A U.N.-backed initiative aims to enlist major companies in each economic sector to work out a credible pathway to net-zero emissions by mid-century - starting now
* Corporate desire to decarbonise strong despite pandemic
* Governments cannot cut emissions to net zero without business collaboration
* U.N. initiative aims to sign up big players in each economic sector
By Megan Rowling
BARCELONA, Feb 25 (Thomson Reuters Foundation) - Despite the pandemic slamming the brakes on flying, UK-based engineering firm Rolls-Royce - whose main clients include the aviation industry - has not backed away from its work to slash planet-heating emissions, according to its technology director.
Dave Smith said crafting a corporate strategy, due this year, to reach its net-zero goals had become an even bigger part of what he does than before COVID-19 hit the global economy.
Rolls-Royce this month said it had conducted the first tests of 100% sustainable aviation fuel in an engine for private business jets, as part of its ambition to play a leading role in enabling efforts to reach net-zero carbon by 2050.
It has pledged to make its own operations carbon-neutral by 2030.
Smith said that while the pandemic would saddle the aviation industry with debt and leave it in a weaker position to invest, the desire to decarbonise was growing, not diminishing.
"We might have a couple of difficult years where we have to go a little slower than we might have wanted to - but there is no changing the direction," he said.
"We are absolutely going (to net zero). By 2050 we'll get there," he told the Thomson Reuters Foundation.
A new U.N.-backed initiative hopes to drive such transformation across 28 key sectors of the global economy, from cement to heavy goods vehicles, plastics, clothing, finance and technology.
In January, the "Race to Zero Breakthroughs" effort launched with a paper that sets out tipping points for each sector, identifying what key players must do, and by when, to deliver changes needed to adopt a zero-carbon model by 2050 or earlier.
HEAVY LIFTING
Nigel Topping, Britain's high-level champion for climate action, said the aim was to sign up large companies accounting for 20% of revenue, production, volume or assets under management in all of the sectors by 2023, with at least 10 sectors there by the COP26 U.N. climate summit in November.
"This is an inevitable transition. If people are not engaged ... and committed to it, they are going to lose," he told the Thomson Reuters Foundation in a video interview.
The idea is to create a race within and between business sectors, with 20% participation by major companies in a sector seen as a tipping point to catalyse faster change.
Even in the face of COVID-19, the paper said, corporate net-zero commitments roughly doubled in 2020, with those joining the "Race to Zero" campaign now covering more than 12% of the global economy and nearly $10 trillion in revenue.
Topping cited cars as one of the leading sectors now moving away from fossil fuel use and towards running on green electricity at a faster-than-expected pace.
GM, the largest U.S. automaker, was the latest big company to get on board, setting a goal last month that all new cars, SUVs and light pickup trucks it sells by 2035 will produce zero emissions.
But some sectors are lagging, especially in heavy industries such as aluminium, cement, mining, steel and paper, as their products or processes lack low-carbon replacement technology.
Research released last week by the Transition Pathway Initiative, a benchmark for investors, found that only 16 of 111 large publicly listed industrial companies were on a path that would keep global warming at 2 degrees Celsius or below.
But some attractive and viable new options are emerging, such as capturing carbon from cement production and making steel from recycled scrap metal using green electricity, it noted.
GOVERNMENT NOT ENOUGH
Since the Paris Agreement on climate change was adopted by more than 190 countries in 2015, pressure has ramped up on corporations not only to commit to ditching climate-polluting business models but to work out clear ways of doing that.
Net-zero goals, most set for mid-century, now cover close to two-thirds of global emissions, but climate campaigners - including teen star Greta Thunberg - have slammed long-term targets as a way to duck urgently needed action now.
Topping said the Race to Zero Breakthroughs push was an effort to show that reaching net-zero was possible in different economic sectors - and that the transition was already underway.
At a launch event as part of a World Economic Forum (WEF) conference in January, U.N. climate chief Patricia Espinosa said the private sector was "absolutely crucial" for global efforts to curb warming and avert its worst impacts.
"Governments alone cannot do the transformation that is required for us to go further into a reality and a future with low carbon," she said.
At a separate WEF event on stepping up efforts to tackle climate change, Ben van Beurden, CEO of energy giant Shell, said the strengthened 2030 emissions reduction targets all nations are due to submit by COP26 "can only go so far".
Government efforts could green the power sector, which accounts for about a fifth of global energy demand, as well as personal transport and homes, he said.
But that would leave two-thirds of emissions to be slashed by businesses, he noted.
"We are only going to get to net zero if, on a sector-by-sector basis, we have the right pathways and the right recipes to wean that sector off using carbon-based energy," he said.
WORKING TOGETHER
Smith said Rolls-Royce had been working with other companies on developing solutions and lobbying authorities to set clear rules requiring the use of green alternatives to power planes.
For aviation, he believes a range of technologies - from electrification of smaller aircraft to use of hydrogen and other sustainable fuels to power larger planes - will be needed.
Sustainable fuels could be made from recycled vegetable oil, municipal waste, alcohol or a chemical process to turn carbon dioxide and water into kerosene, requiring electricity.
Such fuels are currently expensive and account for less than 1% of the market - and a huge cross-sector effort would be needed to boost that, Smith said.
Governments must also mandate industry move in that direction - with such regulation now being considered by Britain and the European Union - to create a market and give investors the confidence to back green fuels, he added.
"If any one of those elements didn't happen, it wouldn't work," Smith said. "We accept that we need to move in a coordinated way to manage this energy transition."
Read more:
OPINION: No more excuses: investors throw climate spotlight on heavy industry
Climate primer: Why is everyone talking about 'net zero'?
Meaningless or sensible? Net zero by 2050 divides climate community
(Reporting by Megan Rowling @meganrowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org/climate)
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