The great divide on the path to net zero… and leveraging technologies to close it

In Davos, a high-level panel discussion offered insights on how to bridge the gap in the infrastructure transition

Is the decarbonization of our infrastructure - one of the biggest challenges of our time - moving fast enough? Are the main actors involved in this transition aligned enough to ensure we meet our targets? According to our Infrastructure Transition Monitor which surveyed more than 1,400 leaders around the world, a “great divide on the path to net zero” exists, with business leaders expressing concern about different transition speeds and pathways.

For instance, while leaders in the U.S. and UK are relatively optimistic about the progress, those in Brazil, India, or South Africa are overwhelmingly negative. Additionally, only half of the senior executives surveyed believe that their country has a “coherent” or “effective” decarbonization strategy. While 40% of senior executives agree that business and government should collaborate on energy system priorities, 32% disagree with this view.

How can we accelerate the transition to sustainable infrastructure?

Financial Times , in collaboration with Siemens , held a panel discussion on this theme that took place at the same time as the World Economic Forum in Davos. Panelists debated strategies for increasing electrification and efficiency to ensure that the infrastructure across grids, buildings, and transportation is efficient and resilient enough to meet sustainable goals.

Focus on the entire infrastructure - grids, electrification, and buildings - is key

“Why did we conduct such a survey and report? Because it’s about raising awareness in society, amongst all stakeholders be it the government, companies, and individuals,” explained our CEO Matthias Rebellius . “The issues are complex and multifold, no one can solve this alone”.

Innovation and collaborative partnerships are required to ensure that infrastructure across grids, buildings, and transportation is efficient and resilient. To accelerate, a focus needs to be put on renewables and grid integration, supporting the ‘electrification of everything’ in industrial processes and driving energy efficiency across all infrastructure, including buildings.

“We have a clear target for net zero in scope 1 and 2 by 2030 and in scope 3 by 2040. We are making good progress,” said Dolf van den Brink , CEO of HEINEKEN

To accomplish our goals, partnerships are needed, said van den Brink. Earlier that day, The HEINEKEN Company signed an agreement with us for a multi-phase decarbonization program at Heineken production sites.

Other types of collaborations are also needed. One of the challenges is working in different regulatory frameworks and local infrastructure as these can vary widely in the 75 countries in which Heineken operates.

“More collaboration between different countries in sharing best practices is needed”, Dolf van der Brink.

Regulatory progress, but more is required

The report also highlights the need for further national and international policy action. 31% of respondents said that “regulators” are responsible for driving progress in the infrastructure transition. This is followed closely by “investors and shareholders” (25%) and then by “businesses” (17%), “political leaders” (14%) and “citizens” (13%). One of the most important regulators is, of course, the European Commission .

A lot of progress has been made in the last few years, but there is still work to be done, according to Kadri Simson, European Commissioner for Energy.

“2022 was the first year that wind and solar produced more electricity than gas,” Simson said. This was also driven by geopolitical reasons, but it shows what can be achieved when there is a joint effort. “To meet our 2030 targets, we need to do more. We need to double the share of #renewables within this decade to reach 2030 targets.” For this purpose, she said, investment in better grids is paramount. More than a third of the existing distribution grid infrastructure is more than 40 years old, which, along with new requirements for the transmission of renewable energy, prompted the European Commission’s recently launched Grid Action Plan.

Innovative technologies

“We are not going to get to net zero with more of the same. We have to innovate, and deploy new creative solutions to address these challenges,” said Andrés Gluski , President and CEO of leading global renewables developer and power generation company The AES Corporation . He focused on the need to improve the efficiency of existing infrastructure, but also on regulatory acceptance of new technologies. He concluded that transmission will be the biggest bottleneck to the growth of renewables.

Stanley E. Porter , @deloitte Deloitte ’s Global Energy, Resources, and Industrials Leader, emphasized the need for collaborative efforts to achieve the goals. According to him, one of the main drivers of change will be technology. “We need scalable solutions because without that we're not really addressing the scale of the problems,” was one of his key takeaways.

“We need investments in the right technologies at the right time”, said Matthias Rebellius. There are two angles to this. First, investing in the faster implementation of existing technologies is critical to speed up the pace. But equally important is investing in the technologies that will be needed in 2050.”

The panelists agreed that there is an urgent need to join forces to transition to a sustainable infrastructure.

Despite the different challenges faced by different industries and regions, as outlined in our Siemens Infrastructure Transition Monitor there is a consensus that achieving sustainability goals will require a multi-faceted and, most importantly, collaborative approach.

About the author

Florian Bayer is a freelance journalist based in Vienna. He was health editor at the Austrian STANDARD and now writes for several newspapers in Germany, Austria, and Switzerland.