Ampersand & Net Zero Enthusiasts
Just do it - adapt, innovate, and experiment towards net zero
Businesses have been exploring innovative ways to become both more efficient and lower carbon emissions, even in hard to abate sectors like steel, cement, and car manufacturing. And in fast-moving sectors like retail, accepting uncertainty has been a key part of early adoption. Here are a few noteworthy examples of how companies are experimenting and moving towards net zero, despite having less than ideal visibility of the full path forward.
Adapting manufacturing methods for radical transformation
While the buzz continues to grow around potential climate solutions such as direct air capture and offsets, there is still significant potential for UK industry to decarbonise with improvements in energy efficiency. The structural shift from blast furnace steel-making to electric arc technology is one way in which improving carbon efficiency and lowering carbon emissions can be combined. Eight major industry players recently signed up to explore how to make a more radical transformation towards net zero steel.
Reducing supply chain emissions
BMW Group announced it will use solar electricity to source aluminium to reduce supply chain emissions. It’s the first step in a plan to scale-up the use of green power across its aluminium supply chain that it estimates could allow it to avoid c. 2.5 million tonnes of CO2 emissions over the next 10 years. That’s the equivalent of taking 1.5 million cars off the road.
Many energy-intensive industries in the UK have the opportunity to participate in one or more of the regional low carbon industrial cluster initiatives, with government support. One recent example is the decision by Hanson, Heidelberger Cement’s UK subsidiary, to join the HyNet project in NW England, involving low carbon hydrogen and the first carbon capture and support (CCS) infrastructures in the country.
One of the retail brands benefiting largely from its early stance on sustainability is Ikea. Taking action on sustainability was an ‘opportunity to think and plan long term but at the same time act now in the short term or risk becoming a sleeping pill’.
CEO of parent-company Ingka Group, Jesper Borodin, told the Harvard Business Review:
‘Part of the journey has been to test and try some changes. It was a big decision to phase out incandescent lighting and bring in LED. When we took the decision, we didn’t have the solution in place. It’s easier to take a fundamental decision rather than trying to do it gradually. This allowed us to scale up LED to a commercially viable point.
Ingka is now investing £3.4bn in renewable energy by 2030 - including energy storage - to help scale essential technologies.
Sainsbury’s has committed to incorporate interim priorities (eg for 2030) alongside the more complex challenges involved with reducing indirect Greenhouse Gas emissions in the value chain that are covered by Scope 3. It demonstrates an important approach to tackle low hanging fruit and efficiencies as soon as possible, while building the capability and preparing early on to tackle the more long-term, challenging goals.
Ampersand’s Net Zero survey illustrates that the traceability and stewardship elements of Scope 3 commitments are challenging for many organisations, particularly with supply chains wrapping around the globe. But as more corporates commit to tackling Scope 3, the learnings and techniques around resolving these issues accelerate and will enable more organisations to get involved.
Don’t wait to get it there sustainably
For many retailers, supply and distribution logistics are an important part of addressing Scope 3 emissions. John Lewis, Waitrose, ASDA and Ocado are among the market leaders in converting their HGV fleets to use bio-methane instead of diesel, reducing CO2 emissions by around 85%.
John Baldwin, Managing Director of CNG Services commented:
"Bio-CNG is currently the only low carbon alternative for UK heavy trucks and there’s enough bio-methane potential to support the market, so let’s not wait but get this done! We see rapidly growing interest from both customers and investors and the high pressure gas grid is a uniquely attractive means to get bio-methane from the AD plant to the truck filling station. CNG Fuels alone expects to quadruple its capacity in the next two years and refuel 8,000 vehicles per day.
Recent evidence suggests a gathering head of steam behind the shift to low-carbon trucking in the UK, shown for example by Gasrec which has doubled the sales of biomethane across its commercial vehicle refuelling network in the first quarter of 2021, compared to the same period in 2020.
With the transition to online shopping, the electrification of local delivery fleets is another key measure for many retailers, such as Tesco’s commitment to go ‘all electric’ by 2028.
Ampersand Partners’ Energy Transition and Sustainability practice helps energy companies navigate their fast changing market environment and non-energy clients deliver their Net Zero ambitions.
The Net Zero Enthusiasts (NZE) is a small group of seasoned independent energy sector professionals who between them have over 100 years of experience in the industry, advisory firms and providers of finance. Based on long-standing connections, complementary backgrounds and a common commitment to decarbonisation, the NZE have come together to support the UK’s low carbon transition.