Investing in a Green Future

Business Opportunities in Decarbonisation, Renewable Energy, and Net Zero

Mankind went ecstatic with the advances ushered in by the various industrial revolutions during the various stages, as it led to an increase in consumption and a marked step-up in lifestyle. The onset of the first industrial revolution was characterised by increasing greenhouse gas (GHG) emissions moving in lockstep with economic growth. This was so as consumption of energy increased, leading to greater use of fossil fuels, accompanied by a corresponding increase in GHG emissions and an increase in prosperity. However, in the last 3 decades, through various policies and regulations at the level of the United Nations and the governments at various levels, there has been an increasing thrust on transitioning to a low-carbon future through extensive decarbonisation. This has met with a response in the form of setting up targets for Net Zero, accompanied by a nationally determined contribution (NDC) to achieve this goal. There is a mistaken notion that this requires huge investments, resulting in sunk costs. Nothing would be further from the truth that it offers an immense business opportunity. This decarbonisation drive has been facilitated by ecoefficiency, increasing electrification, a greater thrust on renewable energy, sustainable agriculture, biodiversity and afforestation, the generation of Wealth out of Waste (WoW), et al., offering enormous business opportunities. This sends cheers not only to the mission Net Zero, committed to by the nations through their NDCs, but also to the rejuvenation of the planet- Earth itself. Moreover, it offers tremendous business opportunities for the corporate sector.

Eco-efficiency

Eco-efficiency implies causing minimum environmental impact, optimising production, and maintaining quality of life. Any product or service must have a thorough environmental impact assessment (EIA) carried out. This activity has to be carried out throughout its value chain and throughout the life cycle of the product or service through life-cycle sustainment analysis (LCSA). This will involve responsible sourcing, responsible production, responsible marketing, and complete product support throughout its life cycle. Moreover, the production processes will have to ensure a minimum carbon footprint with the virtual elimination of pollution at the source itself. This will also entail responsible consumption of resources such as water, energy, and materials and the choice of the correct materials that will have the minimum carbon footprint throughout the life cycle of the product. The design of the product will have to cater to all these factors. Circular economy practices such as reuse, recycle, reduce, repurpose, repair, and reclaim will have to be used to achieve this. These will have to be extended to packaging as well. A conscientious corporate effort for embedding these into corporate strategy itself, such as everyday practices at the workplace: both design factoring in the LCSA of the product and in production. Eco-efficiency will help reduce carbon footprints through reduced resource usage (water, energy, and materials) and material efficiency through circular economy practices. Products addressing planetary concerns are gaining acceptance at an accelerated rate. A recent consumer survey reported in Forbes magazine suggested that 30% want improvement in the environment, 23% want waste reduction in production, and 22% want a reduction in their carbon footprint.

However, it must be kept in mind that decarbonisation does not proceed hastily at the expense of human development, which has been facilitated by fossil fuels so far. There needs to be a well-calibrated approach.

Electrification of transportation

Electrification is not just a magic bullet but a powerful tool for decarbonisation. It is being covered on multiple fronts, such as: battery electric vehicles (BEV), battery charging, vehicle-to-grid technology, battery materials, et al. As per the International Energy Agency's (IEA) survey, the transport sector depends on fossil fuels for 91% of its energy requirements, accounting for 21% of global carbon emissions. Out of this, 45.1% is accounted for by cars and buses and 29.4% by the trucking sector. The balance is accounted for by the rail, shipping, and aerospace sectors. Decarbonizing through electrification offers enormous business opportunities, which, when harnessed, would mean a substantial boost to the economy, bringing enormous growth to the corporate sector. In India, substantial subsidies and incentives have been provided through the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) policy. Lower production costs, longer life, and lower weight are some of the opportunities in the BEV segment. Battery charging provides opportunities for faster charging, battery swapping, the installation of charging stations, and others. There is a vast scope for innovation and business in battery materials due to supply chain constraints and a virtual global Chinese monopoly. A breakthrough in alternatives to lithium has immense opportunities. Here, economic gains will accrue along with a reduction in carbon footprint.

Greater thrust on renewable energy

The declaration at COP 26 (Glasgow) has set in place the targets to be achieved in the renewable energy sector. Among the goals committed by India through Panchamrit, an increase in renewable energy generation capacity to 500 GW from 155 GW today and meeting 50% of its energy requirements from renewable energy by 2030 are the two goals under this category. The various renewable energy sources are solar energy, wind energy, biomass gas, tidal energy, et al. In solar energy, areas that offer vast scope are continuous improvements in materials, design, and manufacturing processes, which will reduce cost and enhance the efficiency and reliability of photovoltaic cells and solar panels. Improvements in aerodynamics, turbine blade materials, their design improvements, and offshore wind technology will increase energy capture and operational lifespan opportunities in wind energy. This also includes the supply chain. Biomass energy offers attractive returns to farmers and municipalities, and setting up such units makes great sense for improving economics as well as the carbon footprint. In tidal energy, the installation of these units and improvements thereto are potent opportunities. Even the battery electric vehicles could be used for providing energy in places where energy needs to be made available.

Alternate fuels

Alternate fuels such as hydrogen gas and fuel cells, biofuels, synthetic fuels, sustainable aviation fuel (SAF), etc. are offering lucrative opportunities. Opportunities exist in areas of production as well as the supply chain, such as grains and bagasse for farmers, plants and machinery for producers, and maintenance services for technical personnel. It is believed that the ultimate source of alternate fuel may be hydrogen gas and cells. This is due to their combustion efficiency and near-zero carbon footprint, particularly in green hydrogen, where price is the main concern. Similarly, SAF can reduce carbon emissions by up to 80%. The feedstock for SAF is renewable resources such as algae, jatropha, camelina, agricultural residues, plant oils, or waste materials. These feedstock absorb carbon dioxide during their growth. This, in turn, offsets the emissions produced during fuel combustion. Moreover, eco-conscious customers prefer traveling by air where SAF is used. IATA has already laid down the stipulations that by 2030, the aviation sector will be using 10% SAF and will be net zero by 2050. Airlines using SAF will get more carbon credits. Plants such as corn, soybean, and sugarcane are used to produce biofuels, absorb CO2 from the atmosphere during their growth, harvesting, and combustion. Farmers are already reaping the benefits of crop cultivation for the production of biofuels. Synthetic fuels can be made from various feedstock, including natural gas, coal, biomass, or even captured CO2. Both biofuels and synthetic fuels can be blended with conventional fuels, including aviation fuel, to reduce GHG after their burning. Although the price points of alternate fuels are not as competitive as those of fossil fuels, the advances in innovation and technology, along with their benefits in carbon reduction, merit their gradual adoption.

Sustainable agriculture, biodiversity and afforestation

Organic farming offers a multitude of opportunities for sustainable agriculture. There is an accelerating consumer preference for organic cereals, pulses, plant-based meat, fruits, vegetables, et al. Moreover, agroforestry, sustainable livestock farming (leading to methane gas reduction), diverse and resilient cropping, and the conversion of biomass and agricultural waste into energy offer huge environmental and economic benefits. Biodiversity and afforestation have a salutary impact on carbon sequestration, climate resilience, and soil conservation, apart from preserving or nurturing the agricultural ecosystem. The forests, natural parks, grasslands, and wetlands have a huge capacity for capturing and storing carbon dioxide from the atmosphere. Soil is a significant carbon sink and needs to be preserved. Moreover, soil organisms like fungi, bacteria, and insects decompose organic matter, helping agricultural yield. The biodiversity helps in pollination, water purification, and disease regulation, which are essential for agriculture, fisheries, and other industries. This brings in humongous agricultural and tourism benefits, apart from cutting down on GHG emissions.

WoW conversion

This offers tremendous potential for reducing the carbon footprint as well as augmenting economic opportunities. WoW practices contribute enormously to carbon reduction by minimizing methane emissions, producing renewable energy, and enhancing recycling efforts. Biogas plants convert agricultural and food waste into biogas, which in turn can be used for heating, electricity, or vehicle fuel. Electronic waste recycling acts as a source of valuable metals and components from electronic waste. This reduces the need for mining and the production of new materials, which are energy-intensive processes. Likewise, plastic recycling and reuse of construction materials help reduce GHG emissions and provide additional revenue. Circular economy practices will provide a tremendous boost towards this. Battery recycling, particularly from battery electric vehicles, offers a fertile business opportunity.

The role of international and national bodies

International and national bodies have a significant role in empowering the various institutions, corporate bodies, communities, and individuals to promote the activities that have the twin benefits of ushering in carbon reduction as well as augmenting revenues at various levels. These are in the form of laying down standards, policies, a regulatory framework, and enabling policies for adoption by the governments at various levels, as well as enforcing them, besides creating business opportunities for companies to reduce carbon emissions. National hydrogen mission, solar mission, FAME, VGF (Viable Gap Funding), reduction of GST to 5%, and income tax exemption of INR 1,50,000 per annum on the interest of loans for EVs, et al. are some of the policies laid down by the government of India.

Conclusion

The transition to a low-carbon future by human civilisation through net zero by 2050 is an arduous one. However, business opportunities through the transition to smart manufacturing, clean energy and fuels, sustainable agriculture, bio-economy, tourism, et al. will attract enormous investments, creating jobs and wealth for humanity, apart from cleaning up the planet as a whole from toxic environmental pollution. This will lead to companies becoming water-positive and carbon-neutral. This more than offsets the cost, although it is estimated by some to be as high as one-fourth of the GDP. As per estimates, the world will need an investment of $215 trillion to achieve net zero by 2050. This path mandates certain responsibilities on the part of governments at various levels, institutions, the private sector, and individuals, offering a ray of hope to humanity, which is caught in the labyrinth of pollution and global warming. However, it must be kept in mind that the decarbonisation does not proceed hastily at the expense of human development, which has been facilitated by fossil fuels so far. There needs to be a well-calibrated approach.