Net Zero Carbon by 2050: Quick summary for non-energy professionals and your organization

Reaching global objective of net zero carbon by 2050 will require that any organization focuses on three core building blocks:  

• Pursuit of immediate, achievable projects for carbon reduction by 2030, 
• Investment in one or two moonshot opportunities by 2050 and 
• A series of partnerships with solid technology providers and investors with deep pockets. 

The International Energy Agency, a hybrid of a watchman and an advisor for governments on their energy issues has recently issued a report that outlines our strenuous, yet, doable journey as humanity to a net zero carbon by 2050. The report is important, because it comes from a trusted, objective source that has been anchored for several decades in advising on fossil fuel policies and has developed its clean energy affiliation progressively over the last 15 years. 

This article explains in simple terms what is proposed by the International Energy Agency to reach net zero carbon by 2050 in the energy sector. 

Let me start with the basics. 

What is net zero carbon?

Net zero carbon by 2050 globally means that by 2050 the world will emit the same amount of carbon as it will be able to capture and store or reuse from the atmosphere. The same principle is used by companies (e.g. Microsoft wants to be net zero by 2030).

What is new in the report?

1.The Agency sends a vocal message to stop all new exploration for oil, gas and coal. This means no more investment in fossil fuel infrastructure. Not everyone agrees, of course!

2.The report offers a list of moonshot projects that need technological breakthroughs and implementation at scale if we are to succeed in getting to net zero by 2050. The list includes:

• Advanced batteries: These allow us to store a large amount of energy, especially from intermittent renewable sources, for example solar, so we can use it during the night when the sun does not shine.
• Hydrogen electrolysers: These use electricity to create hydrogen gas, a new type of energy carrier. Hydrogen can be used as a replacement for fossil fuels and for electricity generation especially in industries (steel, cement, etc.) and transport ( long distance road transport, shipping, etc.) where we don’t have that many low CO2 alternatives. 
• Direct air capture and storage: A process that will allow us to capture CO2 directly from the atmosphere, store it in underground reservoirs or reuse it for industrial processes or to produce useful materials (e.g. renewable fuels)

3. There is a new emphasis on behavioral change based on government regulations which will accompany carbon reduction achieved through new technologies. Behavioral change is relevant both for citizens and corporations and a Government may mandate it (i.e. you need to add an insulation layer to your house or you are fined) or keep it voluntary (i.e. you are recommended to take a shower instead of a bath and no one checks). Actually as much as three quarters of this change will be regulated with the remaining quarter based on citizen and corporate goodwill. The focus is skewed towards mature markets given the ability to impact change in consumer lifestyles (mobility or cooling habits for example). Governments are more willing to impose restrictions on customer’s habits and they have practical means (taxes, fees, fines) to ensure compliance that is harder to execute in emerging and developing economies.

4. The investment required to make this change happen is huge - think tripling the current levels of 1.5 Trillion USD to 5 Trillion USD by 2030 and maintaining the effort all the way to 2050.

Source: Net Zero by 2050, A Roadmap for the Global Energy Sector, IEA 2021

5. The Agency identified relevant risks for the net zero carbon transition that you could track for your organization. Two risks that stand out the most: (1) Security of supply of critical minerals (copper, cobalt, earth metals that we need to produce new equipment for renewable energy) and (2) security of electricity supply with an increasing drive for electrification of everything.

What is the same?

1.The Agency stresses that already implemented policies, regulations and planned targets are not enough to limit the long-term increase in average global temperatures to 1.5C degrees. That’s why the report outlines its own Net Zero Emissions by 2050 Scenario (NZE if you read the report).

2.The report outlines the most important focus areas. I call them immediate, achievable projects in this article introduction, that your organization can pursue by 2030:

• Energy efficiency will be the bedrock of carbon reduction in the coming years. It has the benefit of saving on your operational costs with varying payback options from 2 to 3 years for low cost measures (famous LED lamps) to large retrofit projects in buildings and industrial processes with payback options from 7 to 10+ years.
• Solar and wind power generation will grow exponentially and for your organisation this probably means focusing on procurement of renewable power directly from your power supplier, sourcing through power purchase agreements from independent power producers or co-development if you want to invest time and resources, and have the option given your local market conditions.
• Aggressive deployment of electric vehicle options to replace fossil fuel based mobility solutions (including corporate fleets), mainly on the road.

The following graphic quantifies the progress in these three areas by 2030.

Source: Net Zero by 2050, A Roadmap for the Global Energy Sector, IEA 2021

3. The Agency relies on innovation, finding new business models and new technological advances that will allow us to deploy these solutions in a cost-effective way. Its recommendation is to increase government funding of demonstration projects from 25 Billion USD to 90 Billion USD by 2030.

4. The coming decade will still be strong on carbon reduction in power generation while emissions from industry, transport and buildings will take longer to reduce. Industry and transport in particular require technology breakthroughs with batteries, hydrogen and carbon capture and storage.

5. The report references collaborations that will be required at an international level (well, we haven’t seen great examples of countries collaborating recently) as well as between companies and citizens. What this means for your organization is to look for suitable partners across your value chain both among your suppliers and clients.

What does it mean for your organization? Where do you start or continue in case you already have a net zero carbon strategy?

1. By 2030: Focus on immediate, achievable projects and initiatives that target higher energy efficiency, increase your sourcing of solar and wind power and if you have a vehicle fleet and road transport needs, focus on deployment of electric vehicles.
2. By 2050: Invest time and resources to come up with your moonshot opportunity. You don’t need to be Elon Musk. You can join an industry-wide initiative or one of your technology providers as they research and innovate in one of the promising areas that are relevant for your business. The chances are high that the area will touch on batteries or energy storage, hydrogen and carbon capture and storage. One interesting example is the Hyzon Zero Carbon Alliance, which accelerates transition to hydrogen mobility.
3. Map out your stakeholders and partners to identify who can accompany you on this journey. Remember, “If you want to go fast, go alone, if you want to go far, go together”. I jokingly say that decarbonisation is my retirement project, which sounds about right because I still have 20-30 years to go. Organizations across the world have various timelines for their net zero carbon visions. Starting with the more ambitious 2030 (Microsoft), continuing with pragmatic 2040 and the long view of 2050.

Implementing net zero vision, as part of our response to climate change, is one of the biggest challenges facing the business and policy world today, second only to our fight with COVID-19 pandemic. Extreme weather patterns, irreversible changes to ocean and sea coastlines, loss of biodiversity, impact on human health and well-being are real. Business as usual is not an option if we want to, collectively, stand a chance of preventing costly impacts of climate change for individuals and businesses.

If the content of this article is new to you, you have probably a serious catching up to do. We are here to help you, there is still time. Message me if you want to learn more and get insights on how decarbonization is relevant to you and your organization.

Look out for the next articles that will dive into the details of designing net zero strategies, implementation modalities and innovation activities that can support your net zero vision.

For examples of innovative technologies and solutions supporting decarbonization, follow Enrupt and subscribe to our newsletter. 

The IEA report is available for download here. To start, read the executive summary.

About Enrupt

Building our road to net zero carbon is not easy. COVID-19 taught us that our systems are fragile and we need a more sustainable way of managing our today and the future. Enrupt brings together innovators in the energy sector to accelerate our path towards net zero carbon. Enrupt offers leadership advisory, implementation support and innovation services in the field of decarbonisation. We don’t dream of a better world. We create it. Together. 

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