In this issue: The Climate Bubble, SBTi Steel Targets and First Movers

Signal from MPP | Issue No. 2310-7?

In this issue: Beyond the Climate Bubble – consolidation and new voices are overdue; Steel Targets – new SBTi guidance adopts MPP model for low-carbon scrap; One in 25 – feeling the FOMO in the Forbes 2000.

Hot off the press! Our partners at the Science Based Targets initiative have announced new guidance to help iron- and steel producers to set practical near- and long-term emissions reduction targets. We know that flagship projects from industry pioneers including SSAB and HBIS GROUP HENGSHUI STRIP PROCESSING CO., LTD. that near-zero emissions primary (ore-based) steel production is possible: commercial-scale clean plants have broken ground in Sweden, Germany, and Canada.??

Building on this momentum across the hard-to-abate sectors, MPP is actively supporting First Projects to make the global goal of net zero viable by mid-century. We’re developing a portfolio of services and capabilities to support green value chain incubation in these sectors, bringing together key actors such as energy suppliers, policymakers and buyers’ clubs to aggregate demand for premium green products.????

The proliferation of projects and climate actors is encouraging, but also confusing. Despite strongly positive trends – especially in clean electrification, and a chorus of net zero announcements from almost half of the leading global corporates – the plethora of new initiatives risks fragmenting our collective effort and ambitions. At the recent New York Climate Week, MPP’s executive director Faustine Delasalle urged “consolidation and expansion”.?Read more in our top story.

Thank you as always for your support – subscribers to this newsletter are growing at a brisk clip. Please share with colleagues in the energy transition, and don't hesitate to feedback here or via the usual channels.???

Mission Possible Partnership is?a movement of climate leaders and companies driving industrial decarbonisation across the entire value chain of the world’s highest-emitting sectors: aluminium, cement, chemicals, steel; aviation, shipping, and trucking. We’re charting the inventive steps and radical collaboration to enable commercial-scale First Projects in this decisive decade.?

1. New York Climate Week?

Key indicators improved, but the landscape is overcrowded?

Beyond the climate bubble, consolidation and new voices are overdue?

Faustine Delasalle , MPP Executive Director at the World Energy Transitions Summit opening plenary, September 20, 2023?

SURVEYING THE CROWDED LANDSCAPE for policy and projects, even 纽约时报 described this year’s Climate Week as “chaotic, sprawling and borderline circuslike”. At the same time, the local paper concluded, the late September gathering coinciding with the United Nations General Assembly offered “a showcase of human innovation” and the “countless ways” in which innovators are tackling the hard work of decarbonisation.??

MPP Executive Director Faustine Delasalle noted strong positive trends in clean electrification in her comments to the opening plenary of the World Energy Transitions Summit , hosted by the Copenhagen-based World Climate Foundation in a bare concrete and steel beams industrial space on Sixth Avenue – see video. Renewed effort is needed to build social licence for the energy transition, not least through consolidation of existing initiatives and recruiting more diverse voices. Key points:??

• Commercial-scale decarbonisation in heavy industry and transport requires deep value chain collaboration and policy support to drive green premium demand.??
• Climate action is fragmented: a collective effort to consolidate and expand existing initiatives would reduce the confusion: “We might spend less time in the limelight, but we will certainly gain in efficiency,” said Faustine.?
• The climate bubble lacks the diverse voices of youth activists, workers and representatives of impacted communities.??

About half of the leading global corporates have announced net zero targets, although the vast majority lack detailed plans (see 3. below). The missing voices in this debate are often those who have experienced first-hand the adverse effects of rising emissions, from Africa's economies to the residents of Detroit, US who narrated the dramatic health impacts of industrialisation at the recent TED Countdown in July.?

On current trends, installed solar capacity will treble by 2030, when EVs will comprise 80% of new vehicle sales. Co-panellist Dan Dorner , head of strategic initiatives at the International Energy Agency (IEA) , forecast “seismic change” in the global energy system. Despite record consumption subsidies for fossil fuels, reaching $1 trillion in 2022, the tally of new investment in renewables currently stands at $1.7 for every new dollar in fossil.?

2. Science-Based Steel Targets?

SBTi launches first 1.5°C framework for steel decarbonisation, adopts MPP analysis??

Framework recognises unequal access to scrap and historical emissions???

?OUR PARTNERS at the Science Based Targets initiative (SBTi) last week launched a long-awaited decarbonisation framework for iron- and steelmakers to set clear near-term and long-term emissions reduction targets, recognising the critical role of recycled scrap iron and the varied legacy of historical emissions. ???

With downstream industries from manufacturing to construction, infrastructure, transport and countless consumer products, steel is fundamental to building a green economy -- not least in deploying renewable energy technologies such as solar panels and wind turbines. The SBTi guidance builds on research by MPP to develop criteria suited to the unique context of an industry which accounts for up to 9% of global emissions .??

• Framework provides a fixed boundary system covering all material GHG emissions, regardless of asset ownership, beyond the traditional Scope 1, 2 and 3 criteria.?
• Scrap metal is treated as a ‘global common good’ at the sector level, given the unequal distribution and availability of scrap between regions and companies.
• Targets adjust to actual demand to ensure fast-growing companies stay within a 1.5 degrees-aligned sectoral carbon budget regardless of projected growth forecasts.?

Direct emissions from iron and steel must fall by more than 91% by 2050 relative to 2021 to meet the Paris goals. However, producers from industrialised regions are characterised by higher historical emissions and readier access to scrap.????

Fig 1. Iron and Steel Core Boundary?

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Following a two-month public consultation earlier this year, SBTi worked closely with MPP and an independent Expert Advisory Group recruited from academia, civil society and business. The decision to adopt a fixed system boundary spanning all material GHG emissions sources, recognises that steelmakers in industrialised economies often have more access to lower-carbon intensity feedstocks and scrap metals in domestic markets, by comparison with producers in developing economies with a smaller historical footprint.???

It’s vital to have robust and science-based frameworks to guide decarbonisation efforts. Only by aligning with a science-based emission reduction pathway can steel companies have confidence that they are in line with what’s needed to halt dangerous climate breakdown -- Alberto Carrillo Pineda , SBTi co-founder and CTO

Fig 2. Adjusting for scrap benefit: company emissions target adjusts as the use of scrap increases, to prevent double-counting of the scrap benefit (first at global, and then company level)?

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The framework builds on analysis by MPP to take account of issues including projected global steel demand, access to key technologies, data limitations and availability of steel scrap. SBTi has validated near-term science-based targets for 20 steel companies, while 27 have committed to set targets, of which 19 pledged to reach net zero.?????

Curbing emissions will become a critical factor for commercial viability in regions where carbon pricing is applied. A study by CDP , formerly the Carbon Disclosure Project and a founding member of the We Mean Business Coalition , estimated that up to 14% of the potential value of steel companies could be at risk from rising carbon prices by 2040.??

3. Corporate targets?

Half of the Forbes 2000 announced net zero targets: 4% had a detailed plan????

One in 25 global corporates met UN Race to Zero’s ‘Starting Line’ criteria

THE MOMENTUM is building. Clean electrification is underway, notably in renewables and EVs: solar capacity is set to treble by 2030, when EVs are forecast to comprise 80% of new vehicle sales. After some doubts, proposals to collapse demand for fossil fuels are firmly on the agenda for November’s UAE-led COP28. Even under current policies, the International Energy Agency (IEA) last month forecast ‘peak coal, oil and gas’ in this decade.??

These positive trends prefigure “seismic change” in the global energy system – see top story, above. Where then are the biggest corporates in this busy landscape of net zero initiatives??

• By June 2022, according to Net Zero Tracker , 929 global corporates on the Forbes 2000 list of global corporates had announced net zero targets.?
• Of those, four percent included developed plans which met the (recently revised) UN Race to Zero campaign’s ‘Starting Line’ criteria for scope, implementation and reporting.?
• In the hard-to-abate sectors where MPP works to incubate new green value chains, more than 230 leading industrial companies have endorsed Sector Transition Strategies for action in this decade to meet 1.5°C-aligned sectoral carbon budgets.?

In other words, fewer than 2% of global corporates have a decarbonisation plan that passes serious scrutiny. While incumbents in hard-to-abate sectors do not – in broad terms -- lag their, by implication, ‘easier-to-abate' peers (for want of a more nuanced term).??

Those findings imply a great deal of heavy lifting still to do – and perhaps some cognitive dissonance on the part of those announcing targets, without plans to achieve them. No doubt that paradox contributes, in part, to the pendulum-like sentiments at global climate events such as New York Climate Week, where the mood often seems to oscillate between optimism and despair.??

Sceptics point, reasonably enough, to the heavy carbon footprint of climate actors attending more than 400 events in Manhattan last month – plus delegations to the UN General Assembly. But Net Zero Tracker, an independent research consortium, tells another story, too.???

For all the tendency to grandstanding, the many promises to reach net zero are proof that a growing tally of businesses, governments, and policymakers both local and multilateral, are keen to be seen; to make their promises heard – and feeling the FOMO.

For that, we can thank the one in 25 especially: the First Movers. Keep it coming!?

The?Mission Possible Partnership?is a movement of climate leaders and companies driving industrial decarbonisation across the entire value chain of the world’s most carbon-intensive heavy industry and transport sectors: aluminium, cement, chemicals, steel; and aviation, shipping, trucking.

These ‘hard-to-abate’ industries account for a combined 30 percent share of global carbon dioxide emissions. How fast they reach net zero emissions will make or break the world’s chances to stay well below a 2°C rise in global temperatures by mid-century.

MPP’s work to date has demonstrated that there is a technical and economic path to net zero in each of those sectors, by deploying technologies which are available or near market-readiness. We have developed sector-specific roadmaps to decarbonise these sectors, with quantitative 2030 targets endorsed by more than 200 companies. With stakeholders in policy, industry, energy supply, demand and finance, MPP is supporting a portfolio of first commercial-scale decarbonisation projects in this decade.