Accelerating and scaling up green technology innovations

image is Green Sustainability

Meeting the ambitious net-zero goals outlined in the Paris Agreement requires the successful deployment of multiple new green technologies, at an industrial scale. These emerging technologies range from low-carbon hydrogen and biofuels to carbon capture, and storage (CCS). 

BCG’s recent analysis suggests that existing and scaled technologies can address only about 45% of the 51 gigatons of CO2 equivalent (CO2e) greenhouse gases (GHGs) emitted annually: we will need to mitigate the remaining 55% predominantly through the introduction and implementation of entirely new green technologies. The good news is that much of the fundamental R&D has been done on these new technologies, but the challenge lies not only in their development but also in their scaling, which must occur two to four times faster than previous green tech innovations such as solar photovoltaics and onshore wind.

We believe that the most effective route to accomplishing this ambitious and crucial leap lies in cultivating stakeholder ecosystems that can bring these technologies to market at the high speeds required. These new types of ecosystems must combine the efforts of manufacturers, suppliers, financiers, off-takers, governmental bodies, and educators in a holistic approach.

The challenge

To fulfill their potential role in mitigating GHG emissions and helping countries meet their Paris Agreement goals, new green technologies must industrialise at an unprecedented pace, while facing two critical challenges.

The first is the reduction of what Bill Gates has called ‘the green premium’ – the additional cost of low-carbon technologies compared with conventional fossil fuel-based methods. Already, countries with beneficial green energy policies and subsidies have found ways to reduce this green premium, in part due to rising energy prices in the wake of the COVID-19 pandemic plus geopolitical unrest such as the Ukraine conflict. Policies such as the US’s Inflation Reduction Act and the EU’s Emissions Trading System reforms are expected to expedite green parity in other markets. The second challenge is the scaling up of green technologies for mass industrialisation within a limited timeframe. This requires an unprecedented effort to surmount major hurdles, from devising mass manufacturing processes to full integration into end markets. However, overcoming these challenges promises immensely attractive business opportunities worth up to $25 trillion between now and 2040.

A compelling example is the case of hydrogen electrolysers, now instrumental in producing low-carbon hydrogen for several industries. To significantly contribute to meeting the Paris Agreement targets, electrolysers must achieve mass industrialisation four times faster than solar power and increase their hydrogen production capacity 600-fold by 2030.

In fact, each green technology faces six crucial hurdles to industrialisation at scale: product and process development, factory setup, talent sourcing, supply chain establishment, integration into end systems, and funding. Traditionally, these steps occur sequentially, beginning with product development and ending with commercialisation. However, to meet net-zero goals, we will need to execute these steps in parallel where possible.

To face these problems head-on, we need to facilitate and fund ecosystems of complementary organisations that include incumbent industry players, green tech startups, industry associations, educational institutions, and public bodies, with each playing a unique and indispensable role in the task of bringing a new technology to market.

Orchestrators within these ecosystems must ensure commitment to shared goals, secure necessary investment, and help maintain value-sharing models and governance mechanisms. As climate change escalates, these ecosystems will play a vital role in the rapid development and deployment of technologies needed to combat global warming.

Finding the benefits

Ecosystems have already demonstrated an impressive ability to yield benefits in both time-to-market efficiency and financial performance. This is clearly evidenced in the automotive industry, where VinFast, a Vietnamese car manufacturer established in 2017, managed to bring its first vehicle to market within a mere 24 months – half the conventional four-year timeline, a feat achieved through strategic partnerships with various global automakers and suppliers.

To stave off the worst impacts of global warming we must catalyse a massive acceleration in the development, manufacturing, and implementation of innovative green technologies – and this requires assembling ecosystems of suppliers, catalysts, and other stakeholders. Governments must support the phase down of fossil fuels and mandate the use of new technologies as soon as these are ready. The EU’s plan to stop production of ICE vehicles by 2035, for example, has caused carmakers, automotive suppliers, and battery manufacturers to focus on ensuring compliance with the new rule.

Creating and sustaining ecosystems for every crucial green technology is essential. This endeavor necessitates not just a transformation of our industrial processes but also a reinvention of business practices and a commitment to unprecedented levels of collaboration. The emerging ecosystems, we believe, are the only realistic path to industrialising new green technologies at the speed and scale necessary to limit global warming to 1.5°C. Creating them will also unlock gigantic amounts of business value.

The success of this monumental task depends on the resolve of all players, governmental bodies, and society at large to succeed—and their readiness to begin their journey without delay.


Subscribe to our newsletter and get the best of Energy Connects directly to your inbox each week.

By subscribing, you agree to the processing of your personal data by dmg events as described in the Privacy Policy.

Back To Top