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What is Net Zero Production?

1. Why do we need to go Net Zero?

U.N. Secretary-General António Guterres said in 2018 that “Climate change is moving faster than we are,” and this statement has never been more true. The time for action is now – we need to halve emissions by 2030 to prevent disaster. The evidence is clear and we cannot afford to wait any longer. We need to work together to make this happen.

The Intergovernmental Panel on Climate Change (IPCC) released a report in April 2022 which showed that, on average, greenhouse gas emissions have been higher throughout the years 2010 to 2019 than at any other point in human history. Additionally, the World Meteorological Organization’s (WMO) Statement on the State of the Global Climate in 2019 showed that the last decade was the warmest on record. Unfortunately, this trend is expected to continue, meaning that global warming will likely continue unabated.

Having said that, scientists have warned that without deep and immediate emissions reductions, it will be impossible to limit global warming to 1.5°C. The WMO report paints a grim picture of the future, but there is still hope. The IPCC report says that there is evidence of increasing climate action. If we take action now to reduce greenhouse gas (GHG) emissions, we can mitigate some of the worst effects of climate change. Let us use this report as a wake-up call to take action on climate change.

Decisions we make today can limit global-warming and secure a liveable future for ourselves and future generations. We have the tools and know-how required to bring them about already.  Hoesung Lee, Chair of the Intergovernmental Panel on Climate Change (IPCC) feels encouraged by climate action being taken in many countries such as policies, regulations, and market instruments. If scaled up and applied more widely and equitably, these can support deep emissions reductions and stimulate innovation.

2. What does it mean to be Net zero?

As the goal for businesses and countries when it comes to climate change, Net Zero is becoming more and more common. In short, it means that the amount of greenhouse gasses emitted is levelled out with the same amount taken out of the atmosphere. This can be accomplished in a few ways: by reducing emissions or by removing GHG that have already been emitted through activities like planting trees. When these two things balance each other out, that is when we reach Net Zero.

3. What is a Net Zero company?

A net-zero company is a business that takes significant steps to reduce its greenhouse gas emissions with the goal of eventually having a net-zero carbon footprint. This is done by offsetting any residual emissions – emissions that cannot be avoided without compromising the business – through investing in projects that eliminate or sequester an equivalent amount of GHG. 

Regardless it is important not to confuse Net Zero and carbon neutrality, as the two are different terms:

  • Carbon neutrality is when the amount of carbon emitted is equal to the amount removed from the atmosphere. In other words, it is just achieving a perfect balance.
  • Net zero, however, goes beyond that by also taking into account other greenhouse gases, such as methane, nitrous oxide, and other hydrofluorocarbons. 

4.  How can companies reduce their GHG emissions?

The net-zero initiative is a response to the current state of climate change and greenhouse gas emissions. It is in fact not enough for companies to just reduce their emissions – they must work to eliminate them entirely. There are several ways companies can reduce their GHG emissions:

  • Reducing the amount of gasses resulting from various industrial and logistical processes that are emitted into the atmosphere. These activities may include: raw material processing, power generation, products manufacturing, products’ transport, etc.
  • Improving the energy efficiency of production and transport processes, and switching to renewable energy sources.
  • Removing greenhouse gas emissions from the atmosphere by capturing carbon before it is released, or by planting more trees. 
  • Companies must sequester their own emissions. To do this, companies should identify projects that can serve as carbon sinks.

 By making these changes, companies can help mitigate the effects of climate change while also reducing their carbon footprint.

5. What is the interpretation of Net Zero for companies in terms of product production, transport, and materials?

Net-zero targets aim to reduce companies’ aggregate GHG emissions.

To achieve this, companies can work to eliminate emissions in their operations and reduce emissions across the entire value chain. 

Companies can help reduce the GHG impact of their products by developing emissions-reducing pathways and setting climate-related targets for product production, transport of raw materials, and logistics/distribution.

Many companies have adopted these climate-related targets on a voluntary basis, but the type of target an individual company chooses depends on things like its products and production methods, policy environment, business models, and value chain. 

The company’s approach should be to reduce their GHG emissions by optimizing their products and services to have a zero-net effect. This can be done by reducing emissions where possible, and by offsetting emissions that cannot be avoided. 

6. Why is Net Zero important for companies?

Net zero is crucial for combating climate change and reducing global warming. The decisions we make in the next ten years to lower emissions will be decisive for the future, which is why every nation, sector, industry, and person must work together to find ways to reduce our carbon footprint.

Are we on track to reach Net Zero by 2050? Despite commitments made by governments, we’re falling far short of what is required. Current national climate plans – for 193 Parties to the Paris Agreement taken together – would lead to a sizable increase of almost 11% in global greenhouse gas emissions by 2030, compared to 2010 levels. Net zero can only be achieved if all governments – especially those who are the biggest emitters of greenhouse gasses – significantly strengthen their Nationally Determined Contributions (NDCs) and take urgent, immediate action to reduce emissions. The Glasgow Climate Pact called on all countries to revisit and strengthen the 2030 targets in their NDCs by the end of 2022, but only 24 new or updated climate plans were submitted by September of that year. This means that less than a quarter of countries who had pledged to revisit and strengthen their 2030 targets by the end of 2022 actually followed through and submitted new or updated climate plans.

7. How can companies establish a low-carbon product for sale to the consumer?

Innovating with suppliers and partners is the key to reducing the carbon footprint of a company’s products. For instance, reformulating products to reduce GHG-intensive with fewer raw materials and also different ingredients can reduce CO2 emissions significantly.

It is essential to reduce the impact of raw materials in order to create a more sustainable future for our planet. The growing, extracting, and processing of ingredients and materials for our products and packaging use a lot of energy. In fact, raw materials make up typically around half of a company’s value chain GHG emissions.

In order to reduce the carbon footprint, we need to look for ways to find lower-carbon alternatives for materials and ingredients. This includes working with the suppliers to find more sustainable options.

Another effective way to develop a low-carbon product is to use industrial GHG emissions capture processes. These include chemical methods of converting CO2 into other less harmful byproducts, or utilizing the heat or steam from gas emissions to recapture some energy. 

Companies can develop GHG reduction roadmaps for key materials and ingredients to reduce costs, and work towards a more sustainable future. Moreover, companies should aim to get rid of all carbon emissions from their practices and work towards operational emissions to reach Net Zero.