The recently released International Energy Agency’s (IEA) Breakthrough Agenda Report sets out actions needed to deliver on a recent clean technology commitment by governments representing two-thirds of the global economy.
The Breakthrough Agenda, as the commitment is known, was set up at COP26. It aims to align countries’ actions and coordinate investment to scale up deployment and drive down costs across five key sectors including power, road transport, steel, hydrogen and agriculture.
Evidently, this all represents crucial intelligence for businesses tracking the global green transition, and indeed potential opportunities too.
Clean Tech Catalyst
“We are in the midst of the first truly global energy crisis, with devastating knock-on consequences across the world economy, especially in developing countries,” said IEA Executive Director Fatih Birol.
“Only by speeding up the transition to clean sustainable energy can we achieve lasting energy security. Through international collaboration, we can make the transition quicker, cheaper and easier for everyone – on the back of faster innovation, greater economies of scale, bigger incentives to invest, level playing fields and benefits that are shared across all parts of society.
“Without this collaboration, the transition to Net Zero emissions will be much more challenging and could be delayed by decades.”
“The energy and climate crisis has exposed the weaknesses and vulnerabilities of a system heavily reliant on fuels of the 20th century. Anything short of radical and immediate action will ultimately eliminate the chance of staying on the 1.5°C path,” said Francesco La Camera, Director General of IRENA.
“The Breakthrough Agenda and our joint report sends a strong signal ahead of COP27 that greater international collaboration can amplify ambition and accelerate progress. Advancing the transition to renewables is a strategic choice to bring affordable energy, jobs, economic growth and a cleaner environment to the people on the ground.”
IEA has assessed the five key targets; power, road transport, steel, hydrogen and agriculture account for nearly 60 per cent of global greenhouse gas (GHG) emissions today – and could deliver the bulk of the emission reductions needed by 2030.
The report notes an encouraging increase in practical international cooperation in recent years, and progress in deploying technologies needed, including a doubling of electric vehicles sales in 2021 from the previous year, to a new record of 6.6 million.
Further, an increase in global renewable capacity of eight per cent in 2022 is forecast, pushing through the 300GW mark for the first time and equivalent to powering approximately 225 million homes. This comes with forecast global electricity generation cost reduction of at least USD 55 billion in 2022, based on new renewable capacity added in 2021.
That’s all good, and has already happened. But what can the report do to catalyse new change and new business scope?
Actions for Better
The report puts forward 25 recommendations for leaders to discuss. Among them are a need to create new cross-border supergrids to increase trade in low-carbon power, reduce emissions, improve energy security and enhance system flexibility.
Of interest to businesses will be new goals to set up new international centres of expertise to channel finance and technical assistance to help coal-producing countries’ transition.
Other more practical measures are coming to agree a common definition and target dates by which all new road vehicles will be Net Zero, targeting 2035 for cars and vans and the 2040s for heavy duty vehicles.
There’s also focus on mobilising investment in charging infrastructure, including prioritised assistance for developing countries and harmonising international charging standards to drive investment and accelerate adoption globally.
Some other headline plans include new standards to boost the recyclability of batteries and research into alternative chemistries for batteries to reduce reliance on precious metals, such as cobalt and lithium.
Centrally, new government policies and private-sector purchase commitments to drive demand and deployment of low-carbon and renewable hydrogen alongside standards to enable global trade may be coming, with public and private commitments to purchase near-zero emission steel, and actions to level the playing field between steel producing nations.
And for business in the agri-sector; there may be change on investment for agriculture technologies and farming practices that can cut emissions from livestock and fertilisers, expanding availability of alternative proteins and accelerating the development of climate resilient crops.
This may come with new international standards for monitoring and reporting on the state of natural resources on which agriculture depends, covering soil health, soil carbon content, and pollinator health.
There’s a lot there for corporates to ponder, and indeed build into strategies aimed at maximising opportunities from the green transition.
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New research cited by the report shows some technology costs may decline by as much as 18 per cent by 2030. And IRENA estimates cited by the report suggest an energy transition aligned with limiting global temperature increase to 1.5°C could create close to 85 million additional jobs by 2030 compared to 2019, more than offsetting losses of 12 million jobs.
“This report highlights the need to ensure affordable access to clean and green sources of energy for all. This is also a strong reminder on the need for a focus on implementation, which must be the priority at the national, regional and local level, in order to have the necessary impact globally as well as the need for mobilisation of appropriate finance,” said Dr Mahmoud Mohieldin, UN Climate Change High-Level Champion for Egypt.
“Countries with the thousands of non-state actors running the Race to Zero and Race to Resilience must collaborate more strongly to drive forward the transition to affordable zero emission solutions in each emitting sector of the economy,” said Nigel Topping, UN Climate Change High-Level Champion for the UK.
“This is as essential for development as it is for avoiding dangerous climate change. Clear steps must be taken at COP27 to implement the Breakthrough Agenda commitment to collective action that makes clean technologies affordable and available to all who need them throughout the world.”
Expect a ramping up of these kind of demands pre-COP, with more drivers and business expectations to come. As ever, the world’s top climate conference will have a lot to say about where business goes in the next year.