Scope 1 and 2 - Interventions

As shared in our last post, the renewables sources have taken a giant leap in terms of adoption despite multiple hurdles. The climate change and the subsequent increasing temperature have been instrumental in mass adoption of renewable sources of energy. The constant pressure to ensure that the planet remains habitable for present and future generations has made every industrial company to take a pause, sit back and think about the emissions happening from their end that are contributing to the issue of climate change.

Now many global corporates are actively working to reduce their scope 1 and scope 2 emissions by adopting renewable energy sources.?

Strategies are being made to become carbon neutral and achievement of the commitments. Adoption of renewable sources of energy like Solar plants, Wind plants, Solar and Wind Hybrid, Solar and Wind or Solar/Wind with some battery storages have seen a steep increase. Some of the key global companies that have taken the plunge to reduce scope 1 and scope 2 emissions using renewables are-

Unilever, Shell, and BMW: Unilever has committed to becoming a carbon-neutral company by 2039. Shell has established a net-zero goal for 2050 and along with increasing gas sales, decreasing oil sales, and expanding into the clean energy sector, Shell will rely on a range of carbon-capture technologies and reduce its own operational emissions. BMW has committed to reducing its CO2 emissions per vehicle produced by at least 80% by 2030 compared to 2019 levels. The company aims to achieve this by increasing the share of electric vehicles in its fleet.?

There are multiple ways in which the corporates are moving towards the green and clean energy. Some of them are-

A.????Renewable Energy Purchase: Many companies have committed to purchasing renewable energy for their operations. This often involves signing power purchase agreements (PPAs) with renewable energy developers. These agreements ensure a long-term supply of renewable energy and help companies achieve their sustainability goals.

B.?????On-site Renewable Energy Installations: Companies are increasingly investing in on-site renewable energy installations, such as solar panels or wind turbines, to generate clean electricity for their operations. By generating renewable energy on-site, companies can directly offset their scope 2 emissions and reduce their dependence on the grid.

C.?????Off-site Renewable Energy Projects: Some companies are also investing in or partnering with off-site renewable energy projects. This could involve supporting the development of solar or wind farms, either through direct investment or through power purchase agreements. By contributing to off-site renewable projects, companies can offset their emissions and support the growth of renewable energy infrastructure.

D.????Energy Efficiency Measures: Companies are implementing energy efficiency measures to reduce their overall energy consumption. This includes upgrading equipment, optimizing processes, and implementing smart energy management systems.

E.?????Carbon Offsetting: Companies are also choosing to offset their remaining emissions by investing in carbon offset projects. These projects can include activities like reforestation, afforestation, or investments in clean energy projects in developing countries. Carbon offsetting allows companies to compensate for their emissions by supporting initiatives that remove or reduce greenhouse gases from the atmosphere.

However not everything is easy, and a lot of challenges are being faced by the firms during this transition to green energy. Some of them are -

1) Technical and Commercial Expertise: Certain issues like energy efficiency, capability development, energy mix finalization, demand trends are some of the key factors that impact in the long run while issues like changes in the procurement cycle etc. affect more in the short run. Corporates need to have a specialized technical and commercial support during this transition that can help them in differentiating between these fundamental factors to ensure proper and good decision taking ability.

3)Policy Challenges: This is one of the major showstoppers for majority of the corporates operating in varied geographies. With different countries having different policies and the indecisiveness that happens at times, the targets see a delay in getting achieved.

2) Global Presence & Operations: Usually, all major corporates have their operations spread out globally. To control their emissions and go a carbon neutral way, the exercise needs to be taken up at almost all locations. However, this becomes tough due to factors like different currencies, different geographical and climatic conditions, etc. Issues like these often delay the target achieving times which in turn impact the long-term goals.

4)Infrastructure Readiness: This becomes more applicable for offsite projects as a lot of dependency for infrastructure is on Govt. There have been times when the plant is ready but due to non-readiness of infrastructure it is not getting started. The availability and reliability of necessary infrastructure, such as grid connectivity and storage systems, can pose challenges to renewable energy adoption.

Despite all these challenges, there is a bright side to renewables adoption which everyone is agreeing to and thus moving ahead relentlessly and ensuring the best that can be done in this journey of sustainability.

?#?Contributed by Vijay Kumar and Rupam Gautam?Rupam Gautam

* This content is based on the personal knowledge of the contributors.?Stay tuned for more volumes on this topic.