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Electric Utility, Automotive Industries Slow to Reach Carbon Goals, Survey Shows

(Credit: Pixabay)

Almost all of the largest companies in the electric utility and automotive industries are lagging behind in hitting their carbon budgets, a new study shows.

The study by CDP, World Benchmarking Alliance and ADEME shows that nearly all the companies still rely on fossil fuels and that 7% of vehicles sold are low carbon while just 3 of 50 electric utilities are hitting International Energy Agency guidelines on carbon emissions.

The study looked at 50 electric utility companies and 30 automotive companies.

Electric utilities will exceed their carbon budgets by 57% through 2035, according to the study. With 98% of the companies still relying on fossil fuels, the study says 35 of the companies analyzed will do worse on sustainability goals in the near future without changes.

To be completely reach the IEA’s standard, 78% of the utilities’ electricity generation capacity needs to come from renewables by 2030, but only eight of them are investing enough to accomplish that. For 34 of the companies, the survey found, coal still accounts for 10% of their capacity.

A report by EY says that renewable energy investments, policy and technology improvements are spurring growth worldwide, even as challenges remain. In the United States alone, clean energy is at the forefront of the country’s ambitious sustainability goals. Energy storage is also growing at an impressive rate, and BloombergNEF says it will be 20-times larger in 2030 than it was 10 years previously.

The electricity utility industry has performed well in a just transition, and European utility companies have done the best on making low-carbon goals, the survey says.

As for automobiles, the industry has seen an increase in low-carbon sales of 5% over the past five years. The study says to reach their carbon targets, the automobile industry needs to see an increase in sales of low-carbon vehicle by 5.75% each year until 2030.

Still, 23 of the 30 automotive companies looked at have more detailed transition plans since last year and 20 of them have set new targets to increase their sales of low-carbon vehicles. Eleven have made financial commitments regarding electric vehicles and low-carbon transition, the study says.

Governments and key members of the auto industry did pledge at COP26 to have all vehicle production be net zero carbon by 2040. Forecasts for electric vehicles have also been increased as more emphasis is put on them, as electric vehicle sales are expected to grow by 80% in 2021.

There are 13 companies that set Scope 3 emissions targets, but none yet are ambitious enough to hit the sustainable standard, the study says. The companies average 2.9 out of 16 on the WBA’s 2021 transition assessment.

Post-COP26 analysis overall has lauded new carbon commitments by both governments and industries. An IEA analysis shows that if commitments are met, warming levels will hit their best numbers yet, but that even more needs to be done. A Moody’s report also found the commitments will speed energy transitions and put pressure on industries to make continued improvements.

 

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