To mitigate climate change, the world needs to become carbon neutral – that is, to achieve net-zero carbon dioxide emissions. Finding this balance requires on the one hand to reduce or eliminate carbon emissions from our social and economic activities, and on the other hand to remove carbon from the atmosphere.
Carbon neutrality is no longer an option. It is an obligation since the European Commission set the objective to achieve it by 2050. We all want it, but do we know how to achieve it? How do large carbon emitters like corporations and industries transform their business to become net-zero?
BNP Paribas recently hosted three French corporate clients to share their experience: Sylvie Jéhanno, CEO of Dalkia, Mikaël Lemarchand, Head of Engagement and Sustainable Development at SNCF and Emmanuel Normant, Head of Sustainable Development at Saint-Gobain, in a discussion moderated by Isabelle Giordano from The BNP Paribas Foundation.
Highlights from the Carbon Neutrality Conference
Carbon neutrality is no longer an option. How can we achieve carbon neutrality?
BNP Paribas hosted French corporate clients and experts to share their experience and insights on practical roadmaps to net-zero.
Roadmap to net-zero
In order to be carbon neutral by 2050, the French government has pledged to cut the country’s greenhouse gas (GHG) emissions by 30% by 2030. This has become a milestone for large French companies like state-owned railway operator SNCF which has committed to reduce the carbon emissions of its transport activities by 30% and by 50% for its real estate – from industrial buildings to railway stations and offices – by 2030 compared to 2015.
In France, the mobility sector represents 30% of GHG emissions. Rail transport only accounts for 0.5%. Decarbonising mobility requires a significant increase in the share of rail transport. SNCF only has 10% market share today.
For Dalkia, a subsidiary of energy group EDF, the road to net zero must go through energy savings by being smarter about how we use and reuse energy and increasingly using new technologies. Almost half of French energy consumption is used to heat water, air and to produce steam in buildings and factories. For example, Dalkia’s solutions use energy that is otherwise wasted and reinject it in circular heating networks.
How does Dalkia decarbonise energy in its circular heating networks?
As a leader in renewable heat, Dalkia offers solutions to capture locally-produced heat or energy and reinjects it in circular heating networks. For example, for biomass energy, it uses wood sourced less than 100km away from a project. Even more innovative: in the seaside town La Grande Motte, Dalkia captures energy from the sea to feed the thermic networks of nearby residential buildings. In Reims, the heat produced in champagne bottle factories is reused in local homes. Such solutions create virtuous circles that are decarbonised substitutes to fossil fuels. Thus, Dalkia contributes to avoid the emission of 4.3 million tonnes of CO2 every year, equivalent to the carbon emissions of 2 million vehicles.
Energy efficiency means to consume as little energy as possible: the best energy is the energy we save. Dalkia uses accurate, reliable data from companies like Metron which provides digital management solutions to track and reduce energy consumption, to offer contracts on energy performance, in which it commits to reduce the energy consumption of its clients by as much as 25% in public buildings for instance. If the KPI is not met, Dalkia pays for the loss. The number of Dalkia’s energy performance contracts has doubled in the past 10 years, and still has a lot of potential to increase energy efficiency.
Since 2010, Saint-Gobain has reduced its carbon emissions by 20%. Yet, the construction sector still contributes for 40% of carbon emissions worldwide. How can a carbon-intensive group transform itself fast enough to reach net-zero in the next 30 years?
Emmanuel Normant, Head of Sustainable Development at Saint-Gobain, says it clearly: “First, our solutions are a very important contributor to the decarbonisation of our customers, for example insulation for buildings. But we are an energy intensive company. In 2019, at the UN Climate Summit in New York City, we committed to become carbon neutral by 2050. We have a roadmap with a significant milestone in 2030, but beyond 2030, all the solutions do not exist yet, it requires to invest in R and D from today and an evolution of the worldwide energy mix.” Saint-Gobain’s commitment to reach net-zero emissions applies to scope 1 and 2 (manufacturing), but also scope 3 (supply chain, raw materials, transport).
One of the first steps taken by Saint-Gobain was to reduce energy consumption by improving electricity to manufacture their product providing it is technically feasible and the electricity is decarbonised. To accelerate their transformation, Saint-Gobain published in November 2020 a roadmap to 2030 with targets and milestones that have been validated by the Science Based Target Initiative.
Collaboration, circularity and the price of carbon
The road to 2030, then to carbon neutrality in 2050 will require companies to collaborate: net-zero can only be met if companies, their staff, clients and multiple stakeholders work together to change behavior and find collective solutions.
“We are all interdependent. We work with Dalkia on real estate, and we are a key element in Saint-Gobain’s logistics value chain. I find the panel we represent today interesting as it shows the interdependency of all our companies,” noted Lemarchand at SNCF.
The collective effort also means finding the right financial partners to finance their transition, as Dalkia’s Jéhanno explained: “Industrials cannot finance their transformation only with their own equity. We obviously need to work with a network of clients and investors to co-create the low-carbon economies of tomorrow.”
Circularity will be the next key milestone for economies to reach net-zero. This could mean for SNCF to work with Saint-Gobain to recycle their railway tracks or Saint-Gobain working with Dalkia to recycle the heat produced when making glass to heat nearby schools.
Greasing the wheels of the circular economy, governments, markets and companies will also need to put a price on carbon. At only €6 two years ago, the price of carbon is now at €45. This is still very low compared with internal prices at SNCF and Saint-Gobain at up to €150. But as long as carbon looks cheap, companies will have little incentive to decarbonise.
Carbon neutrality : time to act?
French corporates and experts share their views for a practical roadmap to net-zero.
This is the full replay of the conference hosted by BNP Paribas. Please note footage is in French with English subtitles.