNFCCC) on August 23, Union Environment Minister Bhupender Yadav said India’s NDC does not bind it to any sector-specific mitigation action or obligation.

On August 3, the Union Cabinet approved the country’s updated NDC, incorporating Prime Minister Narendra Modi’s ‘Panchamrit’ (five nectar elements) strategy announced at the Glasgow conference last year into enhanced climate targets.

According to the updated NDC, India now stands committed to reducing emissions intensity of its GDP by 45 per cent by 2030, from the 2005 level, and achieving about 50 per cent cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.

To further a healthy and sustainable lifestyle, ‘LIFE – Lifestyle for Environment’ has been added to India’s NDC as a key to combating climate change.

“India reaffirms its commitment to the UNFCCC and the Paris Agreement on Climate Change. This update to India’s existing NDC is a step forward towards our long-term goal of reaching net-zero by 2070,” the updated NDC document read.

India’s NDC is ambitious and a significant contribution towards achieving the goals of the Paris Agreement. Environmentally sustainable, low-carbon initiatives are underpinning all key sectors of the Indian economy, it said.

“India’s goal is to reduce overall emission intensity and improve energy efficiency of its economy over time and at the same time protect the vulnerable sectors of the economy and segments of our society,” Environment Minister Yadav said.

NDC means national plans and pledges made by a country to meet the goal of maintaining global temperature increases to well below 2 degrees Celsius above pre-industrial levels, while aiming for 1.5 degrees Celsius to avoid the worst impacts of climate change.

India had submitted its first NDC to the UNFCCC on October 2, 2015.

It had eight goals, of which three had quantitative targets up to 2030 — cumulative electric power installed capacity from non-fossil sources to reach 40 per cent, reducing emissions intensity of GDP by 33 to 35 per cent compared to 2005 levels and creating an additional carbon sink of 2.5 to 3 billion tons of CO2 equivalent through additional forest and tree cover.

At the 26th session of the Conference of the Parties (COP26) of the UNFCCC last November, Modi had announced that India’s non-fossil energy capacity will reach 500 gigawatts by 2030.

He had said India will fulfil 50 per cent of its energy requirements from renewable energy sources by 2030 and reduce its total projected carbon emissions by 1 billion tonnes by that year.

India will reduce the carbon intensity of its economy by 45 per cent, over 2005 levels and achieve the target of net zero emissions by 2070, Modi had said.

The five promises are called ‘Panchamrit’.

Source: PTI

Global Net-Zero should be based on the principle of common but differentiated responsibility and of equity, where developing countries will be peaking later given their respective sustainable development paths.

The maximum impact of the climate change is being borne by the poorest countries and most vulnerable communities who have contributed the least to the crisis, India has said, asserting that the developed nations with their historical experiences must take lead in the global transition towards net-zero.

The UN has outlined that in order to keep global warming to no more than 1.5C, as declared in the Paris Agreement, greenhouse gas emissions need to be reduced by 45 per cent by 2030 and reach net zero by 2050. The world body has explained that net zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, by oceans and forests for instance.

“The maximum impact of the climate crisis is being borne by the poorest countries and most vulnerable communities, which have contributed the least to the climate crisis and lack the finance, technology and capacity to significantly alter the status quo, First Secretary in India’s Permanent Mission to the UN Sneha Dubey said on Wednesday.

Speaking at the special High-Level dialogue of the Presidents of the General Assembly and the Economic and Social Council on The Africa We Want: Reconfirming the Development of Africa as a Priority of the United Nations System’, Dubey said developed countries with their historical experiences, must take lead in the global transition towards net-zero.

A global Net-Zero should be based on the principle of common but differentiated responsibility and of equity, where developing countries will be peaking later given their respective sustainable development paths, she said.

India said consequently, in order to vacate the carbon space in 2050 for developing countries to grow, the developed countries should, in fact, do Net-Minus, she said.

Dubey said a cross-regional statement underscoring this was issued in June, with two countries from Africa as the signatories. We hope more African countries can join this statement, she said. We hope more African countries can join this statement, she said.

India’s then Permanent Representative to the United Nations Ambassador T S Tirumurti had delivered the cross-regional joint statement on behalf of India and Bolivia, China, Gabon, Iran, Iraq, Mali, Nicaragua, Panama and Syria on “Global Net Zero in the context of combatting climate change made on the occasion of the World Environment Day. Prime Minister Narendra Modi told the COP26 global climate summit in Glasgow last year that India will meet a target of net zero emissions by 2070.

There still exists a large gap to achieve commitment by developed countries to provide 100 billion dollars for climate action. An added problem is the clubbing of development finance with climate finance, Dubey said. This is pushing developing countries into more debt, she said and underscored that India is strongly committed to climate action and sustainable development.

At COP-21 in Paris in 2015, India committed to 40 per cent share of power generation from non-fossil fuel sources and has achieved this target a decade ahead of the 2030 timeline. India’s experience is useful to African nations as they embark on their own energy transitions, she said, noting that the International Solar Alliance is a notable platform, which has the majority of African countries as members, and has promoted the rapid deployment of clean energy technologies.

In recent years, clean and green energy has been increasingly prominent in India’s development programmes in Africa as also in its third country collaborations, she said. Dubey emphasised that the underlying philosophy of India’s partnership with Africa is to empower Africa for a future that is founded on principles of inclusiveness, sustainability, peace and prosperity, dignity and respect for one and all.

African priorities will guide our initiatives, she said. Underlining that the years 2022 and 2023 should be the years for delivery of action, she said India looks at Sharm-El-Sheikh with such expectation, the venue of this year’s annual UN climate conference Conference of the Parties (COP 27) in Egypt in November.

Source: PTI

• A fully decarbonized energy system requires both clean electrification and low carbon fuels.

• To reach net-zero by 2050, current hydrogen production needs to be decarbonized and scaled to around six times what it is today.

• Immediate action is required to accelerate public and private efforts and boost investment in clean hydrogen.

• Find out what the World Economic Forum is doing to facilitate this work.

Electrification is the number one energy vector for the energy transition, forecast to account for over 50% of total final energy consumption by 2050 in a 1.5°C scenario. However, a decarbonized energy system requires both a huge scale-up in electrification as well as low carbon fuels. In fact, they are not only needed for instances where electrification is challenging or not possible, but also to complement an increasingly intermittent energy system through long-duration storage, flexibility and balancing.

Enter clean hydrogen

The International Renewable Energy Agency’s (IRENA) 2021 World Energy Transitions Outlook estimates that hydrogen and its derivatives will account for 12% of final energy consumption by 2050, with two-thirds coming from green hydrogen (made with clean electricity) and one-third from blue hydrogen (made from fossil fuels and using carbon capture).

Where are we today?

In 2020, the world produced around 90 million tonnes (Mt) of hydrogen, generating 900Mt of CO2, around twice the UK’s 2020 emissions. The vast majority of this hydrogen is used by the refining and chemicals industries. If we were to replace our existing consumption of grey hydrogen (made with fossil fuels and no carbon capture) with green hydrogen, we would require a lot of extra clean electricity (double the amount of renewable electricity that had been installed by 2020 globally).

This increase would only replace our existing grey hydrogen consumption and does not take into account any emerging uses. For example, in hard-to-abate sectors such as steel and heavy mobility or even fuel for ships and planes.

How much more hydrogen will we need and by when?

The IEA estimates that we need 530Mt of hydrogen to reach a net-zero scenario in 2050. That is roughly a six-fold increase from today’s hydrogen production.

In addition to the challenge of this huge scale-up, the global energy system is experiencing major disruptions caused by geopolitical tensions, the war in Ukraine and the tightening of oil and gas markets. The impact of this can be seen in hydrogen markets across the world. For example, with Europe increasing its 2030 renewable hydrogen targets from ~5Mt to 20Mt in a move to replace reliance on Russian gas as laid out in the REPowerEU strategy.

The challenge, however, is non-negotiable if we are to hit our climate goals in line with the Paris Agreement 1.5C scenario and IPCC recommendations.

COP26 showcased the global momentum for hydrogen as critical in the shift from fossil fuels. New commitments, updates in strategy and project announcements have become an almost daily occurrence. To highlight some numbers:

• Approximately 40 national hydrogen strategies have been released or are in development.
• Over 500 projects have been announced globally worth more than $500 billion in investment.
• Over $130 trillion of private capital was committed to transform the economy to a net-zero future by the Glasgow Financial Alliance for Net-Zero (GFANZ).
• These numbers demonstrate that the momentum for clean hydrogen is growing quickly, and there is pressure for the most abundant element on earth to deliver on its role in the energy transition.

The Forum approach – bringing together public and private stakeholders to accelerate clean hydrogen uptake globally
Despite the impressive headlines, significant effort is still required to move from announcement to action and pledges to projects. For example, the Financial Times recently reported that investors in Australia lack confidence in hydrogen projects, with the $188 billon pipeline of projects yet to be translated into a single molecule of hydrogen being sold.

Similarly, during the recent World Hydrogen Summit in Rotterdam, Daryl Wilson, Executive Director of the CEO-led Hydrogen Council, stated that “the pipeline of hydrogen projects globally exceeds 500 projects valued at more than $500bn of investment. In Europe there are 328 projects, yet barely more than 5% have made final investment decision. Crossing the investment decision line requires the confidence that policy will support both demand and supply for the investment horizon of several decades. The public and private sectors need to come together and establish the conditions to take this critical step urgently.”

How is the World Economic Forum accelerating action?

It is on this very topic that the World Economic Forum’s Accelerating Clean Hydrogen Initiative is working. Together with IRENA and supported by Accenture, we launched the Enabling Measures Roadmaps for Green Hydrogen at COP26.

The Roadmaps, initially focused on Europe and Japan, detail the suite of solutions required to remove key barriers and boost the hydrogen economy towards a fully realised net-zero economy. They are a tool to enhance public-private dialogue and turn industry recommendations into concrete policy measures, propelling action to create the necessary environment to get projects off the ground.

In the forthcoming year, we aim to expand our scope to cover further geographies, focusing on regions with high export potential such as Latin America and the Middle East, with China and India also being actively scoped.

In addition, we are very excited to launch the Clean Hydrogen Project Accelerator at the Forum’s annual meeting in Davos this week. We will work directly with projects and their developers to remove specific barriers and expedite the pathway from announcement, through FID and into operation.

This acceleration programme will drive progress at the project level to support cost reduction, innovation and bankability. The aim is to build ties between project developers, investors and policymakers, and to accelerate the time between project announcement and FID. In the medium term, we will scale this process by developing a toolkit with our member organizations and partners, sharing practical learning globally.

This is a hugely exciting and challenging time for the clean hydrogen economy. Bringing together the full suite of stakeholders that can make it real and overcoming the hype is more necessary than ever. We will be doing just that in Davos, and we will make sure that these voices, driving powerful change across energy, industry and mobility systems, are heard.

Source: weforum

The far right are at it again. Not content with energy minister’s Angus Taylor mysterious and quickly debunked “analysis” of Labor’s energy policy released earlier this week, the Institute of Public Affairs has followed it up with a doomsday document looking at the impact of net zero targets.

The short summary of its “analysis” is that if Australia pursues a net zero target by 2050 then we are done for. It is designed specifically to scare the be-jeezus out of voters in several key Queensland and other coal rich electorates. Like many IPA documents, it is complete nonsense.

The IPA, however, are not to be ignored. For a “think-tank” on the far right margins of Australia’s political discourse, they are given an extraordinarily big platform on which to air their views.

They figure constantly, of course, on the likes of Sky News and the rest of the Murdoch media, but because of the pressure on “balance” at the ABC they get a strong run on its flagship programs, although it is hard to see where left wing loonies are given equal air time.

The IPA and its brethren, of course, would disagree.

According to the likes of Murdoch’s Andrew Bolt, the description of left wing loonies would include NSW treasurer and energy minister Matt Kean, and anyone else who has thought for more than a few seconds about whether trashing the environment is good for the economy. Or people. Even Scott Morrison is too far left for their liking.

The other important thing to remember about the IPA is its infiltration of the federal Coalition government.

The IPA’s former policy director, Tim Wilson, is a Liberal MP and, quite laughably, the deputy minister for emissions reduction. In other words, he’s second in charge of a portfolio the IPA doesn’t think should exist.

Other IPA alumni in the Coalition include Senator James Patterson, a former deputy executive director, while the links between the IPA, the Coalition, and big business run deep, and have done for decades.

And it should be remembered that the Coalition has followed the IPA policy wish list almost to the letter, or at least it has tried to: Dumping the carbon price, killing the RET, trashing institutions like the Climate Authority, the Clean Energy Finance Corp and ARENA.

What the IPA does not like is the Coalition’s net zero target for 2050, even if it is largely irrelevant in its current form because there are no meaningful interim targets or policy roadmaps.

But the IPA sees “net zero” as a threat to the industries it and its donors favour most: Fossil fuels. Its new analysis tells us that a ban on new coal, gas and oil projects in Australia would eliminate some $274 billion of new investment, which is the equivalent to 13.5% of Australia’s annual GDP.

It says this corresponds to an estimated 478,673 jobs put at risk, equating to approximately 3.6% of Australia’s total workforce.

Gosh.

What this document – misleading titled “The economic and employment consequences of net zero emissions by 2050 in Australia” – completely ignores is what would take the place of the fossil fuel projects that are to be abandoned.

Apparently, nothing at all. The IPA has failed to identify a single job, or investment, in technology that may replace the oil, gas and coal projects apparently foregone. To describe the analysis as lazy would give it credit beyond its worth.

Which makes you wonder: If you asked an IPA member to change their shirt and tie (it’s black tie darling, did you forget?), does an IPA then go to the event bare-chested, or do they change shirts.

The Australian economy, and firstly its electricity grid, is going through its own change of wardrobe. It won’t happen abruptly, but it needs to happen quickly.

There’s a huge pipeline of green energy and industry projects – led by billionaires and equally deep pocketed international investors, encouraged by some smart state governments, even Coalition ones – that will likely dwarf those of the fossil fuel industry.

And they will have long term prospects, and benefits, both in terms of investment, economic gains and environmental improvements. And, of course, in jobs.

Kean, the mad lefty loony of the NSW Coalition government, has already gathered way more than $100 billion of potential projects for that state’s transition from coal to renewables in his carefully structured transition to green energy.

Similar stories are unfolding in other states, and the scale of the green energy projects being put forward by the likes of Andrew Forrest and Mike Cannon Brookes, and even many of the world’s oil majors, is simply phenomenal.

Even the International Energy Agency, for long the conservative bastion of fossil fuel geopolitics, acknowledges the need and the benefits of the clean energy switch. And unlike the IPA, it’s not going bare chested or even hairy chested into this debate.

Its document, Net Zero by 2050: a Roadmap for the Global Energy Sector, talks of a narrow window of opportunity and huge benefits if those opportunities are seized. Including in jobs. Millions of them.

Which of course, is not what the IPA or its donors want us to do. Or even mention on know about. Net zero analysis.

Source: reneweconomy

Shell today published its Energy Transition Progress Report 2021 detailing the company’s progress over the past year. This report will be put to shareholders for an advisory vote at the Annual General Meeting on 24 May 2022.

“In a time of great uncertainty, it is vital that our long-term energy transition strategy remains on track,” said Ben van Beurden, Shell’s Chief Executive Officer. “This report shows the strong progress we have made towards our target to become a net-zero emissions energy business by 2050.”

This progress includes critical investment decisions in the production of low-carbon fuels, solar and wind power, and hydrogen, and significant changes to Shell’s Upstream and refinery portfolios. The company has also simplified its share structure and moved its headquarters to the UK from the Netherlands.

In 2021, Shell continued to work with customers across sectors, from aviation to marine and road freight, forming more than 50 collaborations with other leading companies.

Today’s publication shows Shell’s progress against concrete climate goals. Last year, the company set a new target to reduce absolute emissions from its operations and the energy it uses to run them by 50% by 2030, compared with 2016 on a net basis. By the end of 2021, Shell had made a reduction of 18%.

Shell also achieved its short-term target to reduce the net carbon intensity of the energy products it sells by 2-3% by the end of 2021, compared with 2016 as well. The company is now working towards a 9-12% reduction in net carbon intensity by 2024, and a 20% reduction by 2030, both compared with 2016.

“We are helping our customers to identify and use low- and zero-carbon alternatives to the energy products they have used for many decades,” said Andrew Mackenzie, Shell Chair. “We see great business opportunities for Shell in the fast-growing low- and zero-carbon markets where we are well positioned to provide the different products and solutions our customers need.”

Shell’s energy transition strategy was put to an advisory shareholder vote at the Annual General Meeting in 2021 where it secured around 89% of the vote. This year, Shell is asking shareholders to vote on its progress, as it will do every year until 2050. The vote on progress is purely advisory and not binding on shareholders.

Shell’s net carbon footprint

Also, in this announcement we may refer to Shell’s “Net Carbon Footprint” or “Net Carbon Intensity”, which include Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions. The use of the term Shell’s “Net Carbon Footprint” or “Net Carbon Intensity” are for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.

Shell’s net-Zero Emissions Target

Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and Net Carbon Footprint (NCF) targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target and 2035 NCF target, as these targets are currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

The policy shift toward a net-zero United Kingdom continues to emerge, given strong momentum by the recent 26th United Nations Climate Change conference in Glasgow. With a bold target of a 78 percent reduction in economy-wide greenhouse-gas emissions by 2035, now enshrined in law, and the UK government putting the Green Industrial Revolution at the heart of its plans for a stronger post-COVID-19 economy, there is impetus for change.

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Beyond environmental benefits, the energy transition will mean the growth of significant value pools in renewables (in particular, offshore wind), grid, flexibility and operability services, and new downstream. Among industry players, there is excitement about the opportunities within the sector, and investors anticipate a new wave of growth. However, unlocking potential value will not be easy and will involve addressing issues regarding security of supply, costs, demand stimulation, and pressure on returns.

In this article, we draw on modeling contained within the United Kingdom’s Sixth Carbon Budget.1 We consider the implications of the Committee on Climate Change’s modeling on the Balanced Net Zero (BNZ) Pathway, the central route to achieving net-zero emissions by 2050. Looking at electricity demand, technology, and the grid, we discuss options available to investors, regulators, policy makers, and energy companies as they consider how best to support the United Kingdom’s transition to net zero…Read More… 

Source : mckinsey

IRVING, Texas : ExxonMobil today announced its ambition to achieve net zero greenhouse gas emissions for operated assets by 2050, backed by a comprehensive approach to develop detailed emission-reduction roadmaps for major facilities and assets.

• Comprehensive approach centered on detailed Scope 1 and Scope 2 emission-reduction roadmaps for major operated assets
• Ambition supported by 2030 emission-reduction plans, including net-zero plans for Permian Basin operations
• Company strategy tested for resiliency against a range of net-zero scenarios, including IPCC and IEA

The net-zero ambition is contained in the company’s Advancing Climate Solutions – 2022 Progress Report, formerly known as the Energy & Carbon Summary. The net-zero aspiration applies to Scope 1 and Scope 2 greenhouse gas emissions and builds on ExxonMobil’s 2030 emission-reduction plans, which include net-zero emissions for Permian Basin operations and ongoing investments in lower-emission solutions in which it has extensive experience, including carbon capture and storage, hydrogen and biofuels.

“ExxonMobil is committed to playing a leading role in the energy transition, and Advancing Climate Solutions articulates our deliberate approach to helping society reach a lower-emissions future,” said Darren Woods, chairman and chief executive officer. “We are developing comprehensive roadmaps to reduce greenhouse gas emissions from our operated assets around the world, and where we are not the operator, we are working with our partners to achieve similar emission-reduction results.”

The report provides details of how ExxonMobil’s business strategy is resilient when tested against a range of Paris-aligned net-zero scenarios, including the United Nations Intergovernmental Panel on Climate Change’s 2018 Special Report and the International Energy Agency’s Net Zero by 2050 scenario.

ExxonMobil’s Outlook for Energy, which is based on current policy and technology trends, continues to be the basis for the company’s business plans and investment decisions. In the Advancing Climate Solutions report, the company outlines how its short- and medium-term business plans are adjustable to developments in policy and technology and how it uses signposts and leading indicators to evaluate the need for any changes in future years.

Sound government policies will accelerate the deployment of key technologies at the pace and scale required to support a net-zero future. ExxonMobil continues to support an explicit price on carbon to establish market incentives and encourage investments in lower-emissions technologies.

ExxonMobil is also committed to helping customers reduce their greenhouse emissions by investing in carbon capture and storage, hydrogen and biofuels. Bio-based feed and plastic waste streams provide further opportunities for lowering greenhouse gas emissions.

“As we invest in these important technologies, we will advocate for well-designed, high-impact policies that can accelerate the deployment of market-based, cost-effective solutions,” said Woods. “We believe our strategy is unique among industry and enables us to succeed across multiple scenarios. We will create shareholder value by adjusting investments between our existing low-cost portfolio and new lower-emission business opportunities to match the pace of the energy transition.”

To help reach net zero for operated assets by 2050, the company has identified more than 150 potential steps and modifications that can be applied to assets in its upstream, downstream and chemical operations.

Initial actions already underway prioritize energy efficiency measures, methane mitigation, equipment upgrades and the elimination of venting and routine flaring. Further high-impact reduction opportunities include power and steam co-generation and electrification of operations, using renewable or lower-emission power. The company expects to finalize detailed roadmaps that address approximately 90% of operations-related greenhouse gas emissions by the end of this year, and the remainder will be completed in 2023.

Initial steps to achieve net zero by 2050 are included in the company’s plans to invest more than $15 billion by 2027 on lower-emission initiatives. Policies further accelerating the development and deployment of lower-emission technologies could provide ExxonMobil with additional investment opportunities.

Advancing Climate Solutions – 2022 Progress Report is available online at exxonmobil.com. The report expands on the company’s 2030 greenhouse gas emission-reduction plans, which are consistent with Paris-aligned pathways, the U.S. and European Union’s Global Methane Pledge and the U.S. Methane Emissions Reduction Action Plan. Compared to emission levels in 2016, the time of the Paris Agreement, the 2030 plans include a 20-30% reduction in corporate-wide greenhouse gas intensity, which includes 40-50% reduction in upstream greenhouse gas intensity, 70-80% reduction in corporate-wide methane intensity, and 60-70% reduction in corporate-wide flaring intensity.

The 2030 emission-reduction plans are expected to achieve World Bank Zero Routine Flaring by 2030 and reduce absolute greenhouse gas emissions by an estimated 30% for the company’s upstream business and 20% for the entire corporation. Similarly, absolute flaring and methane emissions are expected to decrease by 60% and 70%, respectively by 2030.

ExxonMobil has regularly updated emission-reduction plans as technologies and policies have evolved and will continue to do so. When final data is collected and analyzed, the company expects to report it achieved its 2025 emission-reduction plans as of year-end 2021, including a 15-20% reduction in greenhouse gas intensity for its upstream operations, compared to 2016 levels.

ExxonMobil’s strategy is outlined in Advancing Climate Solutions and leverages its advantages in scale, integration, technology and people to build globally competitive businesses that lead industry in earnings and cash flow growth across a broad range of future scenarios.

About ExxonMobil

ExxonMobil, one of the largest publicly traded international energy companies, uses technology and innovation to help meet the world’s growing energy needs. ExxonMobil holds an industry-leading inventory of resources, is one of the largest refiners and marketers of petroleum products, and its chemical company is one of the largest in the world.

Speaking at the sixth edition of the annual business conclave ‘Marmagya 6.0’ organised by IIM Sambalpur, Maheshwari said “Driving future profits and still caring for the environment is the way forward.”

Sambalpur: Chief guest at IIM Sambalpur business conclave Kapil Maheshwari Saturday said most of the conventional companies now pledge ‘net zero’ strategy to fight climate change. Net-zero refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere.

Speaking at the sixth edition of the annual business conclave ‘Marmagya 6.0’ organised by IIM Sambalpur, Maheshwari said “Driving future profits and still caring for the environment is the way forward.”…Read More…

Source: PTI