As the impacts of climate change continue to escalate, we are at a stage where decarbonization has emerged as one of the most critical strategies in the global push to minimize greenhouse gas (GHG) emissions and mitigate global warming.
According to a report by the International Energy Agency (IEA), global CO2 emissions surged by 36.3 billion tonnes in 2021, as the economy revived after the COVID-19 pandemic. The essential process of decarbonization is crucial to reach the objectives outlined in the Paris Agreement. The agreement’s goal is to keep the global temperature rise to less than 2 degrees Celsius above pre-industrial levels, focusing on limiting it to 1.5 degrees Celsius.
What is Decarbonization?
Decarbonization is the effort to lower carbon dioxide (CO2) emissions and other greenhouse gases (GHGs) in different industries to address the issues of climate change. It includes shifting from using energy based on fossil fuels, which releases high volumes of CO2, to renewable sources of energy, like wind, solar, or hydropower.
Decarbonization is a comprehensive effort with the ultimate goal of reaching a low-carbon or carbon-neutral state. Companies can make the shift to a fossil-free economy, but it demands a strong commitment from the societal and political realms. More than 140 countries, including the biggest polluters, have set a net-zero target, covering around 88% of global emissions.
Importance of Decarbonization
Decarbonization is significant to the environment, as CO2 and other GHGs are the main contributors to global warming. Decreasing emissions is the key to reducing the rate of temperature increase and reducing the negative impacts of climate change, including extreme weather conditions, rising sea levels, and biodiversity loss.
Beyond climate stability, decarbonization will also help in improving air quality and decreasing the occurrence of respiratory and cardiovascular diseases.
Decarbonization Across Industries
Energy Sector
McKinsey reports that energy consumption is the biggest source of CO2 emissions, accounting for 83% of the emissions worldwide. It is vital to decarbonize the energy sector. By switching to renewable sources of energy, companies can significantly lower emissions and improve energy security and sustainability.
CO2 emissions from energy combustion and industrial processes, 1900-2021
Transportation
Owing to the reliance on fossil fuels, transportation is another big source of emissions. Strategies like using public transportation, electrifying vehicles, and improving fuel efficiency must be focused on to reduce emissions.
Manufacturing and Industry
Industrial processes often emit significant CO2 emissions. It is important to adopt circular economy principles, proceed with energy-efficient technologies, and switch to low-carbon fuels to reduce emissions in this sector.
Agriculture and Land Use
Sustainable agricultural practices like agroforestry, crop rotation, organic farming, etc. should be emphasized to reduce emissions from land-use changes.
Industrial Decarbonization Strategy
Industrial decarbonization is a critical component of the global carbon reduction strategy. The process of industrial decarbonization involves a multi-faceted approach encompassing various strategies that are significant to reducing industrial emissions and promoting sustainability.
Energy Efficiency
Energy efficiency is using less energy to perform the same task or produce the same results. For lower energy consumption, it is important to improve industrial processes, such as upgrading heat exchange systems in chemical production or the productivity of manufacturing lines.
High-efficiency motors, pumps, lighting systems, and smart technologies for real-time energy control and monitoring can be implemented. The waste heat generated can also be captured and reused to minimize the need for additional energy inputs. This will reduce operational costs and GHG emissions, improving the overall sustainability performance.
Electrification
Electrification refers to transitioning from fossil fuel-based energy sources like oil, coal, and natural gas to electric power, generated from renewable sources. The electric power can be used further for industrial processes and equipment. It will help reduce emissions from fossil fuels, and using renewable energy will further lower the company’s overall carbon footprint.
Renewable Energy Sources
Renewable energy sources include using solar, wind, hydro, and biomass energy to fuel industrial processes, reducing the carbon intensity of industry’s energy consumption. It helps reduce GHG emissions, reduces energy costs in the long term, and builds the sustainability credentials of the companies.
Carbon Capture and Storage (CCS)
CCS is all about taking CO2 emissions from industrial processes and either storing them underground or using them in different ways, all to prevent them from being released into the atmosphere. CCS can help reduce emissions in hard-to-decarbonize industries, like cement, steel, and chemical manufacturing. It provides an alternate solution to when electrification and renewable energy sources are ramped up.
CCS strategies include removing CO2 from the fuels before they are burned (pre-combustion capture) and capturing CO2 from the flue gases of industrial processes, like steel or cement production (post-combustion capture). The captured CO2 is stored in geological formations or is used in enhanced oil recovery (EOR), chemical production, or other industrial activities.
Role of Policy Frameworks and Incentives in Decarbonization
Industrial decarbonization can be encouraged through effective policy frameworks. Governments can set emission reduction targets, put in place carbon pricing mechanisms, and enforce regulations that promote the use of low-carbon technologies in industries.
Financial incentives, like tax credits, grants, and subsidies, can make it easier to balance out the expenses of carrying out decarbonization strategies. Additionally, backing research & development (R&D) with public funds can drive advancements in new technologies and processes.
Global agreements and initiatives, like the Paris Agreement, set the stage for working together to minimize industrial carbon emissions, urging countries to exchange top technologies and practices.
How do we make Decarbonization happen?
Decarbonization is a vital and intricate challenge that demands collaboration from different sectors.
Steps to Achieve Decarbonization
Energy Efficiency Improvements
Auditing and optimization are important to pinpoint areas for enhancement and opportunities for improvement. Measures like upgrading equipment, enhancing insulation, and optimizing procedures should be implemented. To enhance operational efficiency, it is crucial to invest in energy-efficient technologies and smart systems that reduce energy consumption.
Renewable Energy Integration
Installation of solar panels, wind turbines, or biomass boilers at industrial areas can help source energy locally. Companies can collaborate with renewable energy providers and secure green power purchase agreements (PPAs) for a consistent flow of green energy.
To guarantee an uninterrupted power source, they can also set up battery storage systems to save surplus renewable energy.
Electrification
Electrification includes replacing gas or oil-fired boilers and furnaces with electric heat pumps and induction heaters. Another approach to this is the use of electric trucks, forklifts, and other vehicles to reduce emissions from transportation. Additionally, the use of electrochemical reactions can be focused on, like electrolysis for hydrogen production.
Encourage the use of EVs among employees and set up EV charging infrastructure.
Carbon Capture and Storage (CCS)
Invest in research & development (R&D) to enhance the efficiency and cost-effectiveness of CCS technologies.
Sustainable Practices
Circular economy principles like reducing waste, recycling materials, and designing products for longevity and recyclability should be adopted.
Decarbonization – Case Studies
Orsted (Energy Sector)
Orsted, a leading global company in offshore wind energy, made the switch from fossil fuels to renewable energy, leading to a significant reduction in its carbon footprint. They are committed to achieving a science-based net-zero GHG emissions target by 2040 along with reducing scope 3 emissions by 50% from 2018 levels by 2032 and by 90% by 2040.
Orsted increased their total installed renewable capacity by 17%, from 12,977 MW in 2021 to 15,121 MW in 2022. Additionally, Ørsted’s Scope 3 emissions decreased by 40% in 2022, mainly due to a 48% decrease in natural gas sales. Their renewable energy projects provide green electricity to millions of households.
Orsted’s decarbonization progress stats
Tesla (Automotive Sector)
Tesla made a huge impact on the automotive sector with its electric vehicles (EVs), ultimately lowering emissions from transportation. They are also focusing on sustainability within its supply chain, encouraging suppliers to adopt greener practices and reduce their carbon footprints.
As of 2023, Tesla’s customers managed to avoid releasing over 20 million metric tons of CO2 into the atmosphere. They also supported the recovery of enough battery materials to produce 43,000 Model Y Rear-Wheel Drive vehicles.
Tesla’s decarbonization progress stats – 2023
Unilever (Consumer Goods Sector)
Unilever has set targets to reduce scope 3 carbon emissions by 42% by a 2023 baseline. Additionally, it also aims to achieve net zero by 2039.
Unilever has managed to reduce GHG emissions in their operations by 74%
Unilever’s decarbonization progress stats – 2023
Role of Governments, Businesses and Communities
Governments should implement clear, long-term policies and regulations to minimize energy efficiency requirements for industrial operations and machinery, as well as for the use of renewable energy sources and reporting emissions.
Public-private partnerships and collaborations between industry stakeholders, governments, and financial and research institutions can speed up the progress and deployment of decarbonization strategies.
Local support for decarbonization can be garnered by engaging communities, building public awareness, and participating in sustainability initiatives.
Setting Targets and Measuring Progress
Ambitious but Achievable Targets
By setting emission reduction goals that are grounded in science, companies can ensure they are in line with their climate targets, all while considering economically feasible and latest technological progress.
Transparency and Accountability
Robust monitoring, reporting, and verification mechanisms should be established to measure and track progress toward decarbonization goals and hold stakeholders accountable.
Adaptability and Resilience
Companies must adapt to the evolving scientific knowledge and technological advancements, and building resilience to climate change impacts is crucial for long-term success.
Challenges in Decarbonization
Technological and Infrastructure Limitations
Using renewable energy sources like solar and wind energy requires improvements in energy storage technology, such as batteries, to ensure a steady energy supply. Upgrading aging electrical grids to enable decentralized energy sources and streamline energy distribution.
Economic and Financial Barriers
Financial incentives or supportive policies are needed because initial investments in renewable energy and energy-efficient technologies can be high. Even industries dependent on fossil fuels have to endure costs while transitioning to renewable energy sources or low-carbon alternatives.
Policy and Regulatory Challenges
Irregular or insufficient government policies and regulations may lead to uncertainty for businesses and investors, hindering long-term planning and investment in decarbonization. Lack of global cooperation and consensus on climate policies can lead to inequalities in emissions reduction efforts across regions.
Social and Behavioral Factors
Lack of public awareness and understanding of the benefits and importance of decarbonization leads to slow demand for sustainable products and services. Consumers’ reluctance to change how they consume and what they prefer, as well as cultural traditions, can make it difficult for low-carbon lifestyles and practices to catch on.
Conclusion
Decarbonization is a complex yet critical process to combat climate change and secure a sustainable future ahead. Businesses should collaborate to swap best practices, merge resources for research, and work together to promote favorable policies.
Carbon Trail helps the fashion and retail industry measure their corporate and product impact using primary supply chain data. Organizations can benefit from Carbon Trail’s suite of tools, including AI/ML applications, emission factor matching, autofilling data gaps, and ensuring data quality.
In the end, reaching decarbonization requires leadership, creativity, and teamwork to protect the planet and the coming generations from the adversities of climate change. Mobilizing private sector investments is dependent on financial mechanisms like green financing and incentives for renewable energy adoption. Businesses, the public, policymakers, and other stakeholders should partner to create a cleaner and more resilient planet. It makes way for a sustainable world where environmental leadership and economic growth go together.
