Decarbonization – A must for companies

published on 17 May 2023 | reading time approx. 2 minutes

Companies cannot and should not shirk their responsibility to contribute to climate protection by decarbonizing their business processes. A structured approach helps to identify the “low hanging fruits”, to develop a strategy and objectives and to define measures.

Decarbonizing the own operational processes holds enormous opportunities. Companies that are pioneers in climate protection can:

reduce their energy costs,
make better use of time resources,
hedge against regulatory changes at an early stage,
build a positive image (“employer branding”) and
strengthen the identification with their employees.

In the following, the procedure is briefly presented and explained in the graphic:

1. Creation of the greenhouse gas balance

An energy and greenhouse gas balance is the basis for defining the starting point and gaining a good overview of all emission sources (Scope 1-3; according to Greenhouse Gas Protocol) that the company generates directly and indirectly.

2. Setting Goals

Decarbonization targets can be individual, aligned with policy targets, or aligned with the Science-Based-Targets (SBT) to achieve the Paris Agreement Goal to meet the 1.5°C limit. They can also be oriented towards an industry average or be determined individually.

3. Definition of measures to achieve the Targets

The measures can follow different approaches, such as efficiency improvements, green energy supply, electrification of industrial processes or a rethinking of mobility. Green corporate PPAs in particular have enormous potential to stabilize costs and make the company's contribution to the fight against climate change visible.

4. Reporting and Communication

Include the decarbonization strategy as part of your non-financial reporting. Your efforts and achieved goals deserve to be communicated to the stakeholders.

5. Review Targets (monitoring)

A systematic review of your actions helps to keep track on progress and your goals.

Management has the responsibility

The management is primarily called upon to think about aligning value creation to a climate-neutral future in the sense of modern corporate management. If one does not dare to tackle this topic, there is a risk of cost increases due to volatile prices of fossil energies (such as in 2022 / 2023) and thus possibly also disadvantages in the competitive situation. If, however, one gets involved in this topic in the medium term, energy costs will stabilize, innovation will be possible, and the company will appear much more modern and forward-looking. There is no way around it in the short and medium term: it is even more urgent to deal with it as early as possible.

As the approach in the energy industry is electrification, any combustion process should also be questioned here – this includes the vehicle fleet. If high temperatures for the production process can only be achieved through combustion, it should be examined to what extent alternative fuels can be used here. Of course, H2 can be a solution in the long term, but time is pressing to look into the availability and integrability at the locations and, if necessary, working together with energy suppliers to find solutions. Subsidy programmes also help to cover the initial investments.

Making the energy supply independent and “green” locally at a production site can be considerable, depending on the energy intensity of the production; however, there are technical solutions on the market that can help considerably here: Heat pump (also high-temperature), photovoltaics (ground-mounted, bifacial, carports), storage, electric mobility – all ultimately aim at decarbonizing the company and allow the above-mentioned chances to be exploited.