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Sustainability needs global common standards; fossil fuels part of carbon neutral future

Highlights

Fossil fuels, mining to be part of carbon neutral future

Standardization needed in sustainability definitions

Global standardization is needed to further clean energy goals as industry investors are driving sustainability with companies setting voluntary targets based on consumer demand, panelists at an S&P Global Platts webinar said Sept. 1.

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Fossil fuels will be part of the clean energy transition with innovative ideas to drive carbon neutral targets, panelists at "S&P Global Platts Energy Transition Webinar" agreed.

"When we talk about sustainability, we've seen a dramatic shift in attitude in the last few years," Salla Ahonen, vice president of sustainability at Finnish refiner Neste, said during the webinar's introductory panel.

Sustainability has been discussed before, but the focus has never lasted as long as it is now, Ahonen said. A critical mess of industry participants are pushing the focus forward now, said Tom Holmberg, a partner in the Global Projects Group at Baker Botts.

"Much of what you see out there is voluntary," Holmberg said about companies and states self-regulating clean energy goals.

Forty states have some type of clean energy goal, including 33 states that have the goal mandated by law, according to an analysis by Platts. Twenty states have aggressive goals of 100% renewable generation, carbon-free power, net-zero emissions or carbon neutral power, with 15 of those mandated by legislation.

Investors are driving solutions, said Drew Lichter, vice president of corporate strategy and development at Mobius Risk Group, an independent commodity and energy enterprise, risk, compliance and advisory firm.

"It's not about zero emissions. It's about net-zero," Lichter said.

However, definitions of carbon neutral can differ by company and country, said Anmay Dittman, head of strategic execution at BlackRock, an investment management company.

"We need to be careful what we mean when we say carbon neutral," Dittman said. "Carbon neutral means an economy that emits no more carbon than it removes from the environment."

Panelists agrees more standardization is needed on the definition of sustainability, especially as companies operate in multiple jurisdictions around the globe.

"Everybody cares about it, even those people you think wouldn't," Lichter said. "They genuinely care."

Fossil fuels

The energy transition is not about demonizing any sector, panelists agreed. Natural gas, metal and mining have a role to play too.

"Fossil fuels are not going away tomorrow or in 50 years," Lichter said. "They can actually be carbon neutral. They just have to think outside the box."

There's no single solution that will solve all the sustainability issues, said Franz Deimbacher, head of technology, energy at Amazon Web Services. He added there is no silver bullet solution, no matter how much everyone would like.

Since mines underground can't be powered by solar generation, it's about harm reduction, Lichter said.

"Mining is going to play a key role," he said. "You can't demonize those industries if they are being responsible."

It will take innovation, such as Tesla recently entering the industry

Carbon costs

"I think there is a change in behavior that people are willing to pay more for sustainability," Ahonen said.

At the end of the day, the consumer is going to pay the cost of sustainability, Holmberg said.

"The biggest hurdle to sustainability is the cost involved," Holmberg said about lack of a carbon price.

Putting a price on carbon is one of those things that will be needed, Ahonen said.