COP27 Decarbonization Day November 11, 2022

Decarbonization Day saw US President Joe Biden and a record number of delegates connected to the fossil fuel industry in attendance. Discussion was centred around the necessity to invest in the decarbonization of the highest emitting sectors and identify new technologies to advance the transition to low carbon economies. “The climate crisis is existential, overriding and ever present and we need to look at every piece of the puzzle, including the decarbonization of the industrial sectors that underpin the global economy,” said COP27 President Sameh Shoukry.

The Breakthrough Agenda

Initiated by COP26, the Breakthrough Agenda aims to facilitate practical bilateral and multilateral partnerships to implement effective climate solutions. This year, the coalition of countries representing over half of global emissions and half of global GDP has set out an ambitious action plan to be delivered by the UAE-hosted COP28 and designed to accelerate decarbonization in key sectors such as power, road transport and steel, scale up hydrogen production and rapidly shift to sustainable agriculture. The priority action notably includes agreements to develop common definitions for low-emission and near-zero emission steel, hydrogen and sustainable batteries which will be a welcome development to ensure transparency and attract investment.

US leadership initiatives ?

Following John Kerry’s Energy Transition Accelerator proposal on Wednesday, Joe Biden made a number of announcements seeking to re-establish the US’ commitment to confront climate change including:

• pledging to double its contribution to the Climate Change Adaptation Fund to $100 million and commit $150 million to support the climate emergency plan in Africa.
• investing over $250 million with Germany in new initiatives to support Egypt in deploying 10 gigawatts of new wind and solar energy while decommissioning 5 gigawatts of natural gas generated plants.
• adopting a tougher stance to curb methane emissions from oil and gas wells in line with the global methane pledge. The proposed measure to expand the 2021 methane rules will require a concerted effort from drillers to find and stifle leaks. This is in conjunction with the UN Environment Programme’s plan to launch a public database of global methane “hot spots” detected by a new satellite-based system and notifying the relevant governments and companies to take the appropriate action.
• requiring major federal contractors to publicly disclose their greenhouse gas emissions, climate-related financial risks and set science-based emissions reduction targets in an effort to strengthen supply chain resilience.

Calls for end of fossil fuels financial support

Notably, the Indian delegation called on the Egyptian Presidency to conclude the conference by including language in its cover text to the effect of phasing down all fossil fuels. Consultations in relation to the cover decision are ongoing and it remains to be seen what will be covered and how comprehensive it will be.

The UN Expert Group on Net-Zero Emissions, convened by the Secretary General earlier this year has published a new set of guidelines setting clearer and more consistent standards on net zero and listing specific recommendations addressed to businesses and financial institutions to end their support and investment in fossil fuels.

The Alliance for Industry Decarbonization launched in September 2022 by the International Renewable Agency (IRENA) and its co-founding partner Siemens Energy, held its first roundtable on Friday. The roundtable focused on six key areas to accelerate decarbonization including renewables, green hydrogen, bioenergy with Carbon Capture, human capital and finance

Sindhura Swaminathan comments:

"What does it truly mean to decarbonize? It is an opportunity to instil true change from the top all the way to the bottom. An opportunity to truly change behaviour by imposing requirements from not only a regulatory and legal perspective but also from a social perspective. It has to be done on all levels and we need to incentivise everyone on that chain to do so by rewarding true decarbonizing initiatives and we need to set fixed parameters to properly evaluate and monitor the impact of such change. And the real challenge is to ensure that these parameters truly reflect the realities of our world. All of us on this chain need to be accountable to ensure we are able to move towards to a low carbon environment and an economy that thrives in such an environment."