European power companies raise the bar on climate action
18 European power companies, including ten of the largest European utilities, have approved science-based targets that will result in combined emissions reductions of 303.5 million tonnes by 2030, more than the total greenhouse gases emitted from Spain in 2020 (272 million tonnes).
This compares to just one, NRG Energy, in the US. Several major US utilities, including Duke Energy, Dominion and Southern Company have self-defined 2050 net zero targets and are currently reducing emissions by only 1-2% a year.
The findings are part of new data released today by The Science Based Targets initiative (SBTi), a global body enabling businesses to set emissions reduction targets in line with climate science. Overall, the data points to power sector science-based targets becoming mainstream in Europe but lagging in the US.
European power companies, Enel, EDP, Iberdrola, Siemens Renewable Energy and Orsted have all joined the Race to Zero and have approved 1.5°C targets and are reducing emissions at an average rate equivalent to 59% over ten years, according to the data. Combined, these companies will cut more than 136 million tonnes of emissions by 2030. Siemens Renewable Energy, Orsted and Verbund also all have near-term target dates within the next four years, demonstrating their commitment to urgent climate action.
Major German utility E.On and UK Utility Centrica have committed, via the UN-backed Race to Zero campaign and Business Ambition for 1.5, to set targets in-line with 1.5°C, and French multinational Engie is upgrading its 2°C science-based target in line with 1.5°C. These additional commitments are expected to result in significant additional emissions reductions.
The Race to Zero invites all remaining major European utilities, such as Vattenfall and ENBW, to follow suit to help further accelerate action from Europe’s power sector and deliver emissions reductions at the rapid pace and scale required by science.
In all IPCC climate scenarios that limit warming to 1.5°C, electricity-related emissions are immediately reduced and the share of electricity in energy consumption grows steadily. This is because the power sector can establish steep emissions reductions, enabled by rapid cost reductions for solar, wind, and storage, expansion of national and subnational goals and demand for clean energy. The decarbonization of power is therefore vital to halving global emissions by 2030 and achieving net-zero before 2050.
Alberto Carrillo Pineda, Managing Director of the SBTi, said: “The science is clear – we must halve global emissions by 2030 and the electricity sector must lead the way. But currently, the European electricity sector is powering ahead of North America. Europe has demonstrated the possibilities, and the US must now deliver an energy revolution that rapidly phases-out coal and gas while turbo-charging the expansion of renewable energy.”
The US is committed to cut emissions 50-52% from 2005 levels by 2030. The Biden administration is also hoping to enact a Clean Energy Standard, which is critical to delivering on the US 2030 target. If passed into law, the goal will be to generate 80% clean electricity by 2030 and 100% by 2035, up from 12% in 2020.
The Race to Zero is calling on US power companies to urgently follow the lead of those in Europe by setting ambitious and robust science-based targets. To deliver emissions reductions at the rapid pace and scale required by science, immediate and decisive action from the world’s power sector is required.
However, setting and achieving an emissions target in line with a 1.5°C-aligned scenario is challenging. For an average electric utility, achieving an SBT means decreasing its emissions intensity of power generation by 76% in the next ten years. This level of transformation is massive and many utilities face a range of technical, political and social challenges which they must overcome to decarbonize in line with science. These include the need to ensure a just transition away from coal or other carbon-intensive power generation; developing a robust understanding of emissions from their value chain; and abating certain sources of value chain emissions.
Crucially, these challenges can be overcome, as this guide explains. The World Business Council for Sustainable Development (WBCSD), argues that companies who can do so will also mitigate climate risks across their operations and supply chain, boost shareholder and investor confidence and improve their license to operate in a decarbonizing global economy.
“Decarbonizing our power generation is critical to securing a net-zero carbon economy by 2050. We need many more utilities to set targets aligned with the science to lower their emissions and commit to transitioning to low-carbon energy,” said Mariana Heinrich – Director, Energy at WBCSD.
Recent data shows science-based targets are driving corporate decarbonization — between 2015 and 2020 companies with validated targets cut emissions by 25% compared with an increase of 3.4% in global energy and industrial emissions.
The roadmap shows that net zero has become mainstream, fossil fuels must be phased out urgently and that those businesses that work towards cutting their emissions in line with 1.5C will be in the best position to thrive, argues We Mean Business CEO, María Mendiluce.