CEO, Jeff Staub, and I were genuinely excited, privileged, and inspired to join over 5000 delegates and over 900 excellent speakers including many senior captains of industry, at last week's CERA conference in Houston. Anyone attending could not fail to recognize the gaining momentum around the energy transition and leave with the thought that this is happening now.
The challenges and associated opportunities to reach 2030 and 2050 carbon neutral targets are immense and will require all segments of industry to push innovation and create partnerships never before dreamt of, often of competitors particularly in Direct Air Capture (DAC) and Carbon Capture and Storage (CCS), but also many other fields.
There are already billions of dollars being invested in DAC and CCS; there were around 100 start up and innovation companies attending CERA. But this is only the start, and a significant ramp up of new technologies will be required with associated significant investments.
In the end, three major conclusions emerged.
#1: Between incentives and penalties, action cannot wait.
Speakers made it clear that 2030 and 2050 Carbon Reduction deadlines are solid, not going away, and important for every industry vertical. Companies are already lining up collaborations, often with their direct competitors, to share the financial burden of the energy transition.
Incentives such as the Inflation Reduction Act (IAR) in the USA and the Carbon Removal Certification Framework (CRC-F) in Europe have been set up to accelerate technologies and innovation to meet the Paris Accord targets.
Estimates for the cost of meeting Carbon Zero deadlines are as high as 2% of the global gross domestic product (GDP) equating to trillions of dollars. Companies are moving beyond planning to execution of carbon reduction strategies involving several pillars, including but not limited to DAC, CCS, renewable fuels, hydrogen, wind, and solar.
#2: Before commercial adoption all new technologies must be Safe, Secure, Reliable, and Affordable.
These key words were used by multiple speakers in relation to carbon reduction technologies: safe, secure, reliable, and affordable.
No single technologies or methods enable carbon zero requirements ; therefore, hundreds of startup companies are emerging to meet future needs . At CERA over 100 such startup companies were present, all hungry for investor funding and future clients. This proliferation of choices presents risks that must be investigated and mitigated before making significant investments in any one company.
Current carbon capture costs vary by industry and technology but significant cost reductions are required to make future technologies commercially viable and scalable.
#3: No single industry vertical is immune.
While energy and petrochemicals companies are at the forefront of carbon reduction, hard to abate industries like steel, concrete, and airlines account for over 30% of the world’s greenhouse gases. These industries will require multiple means to reach net zero.
You can be certain your industry sector will feel the impact. You can start the process of carbon reduction by switching fuels, optimizing routes to reduce fuel usage, changing or optimizing processes, increasing recycling, increasing awareness among your employees, especially to stop leaks and waste, making sure you have the right metrics and KPIs in place, optimizing and increasing optionality in your supply chain, and improving your tracking and the data it is based upon. But you need to start now.
Your existing and future supply chains offer a significant opportunity for carbon reduction and capture.
Talk to the #1 Supply Chain consulting firm to handle these challenges.
