Road to Zero: The path to decarbonization

In the business and industrial world, decarbonization has gone from being a long-term goal to a short-term requirement, not only to achieve environmental sustainability objectives, but also to protect competitiveness and ensure their own survival in the markets. But what does decarbonization mean? Behind this term lies the intention and goal of reducing carbon dioxide (CO₂) emissions to zero, relying on new technologies, energy efficiency solutions, the use of renewable energy sources, and the application of circular economy principles to achieve it. It is a process that aims to transform our economic systems into sustainable models, with the ultimate goal of achieving zero emissions no later than the middle of this century. And what is the difference between Carbon Neutrality and Net Zero? These are two concepts that are often mistakenly used as synonyms, because there are no unambiguous definitions that clearly delimit their boundaries, but in reality they indicate different approaches to the energy transition. On the one hand, Carbon Neutrality consists of achieving a balance between carbon emissions and carbon absorption. This balance can be achieved in different ways, for example, by financing reforestation projects, but also by reducing emissions through decarbonization measures. On the other hand, Net Zero refers to the activity that aims to reduce not only CO2, but also all greenhouse gas emissions, until the goal of zero emissions is reached by 2050. Furthermore, Net Zero also includes offsetting residual emissions that cannot be eliminated with decarbonization measures. To achieve the Net Zero standard, companies must act across their entire value chain, addressing Scope 1 emissions (direct emissions generated by the company or one of its subsidiaries), Scope 2 emissions (indirect emissions related to the production of energy consumed by the company, such as electricity, heat, compressed air, etc.), and Scope 3 emissions (includes all other indirect emissions generated by the company’s value chain). Therefore, companies that decide to join the Net Zero standard set short, medium, and long-term goals, with the aim of reducing their greenhouse gas emissions to zero by 2050. Driving Net Zero For companies, Net Zero has become an inevitable kind of “revolution”. In fact, the pressures to achieve these goals are increasingly strong; from the regulatory environment with the UN’s 2030 Agenda and the climate neutrality goal for 2050, to government action and the growing global awareness of the importance of sustainability. Initiatives in this regard are also multiplying. The proliferation of initiatives such as climate impact reports from authoritative intergovernmental organizations, awareness campaigns like Race to Zero, and the definition of official standards to achieve Net Zero, evidence a global movement towards decarbonization. Added to this, economic factors such as rising energy costs and the preference of consumers and investors for sustainable products also increase the actions and measures taken to achieve the goal. Why is decarbonization good for companies? Thanks to decarbonization, not only can energy costs and emissions be reduced for the benefit of competitiveness, but intangible benefits that guarantee an economic return can also be obtained. However, to achieve this, not only investment is needed, but also a change, sometimes radical, in mindset. The effort is hard, but the short and long-term benefits are enormous. How to carry out decarbonization? We must follow a strategy that involves a combination of solutions developed over time, balancing investments with a short-term return, such as photovoltaics, with more challenging ones with a greater decarbonization impact, but with prospective returns, such as hydrogen. At Edison Next, we propose the comprehensive solution called Road to Zero, a path towards Net Zero that consists of several stages. The path towards corporate decarbonization begins by understanding the environmental impact in all areas, considering greenhouse gas emissions in Scope 1, 2, and 3, with the latter being more challenging as they do not always come from sources controlled by the company. This first step starts with the collection and analysis of data through surveys and audits to calculate the carbon footprint, identify critical areas, and establish priorities. Then, an efficient strategy is planned with decarbonization objectives aligned with SBTi standards and a clear roadmap to achieve them. Collaborating with solid and reliable energy partners when designing and executing this strategy is key to ensuring its success and the achievement of the pursued objectives. However, there is no single solution for decarbonization. The route must be adaptable, considering technological options with different levels of maturity, changes in the market and regulations. Furthermore, the combination of technologies that ensure energy, economic, and environmental savings in the short, medium, and long term is essential. With all this, at Edison Next we have been promoting the decarbonization of the public and private sectors for years, designing and offering our clients solutions that allow them to achieve their environmental and decarbonization objectives. To do this, we establish a plan of tangible measures that adapt to their needs, always relying on innovation and the most advanced technology.