'Now or never' – how technology and collaboration can accelerate decarbonization

With the notion of “now or never” hanging over us, should we be fearful or optimistic? I remain optimistic. Firstly, we already have the technology and, secondly, we all acknowledge that none of us can do it alone. If we accelerate the application of critical technology, we have a unique opportunity to help solve the world’s most pressing challenges together. Challenges like meeting the Paris Agreement goal of limiting global warming to 1.5°C.

We want to create a more sustainable and equitable future for everyone through technology with purpose. We are already providing the technologies for decarbonization within critical industries to make a difference in the world – and we believe in the power of innovation and its impact when scaled up. With the latest IPCC report outlining that it’s “now or never” to limit global warming, the impetus business can provide is critical.

Looking beyond technology, companies like Siemens have the reach and reputation to act as a “convener” and enabler of relevant industry players. Progress can be significantly accelerated if we abandon silos and work together across powerful ecosystems. Such “networks of networks” allow companies to join forces and co-create. As more partners join, ecosystems get new products and services to market faster; they speed up change, create new revenue streams, and facilitate private-public collaboration. They are powerful tools to tackle complex problems.

By convening players into ecosystems, the whole outcome is greater than the sum of the parts. Let’s take the manufacturing industry as an example. Between 70-90% of a product’s carbon emissions happen along the value chain. For this reason, it’s essential to achieve transparency and track emissions along this entire chain in order to reduce carbon footprints.

Estainium is a response to that. Initiated by Siemens in late 2021, it is an open network which enables manufacturers, suppliers, customers and partners to exchange trustworthy product carbon footprint data. This brings us a step closer to carbon-neutrality and accelerates the climate transition.

An industry at the cutting edge of that transition is the automotive sector. Here, too, the open cross-company exchange of data is being sought within a European ecosystem in which automotive manufacturers and suppliers, dealer associations and equipment suppliers can all participate equally.

This partner network – of which Siemens is a founding member – is Catena-X. It’s clear that an ecosystem that brings together all players, including larger, more established companies and SMEs, has a far greater chance to improve efficiency and boost decarbonization.

Such ecosystems thrive on a diversity of partners, but they need the genuine commitment of all. And that can be gained by creating a foundation of trust and data security. The willingness of companies to share data needs to be protected against the unintentional (mis-)use of that data which would jeopardise their own competitiveness. This requires an ecosystem with full data sovereignty.

When it comes to Estainium, distributed ledger technology is being used to guarantee both a high level of data protection and trustworthiness. And since no centralised storage takes place, each of the parties maintains full data sovereignty. For Catena-X, the companies involved have agreed on the International Data Spaces (IDS) standard for data sovereignty.

For collaboration to be successful, it needs to be underpinned by frameworks that strong institutions like the EU provide. These include clear pathways to create a level playing field and taxonomies for policy, regulation and disclosure across markets. The EU Taxonomy, a key enabler in the EU Green Deal legislative package, is a prime example.

The move to enable decarbonization via the electrification of energy needs in our economy – be it in the industrial, infrastructure or mobility sectors – is a clear case of where tech-providing companies and regulation-providing institutions should work hand-in-hand to accelerate a sustainable recovery.

An example which many people can currently relate to is the adoption of electric heaters (also known as power-to-heat) and e-charging technology, coupled with the integration of renewable energy sources. In terms of technological solutions, the heat pump and EV charging hardware exists, as do the grid-edge software and control tools to balance generation, consumption and demand.

So, what do we need to take it to the next level? To mention just a few areas: policies to incentivise large-scale adoption of power-to-heat systems and a regulatory framework, including regulations to support smart grid management and coordination with grid operators – for example via edge devices installed on all e-heaters and e-chargers. A positive outcome would therefore be dependent on collaboration between multiple stakeholders: governments, businesses and the general public.

Governments and businesses also have a role to play in encouraging investment in the climate transition. Investment in renewable energy reached $322b in 2018 and continues to rise, according to IRENA. However, it still falls well short of the level required to meet global climate goals. In fact, the IPCC report found that financial flows are a factor of three to six times lower than the levels needed by 2030 to limit warming to below 2°C; however, there is sufficient global capital and liquidity to close investment gaps. Once again collaboration – between governments, businesses, private investors and financial institutions – is required to move the needle on deploying such capital to the right projects in the right places.

Business is a powerful force in driving sustainability – and vice versa. Businesses that provide technology with purpose can help solve the world’s biggest challenges. It is working in ecosystems –with customers, suppliers, institutions, investors and wider society – that will further accelerate progress. This underscores our belief at Siemens that what’s good for business and what’s good for people and our planet go hand in hand.