by Garrett Keraga & Kayla Carey | April 9, 2024
Decarb Connect NA 2024 was the most recent iteration of the leading North American conference about industrial decarbonization. Leaders in industry and sustainability convened to share challenges, solutions, and learnings from their experience moving towards a low-carbon future. Below are five key trends discussed during the sessions:
1. As companies develop low-carbon offerings, they must explore ways to awaken consumer awareness.
Many industries expressed a lack of customer willingness to pay for sustainable alternatives – especially those industries that have traditionally low margins. This can create barriers for companies that need to invest significant capital into projects for the sake of decarbonization and need a way to recoup their expenditure. As 2030 approaches and companies are required to reach interim goals, especially those with Scope 3 targets, ClimeCo expects to see more customers expressing interest in low-carbon alternatives and a correlated rise in willingness to pay for supply chain innovations. Our team has assisted companies in engaging with stakeholders and customers, understanding supply chain sustainability claims, and pricing sustainable alternatives.
2. Decarbonization solutions and innovative financing structures are needed at scale.
Scalability of decarbonization solutions is a critical factor in assessing applicability to various industries. Many clean tech and industrial process offerings differentiated themselves through proof of scale as they looked to commercialize, such as electrification of industrial heating and carbon capture. Industries vary significantly in production volumes and portfolio sizes, requiring technology that is applicable to facilities with widely varied profiles. Financing experts agreed that clean technologies should aim for multi-industry applicability to find the highest likelihood of success. Project developers should also understand how project costs change as they scale and how innovative business models (e.g., green premiums and technology licensing) can be utilized to de-risk their technology.
3. Cross-industry partnerships and collaboration are critical to success.
As industries look for innovative solutions to decarbonize, it will continue to be imperative to borrow from other’s experiences and fill gaps in expertise and capabilities. There have been early successes in partnerships exploring the usefulness of existing pipelines, establishing incubators for start-ups and first-of-a-kind technology, and collaborating on commercial structures such as book and claim accounting. In some cases, supply chain pathways have been shifted entirely to adapt to more sustainable practices or providers. Companies will need to identify their own needs, lay out clear guideposts, and critically evaluate their capabilities as they enter into partnerships. Additionally, industries should engage with local, state, and federal governments to discuss pain points and strategies to support project implementation.
4. Carbon Capture Utilization and Storage (CCUS) is critical to decarbonizing heavy industry, but project economics depend on government and voluntary funding incentives.
Throughout the event, CCUS was emphasized as an essential decarbonization tool for hard-to-abate industries. However, these projects face significant risks and barriers, including permitting delays, pipeline accessibility, unclear timelines, and uncertainty around the stability of government support. A successful CCUS site is dependent on the value derived from the project’s environmental attributes through tax incentives and carbon credits. Industry may be able to use additional market mechanisms, including book-and-claim accounting, to supplement project financing further.
5. Universal standards to define “green” products are lacking.
Multiple companies reported challenges around inconsistent or lacking standards for measuring a product’s embodied carbon. There is a need for feasible and verified sector-wide mechanisms to monitor and account for the emission reductions associated with specific sites or products. Standards may help industries define “green” or “low-carbon” products and communicate the value of the environmental attribute to their customers.
About the Authors
Garrett Keraga is a Director of Sustainability, Policy, and Advisory and is based in Burlington, Vermont. His sustainability work has included greenhouse gas accounting, carbon abatement planning, ESG strategy development, and disclosure advisory. He has worked with various industries, both across consumer-facing and industrial clients. Garrett holds a Bachelor of Science in Mechanical Engineering from the University of Vermont.
Kayla Carey is a Senior Manager of Sustainability, Policy, and Advisory and is based in Colorado. She specializes in decarbonization for hard-to-abate sectors. She has experience in sustainability management and energy policy and helps clients navigate environmental markets and develop climate strategies. Kayla holds a Master’s in Environmental & Natural Resources Policy and a Bachelor of Arts in Ecology and Evolutionary Biology from the University of Colorado Boulder.
