What is Decarbonization?

Terms to Know 

• Greenhouse Gas - Greenhouse gases (GHGs) are gasses in the Earth's atmosphere that trap heat and warm the planet.
• Carbon Footprint - Also known as a GHG inventory, a carbon footprint is the estimated quantity of greenhouse gases emitted into the atmosphere by a company or entity. It is expressed in terms of carbon dioxide equivalent, or CO₂e.
• CO₂e - Expresses the impact of each GHG in terms of the amount of carbon dioxide that would create the same amount of warming—calculated by applying a global warming potential (GWP) to each gas.
• Global Warming Potential - This measures how much energy the emissions of 1 ton of a gas will absorb over a given period relative to the emissions of 1 ton of carbon dioxide (CO2).
• Science-Based Target - Science-based targets are a well-defined route for companies to decrease GHG emissions, safeguarding against the most severe consequences of climate change while ensuring the resilience of business expansion. To be classified as 'science-based,' targets must align with the latest findings of climate science, aiming to fulfill the Paris Agreement's objectives of restricting global warming to significantly less than 2°C above pre-industrial levels and striving for measures to limit it to 1.5°C.

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Decarbonization Defined 

‍Corporate decarbonization has emerged as a crucial component in the fight against climate change and refers to organizations' processes and strategies to reduce or eliminate greenhouse gas emissions throughout their operations, products, and supply chains. 

Decarbonization Example

The process of decarbonization doesn't include just one method or strategy. It often combines multiple strategies, such as reducing employee commutes, improving operational efficiencies, or verifying progress from independent auditors.

Example: Let's look at an example of decarbonization through a fictional chemical company Quadial Inc. They have set a goal to reduce their GHG emissions by 60% by 2050 (we’ll learn how companies set these goals in Module 3). To achieve this, they will need to use a variety of tactics in their decarbonization strategy, including:

• Using recycled and bio-based feedstocks in place of fossil fuel-based materials
• Partnering with a third party to annually verify emissions data to align with reporting requirements.
• Incorporating renewable energy on-site and off-site to optimize energy usage such as solar, hydro, geothermal power, and wind, which provides sustainable energy alternatives to fossil fuels.

Quadial Inc. also displays its progress in a digestible format on their website, including its audited scope 1, 2, and 3 emissions and decarbonization target aligned with the Science Based Target Initiative. They make additional information available to shareholders and stakeholders. 

Net Zero x Carbon Neutral x Carbon Negative

For an organization to decarbonize, it must have a goal to work toward. Quadial Inc. sets a Net Zero goal, but there are various goals organizations commonly set to track their decarbonization progress and disclose their intentions to the public. Let’s walk through some of these:

• Net Zero - The most popular decarbonization commitment, Net Zero initiatives focus on neutralizing all greenhouse gases. Objectives focus on generating internal solutions, such as reducing the amount of emissions produced, and external solutions, such as carbon removal projects. Simply put, net zero means cutting all greenhouse gas emissions to as close to zero as possible. 
• Carbon Neutral - These initiatives focus on neutralizing carbon emissions. Carbon neutrality focuses on developing sustainable carbon offset programs that neutralize (not eliminate) current emissions levels. An example of a carbon-neutral initiative may be replacing electric grid power with wind power. 

• ‍Carbon Negative - A relatively uncommon approach, carbon negative commitments goes a step beyond carbon neutrality by removing additional carbon emissions outside of the entity's value chain, creating an overall positive impact on the environment. This might include additional carbon capture and storage.