The International Energy Authority estimates that half of the emissions reductions necessary to reach net-zero will come from technologies that are too nascent to be used commercially today. Yet now is precisely when they need to be deployed, given that the U.N. Intergovernmental Panel on Climate Change (IPCC) says limiting global temperature rises to 1.5 degrees Celsius depends on cutting emissions by 45% in the next eight years.
One of the big announcements at the United National Climate Change Conference COP26 last November was from the U.S. Special Presidential Envoy for Climate, John Kerry. He unveiled a new platform with the World Economic Forum that will speed up the adoption of new technologies in the hard-to-abate sectors of steel, trucking, shipping, aviation, cement, aluminium and chemicals.
The 34 members of the First Movers Coalition (FMC), who represent almost $6 trillion in market value, commit to buy products such as low-carbon cement and steel, zero emissions heavy duty trucks, sustainable aviation fuels and direct air capture, despite their high price tags, with the idea of driving up demand and eventually bringing down costs.
At COP26 the FMC set out specific purchasing commitments by 2030 in steel, trucking, shipping and aviation fuel, with the remaining sectors set to launch their purchasing commitments this year.
At the launch, Kerry said the FMC would “turbocharge” innovation in tackling emissions in sectors that have been regarded as too difficult to decarbonise, though they account for a third of global carbon emissions today, and by 2050 could produce a majority.
“We’re going to need to do this across the economy, from region to region, hemisphere to hemisphere, continent to continent,” said Kerry. “If we get this cooking, it will go X factor faster than it would otherwise. And that is what we need.”
The U.S. is also doing its bit to help. The White House has announced a multi-agency “Buy Clean Task Force” to speed up U.S. government purchases of greener products, including steel and concrete. The U.S. government buys goods and services worth more than $650 billion each year.
First Mover members include Amazon, Apple, Scania, Boeing, Bank of America, Holcim, Trane Technologies, Delta Air Lines, Engie, Fortescue, A.P. Moller-Maersk and DP DHL.
In the case of shipping, carriers set a target that at least 5% of their deep-sea vessels will be powered by zero-emission fuels by 2030, while cargo owners commit to at least 10% of the volume of their goods shipped internationally being on ships using zero-emission fuels by 2030, on the way to 100% by 2040.
COP26 in Glasgow
U.S. climate envoy John Kerry attends the UN Climate Change Conference (COP26), in Glasgow, Scotland, Britain November 12, 2021. REUTERS/Yves Herman
Such private sector commitments could really help move the needle in shipping, where the International Maritime Organization is working under a draft greenhouse gas strategy that only requires the sector to reduce its absolute emissions by 50% by 2050 compared to 2008.
Kara Hurst, chief sustainability officer of Amazon, said the retailer’s climate pledge to get to net zero by 2040 includes an interim target of delivering 50% of Amazon shipments with net-zero carbon by 2030.
She said the FMC’s commitment aligns with that of the Cargo Owners for Zero Emission Vessels, another collaborative platform launched last October by the Aspen Institute, whose signatories pledge to progressively switch all of their ocean freight to zero-carbon fuelled vessels by 2040.
“It’s important that cargo owners with net-zero commitments see the alignment of these kinds of (buyers’) initiative,” Hurst said. “We need to send those demand signals.”
Another company set to benefit from the shipping commitment is Maersk, which in December placed a 500 million euro green bond to fund the construction of a feeder vessel and eight large ocean-going container vessels capable of operating on carbon-neutral methanol by 2023 and 2024.
Soren Skou, chief executive of Maersk, said in a World Economic Forum panel last September: “We’ve tried to solve the chicken and egg situation. Today, there’s no one producing green fuels for shipping because no ships are using it. At the same time no one is building green ships because they can’t buy the fuel. But I’m a big believer in creating demand and a market. We’ve ordered what will eventually become 12 ships, and I need to find 500,000 tonnes of green fuel by 2025.”
He added that although the fuels will be expensive, as much as three times conventional fuels, the premium paid by final customers would be “negligible”. And with more than half of Maersk’s top 200 customers having set science-based targets to cut emissions, he says big customers like Amazon and Walmart are demanding lower-carbon logistics.
Anna Borg, chief executive of Swedish power company Vattenfall, said her company had committed to buy green technologies in aviation, trucking and steel through the coalition, all of which will be critical to Vattenfall meeting its commitment to become net zero by 2040.
“We are heavily underestimating the risk of staying in the existing business models, because things are evolving and new business models will be developed across industries and companies,” she said.
“To be early (in adopting new technologies) may be challenging, but to be too late might be devastating.”
She said Vattenfall was a partner, with steel-maker SSAB and the Swedish state-owned mining company LKAB, in HYBRIT, which is already producing steel using green hydrogen. Another member of the First Movers Coalition, Volvo Cars, has committed to buying the steel, which will go to commercial customers as early as 2026.
Also set to benefit are French energy company Engie and Norwegian fertiliser company Yara International, which are co-developing one of the world’s first industrial-scale renewable hydrogen projects in Pilbara, Western Australia, using onsite solar PV and a 10 megawatt electrolyser with A$42.5 million ($30.3 million) in funding from the Australian government. The project, scheduled for completion in 2023, will also produce green ammonia for shipping.
“The First Movers Coalition is exactly what’s needed now,” said Svein Tore Holsether, president and chief executive of Yara International. “When I look at the transition we are making, converting the production of fertilisers to renewable energy, the size of the project is equal to the combined installed capacity of electrolysers in the world to date. We don’t need a first-movers’ advantage but we’d like to be first-movers neutral, because that creates scale in the market, which will drive down cost.”
Another green hydrogen proponent is Andrew Forrest, chief executive of Australia’s Fortescue Metals Group, who plans to ramp up his company’s production of green hydrogen to 15 million tonnes by 2030, and 50 million by 2040 as part of its drive to becoming net zero.
At COP26 the company announced a $8.4 billion green hydrogen infrastructure project in Argentina, and signed a deal with UK construction giant JCB and hydrogen distributor Ryze Hydrogen, to supply 10% of its global green hydrogen production.
“We are trying to pull together a coalition of green hydrogen intenders (purchasers) and producers to produce 200 million tonnes of green hydrogen so we can give the world a real choice away from fossil fuels,” Forrest said. “We think it will take a critical mass of 200 million tonnes to achieve that, and I think that’s feasible. There’s projects all around the world by companies like mine that can make it happen if we work together.”