Business is comitted to leading our global response to climate change. There’s now a consensus that we all must act to address to respond to the changes in our climate and do what we can to respond to what we are experiencing.
Climate scientists point out that a world record temperature was set last month. They remind us that heat waves and forest fires ravished Southern Europe and Northern America, that devastating floods hit India and Pakistan, and that a record level of ice melting in the artic has been observed.
They suggest that this demonstrates that modern climate change is being caused by human activity and global warming is upon us. We’re not climate scientists but we accept the urgency of their warnings and that’s why we’re acting to make transitioning to cleaner sources of energy a compulsion of the present not a challenge of the future.
Fortunately, our government in India is also acting and has committed itself to achieving carbon neutrality by 2070.
Responsible corporate citizens must play their part and acknowledge the seriousness of the issue at hand. Our net zero blueprint has three elements: renewable electricity, hydrogen production and development of biofuels. Renewable electricity is based on utilising nuclear, wind and solar for light transport, and home and office heating, air conditioning and lighting.
Hydrogen production substitutes as a low carbon fuel for gas in energy intensive industries like steel and refining, as well as for heavy transport including trucking and shipping. Bio-fuels play a crucial role by mitigating the carbon footprint of standard transport fuels in the transition away from fossil fuels.
While the technologies are evolving, corporate leaderships need to put a plan inaction with a strategic focus, to massively restructure their portfolios and investments to the themes of decarbonisation, decentralisation and digitalisation.
The strategic roadmap for energy transition, especially in core economy sectors, should involve transitioning existing assets while also investing in new technologies and businesses to transform industry sectors to achieve low carbon goals.
The world is dependent on supply chains involving carbon heavy assets. This meanstransition-investments must not only deliver low carbon assets, but also cleanerecosystems.
For example, developing hydrogen production centres on their own may not be enough. There needs to be low carbon logistics, storage and industry belts to encourage demand and promote transitions. Refineries and steel plants must transition to hydrogen furnaces.
Similarly, biofuels have immense potential, with products like sustainable aviation fuel and hydrotreated vegetable oil (HVO) already demonstrating their worth. During the transition, liquefied natural gas (LNG) can be a great bridge fuel for heavy trucking and logistics, helping this traditionally heavily polluting sector to decarbonise.
These are in addition to the efforts we need to take in our move to solar, wind and nuclear power to support the requirements of industries and manufacturing.
Business has a significant role to play in helping governments achieve their net zero targets. We’ve started work already and together we can address this shared national and global challenge.
This article was written by Mr Tony Fountain, Managing Partner, Essar Energy Transition and Non-Executive Director, Essar.