By Deepa Poduval
Last year saw significant activity as governments, utilities, businesses and other entities zoned in on mitigating climate change by setting aggressive decarbonization goals in an effort to lower carbon emissions.
November’s COP26 conference saw several countries make national commitments to fight climate change: More than 130 countries pledged to halt and reverse deforestation and the destruction of land by 2030, and more than 100 countries signed the Global Methane Pledge to collectively cut emissions by 30 percent before this decade comes to a close. On top of this, dozens of nations committed to supporting electric vehicle (EV) adoption and funding programs for climate-positive projects.
Many companies have also chosen to act. There now are more than 215 global companies that have joined industry leaders such as Amazon, Mercedes Benz, Microsoft and Unilever in signing the Climate Pledge. This collective business community effort is aimed at achieving net-zero carbon emissions by 2040 – a full 10 years ahead of the Paris Agreement timeline. In addition, more than 340 companies have signed onto the RE100 pledge to use 100-percent renewable energy.
Progress is More than a Pledge
Although these commitments and goals signal an energized global community that is eager to decarbonize, many nations and companies do not know how they will reach their targets. While making the choice to act is the most important first step in transitioning to a net-zero economy, the biggest challenges exist in the space between pledges and execution.
Black & Veatch’s 2021 Corporate Sustainability Goal Setting and Measurement report found that 80 percent of companies with revenues greater than $250 million have set greenhouse gas (GHG) reduction goals, yet one in four of these companies is unsure how they’ll meet them.
At Black & Veatch, we work with a wide range of clients – from utilities and municipalities to generators, manufacturers, investors, and C&I customers – for whom energy, water, communications and transportation infrastructure is mission critical. We are right there with them as they attempt to navigate the tangled web of government incentives, regulations, shareholder and commercial pressures, and workforce demands. Often, they find it difficult to balance all these forces while working toward their sustainability goals.
The Need for a Roadmap
While many organizations are committed to sustainability, they lack the strategic roadmap to get them there. Every company must first identify where it is and where it wants to be – identify the gap, allow for scenarios and develop “crawl, walk or run” strategies. Blueprints lead to a higher return on investment while also boosting entities’ ability to compete and thrive in a decarbonized future, because they look at long-term benefits instead of focusing on short-term considerations. There’s no one-size-fits-all methodology. Success will require broad-based strategies, and each organization will need to plan according to their own goals and needs.
Ten Steps for Creating A Successful Roadmap
While crafting a decarbonization roadmap can be intimidating, breaking it into steps can make it less daunting and more achievable:
- Identify low-hanging fruit and immediate actions that can lower your carbon footprint.
Look for easy-to-decarbonize areas of your operations where you can make a difference right away. Could you change to a local supplier or one who embraces renewables? Could you upgrade your generators to high-efficiency models, saving money and lowering emissions? Making quick, easy changes will kick-start your decarbonization journey, and those early wins will energize your organization on the path forward.
- Accept uncertainty.
No good plan goes unpunished. When creating a blueprint that spans across decades, there is always the likelihood that you’ll have to pivot along the way. That’s okay! It’s much easier to adapt when you already have momentum behind you. Accept that there might be changes in technology, or setbacks here and there. Do what you can with what you have and stay aware of emerging technologies and funding options.
- Determine what can be done in-house and where external partners are necessary.
It’s okay not to have all the answers. The most complete decarbonization plans will come from partners with expertise in strategic consulting and a wide portfolio of technology solutions, including hydrogen, renewable energy and energy storage. End-to-end infrastructure experts like Black & Veatch have the holistic perspective and range of strategic, regulatory, financial and technical capabilities to ensure that you are positioned to make the best economic and technology choices possible to meet your decarbonization objectives.
- Read and understand the regulatory landscape
Regulation can pose tricky hurdles. For example, there is a growing acceptance that there will be a cost associated with emissions of CO2, likely tied to rates of emission and concentration. A strategic decarbonization roadmap will need to be aware of this, as well as the incentives available to those reducing their CO2 emissions, when setting out the pace and potential cost of achieving net-zero goals. Having an idea of what those rates might be will give you an edge as you decide how and how fast you’ll move.
Policy actions can also offer incentives that lower costs and remove barriers. Having a good understanding of what policy is out there for your field will go a long way to making sure you both avoid making major mistakes and maximize the opportunities available to you.
- Embrace digitization
Every roadmap needs a detailed technology core. The new digital technologies on the market allow for better asset monitoring, metering, data measurement and can vastly improve performance. Digital technology can provide information about the real-time “health” of the infrastructure that underpins our businesses. Digitalization provides the opportunity to collect and analyze vast amounts of data, creating a 360-degree view of our infrastructure.
When Orbital Marine Power Ltd., a developer of floating tidal stream turbines, worked with Black & Veatch to create a digital twin of their current turbine design, they were able to simulate turbine improvements and identify which would deliver the lowest levelized cost of renewable energy across the entire lifecycle of the turbine, saving money and increasing efficiency over the long-term.
- Identify the commercially ready and emerging technologies available over the next 30 years that could be deployed to reach your decarbonization goals.
Research all the available technologies and think carefully about which would best match with your assets and operations. Would wind, solar, hydropower or geothermal power generation work best in your location? Could you invest in electric vehicles?
Maybe it suits you better to pair with a company who might put your emissions to better use by recycling them into something useful. You could look into incorporating RNG production, or maybe you’re looking for something more futuristic. NovoNutrients is a good example; Black & Veatch is helping the company scale their first production plant that will recycle carbon dioxide emissions from a neighboring facility. The emissions will feed bacteria that will serve as the base for livestock feed and, one day, for alternative protein products for human consumption.
Looking to the longer term, emerging low-carbon alternatives such as hydrogen, ammonia, carbon capture, bio fuels, long-term storage and newer types of nuclear power are becoming considerations, beneficial for their range of applications.
- Gain or contract the technical competence and in-depth knowledge to:
- Identify the likely timeline of these technologies.
- Identify the likely cost curve of these technologies.
- Identify the resiliency characteristics of these technologies.
- Prioritize technologies based on cost, risk, availability and opportunity to scale.
Placing strategic but informed bets on emerging low-carbon fuels and technologies is a challenge because the commercial viability and timeline of those technologies are constantly evolving through investments, R&D, and policies. Choose the strategies and technologies that are realistic for your budget, risk tolerance, and for future development.
- Build adaptability into the plan.
The great ones anticipate adaptation. This means having pre-set checkpoints where you will consider your progress and reflect on changes and developments that will influence the roadmap’s evolution. These are the times when you may read signposts and choose to change course or add new technologies to the plan.
Once developed, a well-designed decarbonization roadmap becomes a powerful North Star to galvanize action and to communicate progress. Use it to bring your wide range of stakeholders along with you on your journey. Share progress and challenges and adaptations using the roadmap as your anchor by communicating what has changed and why and how your pivots keep you on track to reach your overall destination.
To Put it Simply…
Creating a decarbonization roadmap is neither a simple nor an easy task. But it is incredibly important to have a thoughtfully constructed one to ensure you achieve the highest return on your investments and efforts along your decarbonization journey. Ask for help when you need it, embrace new technologies, and keep a realistic yet optimistic attitude. Many of today’s sustainability goals may seem lofty and ambitious, but with the right plan, they can feel much more achievable. Black & Veatch is committed to working with organizations in this complex decarbonization landscape. We provide business decision frameworks and flexible execution to meet companies where they are and help them navigate where they want to go.