New alliance forged to accelerate net-zero ambitions

07 November 2022
The launch of the Alliance for Industry Decarbonization is an important step toward greater industry collaboration

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The immense challenge posed by global warming and the pressing need to reduce carbon emissions cannot be overcome by one single policy, nation or group. Action by every segment of society, from individuals to companies and governments, is essential. 

Historically, the main impetus in the drive toward net zero has come top down from policymaking, laws and strategies at a government or international level.

Global treaties such as the 1997 Kyoto Protocol, the 2016 Paris Agreement and the annual Conference of the Parties (COP), all held under the United Nations Framework Convention on Climate Change (UNFCCC), have provided the frameworks and targets to which each member state must bind itself.

In turn, each nation has implemented its own laws and strategies to ensure these targets are met. Regulatory examples include banning new combustion-engine-car sales, green building codes, and subsidies and incentives for renewable energy expansion.

While countries have coordinated policies through intergovernmental organisations such as UNFCCC and the International Renewable Energy Agency (IRENA), companies have often operated in silos as they seek to follow regulations or enact their own decarbonisation agenda. 

Corporates are critical to the net-zero process because they directly or indirectly contribute a large percentage of global emissions. According to IRENA, the industrial sector alone accounts for 28 per cent of total global greenhouse gases, of which four segments in particular – iron and steel, chemicals and petrochemicals, cement and lime, and aluminium – account for almost three-quarters.

Therefore, a situation where companies act in isolation and at different paces is far from ideal.

Industrial decarbonisation alliance

But this is changing. In early September, IRENA and Siemens Energy announced the formation of the Alliance for Industry Decarbonization. The new alliance, which launched with 13 other international energy and industrial members, aims to speed up net-zero ambitions and the decarbonisation of industrial value chains in pursuit of the Paris Agreement climate goals.

“Climate action needs industry leaders,” says Francesco La Camera, IRENA's Director General. “This Alliance stands for the growing commitment of global industry to act on decarbonisation and unlock opportunities that come with a green industrialisation through renewables and other transition-related technologies like green hydrogen.

“By standing together, we send a clear signal of solidarity ahead of COP27 and we invite new partners to join our common vision.”

The new industry grouping aims to achieve country-specific net-zero goals faster by encouraging action to decarbonise industrial value chains and enhance the understanding of renewables-based solutions and their adoption by industry. It will also work toward strengthening dialogue among key industrial stakeholders.

Coordinated and facilitated by IRENA, the Alliance will hold its first meeting during COP27 in Egypt in November. Siemens Energy, the principal driver behind its formation next to IRENA, will chair the Alliance together with Tata Steel.

“We need to slash greenhouse gas emissions urgently to tackle climate change,” says Karim Amin, a member of Siemens Energy's executive board. “Accounting for more than a quarter of global emissions, the industrial sector is the second-largest emitter and requires rapid decarbonisation. In this endeavour, partnerships are crucial.

“With our technologies, we at Siemens Energy constantly seek to create value with our partners toward a low-carbon future. I am convinced the Alliance for Decarbonization will accelerate decarbonisation by installing a first-class exchange forum for industry, technology and knowledge partners.”

By standing together, we send a clear signal of solidarity ahead of COP27 and we invite new partners to join our common vision
Francesco La Camera, IRENA

Collective potential

The Alliance's founding members cover a wide range of industrial players. They comprise two regional firms – Abu Dhabi-based energy and water company, TAQA, and Egyptian energy and utility provider TAQA Arabia – oil giants Eni, Equinor and Repsol, engineering, procurement and construction contractor Technip Energies, energy firms Enel Green Power, Tatanga Power and EDF Renewables, steelmakers Tata Steel and JSW, Zimbabwean fertiliser producer Sable Chemicals, and consultancy Roland Berger. 

“We all know we need innovative approaches to achieve net zero by the middle of this century. No single company or sector can get there alone,” says Jasim Husain Thabet, TAQA Group’s CEO and Managing Director, explaining why his company joined the Alliance.

“Only by harnessing the power of partnerships can we unlock our collective innovation potential … the world urgently needs us to act.” 

By bringing together renewable energy providers, manufacturers and technology companies, the hope is that industrial firms will benefit from low-carbon solutions to their energy requirements, harness industrial electrification technologies and better understand what their peers are doing to meet their own net-zero commitments. 

Over time, more companies and industry stakeholders are expected to join the alliance as it gains momentum and the benefits of its collaborative approach become clear. Since its launch, a further eight companies have joined, bringing its total number of members up to 22 

New members include Omani global integrated energy company OQ, Cairo-based energy, digital and infrastructure group, El Sewedy, the KIS Group, VALE, ATC Development, Subsea 7, FLSmidth and Petronas.

Energy-intensive heavy industry players – under pressure to transition from coal and other carbon-intensive fuels to renewables and further clean energy sources such as green hydrogen – have been playing a prominent role in the alliance.

But any private or public industrial company with the ambition to reduce its carbon output or with experience and expertise in deploying energy transition technologies is welcome to join.

The Alliance for Industry Decarbonization will not be a magic wand to reduce global warming. But it is a significant first step in encouraging industry stakeholders to work together.

Climate change represents an existential challenge to humanity. Ultimately, companies have an obligation to act now to play their part in mitigating its impact, and the Alliance’s vision is set to help achieve that.

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