Consortiums can help companies achieve net-zero goals, says GlobalData
Due to a dearth of low-cost innovative solutions and scalability issues, several companies are failing to achieve their ambitious net-zero goals. Consortiums, with a collective goal of reducing carbon emissions, can address these challenges and attract investment from big companies to accelerate and support the implementation of decarbonization strategies, says GlobalData, a leading data and analytics company.
Vaibhav Gundre, Senior Consultant of Disruptive Tech at GlobalData, comments: “There is a growing consensus that to achieve the 2050 net-zero goal requires collaboration among the governments, policymakers, companies, and other stakeholders. Consortiums can play this pivotal role in reducing carbon emissions via key pathways such as renewables, energy efficiency, carbon removal technologies, and the hydrogen economy to provide the necessary investment to accelerate such efforts. Moreover, a cross-sector collaboration can bring innovative solutions involving the application of technologies.”
Stripe, in collaboration with McKinsey, Alphabet, Shopify, and Meta launched a consortium named “Frontier” in April 2022 to commit to carbon removal technology improvements and cost reduction by guaranteeing future demand. This collaboration among corporate giants is an advance market commitment (AMC) to buy an initial $925 million of permanent carbon removal between 2022 and 2030. It aims to convince researchers, entrepreneurs, and investors that there is a growing demand for such technologies by providing a profit incentive to encourage innovations in carbon removal.
Guidehouse launched a new consortium “Building the Clean Hydrogen Economy” in February 2022 to create and launch innovative pilot projects that use clean hydrogen to decarbonize heavy transport, increase renewables integration, and decrease emissions in the US energy sector. The consortium’s working groups are currently working on three pilots in the Southwest US, New York, and the US Gulf Coast. The pilots aim to drive an adequate and cost-competitive supply of hydrogen by 2025-2030.
The UN Global Impact announced the launch of the CFO Coalition for the SDGs, a platform where global chief financial officers (CFOs) and other corporate officers can collaborate with peers, investors, financial institutions, and UN agencies to develop principles, frameworks, and recommendations, in March 2022 to integrate the sustainable development goals (SDGs) in corporate finance. The coalition aims to leverage the commitments from CFOs to create a $10 trillion market for SDG-directed finance by 2030.
Launched by Repsol in January 2022, The Spanish Hydrogen Network (Shyne) consortium aims to invest $4.4 billion in green hydrogen technologies and install 500MW of capacity by 2025 and 2GW by 2030, which is half of the Spanish government’s 4GW target. The consortium will also build renewable-energy projects to power the electrolyzers, promote the use of hydrogen in transportation via synthetic fuels, and at least 12 new hydrogen filling stations by 2025.
Gundre concludes: “Despite a flurry of net-zero announcements, there is no significant progress made due to a myriad of challenges. Consortiums can help companies with little to no expertise in net-zero technologies by leveraging the know-how of other players and helping unlock the full potential of clean technology innovators. In a nutshell, embracing new technologies and being open to new partnerships will be key in achieving the collective goal of net-zero.”