As global emissions continue to rise, we all witnessed the new high recorded in 2022. This happened because we have not attended to the primary cause of climate change, that is combustion of fossil fuels. Yes, despite all the efforts and progress made towards clean energy, around 80% of energy supply is based on fossil fuels. We Mean introduces principles for phasing out fossil fuels by 2040 and launches its multi-year campaign Fossil to Clean to urge companies to commit to eliminating fossil fuels by 2040, supported by climate action plans. Governments should endorse international agreements for a just phase-out, providing policies and financial backing.
Do you know, this ratio has never changed since the first United Nations Framework Convention on Climate Change’s Conference of the Parties (COP) that took place in Berlin in 1995. To bring this to light and shift everyone’s focus towards the major cause, We Mean Business Coalition is taking the initiative. They are launching a multi-year campaign named Fossil to Clean that will accelerate and guide the shift from fossil fuels to clean solutions.
They are inviting companies to phase out fossil fuels by 2040 along with advocating for a well-managed and equal transition on a global scale. To imply this, they are calling on governments to support an international agreement on an equitable phase-out at COP28. They are also urging the governments to deliver the required policies and financial support to decarbonize the global energy system by 2040. And not just this, because they proposed the concept of companies and governments holding responsibility to support various affected stakeholders in this transition.
This campaign consists of a set of principles developed with the advice of leading experts, including, Science Based Target Initiatives (SBTi) and Energy Transitions Commission (ETC). These principles are expected to guide the process in all industries, including demand, supply, government, and finance.
The recommendations of the UN High-Level Expert Group on Net Zero (HLEG) have been utilized as a foundation, and the latest modelled pathways for limiting warming to 1.5° C with minimal overshot have been employed in their development. These pathways, based on crucial reports from authoritative bodies like the IEA and IPCC in 2022, aim to achieve net-zero emissions by 2050.
The principles help producers, consumers, and finance with their transition plans and strategies. Governments use them to make policy choices. The principles are important because they set goals and help other stakeholders evaluate their plans and targets.
The Ambition Loop
The ambition loop consists of the following points that will inspire others to switch from fossil fuels to clean energy.
- Companies and stakeholders should publicly support the principles.
- Companies that actively stop using fossil fuels will send a clear message to the market, which will encourage energy suppliers, investors, and governments to speed up the development of affordable, reliable, and safe alternatives.
- Governments that establish a deadline for fossil fuels and implement strong national policies will create an environment that motivates businesses to adopt clean solutions quickly and on a large scale, to achieve the goal of limiting global warming to 1.5° C.
We Mean introduces principles for phasing out fossil fuels by 2040- Highlights
We Mean introduces principles for phasing out fossil fuels by 2040 that need to be followed by different sectors.
Principles for companies consuming fossil fuels, including power generators.
- Commit to eliminate the use of unabated thermal coal, gas, and oil by 2040 at the latest.
- Establish an ambitious net-zero target and disclose a comprehensive Climate Transition Action Plan (CTAP) detailing the following:
- Gradual phasing-out plan that includes interim reduction targets for fossil fuel use
- Strategy and goals to gradually implement clean energy solutions while phasing out unabated fossil fuels by 2040.
- Engage in achieving a majority of Tier 1 suppliers’ credible net-zero commitments well before 2030.
The principles further elaborate the tools and initiatives to be followed by demand-side companies.
The 4 A’s of Climate Leadership – It is the starting point for a credible climate action plan that guides companies through their climate journey. This program helps companies with their journey to address climate change. It provides guidance on various aspects, including nature, a fair transition, responsible policy engagement, and reducing Scope 3 emissions.
Some of the key initiatives and platforms mentioned in the 4 A’s of Climate Leadership are as follows.
- Set up a credible Net-zero commitment in line with the SME Climate Hub (for small and medium businesses) and Science Based Targets initiative.
- Submit a CTAP aligned with We Mean Business Coalition, Ceres, EDF, and CDP. Also, guidance on effectively demonstrating the credibility of their climate transition action plan.
Different initiatives and platforms to enhance clean alternatives include the following:
- Mission Possible Partnership – To decarbonize heavy industries
- Clean Energy Buyers Association – US companies switching to 100% renewable energy can join this, and other countries can join RE100.
- EV100, CEVA, EV100+ or the Sustainable Freight Buyers Alliance – To accelerate the transition from gas to EVs across major classes.
- EP100 – To achieve net-zero building and drive energy efficiency
- Net Zero Carbon Buildings Commitment – To decarbonize buildings owned by them
- ConcreteZero and SteelZero – To signal their demands for low carbon alternatives
- The Climate Pledge – To speed up cross-sector collaboration and joint action along with joining the leading companies committed to achieve net-zero CO2 emission by 2040.
- The Supplier Cascade – To engage in Tier 1 supplier for decarbonization
Principles for companies supplying oil and gas, including integrated oil and gas companies, companies specialized in exploration and production, integrated gas companies, and other actors involved in refining, distribution and retail of oil and gas products.
- They need to commit and avoid exploration or development of new gas and oil fields.
- They should aim to reach near-zero methane emissions by 2030.
- They need to publish a Climate Transition Action Plan (CTAP) including the following points.
- Percentage gradual reduction in existing production volume by 2030 and 2040, gradually approaching zero by 2050 (2021 baseline)
- Percentage projected decrease in oil and gas products utilized for energy consumption by 2030 and 2040 (2021 baseline)
- Percentage reducing operational emissions by 2030 and 2040 (2021 baseline)
- Percentage of capital expenditure (CAPEX) allocated to clean solutions every five years
- They need to set a science-based target once the SBTi standard is available.
We Mean introduces principles for phasing out fossil fuels by 2040 and here are the principles to be followed by the financial institutions engaged in investment activities as their core function.
- Stop funding any new coal value chain, new development or exploration of gas and oil fields.
- Publish a Climate Transition Action Plan (CTAP).
- Implement deadlines for the gradual termination of all current financial transactions, including the following points:
- To consider 2030 as a deadline for oil companies not aligned with the 1.5° C target and undertaking unabated oil projects.
- To announce 2040 as the latest deadline for gas companies that are not aligned with 1.5° C and unabated gas projects.
- By 2030, coal projects and companies in high- and high-middle income countries should no longer exist, and by 2040, the same should be true for all other countries.
- Maximize the proportion of financial investments in clean energy solutions (compared to fossil fuels) annually at the portfolio level
- Establish a science-based target using the SBTi FI Net Zero standard, which will be accessible in 2024.
Governments need to commit to decarbonizing the global energy system by the 2040s to meet the 1.5° C temperature limit. They can do this collectively through international agreements and individually through national policies. Principles to be followed by the government are as follows:
- Targets and timelines need to be established to phase out unabated fossil fuels in line with 1.5° C. This needs to be supported by national plans and policies to ensure a just transition for affected workers and communities. Developed countries should be the ones to start following the initiative.
- Pledge to achieve completely carbon-free power systems by 2035 in developed nations, and by 2040 in all other countries, at the latest.
- Provide financial support and capacity-building to help countries in the Global South develop diverse economies and transition to net-zero emissions.
- Take action to shift financial investments away from fossil fuels, both publicly and privately. This can be done by implementing a significant carbon price and reforming and redirecting subsidies that currently support fossil fuels.