The International Energy Agency this week published its first ever roadmap to net zero emissions by 2050 for the global energy sector, bringing much-needed clarity to the task of meeting the Paris Agreement targets.
This roadmap shows that net zero has become mainstream, fossil fuels must be phased out urgently and that those businesses that work towards cutting their emissions in line with 1.5C will be in the best position to thrive.
Until now, there was no clear guidance on what net zero really means. It is not the same for Germany, the US or China. It is not the same if you produce steel, beverages or clothes. This roadmap helps provide that guidance.
For the private sector, guidance on net zero comes from the Science Based Targets initiative (SBTi), which relies on the IEA scenarios. The SBTi has come to represent the mark of scientific rigour for companies that are seriously working to reduce their footprint aligned with the Paris Agreement. It is now consulting on a Net Zero Standard for the private sector, due to be released in November this year. The standard will include guidance to help companies set science-based, net zero targets.
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The IEA roadmap says the energy sector will be dominated by renewables and there is no need for investment in new fossil fuel supply. It highlights the urgent need to shift away from coal burning.
With 300+ businesses already switching to 100% renewable electricity through RE100 and a growing number of power utilities aligning their emissions reductions with the 1.5C target, through science-based targets, many businesses already see this in the future. The IEA roadmap reinforces the trend. What is needed now is for governments to adopt supportive policies, like phasing out coal use and ending fossil fuel subsidies.
An increase in investments in grid infrastructure is also specified in the roadmap along with a lower reliance in carbon capture and storage (CCS) compared to previous reports. Net zero hinges on an unprecedented clean technology push, through to 2030, and requires huge leaps in clean energy innovation. This again provides clarity for business on where to focus their efforts and resources. It reaffirms the recent conclusions from the Energy Transition Commission on electrification and hydrogen which conclude that massive clean electrification will be the primary route to decarbonization, complemented by hydrogen in the harder-to-abate sectors.
Action cannot wait. To arrive at net zero by 2050, global emissions must halve by 2030.
With a few weeks until the G7 summit, the business community has very clear asks to leaders in line with the IEA roadmap to net zero:
- Put forward strengthened, high quality national contributions to the Paris Agreement in line with a 1.5C trajectory to halve global emissions and contribute to reversing nature loss by 2030
- Deliver on the commitment by developed countries of $100 billion a year in support of climate action by developing countries
- Commit to 100% sales of zero-emission vehicles by 2035 for new light-duty vehicles
- End coal financing immediately, coal exports by 2025, and phase out the use of coal by 2030
- Lay out roadmaps by 2022 to phase out all fossil fuel subsidies and financing by 2025 at the latest
- Put a meaningful price on carbon
- Make climate-related financial disclosure mandatory for corporations, in line with recommendations by the Task Force on Climate-related Financial Disclosures
For the energy transition to net zero to be effective, governments need collaborate with the private sector at an unprecedented level. Government action, company strategies and investor choices can make this goal a reality.
María Mendiluce is CEO of the We Mean Business Coalition.