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The US government plans to harness its $650 billion purchasing
power to set an example for large Fortune 500 companies to join a
global effort to drive demand for low-carbon technologies and to
decarbonize their industrial supply chains by the decade's end.
Launched 4 November at the UN COP 26 meeting, the First Movers
Coalition is a joint initiative of the World Economic Forum (WEF)
and the Office of US Special Presidential Envoy on Climate John
Kerry that creates a platform for companies to make purchasing
commitments for raw materials, such as steel, cement, and
petrochemicals, that are manufactured using low-carbon technologies
that are not yet commercially viable.
Their goal is to create and drive demand for these decarbonized
technologies, which include the use of green hydrogen that is
gleaned through electrolysis powered by renewable sources or from
natural gas supported by carbon capture and storage technology
(blue hydrogen).
Announcing the initiative two days prior to its formal launch,
US President Joe Biden said on 2 November "the U.S. government is
going to use our enormous market power as the world's largest buyer
of goods and services" to set an example for these corporations
that make up the coalition.
And these companies will be "critical partners" in this
endeavor, Biden added.
According to the International Energy Agency's net zero roadmap released in
May, roughly half of the emissions reductions needed to reach the
critical 2050 climate target of keeping the global temperature
increase under 1.5 degrees Celsius, when compared with
pre-industrial levels, rely on new and emerging technologies.
The First Movers Coalition started out of the gate with 34 of
the world's largest companies that
represent eight major sectors—steel, shipping, aluminum,
concrete, trucking, aviation, chemicals, and direct air
capture—that the WEF said are responsible for nearly a third of
global GHG emissions.
These companies include Apple, AP Møller-Mærsk, Boston
Consulting Group, Cemex Dalmia Cement, Delta Airlins, Fortescue
Metals Group, Nokia, Ørsted, Salesforce, Trafigura, Vattenfall,
Volvo Group, and Yara International.
The idea is that these participating companies will commit to
buying products with a low-carbon footprint to help develop green
supply chains and meet the world's climate goals.
Source: World Economic Forum.
World Economic Forum President Børge Brende said technology
advancements have yielded tools to reduce global GHG emissions and
build a stronger and more inclusive economy, but for innovators and
investors to play a role in tackling the climate crisis, "they need
clear market demand" which First Movers Coalition can provide.
At the coalition's launch, Kerry said this is a critical decade
for the world to meet its climate goals. "We not only need to
deploy as rapidly as possible existing clean energy technologies,
such as wind turbines, solar panel, and battery storage, but also
drive innovation for our long-term decarbonization goals," he
said.
Create momentum, drive down costs
For observers like IHS Markit Research and Analysis Executive
Director Paul McConnell, this initiative, unlike others, is
"essentially creating guaranteed demand for low-emission
technologies, and in doing so creating momentum and driving costs
down."
Cemex, a Mexican multinational construction materials company,
is among the First Movers that already has committed to a net-zero
goal in its sector by midcentury and counts itself among the UN
Race to Zero coalition. The venture capital unit of Cemex on 2
November announced its plans to invest in the Swiss company
Synhelion that has developed a technology to use extremely high
temperature of solar heat to turn CO2 into synthetic
drop-in fuels, such as kerosene, diesel, and gasoline, that can in
turn be used to manufacture cement.
Another First Mover, Trafigura, has committed to own and operate
six ammonia-carrier vessels which will be converted to use
low-carbon ammonia as their primary fuel source by 2030, if
technically feasible.
Trafigura also has committed to working with the First Movers
Coalition to agree future purchasing commitments for low-carbon
aluminum, to "incentivize and work with producers and consumers of
aluminum to decarbonize the industry."
"The First Movers Coalition is an important initiative that will
drive investment in technologies and solutions to achieve net zero.
In the shipping sector, this marks another important signal by
industry of its willingness and readiness to decarbonize,"
Trafigura Chairman Jeremy Weir said in a 4 November statement.
--With contributions from Net-Zero Business Daily's Max
Tingyao Lin.
Posted 04 November 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst
