- After setting climate targets, countries and companies will need to quantify, reduce and monitor their emissions.
- This process can be complex, time consuming, and error prone, especially for novices.
- The right technology can simplify this process and make it more efficient, transparent and efficient.
- Here are three ways technology, especially AIoT, can help.
As society lobbies leaders for a more environmentally friendly agenda, governments responsible for 63% of global emissions have committed to net zero with business zero net commitments covering 12% of the global economy (representing $ 9.81 trillion in revenue).
However, it is not uncommon to see big disconnections between goals and actual emissions – when talk and walk have to go hand in hand in terms of effective progress in reducing emissions. In June 2021, when the G7 Decided to make climate risk disclosure mandatory, seven of the world’s most influential economies have indicated that carbon emissions reporting and disclosure will play a critical role in ensuring that emissions reduction targets are actually met.
Setting a goal is only the first step; the second is to understand and quantify the baseline of actual emissions in measurable units. Then, a clear definition of the emission reduction strategy must be constructed. Finally, near real-time monitoring of targets against actual progress should be in place. Ultimately, if countries and businesses are to achieve net zero, they must monitor, reduce and, in some cases, offset the emissions they generate.
The journey can be complex for beginners; it can be time consuming, very manual, and error prone. This should not prevent companies from joining the wave of decarbonization. After all, beyond satisfying consumers and political leaders, committing to net zero could also prove economical, as access to capital will prove increasingly difficult for those who do not embrace not the energy transition. While “carbon tax” or “cap and trade” systems are becoming the most common likely way forward, and as access to capital is reduced for those who fail to embrace the energy transition, the first net zero players will have a competitive financial advantage over the laggards.
Carbon management process
Carbon management can be divided into three main categories: emission measurement and reporting, reduction and offsetting.
1. Measure and report the carbon footprint
The first step is to measure carbon emissions. The carbon reporting process involves the collection of CO2 data, organized by type of emission and geographic segment. The data is then measured against internationally recognized carbon accounting standards such as GHG protocol or ISO 14064-1. Currently, broadcast data can be got through meter readings, purchase records, utility bills, engineering models, direct monitoring, mass balance, stoichiometry (the calculation of reagents and products in chemical reactions) or d ” other methods of acquiring data from specific activities in the company’s value chain. The challenges associated with measuring and reporting typically include the laborious process of collecting data, the difficulty in examining the carbon footprints of business units and assets, as well as validating the underlying emissions assumptions.
2. Planning and management of reduction
Reduction planning involves identifying the main sources of emissions and implementing measures to reduce them. By categorizing emissions in the first step, companies can then identify and measure which processes emit the highest volumes of CO2 and optimize their plan to reduce carbon emissions. To achieve this, reduction roadmaps set targets and KPIs to reduce emissions, focusing on changing high-emission processes and implementing new technologies to reduce emissions. Due to the multiple variables that must be taken into account in such planning, the process can be uncertain and complex. In addition, monitoring the performance and progress of reduction programs is laborious. Organizational challenges include a lack of transparency regarding the marginal cost-benefits of reduction programs and the resources to manage and execute this reduction journey.
Carbon offsetting is considered the option of last resort once all reduction efforts and decarbonization investments have been exhausted. It is a way of taking responsibility for unavoidable carbon emissions by paying for others to reduce or absorb CO2. Several types of projects are used for carbon offsets, ranging from environmental projects such as reforestation to carbon capture technologies and renewable energy production. Carbon credits are measurable and verifiable emission reductions and have been used as a way for governments and businesses to offset carbon emissions. Other methods include the use of CERs (Renewable Energy Certificates) to offset energy consumed from non-renewable sources. However, offsets also present challenges, from precise measurement to transparency and verification to ease of trade.
How technology can help
Artificial Intelligence of Objects (AIoT) solutions are integral to solving some of the challenges associated with carbon management. There are three main areas of intervention to make carbon management more efficient, transparent and effective.
1. AIoT – integration into measurement and reporting
With a myriad of databases and systems involved in different carbon-producing assets, the work required to simply categorize and organize data from multiple business units and assets is immense. AIoT integration enables seamless provisioning of real-time activity level data and asset inventory data from a variety of systems. This enables an organization to effectively structure, collect and transform data into reports for accurate emissions monitoring and measurement, thereby reducing overall efforts around data collection and improving data quality and report resolution. .
2. Intelligence abatement – predictive analysis to simulate emissions over time
Reduction planning is a challenge mainly due to the lack of precise measurements to determine the emissions derived from certain processes. AIoT technology addresses this challenge by creating insights from real-time data to better predict process emissions. By analyzing and learning through data from multiple processes, AIoT can refine the performance evaluation of reduction measures and optimize emissions predictions. Beyond optimizing reduction strategies, this technology also reduces overall marginal reduction costs.
3. Carbon offsetting and integration of offsetting
Although it is a last resort, the carbon offset market plays a critical role in achieving global net zero emissions targets for countries and organizations, with estimated addressable potential. market size of $ 200 billion by 2050. However, the verification of carbon offsets and the difficulty of trading plague the industry. The technology can support the validation of CERs in near real time and provide a market for affordable and rapid carbon offsetting. The integration of offsets would provide a global pool of offsets to an organization, improving ease of trade and emissions planning, reducing organizational hassle, and optimizing the time it takes to purchase and retire RECs.
Carbon management solutions are essential to meet the mandatory G7 climate risk disclosures. Most importantly, they provide the technology to actively manage and reduce carbon emissions and meet the net zero commitments made by governments and businesses. Driven by strong political, societal and economic agendas, carbon management solutions will be an integral part of emission reductions. For that, the integration of real-time measurement, reduction and compensation will help businesses not only to speak up, but also to walk and seamlessly achieve their net zero goals.