Covid-19 has accelerated focus on decarbonisation: KPMG

The Covid pandemic has accelerated the decarbonisation efforts and has provided with an opportunity to look at this with greater focus globally as well as in India.

While the Covid-related disruption will probably be for a year in a 25-year cycle, it has given an opportunity to re-strategise priorities towards decarbonisation and net zero targets.

According to consultancy firm KPMG, “During the Covid-19 the industry discussions have additional significance as the world is seized with the imperative of decarbonisation.”

In its report, “Decarbonising growth - Managing the transition” shared today at its 11th annual energy conclave ‘ENRich 2020,’ KPMG India highlights the importance for businesses to identify their strategies and portfolios of technologies to meet their respective Net Zero targets.

Anish De, Partner and National Head, Energy Natural Resources & Chemicals, KPMG in India said, “Global environmental damage especially over the past century have taken us close to a point of no return. Perhaps we have a small action window to contain severe and irreversible damage across the board. But for this, governments and businesses have to set and act on specific and ambitious goals with set dates. Net zero is a key goal that many nations have explicitly committed to.”

Santhosh Jayaram, Partner and Head – Climate Change and Sustainability, KPMG in India said, “Climate change risks are now evolving as a barrier to competitiveness. Whether it is the country or business, the price of carbon will have to be internalised and is no longer an externality. The race to net-zero has started.” .

Interacting with mediapersons, Anvesha Thakker, Global Co-Head: Climate Change & Decarbonisation, KPMG IMPACT, said, “Net Zero pathways will require businesses to consider both demand side as well as supply side measures. In this journey, decarbonisation technologies such as renewable energy, demand electrification, Carbon capture, utilisation and storage, hydrogen, biofuels may compete but will also complement with the right eco system enablers. Government has to facilitate this journey through the right policy and fiscal measures.”

Large global corporations have started to urge their suppliers to reduce their carbon footprint as part of their own decarbonisation strategy. Sector specific measures on the demand side and energy efficiency will continue to see impact and largely align with investment and retrofit cycles.

The four dominant clean energy technology pathways include electrification of end use sectors; renewable energy may not be able to completely replace coal and gas-based power plants for many decades; Green hydrogen will help decarbonise consuming sectors such as transport and industries through sector coupling and bioenergy; Use of biofuels in transport applications is expected to show the strongest growth and is expected to play an important role in shipping, aviation, heavy transport.