Climate change is a serious concern that is being discussed in board rooms across the globe, highlighting that combatting it and its impacts are a necessity. The UAE’s ambitious Net Zero by 2050 plan, which aims to make the country the first in the Middle East and North Africa (MENA) to reach this milestone, serves as a beacon of hope and motivation. The plan recognises that the path to net-zero emissions offers substantial economic opportunities, aligning with the vision of transforming the Emirates into the most dynamic economy globally. Similarly, a list of over 70 countries which cover around 76% of global emissions have committed to setting net-zero targets. But what does this imply for businesses and what strategies must they implement to align themselves with the changing landscape? What role do sustainability consultants, often referred to as green consultants or climate change consulting firms, play in shaping strategies for achieving net-zero emissions?
In today’s blog we explore the answers to these questions and delve into the strategies and implications associated with the pursuit of net-zero emissions.
Strategies for Achieving Net-Zero Emissions
- Setting Ambitious Targets
One of the fundamental steps on the path to net-zero emissions is setting ambitious targets. Countries and organisations must commit to reducing emissions significantly by 2030 and reaching net-zero emissions by 2050, in line with the Paris Agreement’s call to limit global warming to 1.5°C. This commitment is a critical aspect of the global stocktake, a process that reviews progress toward the Paris Agreement’s goals and encourages nations to adopt more ambitious climate actions. The good news is that, as a result of this, we have definitely seen an increase in decarbonisation targets set by the world’s publicly listed companies.
- Recommendations for Non-State Entities
To create a more sustainable future, UN Secretary-General António Guterres established a High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities. The group proposed ten recommendations, including announcing a net-zero pledge, setting clear targets, using voluntary credits, and aligning lobbying and advocacy efforts. These recommendations are vital for businesses, investors, cities, and regions in their journey towards achieving net-zero emissions.
- Transitioning to Renewable Energy
Phasing out fossil fuels and scaling up renewable energy sources are essential for achieving net-zero emissions. These actions are central to the transition plan, as they significantly reduce greenhouse gas emissions and promote a cleaner, sustainable energy landscape.
Implications for Energy Businesses and Their Strategies
The energy industry, as the focal point of emissions, has seen a 60% increase in emissions since the signing of the 1992 UN Framework Convention on Climate Change. This underscores the urgency for businesses to transition to cleaner energy sources and adopt more sustainable practices.
For businesses, achieving net-zero emissions has significant implications. It calls for a conscious shift in decision-making, including sourcing materials and energy from net-zero emission industries. While these sustainable choices positively impact the environment, they may also result in increased production costs. The transition to net-zero emissions often requires substantial investments and a phased approach, which can impact businesses’ operational costs and profitability. This is where sustainability consultants and net-zero consultants come into play, providing invaluable guidance and expertise to help businesses navigate the complex journey towards sustainability while optimising their strategies, reducing costs, and ensuring long-term profitability.
A Case Study on Cost Efficient Decarbonisation of Energy
Effective policies and incentives play a pivotal role in driving businesses towards cost-efficient decarbonisation of energy. These policies offer essential support and guidance for the transition towards sustainable and environmentally responsible practices.
In a 2018 study on biomethane, the levelized cost of energy for biomethane production from food waste was assessed at 87 €/MWh, making it a promising and cost-competitive renewable energy source. However, to ensure financial viability, a modest incentive of 0.13 €/m3 (equivalent to 13 €/MWh) was required, taking into account gate fees. This case study highlights the importance of incentives in promoting the financial viability of renewable energy sources like biomethane.
Comparing Incentives and Policies
To put this in context, let’s compare the incentives for biomethane with other successful renewable energy policies across the European Union. For instance, photovoltaics and biogas in Germany and electric vehicles in Norway have achieved remarkable success. These schemes were analysed in terms of the incentive applied per tCO2 (tonnes of carbon dioxide) avoided.
For Ireland, the study predicted that biomethane needed a financial subsidy of less than 180 €/tCO2 avoided. Most successful EU systems offer incentivisation levels lower than 260 €/tCO2 avoided. This indicates that biomethane is a promising and cost-effective avenue for businesses in Ireland to reduce their carbon footprint and contribute to sustainability.
Incentives in the Electric Vehicle Realm
A noteworthy point arises when assessing incentives per tCO2 avoided: electric vehicles (EVs) stood out, receiving significantly higher incentives compared to biomethane. This was primarily due to the necessity of initiating a new infrastructure for clean, decarbonised transport and clean air. Government intervention plays a crucial role in incentivising the adoption of EVs, explaining the higher incentive levels.
Biomethane for Businesses
Biomethane as a transport fuel represents a significant shift in infrastructure, requiring the provision of compressed natural gas service stations and natural gas vehicles. Just like other successful renewable energy systems, initial stages may require more substantial incentives to initiate the industry. However, over time, these subsidies can be gradually reduced.
Biomethane as a transport fuel offers similar rewards as electric vehicles, including decarbonised transport, clean air, energy security, renewable energy, job creation, and support for greening the agricultural sector. These aspects make biomethane a compelling choice for businesses seeking to reduce their carbon footprint and embrace sustainability.
In conclusion, the study on biomethane emphasised the role of incentives and policies in promoting cost-efficient decarbonisation of energy for businesses. It provides insight into how businesses can transition towards sustainable practices with the right incentives, making biomethane an attractive and eco-friendly choice. This case study showcases that, with the right support, businesses can contribute to sustainability while ensuring their financial viability.
UAE’s Hydrogen Leadership Roadmap
Just as we’ve explored the case study of biomethane and its role in clean energy strategies, the UAE has unveiled its Hydrogen Leadership Roadmap, a ground-breaking initiative with global implications. This comprehensive national blueprint, represented by the Ministry of Energy and Infrastructure (MOEI), is designed to support low-carbon industries, contribute to the country’s net-zero ambition, and position the UAE as a competitive exporter of hydrogen.
The Hydrogen Leadership Roadmap was unveiled at the 26th United Nations Framework Convention on Climate Change’s (UNFCCC) Conference of Parties (COP 26) in Glasgow. This visionary roadmap is poised to play a pivotal role in the UAE’s transition to a sustainable, low-carbon economy and aims to drive the country’s investment in clean energy forward in line with its role as the host of the COP28.
Parallel Path to Clean Energy
The Hydrogen Leadership Roadmap shares common objectives with the biomethane case study we’ve explored earlier. Just as biomethane presents a cost-competitive and eco-friendly energy source, the UAE’s roadmap aims to unlock new sources of value creation through exports of low-carbon hydrogen and its derivatives to key importing regions. This move not only aligns with the UAE’s 2050 net-zero commitments but also fosters growth opportunities across various industries.
Case Study 2 – The Abu Dhabi Mangrove Initiative: A Vision for Change
Abu Dhabi’s commitment to mangrove conservation and restoration is exemplified through the Abu Dhabi Mangrove Initiative launched in 2022. This ground breaking project, inaugurated by His Highness Sheikh Khalid bin Mohamed bin Zayed Al Nahyan and His Royal Highness Prince William at Jubail Mangrove Park, symbolises a new chapter in environmental sustainability.
The initiative embraces innovative methods, such as drone technology, enabling the planting of 1.2 million mangrove seeds across Abu Dhabi. This innovative approach not only significantly reduces planting costs but also has the potential to bolster mangrove cover. Over the last two decades, nearly 20 million seeds have been planted, leading to a 6,400-hectare expansion of mangrove forests in the Abu Dhabi Emirate.
Benefits of Mangroves
Beyond being a carbon sink, these mangroves serve multiple crucial roles. They offer flood protection, curbing the impact of severe storms and preventing erosion, thereby safeguarding communities and preventing financial losses due to environmental hazards.
Under sustainable management, mangroves offer livelihood opportunities for local communities. Activities such as shellfish gathering, fishing, and beekeeping support communities living alongside these mangrove forests. Additionally, they generate indirect income through the protection and nurturing of vulnerable marine life, supporting biodiversity and livelihoods.
The Way Forward
The research and innovation investments in Abu Dhabi aim not only to restore and sustain mangroves but also to provide a template for cost-effective restoration globally. By leveraging advanced mapping techniques and drone technology, the endeavour targets efficient seeding with remarkable precision at rates of 2,000 per ten minutes, aiming to support mangrove conservation worldwide.
The initiatives for mangrove restoration and conservation underscore the potential for businesses to invest in environmental sustainability and contribute to the UAE’s net-zero emissions goal, ensuring a more environmentally conscious and economically viable future for all.
Strategies for Companies in the UAE
Companies seeking to embark on the journey towards net-zero emissions can take specific steps:
- Identify Priority Areas: Businesses should pinpoint areas where emissions can be reduced. This includes assessing climate risks, particularly for wealth and asset managers.
- Set Clear Targets: Establishing both long-term (net-zero) and interim targets for reducing emissions is essential. These interim goals, often aimed at halving emissions by 2030, serve as markers on the path to net-zero. Businesses in UAE are encouraged to align themselves with this target as the country seeks to adhere to the UN 2030 Agenda that aims to provide better living conditions to all using a set of 17 Sustainable Development Goals (SDGs), also known as Global Goals.
- Implementation and Progress Tracking: The implementation of a well-defined strategy is crucial. It’s not just about setting goals but also about publishing, actively working towards these objectives, and tracking their progress via materiality assessments and ESG reports. Transparency and accountability are key components of a successful net-zero journey.
Where We Are and Where We Should Be Heading
A report published by the International Energy Agency (IEA) paints a roadmap to net-zero emissions by 2050 for the global energy sector that highlights the key steps that need to be taken in order to achieve this goal as well as progress that has been made from the year 2021. As all businesses require the usage of energy, one way or another, these goals set for the energy sector impact all business entities and their strategies.
The pursuit of net-zero emissions is not just an environmental endeavour; it’s an economic and social imperative. It requires the collective efforts of nations, businesses, and individuals. Sustainability consultants and climate consulting firms are integral to developing effective strategies to achieve this monumental goal. As countries worldwide commit to reducing emissions, the path to a sustainable, green future becomes clearer, offering hope that we can successfully decarbonise our world and mitigate the impact of climate change.
At AKW Consultants, we provide comprehensive solutions to support your business in its journey towards achieving net-zero emissions. Our Sustainability and Responsible Business vertical offers a range of services designed to empower businesses to develop effective strategies for a sustainable and greener future. Get in touch today at [email protected]