Thailand’s agriculture ministry plans to install solar panels on at least one million of Thailand’s farms in a new pilot project aiming to reduce farms’ electricity bills by 20-30% in 15-20 years. The ministry plans to issue a non-fungible token named “Solar Panels NFT for Thai Farmers” worth around 697 billion baht to legally trade with international investors in Singapore.
The ministry’s deputy minister told reporters money raised from the cryptocurrency will be used to buy high-quality solar panels, and give them to farmers. In addition to helping reduce farms’ electricity bills, the project will also help reduce Thailand’s greenhouse emissions. The project might even expand across Thailand’s homes and businesses.
Some solar farms have already taken off in Thailand. One ‘floating farm‘ in Ubon Ratchathani, a northeastern province, started generating power in November. Solar panels cover 720,000 square meters of water surface, and use a hybrid system that converts sunlight to electricity by day and generates hydropower at night. The project includes a ‘Nature Walkway’ shaped like a sun ray.
Thailand currently still relies heavily on fossil fuel. The country’s Energy Policy and Planning Office said in October 2021, 55% of power came from natural gas. It said 11% came from renewables and hydropower. At the COP26 climate conference in Glasgow, Scotland last year, PM Prayut set the carbon neutrality goal for 2050, as well as a goal to have net-zero greenhouse emissions by 2065.
Singapore can work with the United Arab Emirates (UAE) on solutions that reduce planet-warming carbon emissions to sustain “robust global responses to the climate crisis”, said President Halimah Yacob on Monday (Jan 17). These solutions include hydrogen fuel and carbon capture, utilisation and storage.
Delivering a virtual keynote speech for the Abu Dhabi Sustainability Week Summit held in Dubai, she highlighted green innovations and efforts in the UAE, such as its vast solar parks and being the first in the Middle East and North Africa region to declare a net-zero commitment by 2050.
Dubai houses the region’s first solar-driven hydrogen electrolysis facility to produce green hydrogen, where the gas is produced using renewable energy and has zero emissions.
Singapore is keen to collaborate with the UAE on improving the technical feasibility and the establishment of supply chains for low-carbon hydrogen, said Madam Halimah.
Such advanced low-carbon technologies are an area of interest for Singapore, which has pumped $55 million into 12 research projects in the areas of hydrogen and carbon capture, utilisation and storage.
A local study looking at the feasibility of using hydrogen as a fuel stated last year (2021) that Singapore would need to explore various supply pathways for price-competitive low-carbon hydrogen.
It was reported in June last year that three Singapore agencies were studying whether hydrogen could be imported via ships or pipes.
“We cannot afford to work in isolation when our planet’s future is at stake. Cooperation, partnerships and leadership are critical,” said Madam Halimah.
“Sustainability plans and road maps, including our Singapore Green Plan, will need to be refined as technologies evolve, mistakes are made and learnt from, and the knowledge and experiences of others guide us onto better and wiser paths,” she added.
The Abu Dhabi Sustainability Week (ADSW) is the first global and large-scale sustainability event after last year’s United Nations Climate Change Conference (COP26) in Scotland.
The programme – which started on Saturday and ends on Wednesday – convenes numerous world leaders, international businesses and students to accelerate pathways to further sustainability and meet net-zero goals.
ADSW also acts as a global catalyst for COP27, which will be held in Egypt later this year, and COP28, which will be hosted by the UAE in 2023.
Speaking from Singapore, Madam Halimah said on Monday that the Republic and UAE will be enhancing their bilateral memorandum of understanding (MOU) on environmental protection and climate change to include food and water security.
The MOU – signed in 2017 – identified environmental protection, climate change and sustainable development issues of mutual interest to both countries, and established a mechanism through which both nations can pursue cooperative efforts.
“As we work to implement our respective plans, Singapore stands ready to collaborate with the UAE and other partners in the Middle East,” added Madam Halimah.
Minister for Sustainability and the Environment Grace Fu said in Parliament last week that there is “significant uncertainty” associated with technologies like hydrogen and carbon capture, utilisation and storage.
“Their commercial success hinges on factors such as technological maturity and transboundary cooperation, which are not entirely within our control,” she said during a debate on Singapore’s green transition.
There have been sustainability-related collaborations between the UAE and Singapore.
Last year, a few Abu Dhabi organisations collaborated with Enterprise Singapore to hunt for start-ups and small and medium-sized enterprises from the Republic that can help with smart city developments in the Middle East. The partnership is called the Abu Dhabi-Singapore Smart Cities Open Innovation Challenge.
Mr Imran Hamsa, Enterprise Singapore’s regional group director for Middle East and North Africa, told The Straits Times: “As global trading hubs, Singapore and the UAE share strong economic links and cooperation in areas such as innovation and sustainability.
“Through this innovation call, we hope to uncover new and viable solutions that will accelerate the development of smart cities and knowledge economies for both countries.”
Ms Fu is in Dubai for the ADSW. On Monday, she attended the Zayed Sustainability Prize award ceremony, where Singaporean company Wateroam – which develops portable water filters – won an award under the water category.
Ms Fu will be meeting various officials, including UAE’s Minister of Climate Change and Environment, the chairman of the Abu Dhabi Department of Energy, and the chief executive of Dubai Electricity and Water Authority.
In a statement, the Ministry of Sustainability and the Environment said Ms Fu and the government officials will discuss ways to enhance cooperation in areas such as food and water security, and climate action.
The time is right to tap into hydrogen’s potential to play a key role in tackling critical energy challenges. The recent successes of renewable energy technologies and electric vehicles have shown that policy and technology innovation have the power to build global clean energy industries.
Hydrogen is emerging as one of the leading options for storing energy from renewables with hydrogen-based fuels potentially transporting energy from renewables over long distances – from regions with abundant energy resources, to energy-hungry areas thousands of kilometers away.
Green hydrogen featured in a number of emissions reduction pledges at the UN Climate Conference, COP26, as a means to decarbonize heavy industry, long haul freight, shipping, and aviation. Governments and industry have both acknowledged hydrogen as an important pillar of a net zero economy.
The Green Hydrogen Catapult, a United Nations initiative to bring down the cost of green hydrogen announced that it is almost doubling its goal for green electrolysers from 25 gigawatts set last year, to 45 gigawatts by 2027. The European Commission has adopted a set of legislative proposals to decarbonize the EU gas market by facilitating the uptake of renewable and low carbon gases, including hydrogen, and to ensure energy security for all citizens in Europe. The United Arab Emirates is also raising ambition, with the country’s new hydrogen strategy aiming to hold a fourth of the global low-carbon hydrogen market by 2030 and Japan recently announced it will invest $3.4 billion from its green innovation fund to accelerate research and development and promotion of hydrogen use over the next 10 years.
You might encounter the terms ‘grey’, ‘blue’, ‘green’ being associated when describing hydrogen technologies. It all comes down to the way it is produced. Hydrogen emits only water when burned but creating it can be carbon intensive. Depending on production methods, hydrogen can be grey, blue or green – and sometimes even pink, yellow or turquoise. However, green hydrogen is the only type produced in a climate-neutral manner making it critical to reach net zero by 2050.
We asked Dr Emanuele Taibi, Head of the Power Sector Transformation Strategies, International Renewable Energy Agency (IRENA) to explain what green hydrogen is and how it could pave the way towards net zero emissions. He is currently based with the IRENA Innovation and Technology Center in Bonn, Germany, where he is responsible for assisting Member Countries in devising strategies for the transformation of the power sector, and currently managing the work on power system flexibility, hydrogen and storage as key enablers for the energy transition. Dr Taibi is also a co curator for the World Economic Forum’s Strategic Intelligence platform, where his team developed the transformation map on Hydrogen.
Green hydrogen technologies
What motivated you to develop your expertise in energy technologies and how does your work at IRENA contribute to it?
It was during my Master’s thesis. I did an internship in the Italian National Agency for Energy and Environment (ENEA), where I learnt about sustainable development and energy, and the nexus between the two. I wrote my thesis in management engineering about it and decided this was the area where I wanted to focus my working life. Fast forward almost 20 years of experience in energy and international cooperation, a PhD in Energy Technology and time spent in private sector, research and intergovernmental agencies, I currently lead the power sector transformation team at IRENA since 2017.
My work at IRENA is to contribute, with my team and in close cooperation with colleagues across the agency and external partners such as the World Economic Forum, in supporting our 166 Member Countries in the energy transition, with a focus on renewable electricity supply and its use to decarbonize the energy sector through green electrons as well as green molecules like hydrogen and its derivatives.
What is green hydrogen? How does it differ from traditional emissions-intensive ‘grey’ hydrogen and blue hydrogen?
Hydrogen is the simplest and smallest element in the periodic table. No matter how it is produced, it ends up with the same carbon-free molecule. However, the pathways to produce it are very diverse, and so are the emissions of greenhouse gases like carbon dioxide (CO2) and methane (CH4).
Green hydrogen is defined as hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity. This is a very different pathway compared to both grey and blue.
Grey hydrogen is traditionally produced from methane (CH4), split with steam into CO2 – the main culprit for climate change – and H2, hydrogen. Grey hydrogen has increasingly been produced also from coal, with significantly higher CO2 emissions per unit of hydrogen produced, so much that is often called brown or black hydrogen instead of grey. It is produced at industrial scale today, with associated emissions comparable to the combined emissions of UK and Indonesia. It has no energy transition value, quite the opposite.
Blue hydrogen follows the same process as grey, with the additional technologies necessary to capture the CO2 produced when hydrogen is split from methane (or from coal) and store it for long term. It is not one colour but rather a very broad gradation, as not 100% of the CO2 produced can be captured, and not all means of storing it are equally effective in the long term. The main point is that capturing large part of the CO2, the climate impact of hydrogen production can be reduced significantly.
There are technologies (i.e. methane pyrolysis) that hold a promise for high capture rates (90-95%) and effective longterm storage of the CO2 in solid form, potentially so much better than blue that they deserve their own colour in the “hydrogen taxonomy rainbow”, turquoise hydrogen. However, methane pyrolysis is still at pilot stage, while green hydrogen is rapidly scaling up based on two key technologies – renewable power (in particular from solar PV and wind, but not only) and electrolysis.
Unlike renewable power, which is the cheapest source of electricity in most countries and region today, electrolysis for green hydrogen production needs to significantly scale-up and reduce its cost by at least three times over the next decade or two. However, unlike CCS and methane pyrolysis, electrolysis is commercially available today and can be procured from multiple international suppliers right now.
Green hydrogen energy solutions
What are the merits of energy transition solutions towards a ‘green’ hydrogen economy? How could we transition to a green hydrogen economy from where we are currently with grey hydrogen?
Green hydrogen is an important piece of the energy transition. It is not the next immediate step, as we first need to further accelerate the deployment of renewable electricity to decarbonize existing power systems, accelerate electrification of the energy sector to leverage low-cost renewable electricity, before finally decarbonize sectors that are difficult to electrify – like heavy industry, shipping and aviation – through green hydrogen.
It is important to note that today we produce significant amount of grey hydrogen, with high CO2 (and methane) emissions: priority would be to start decarbonizing existing hydrogen demand, for example by replacing ammonia from natural gas with green ammonia.
Recent studies have sparked a debate about the concept of blue hydrogen as a transition fuel till green hydrogen becomes cost-competitive. How would green hydrogen become cost competitive vis-à-vis blue hydrogen? What sort of strategic investments need to occur in the technology development process?
The first step is to provide a signal for blue hydrogen to replace grey, as without a price for emitting CO2, there is no business case for companies to invest in complex and costly carbon capture system (CCS) and geological storages of CO2. Once the framework is such that low-carbon hydrogen (blue, green, turquoise) is competitive with grey hydrogen, then the question becomes: should we invest in CCS if the risk is to have stranded assets, and how soon will green become cheaper than blue.
The answer will of course differ depending on the region. In a net zero world, an objective that more and more countries are committing to, the remaining emissions from blue hydrogen would have to be offset with negative emissions. This will come at a cost. In parallel, gas prices have been very volatile lately, leaving blue hydrogen price highly correlated to gas price, and exposed not only to CO2 price uncertainty, but also to natural gas price volatility.
For green hydrogen, however, we might witness a similar story to that of solar PV. It is capital intensive, therefore we need to reduce investment cost as well as the cost of investment, through scaling up manufacturing of renewable technologies and electrolysers, while creating a low-risk offtake to reduce the cost of capital for green hydrogen investments. This will lead to a stable, decreasing cost of green hydrogen, as opposed to a volatile and potentially increasing cost of blue hydrogen.
Renewable energy technologies reached a level of maturity already today that allows competitive renewable electricity generation all around the world, a prerequisite for competitive green hydrogen production. Electrolysers though are still deployed at very small scale, needing a scale up of three orders of magnitude in the next three decades to reduce their cost threefold.
Today the pipeline for green hydrogen projects is on track for a halving of electrolyser cost before 2030. This, combined with large projects located where the best renewable resources are, can lead to competitive green hydrogen to be available at scale in the next 5-10 years. This does not leave much time for blue hydrogen – still at pilot stage today – to scale up from pilot to commercial scale, deploy complex projects (e.g. the longterm geological CO2 storage) at commercial scale and competitive cost, and recover the investments made in the next 10-15 years.
Several governments have now included hydrogen fuel technologies in their national strategies. Given the rising demands to transition towards decarbonization of the economy and enabling technologies with higher carbon capture rates, what would be your advice to policymakers and decisionmakers who are evaluating the pros and cons of green hydrogen?
We will need green hydrogen to reach net zero emissions, in particular for industry, shipping and aviation. However, what we need most urgently is:
1) energy efficiency;
2) electrification;
3) accelerated growth of renewable power generation.
Once this is achieved, we are left with ca. 40% of demand to be decarbonised, and this is where we need green hydrogen, modern bioenergy and direct use of renewables. Once we further scale up renewable power to decarbonise electricity, we will be in a position to further expand renewable power capacity to produce competitive green hydrogen and decarbonise hard-to-abate sectors at minimal extra cost.
The future of green hydrogen
Where do you see energy technologies relating to hydrogen evolving by 2030? Could we anticipate hydrogen-powered commercial vehicles?
We see the opportunity for rapid uptake of green hydrogen in the next decade where hydrogen demand already exists: decarbonising ammonia, iron and other existing commodities. Many industrial processes that use hydrogen can replace grey with green or blue, provided CO2 is adequately priced or other mechanisms for the decarbonisation of those sectors are put in place.
For shipping and aviation, the situation is slightly different. Drop-in fuels, based on green hydrogen but essentially identical to jet fuel and methanol produced from oil, can be used in existing planes and ships, with minimal to no adjustments. However, those fuels contain CO2, which has to be captured from somewhere and added to the hydrogen, to be released again during combustion: this reduces but does not solve the problem of CO2 emissions. Synthetic fuels can be deployed before 2030, if the right incentives are in place to justify the extra cost of reduced (not eliminated) emissions.
In the coming years, ships can switch to green ammonia, a fuel produced from green hydrogen and nitrogen from the air, which does not contain CO2, but investments will be needed to replace engines and tanks, and green ammonia is currently much more expensive than fuel oil.
Hydrogen (or ammonia) planes are further away, and these will be essentially new planes that have to be designed, built and sold to airlines to replace existing jet-fuel-powered planes – clearly not feasible by 2030: in this sense, green jet fuel – produced with a combination of green hydrogen and sustainable bioenergy – is a solutions that can be deployed in the near term.
In conclusion, the main actions to accelerate decarbonisation between now and 2030 are 1) energy efficiency 2) electrification with renewables 3) rapid acceleration of renewable power generation (which will further reduce the already low cost of renewable electricity) 4) scale up of sustainable, modern bioenergy, needed – among others – to produce green fuels that require CO2 5) decarbonisation of grey hydrogen with green hydrogen, which would bring scale and reduce the cost of electrolysis, making green hydrogen competitive and ready for a further scale up in the 2030s, towards the objective of reaching net zero emissions by 2050.
This article was originally published in the World Economic Forum.
Energy firms are pressing on governments in Asia-Pacific to facilitate the development of renewable power and technologies on the back of the COP26 global climate summit where countries pledged to slash greenhouse gas emissions.
In a series of forums organised by media firm Thomson Reuters last week, industry leaders said that political will is key to ensuring a smooth switch to green fuels.
Nitin Apte, chief executive of Singapore-based solar and wind power firm Vena Energy, said governments need to provide transparent and predictable pathways for companies to align with their sustainability targets in the next few decades.
“Projects that we develop take several years,” said Nitin. “They’re around for 20, 30 years in the communities that they are going to be built in.”
Nitin added that he wants to see countries collaborate and help firms on cross-border energy projects, pointing to examples like Singapore’s slated import of up to 100 megawatts of hydroelectric power from Laos. The venture involves Keppel Electric, a Singapore-based power retailer, and the Laotian state electricity company.
Other speakers said demand for hydrogen power from “centres of consumption” like Japan, China and Taiwan, could be fulfilled by Australian exports. Australia is set to become one of the world’s largest producers of green hydrogen.
Each country has a different history, a different energy mix. Does that mean each country will just look at its roadmap in isolation? I guess not, maybe that’s precisely where collaboration comes into play.
Valery Tubbax, chief financial officer, InterContinental Energy
“Each country has a different history, a different energy mix. Does that mean each country will just look at its roadmap in isolation? I guess not, maybe that’s precisely where collaboration comes into play,” said Valery Tubbax, chief financial officer of Hong Kong-based hydrogen power firm InterContinental Energy.
Chairperson of Taiwan’s Offshore Wind Industry Association Marina Hsu agreed, saying that associations can invest and advocate for development, but it’s the job of country leaders to “liaise and really think strategically” across the region.
Singapore Minister of State for Trade and Industry Low Yen Ling, speaking at the forum, said countries in Asia-Pacific need to play to their strengths, and “given different countries’ circumstances, the energy transition strategy for countries in APAC will really differ from one another”.
Low said Singapore is focusing on developing emerging technologies, and it recently awarded US$40 million to 12 projects on low-carbon hydrogen, as well as carbon capture, utilisation and storage.
“I hope we will only see an acceleration of the pace of deployment of carbon-neutral technologies,” said Thomas Baudlot, CEO of the Southeast Asia arm of French utility firm ENGIE.
But how much cash other governments in Asia-Pacific can pour into decarbonisation remains in question. In Southeast Asia, the Covid-19 pandemic caused delays in renewable energy projects and put a strain on the public purse to fund capital projects. Many member states’ climate pledges are also contingent on foreign funding.
Countries in ASEAN may need to place a greater emphasis on balancing social economics with sustainability.
Mohamad Irwan Aman, head of sustainability, Sarawak Energy
“Countries in ASEAN may need to place a greater emphasis on balancing social economics with sustainability,” said Mohamad Irwan Aman, head of sustainability at Malaysian utility firm Sarawak Energy.
Others point to the government’s role in managing private players to prevent a chaotic scramble for power generation and distribution markets. Australia’s electricity market hit a crisis point in 2017, when high wind and solar investments caused the closure of fossil fuel plants, while the grid was not prepared for intermittent power supply. After a series of black-outs and close shaves, the government worked on coordinating supply between power plants and invested in batteries – steps that led to a smoother roll-out of renewables in the years since.
“The foundation for net-zero in the energy infrastructure space, where everyone can be a winner, starts with a thought through and orchestrated plan,” said Morris Zhou, co-founder and executive chairman at Australian solar power firm Maoneng. “I believe that this responsibility sits with the policymakers around the world.”
Citing the need to adapt to climate change, Irwan said companies shouldn’t wait for policy changes before building a business case around addressing climate change. “This is not about environmental issues, it’s about the company’s survival in the long term,” he added.
Balancing green power and efficiency
Despite the rapid escalation in renewables, discussions also focused on increasing energy efficiency for existing power infrastructure, particularly in India, which will remain reliant on coal-fired power for some time. Currently the world’s third-biggest emitter of greenhouse gases after China and the United States, India has pledged to reach net zero carbon emissions by 2070. While there will be an overall reduction of coal’s contribution to electricity in the coming years with the ramping-up of renewables, India’s coal consumption is expected to grow in absolute terms.
India’s electricity consumption per person increased by over 30 per cent since 2012, although it’s just 40 per cent of the world average in absolute terms. But as the middle class in the world’s second largest country expands, its energy demand in the next 20 years is expected to outstrip all other countries.
This means not just adding incremental power capacity with renewables, according to Raman Kalra, chief digital officer of Indian solar and wind energy firm ReNew Power, but making the efficiency of existing power assets “much, much higher”.
Kalra said that involves using digital technologies to make the electricity grid work optimally, and to create better public transport networks to take cars off the road. India’s car ownership is expected to increase five-fold by 2040, which will drive demand for oil.
Wasting power is not just India’s problem. A United Nations report found energy efficiency to be the most useful tool in curbing energy demand in Asia Pacific, followed by developing renewable energy. Mismanaged road traffic is the main culprit for energy inefficiencies, alongside manufacturing and a lack of building regulations for houses which end up wasting energy in heating and cooling.
The International Energy Agency also factors in a “major worldwide push to increase energy efficiency” in its projected net-zero scenario, where the 2030 world economy is 40 per cent larger but uses 7 per cent less energy.
No carbon is produced from energy that’s not used. It’s not been sexy to have that discussion, but it’s a missing piece.
Jeff Connolly, Chairman and CEO, Siemens Australia and New Zealand
“No carbon is produced from energy that’s not used. It’s not been sexy to have that discussion, but it’s a missing piece,” said Jeff Connolly, chairman and CEO of Siemens Australia and New Zealand. The firm provides energy management and tracking services.
While smart meters for energy optimisation, along with renewables like solar and wind, areready for mass deployment, speakers conceded that other popular technologies like green hydrogen and carbon capture are nascent and expensive. But they’re bullish about the prospects.
“Technology has always surprised us on the upside,” said Vipul Tuli, South Asia CEO of Singapore energy firm Sembcorp.
It has been another record year for renewable energy, despite the Covid-19 pandemic and rising costs for raw materials around the world, according to the International Energy Agency (IEA).
About 290GW of new renewable energy generation capacity, mostly in the form of wind turbines and solar panels, has been installed around the world this year, beating the previous record last year. On current trends, renewable energy generating capacity will exceed that of fossil fuels and nuclear energy combined by 2026.
New climate and energy policies in many countries around the world have driven the growth, with many governments setting out higher ambitions on cutting greenhouse gas emissions before and at the Cop26 UN climate summit in Glasgow last month.
However, this level of growth is still only about half that required to meet net zero carbon emissions by mid-century.
Fatih Birol, executive director of the IEA, said: “This year’s record renewable energy additions are yet another sign that a new global energy economy is emerging. The high commodity and energy prices we are seeing today pose new challenges for the renewable industry, but elevated fossil fuel prices also make renewables even more competitive.”
According to the IEA report, published on Wednesday, renewables will account for about 95% of the increase in global power-generation capacity from now to the end of 2026, with solar power alone providing about half of the increase.
Raw material prices have risen as the world has emerged from the Covid pandemic and on the back of the energy price rises around the world. These price increases have cancelled out some of the cost falls of recent years in the renewable sector. If they continue next year the cost of wind power will return to levels last seen in 2015, and two to three years of cost falls in solar power will be wiped out.
Heymi Bahar, lead author of the report, said that commodity prices were not the main obstacles to growth, however. Wind and solar would still be cheaper than fossil fuels in most areas, he noted. Permitting was the main barrier to new wind energy projects around the world, and policy measures were needed to expand use of solar power for consumers and industry.
“We need a gear change to meet net zero,” he said. “We have already seen a very important gear change in recent years but we need to move up another gear now. It is possible, we have the tools. Governments need to show more ambition, not just on targets but on policy measures and plans.”
China installed the most new renewable energy capacity this year, and is now expected to reach 1,200GW of wind and solar capacity in 2026, four years earlier than its target of 2030. China is the world’s biggest carbon emitter, but the government was reluctant at Cop26 to commit to the strengthening of its emissions-cutting targets, which many observers had hoped for.
China is targeting a peak in emissions by 2030, which many analysts say is much too late if the world is to limit global temperature rises to 1.5C above pre-industrial levels, the Paris agreement target that was the focus of the Cop26 talks.
Birol said China’s rapid expansion of renewable energy suggested the country could reach an emissions peak “well before 2030”.
India, the world’s third-biggest emitter, also experienced strong growth in renewable energy capacity in the past year, but its target – set out at Cop26 – of reaching net zero by 2070 is also regarded as too weak by many. Birol said: “The growth of renewables in India is outstanding, supporting the government’s newly announced goal of reaching 500GW of renewable power capacity by 2030 and highlighting India’s broader potential to accelerate its clean energy transition.”
When applied to droughts, wildfires, hurricanes, floods, or other extreme weather events, the term “unprecedented” is getting old. In August, when the Intergovernmental Panel on Climate Change released its latest report about the dire realities we face, a drought exacerbated by global warming already had been raging for years across much of southern Africa.
It seems as though world leaders are finally ready to take meaningful action, but there’s a critical group regularly missing from key climate meetings like the recent United Nations Climate Change Conference (COP26) in Glasgow: local, climate-focused small businesses that already are making a difference in their communities. Small and medium-size enterprises (SMEs) working on climate adaptation and mitigation are a crucial but underestimated partner in the fight to reduce emissions.
Even though climate financing options are increasing, SMEs’ role in sustainable development continues to be overlooked. Their predicament is one shared by more than 200 million SMEs of all types in developing countries that cannot get the funds they need to grow, facing an estimated US$5.2 trillion annual financing gap.
International investors focus on getting dollars out the door through larger deals, while local capital is kept on the sidelines by high collateral requirements and unmanageable interest rates for early-stage businesses.
SMEs represent 90 per cent of businesses and provide more than 50 per cent of jobs worldwide according to the World Bank, so they have a key role to play in creating opportunities in economies struggling to recover from the Covid-19 pandemic.
Examples like SELCO India, a pioneering off-grid solar company, and Husk Power, an innovative pay-as-you-go renewable energy provider operating in Asia and Africa, show that with the right amount and type of financing and technical support, small businesses can improve lives through energy access – a key international goal. Off-grid renewables also help power sustainable mobility in both rural and urban settings.
Small businesses also have an important role to play in greening agriculture. Land use for crop and livestock production accounts for 24 per cent of global greenhouse-gas emissions, and farms are vulnerable to droughts, floods, and rising temperatures. Financing climate-smart agricultural entrepreneurs is essential for making our food systems more resilient.
Here, too, off-grid renewable energy has become indispensable, providing power for irrigation, processing grains, and operating the cold rooms and coolers needed to store dairy products, fresh seafood, and fruits and vegetables. In India, Technoserve is helping small farms withstand and adapt to the climate crisis and raise their productivity without increasing emissions.
As these examples show, when small businesses have the financing and support they need, they can drive economic growth while mitigating emissions and supporting adaptation to climate change. That is because small businesses are more agile and adaptable – and respond to local needs much faster and more effectively – than large organisations. They also offer governments and policymakers an opportunity to try out new ideas, revealing both pitfalls and best practices before initiatives are scaled regionally or nationally.
For starters, the world needs far more finance vehicles and instruments that are tailored to small businesses working in the green economy. That means a mix of lower-cost, long-term capital and blended finance, as well as easier access.
Achieving the global goal of net-zero emissions requires policymakers, investors, banks, and others to attend to SMEs’ needs much more effectively than they have in the past. For starters, the world needs far more finance vehicles and instruments that are tailored to small businesses working in the green economy. That means a mix of lower-cost, long-term capital and blended finance, as well as easier access.
The world also needs more business accelerators focused on adaptation to climate change. There are only 25 such green accelerators located in non-OECD countries. Funding research and establishing professional networks will drive support to businesses that have strong growth potential.
Better metrics to assess success will be needed. That does not mean lowering environmental, social, and governance standards. Instead, it means devising indicators specifically for green enterprises in the SME sector to help them demonstrate their effectiveness and attract more investment.
Finally, investors must not overlook women, who produce up to 80 per cent of food in the Global South. Women also are the most vulnerable to the effects of climate change. Investing in female climate entrepreneurs benefits the climate, food production, and overall prosperity.
Small businesses are integral to climate-change mitigation, adaptation, and resilience. Providing them the financing and support necessary to help them succeed is in everyone’s interest.
Kristina Skierka is CEO of Power for All. Richenda Van Leeuwen is Executive Director of the Aspen Network of Development Entrepreneurs.
Consumers are demanding more transparency about where their clothes are produced and under what conditions. With the average supply chain for a merino sweater spanning 28,000 kilometres, fashion brands have the colossal task of tracing a product’s history from field to shelf in a bid to clean-up the sector’s spotty environmental, social and governance (ESG) record.
In partnership with conservation groupWorld Wide Fund for Nature (WWF), fashion label Stella McCartney and non-profit The Textile Exchange, the search giant has developed the Google Impact Fibre Explorer, that it says will enable companies to identify the biggest risks associated with more than 20 fibre types in their supply chains, including synthetics.
Despite sustainability pledges, the fashion industry is failing to tackle its hefty carbon and environmental footprint and is on a trajectory that will far-exceed the pathway to mitigate climate change to align with the United Nation’s goal of keeping global temperatures from rising above 1.5°C since pre-industrial times, according to research by McKinsey, a consultancy.
The fashion industry is one of the largest contributors to the global climate and ecological crisis — accounting for up to 8 per cent of global greenhouse gas emissions.
A large chunk of emissions could be avoided in its upstream operations with approximately 70 per cent of the industry’s greenhouse gas emissions stem from energy-intensive raw material production.
The Global Fibre Impact Explorer (GFIE) dashboard allows brands to upload their fibre portfolio data and get recommendations to reduce risk across key environmental categories. Image: The Keyword, Google
Environmental factors such as air pollution, biodiversity, climate and greenhouse gasses, forestry and water use are calculated to produce risk ratings. The tool will also provide brands with recommendations for targeted and regionally specific risk reduction activities including opportunities to work with farmers, producers and communities.
During a pilot phase, British fashion house Stella McCartney was able to identify cotton sources in Turkey that are facing water stress.
Brands such as Chanel, Nike and H&M are among the 130 companies that have pledged to halve their greenhouse gas emissions by 2030 under the renewed United Nations Fashion Charter announced last month during climate talks in Glasgow. Alongside updated commitments to cut emissions, the charter promises to reduce the environmental impact from the use of materials such as cotton, viscose, polyester, wool and leather.
The renewed agreement is more ambitious than a previous commitment in 2018 to cut emissions by a third. Nevertheless, the signatories represent a slither of the vast garment and footwear industry with fast-fashion brands such as BooHoo, Shein and ASOS notably missing from list.
The textiles sector also called for policy change to incentivise the use of “environmentally preferred” materials, such as organic cotton and recycled fibres earlier this month.
Consumers do not want to buy products made with forced labour…Without government regulations, many companies will continue to make choices based on profits not on rights.
Laura Murphy, professor of human rights and contemporary slavery, Helena Kennedy Centre for International Justice
Improved data mapping tools should help to shed light on fashion’s murky supply chains. Many brands do not have reliable information on their upstream suppliers beyond the manufacturers they deal with. Data from cotton farms and spinners are rarely available on paper, let alone a digital format. Blind-spots are perpetuating environmental and social problems that have dogged the industry for decades.
Cotton supply, in particular, has come under the spotlight. China’s northwestern Xinjiang region, which produces a fifth of the world’s cotton, is where the Chinese government has allegedly committed grave human-rights violations against the largely Muslim population of Uyghurs and other minorities.
A new report published on 17 November by Sheffield Hallam University in the United Kingdom analysed supply chain connections identified through shipping records to show how cotton from the Uyghur region circumvents supply standards and import bans to end up in consumer wardrobes around the world.
In the report, Laundering Cotton: How Xinjiang Cotton is Obscured in International Supply Chains, Professor Laura Murphy and co-authors identify more than 50 contract garment suppliers – in Indonesia, Sri Lanka, Bangladesh, Vietnam, India, Pakistan, Kenya, Ethiopia, China and Mexico – that use the Xinjiang fabric and yarn in the clothes they make for leading brands, “thus obscuring the provenance of the cotton.”
“The benefits of such an export strategy may be clear: the end buyer is no longer directly involved in buying Xinjiang cotton,” the report said. “International brands and wholesalers can buy from factories in third countries that have few visible ties with Uyghur region-based companies.”
The researchers identified over 100 international retailers downstream of Xinjiang cotton, Murphy told media on a call on Friday. These include Levi Strauss, Lululemon, H&M, Marks & Spencer and Uniqlo, according to the report.
“Consumers do not want to buy products made with forced labour,” Murphy told Eco-Business. “We need our governments to insist that companies trace their supply chains back to the raw materials and make those findings public. Without government regulations, many companies will continue to make choices based on profits not on rights.”
The UK will continue to press governments around the world to cut greenhouse gas emissions urgently in the next year to limit global heating to 1.5C, after the UN climate talks that concluded last week, the president of the summit has pledged.
Alok Sharma, the cabinet minister who led the Cop26 talks, said the world had shown in Glasgow that countries could work together to establish a framework for climate action but the next year must focus on keeping the promises made there.
“The 1.5C limit lives,” he writes in today’s Guardian. “We brought it back from the brink. But its pulse remains weak. We must steer it to safety by ensuring countries deliver on the promises they have made.”
Some argued the talks had failed because the pledges on emissions cuts made at Cop26 were insufficient to meet the 1.5C goal.
Sharma acknowledged that countries must increase their pledges and turn them into action and policies. Referring to youth activists from around the world who urged political leaders to act in Glasgow, he said: “We owe it to all of them to deliver what we agreed.”
Two weeks of Cop26 talks ended in dramatic fashion as Sharma feared the carefully constructed deal among nearly 200 countries was about to collapse at the last moment, when China and India objected to a reference in the final agreement to the “phase out” of coal-fired power.
In the end a compromise was reached, with Sharma on the brink of tears as he apologised to developing countries for the change. The pledges on emissions cuts made at the talks would lead to heating of about 2.4C above pre-industrial levels, far above the 1.5C threshold, so the Glasgow pact also requires countries to revise their targets upwards in the next year.
Under the UN rules, the UK will retain responsibility for climate negotiations for the next year, until the Egyptian government assumes the presidency next November. In his first public writing since the talks concluded, Sharma sets out his aims.
“The UK’s work as the Cop26 presidency is really only just beginning,” he writes. “Over the course of the next year, we will work with countries urging them to take action and honour their promises.
“There is no formal policing process in the UN Framework Convention on Climate Change system, and so we must keep up the constructive pressure, and build on the trust and goodwill generated through Cop26.”
The lack of any policing process or sanctions for countries that fail to revise their national targets on emissions, known as nationally determined contributions (NDCs), means that the main ways of holding governments to account are through public scrutiny and political pressure.
Australia’s government has already made clear that it does not intend to increase its targets, which are widely regarded as inadequate. The US and the EU have also indicated they do not intend to increase their ambition.
Key countries under the spotlight are the world’s biggest emitter, China, whose promise to peak emissions by the end of this decade disappointed many analysts who argued it could go further; and the third biggest emitter, India, which announced new targets in Glasgow but has yet to formally detail them. Russia, Saudi Arabia and Brazil are also under scrutiny.
Sharma argues that business and finance will play a key role. “Markets are falling into line, with the value of shares in coal firms around the world dropping since we sent a signal that coal is no longer king,” he writes.
Green campaigners have told the Guardian that if the UK wants to show leadership this year, ministers must also look to their own actions. Proposals for a new coalmine in Cumbria, new oil and gas licences in the North Sea, airport and road expansion and dithering on green policy have tarnished the UK’s reputation, while above all the decision to slash overseas aid – even while the Cop26 talks centred on climate finance for poor countries – caused deep alarm.
Sharma was widely regarded as isolated within the cabinet at Cop26, as insiders told the Guardian of a rift between the chancellor, Rishi Sunak, and prime minister, Boris Johnson, over green measures.
Sunak visited the summit briefly but made little impact on senior figures from other countries present. The foreign secretary, Liz Truss, also played a little role in Glasgow.
Rachel Kyte, a former World Bank top official on climate change, now dean of the Fletcher School at Tufts University in the US, told the Guardian that getting other donor countries to increase climate finance “was made even more complicated by UK Treasury’s insistence on cutting overseas aid. While this was then confirmed as being temporary the damage was done … The UK lost moral authority, and leverage as the presidency which we saw them struggling with. Alok was liked and respected wherever he went but it was not lost on people that he was a little alone [in the cabinet as a champion of climate action]. ”
Rachel Kennerley, a climate campaigner at Friends of the Earth, said: “The fight to curb climate breakdown didn’t end with Mr Sharma’s gavel coming down on an underwhelming deal. Just next week the high court will hear about UK-financed gas drilling in Mozambique, so this is the perfect time for the government to withdraw support for that damaging project, laden as it is with climate hypocrisy.
“Given the UK’s historical contributions to emissions alongside our role as Cop host, it’s right that we take a good look at the fact that we are still supporting fossil fuel extraction, here and overseas.”
Announced today (23 November), the Carbon Innovation Fund will run for three years, offering £1m in grant funding annually to community environmental causes, social enterprises, charities, start-ups and collaborative projects working on solutions for a more sustainable food system.
Ten projects will be awarded each year by the Fund and each successful applicant will be entitled to a share of up to £100,000. Applicants will need to be UK-based but their projects could help decarbonisation at any point in the food system globally.
Co-op said in a statement that it will only support projects that contribute to “real systems change” for food. The company has also said the fund will support the preservation and dissemination of ancient and indigenous knowledge as well as supporting emerging technologies and processes.
“With the Carbon Innovation Fund, we’re looking to do something different; rather than ideas for individual commercial benefit, we want innovations that can be freely shared and can be of benefit to society in general,” said Co-op Food’s chief executive Jo Whitfield.
“It’s this type of co-operation that we believe we need to help accelerate our response to the climate crisis.”
The Fund is being provided with money allocated from the Co-op; the retailer allocates 2p from every £1 of sales to its charitable foundation. Applications are open until 12pm on Friday 10 December 2021.
Earlier this year, the Co-op Group built on a commitment to reach carbon neutrality for all own-brand food and drink by 2025 with a detailed 10-point climate action plan. The firm’s long-term climate goal is net-zero across all scopes, for all Group activities, by 2040.
Then, at COP26 in Glasgow this month, the retailer joined competitors Sainsbury’s, Tesco, Waitrose & Partners and Marks & Spencer in signing a new joint commitment to halve the nature and climate impacts of food systems by 2030. This initiative is being orchestrated by WWF.
The news on the Carbon Innovation Fund comes on the same week that John Lewis & Partners, in partnership with environmental charity Hubbub, launched a new £1m fund for innovative projects that help to reduce waste across the food, textiles and technology sectors.
As pressure ramps-up to drastically shrink the carbon footprint of the world’s cities, developers and architects have been tinkering with the recipe for the type of materials that goes into a building. City-planners are banking on technology to make cheaper and greener steel and concrete, to drive down the hefty emissions of built infrastructure.
Building and construction are responsible for 39 per cent of all carbon emissions in the world, according to the International Energy Agency. Concrete, the primary component for most built infrastructure, is responsible for a huge amount of greenhouse gas emissions. The five billion tonnes of cement produced each year account for eight per cent of the world’s man-made carbon dioxide emissions. It would rank third for its emissions if it was a country. Then there is steel — whose production accounts for around seven per cent of the world’s greenhouse gas emissions.
As countries look to slash their emissions, hard-to-abate sectors like construction are facing more heat with governments joining hands and forming coalitions to signal that, moving forward, they will shift to buy low-carbon steel and concrete for public construction.
At the COP26 landmark climate summit in Glasgow, the governments of the United Kingdom, India, Germany, Canada and the United Arab Emirates (UAE), under a new coalition named the Industrial Deep Decarbonisation Initiative (IDDI), pledged to support the use of low-carbon materials in building construction. “If you make it, we will buy it,” said the five nations in a statement.
The member governments of the IDDI plan to reveal interim targets by mid-2022, to better align their procurement plans with new net-zero goals for the public construction sector. The pledge also includes requirements for members to disclose the carbon embodied in major public construction projects by 2025, said the UK COP presidency in a press release.
Within the next three years, the IDDI aims to have at least 10 countries commit to purchasing low-carbon concrete and steel.
Large steelmakers clean up their act
The public procurement of steel and concrete in the five nations currently represents between 25 to 40 per cent of the domestic market for such materials. Industry stakeholders said that the pledge is a clear market signal from some of the world’s largest steel and concrete buyers believing that it will create green demand across the supply chains of the building sector.
China, India and Japan are the world’s top steel producing countries. Image: World Steel Association
“Global construction accounts for 39 per cent of total global emissions, with buildings equivalent to the size of Paris being built every week. There is now a critical and narrow window for sector transformation,” said Jo da Silva, global director of sustainable development at Arup, a London-based engineering, architecture and city planning consultancy.
“Governments need to make companies feel confident about investing now in the processes of making low-carbon steel and concrete,” she said.
China, the world’s largest steel and concrete producer, is missing from the IDDI list. However, its top steelmaker, the China Baowu Steel Group Corp., formed its own global alliance with other steel producers last Thursday, in a bid to gather resources and exchange information in the development of low-carbon metallurgical technology.
Known as the Global Low-Carbon Metallurgical Innovation Alliance, it has more than 60 members from 15 countries. These include leading global steelmakers and mining enterprises such as Luxembourg-based ArcelorMittal, German conglomerate Thyssenkrupp and Melbourne’s BHP Group. About 20 Chinese steel companies are also part of the alliance.
Baowu has committed to carbon neutrality by 2050, a decade earlier than the Chinese government’s national target.
China’s Baowu Steel Group Corp., the world’s largest steelmaker, initiated the formation of a global alliance of steel producers last Thursday, in a bid to gather resources and exchange information in the development of low-carbon metallurgical technology. [Click to enlarge] Image: World Steel Association
Neil Martin, chief executive for property developer Lendlease’s European business, told Eco-Business that the commitment from steel producers and national authorities to seize decarbonisation opportunities is a potential game-changer for the building sector.
Need for sharper approach on embodied carbon
Lendlease currently uses a large amount of steel – what amounts to a volume sufficient for the building of 60 Eiffel Towers per annum – for its global projects. Substituting the material will make a difference for the environment, given how dirty the steel industry is.
The developer targets to be completely net zero by 2040.
“Property developers have made progress in reducing the operational carbon emissions of buildings, but here’s the rub: almost 90 per cent of building emissions are Scope 3 – indirect emissions from the production of building materials along the value chain. We still have to buy a lot of steel, concrete, aluminium and glass, but we do not have control over their production and supply lines,” said Martin.
Currently, much of the push towards greener buildings is devoted to minimising the energy needed to keep them running, but the situation is changing. During COP26, architects, mayors and property developers have been calling for green building certifications that take embodied emissions from materials into account in order to meet net-zero carbon goals.
Traditionally, steel is made by heating and melting iron ore in a blast furnace at high temperature. A by-product of the chemical reaction that takes place is carbon dioxide. Now, there are several other production methods that are cleaner, involving renewables and green hydrogen. These processes, however, are at various stages of development.
Professor Lam Khee Poh, dean of the National University of Singapore’s School of Design and Environment, and its Provost’s Chair Professor of Architecture and Building, said that strong signalling from national actors to industry matters and governments need to go beyond changing their public procurement models.
We need not and should not regard our predominantly steel and concrete jungles as the norm for cities.
Professor Lam Khee Poh, Dean of NUS School of Design and Environment, Singapore
“It is not just that the public sector is often a major customer. Yes, there are economies of scale to be gained, but more importantly, the demonstration of leadership from governments has an impact on the enactment of building codes and standards that will pave the way for a green transition,” he said.
Lam, a strong advocate for net-zero cities, said that building industries around the world typically work to existing regulations and only a handful will adopt voluntary standards to advance the field.
According to COP26 reports, between 2015 and 2020, 19 additional countries have building energy codes in place. However, most construction will still take place in countries without such codes.
“The building sector has historically been fragmented. It will take a revolutionary effort to develop a broadly accepted and comprehensive method of calculating embodied carbon that can be effectively and efficiently implemented in the design process for change to happen,” Lam said.
Better pricing for low-carbon building materials
In Southeast Asia, there is also a need to overcome the biased perception that concrete is cheap, which leads to the inertia to replace concrete use in buildings. The low cost of concrete is mainly due to the use of cheap labour in developing countries, and does not take into account the spillover costs when the production of concrete creates externalities – negative impacts on the environment, said Lam.
Referring to a recently-published McKinsey report, Lam argued that products such as carbon-cured concrete, if positioned differently, can potentially give companies an edge among environmentally conscious buyers and greater pricing power.
Timber as an alternative material should be considered too, especially for tropical cities. “We need not and should not regard our predominantly steel and concrete jungles as the norm for cities,” he said.
Yvonne Soh, executive director of the Singapore Green Building Council, told Eco-Business that the council has recently observed that there is no cost premium for using greener concrete in buildings in Singapore, based on current standards.
Soh also noted that lower-carbon options, whether concrete or steel, are already available.
“In fact, there is a lot of interest among private sector players and many are ready to take the leap to try out new materials. We do not have a lack of willing early adopters,” she said. “The key issue is regulatory barriers, because there are basic safety requirements governing the usage of structural materials in a building.”
“Building professionals must also be comfortable with using the material,” she said, drawing parallels to how governments have educated the public on the safety of the Covid-19 vaccines before they pushed for widespread adoption. “It’s not just about sticking some wallpaper on the wall. We have to ensure that [the use of low-carbon materials] does not compromise the building’s structural safety.”
The Singapore Green Building Council now conducts courses on sustainable supply chains for buildings, to encourage firms and stakeholders in the built environment sector to address environmental gaps in their sourcing and reporting. The council also initiated a pledge for the built environment industry to act on embodied carbon. As of November 2021, more than 75 organisations have signed up.
