Davos Agenda

Why innovative software, industries and governments must unite to make decarbonization a reality

People at a wind turbine site which helps decarbonization

Decarbonization is a joint-up effort. Image: AVEVA

Caspar Herzberg
Chief Executive Officer, AVEVA Group
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Davos Agenda

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  • The climate crisis is accelerating, but governments and industry are now working together to combat it.
  • By building a connected network of intelligence, leading businesses are decarbonizing life’s essentials without sacrificing security, reliability or profitability.
  • Alongside policymakers, industry is proactively looking to use the power of science and human ingenuity to reduce the effects of runaway climate change and chart a clearer path to decarbonization.

The climate crisis is accelerating. From June to September, 2023, the Gulf Stream diverted from its conventional course, triggering heatwaves in Southern Europe and North America. Wildfires raged, destroying millions of hectares of forest in the Yukon and devastating floods destroyed cities in India. In such a context, it’s no surprise that industries and governments are looking at fast-track routes to net zero. This demands concerted action and connected thinking – digital insights can provide a 360-degree view of both scenarios and potential solutions, empowering teams to map the path to a fully decarbonized, actionable future, today.

When I visited Houston in August, the mercury had not dropped below 90 degrees Fahrenheit for five months. Wildfires have destroyed thousands of hectares of vegetation in Greece and Spain. Devastating floods inundated the cities of southern China, causing damage and loss of life. The world’s oceans have heated by over 200 zettajoules more than in 1990. The resurgence of El Niño will exacerbate the problem, intensifying the challenges we must face in 2024. As Professor Meinshausen of the University of Melbourne commented: “Climate science’s projections have been robust over the last decades. Unfortunately, humanity’s stubbornness to send out ever-higher amounts of greenhouse gases has also been pretty robust.”

Yet, the world is not standing still. Governments and industries are taking action. Countries representing over 70% of the world’s energy consumption have introduced new or strengthened efficiency policies in the past 18 months. Beyond efforts to deliver the energy efficiency agenda, boosting clean energy supply remains a critical policy focus and with $1.2 trillion in US stimulus and €500 billion in EU funding, these policy levers are starting to work.

Now, preliminary analysis of the Inflation Reduction Act by the Rhodium Group suggests that a significant 'multiplier effect' is underway. For every ton of CO2 cut or sequestered within the US, an additional 2.4-2.9 tons of emissions reductions are being achieved worldwide, as the cost of new technologies is reduced. This amplification is reflected in broader society as it is accepted that having a robust decarbonization strategy is key to industries’ licence to operate today. Without it, it is becoming more difficult to secure investment, talent and regulatory approval. At AVEVA, we believe these policy shifts and societal preferences are just the beginning of a wider process of sustainable change. Though with temperature records being broken from month to month, we need to get there faster - but how?

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What’s the World Economic Forum doing about climate change?

Connected networks drive decarbonization of life’s essentials

The industrial sector accounted for a quarter of global energy system CO2 emissions in 2022. Rapidly realizing more sustainable manufacturing, usage and disposal of materials and goods remains key if we are to get back on track to hit net zero by mid-century. This is where digitalization and, in particular, digital twins can help, providing business leaders with a comprehensive virtual model of their assets within a broader connected ecosystem. When industrial data is enriched with AI-enabled insights and can be shared seamlessly between teams and across entire value chains, you unlock better and faster decision-making.

On the demand side of the energy equation, this holistic, data-centric view and improved decision-making drives efficiency, optimized energy consumption and reduced emissions. On the supply side, it speeds up the delivery of renewables and other low-carbon technologies that are available today, while supporting development of new processes and technologies needed to successfully expand the current energy system— such as clean hydrogen and synthetic fuels at scale. By building a connected network of intelligence, leading businesses are decarbonizing life’s essentials without sacrificing security, reliability or profitability.

Have you read?

    The greenest energy is still the energy we don’t use

    Globally, we are trending in the right direction when it comes to energy efficiency. According to the latest data from the International Energy Agency, global energy efficiency progress reached 2.2% in 2022. This is twice the average over the previous five years, but we still need to double this global pace by 2030 to reach net-zero emissions by 2050. In the industrial sector, a growing number of companies have embraced a twin transformation strategy, strengthening the alignment between their digitalization and net-zero roadmaps to achieve new levels of efficiency and energy savings.

    Henkel, a global leader in consumer-packaged goods, was an early adopter of this approach and an ESG innovator. Dr. Wolfgang Weber, Corporate Director of IT, led a team committed to driving down energy use across its plants. By implementing a digital twin, Henkel improved energy use monitoring and cut overall use by 16%. As Dr. Weber comments: “Once we could measure use, we could identify opportunities to cut. From there, we could drive a clear increase in energy efficiency.” This approach cut the company’s environmental impact and footprint, and it also saved them €37 million over 5 years, with a current annual saving at €8 million, showcasing how efficiency has not only environmental benefits but economic ones too.

    Tackling the hardest to abate industries with breakthrough technologies

    Further indication that we can deliver on the energy transition is the 25% increase in global capacity over the past 12 months for manufacturing electrolysers. Electrolysers help produce low-emission hydrogen, which is projected to play a critical role in decarbonizing carbon-intensive industries that cannot be easily electrified. This is encouraging, yet acceleration is still needed. In Denmark, Topsoe, a global leader in carbon emission reduction technologies, has used digital design to develop systems that support the rapid ramp up of the world’s largest solid oxide electrolyser cell battery manufacturing centre. Opening in 2025, this is part of a truly decarbonized industrial sector.

    I find inspiration in the work of Topsoe and Henkel and countless others. They demonstrate that, alongside policymakers, industry is proactively looking to use the power of science and human ingenuity to reduce the effects of runaway climate change and chart a clearer path to net zero. I look forward to the discussions at Climate Week later this month and at COP28 in December, to forge more connections that can amplify progress and put industry in the driving seat to accelerate decarbonization for society.

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