Research firm Wood Mackenzie has presented the five key carbon emissions trends the company forecasts will shape 2021.
Despite the negative impacts of COVID-19 on government and company operations and on the global economy at large, 2020 saw a number of governments and companies making ambitious net-zero commitments.
Renewables grew in importance in some oil and gas companies’ portfolios and as a power source for mining. Carbon pricing accelerated, with prices for emissions allowances under the EU Emissions Trading Scheme and Western Climate Initiative reaching record highs.
Wood Mackenzie predicts that such momentums will likely increase in 2021 as emitters act on plans to meet their climate targets.
James Whiteside, global head of multi-commodity research, and Amy Bowe, the head of carbon research at Wood Mackenzie, note five key themes:
- Government climate commitments will increase ahead of COP26
- Technology developments will help reduce emissions from metals extraction and oil and gas production
- TCFD (Task Force on Climate-related Financial Disclosures) reporting will become a requirement for a broader range of companies
- Commodities will increasingly be marketed on their green credentials
- Energy companies will continue to lead the way in divestment and diversification to manage emissions risk.
Governments including the UK, EU and Canada, that made pledges to hit net-zero emissions by mid-century are expected to roll out policy to achieve these objectives in 2021.
An increasing number of countries are also expected to join in the race to achieve climate change targets.
China, India, South Africa, Saudi Arabia and India are among the countries that are expected to set climate change targets, although both China and India have indicated they intend to largely renew existing 2030 commitments.
“In particular, all eyes will be on China’s targets for new coal power capacity after the country announced its aim to be carbon neutral by 2060. In addition, President Joe Biden’s pledge to re-join the Paris Agreement and enshrine a 2050 net zero goal will be another step forward in climate ambitions in 2021,” said Bowe.
The mining sector is expected to accelerate its decarbonisation efforts with mine operators installing more and more renewables capacity at sites.
For instance, Chile alone is expected to see 3.5GW of renewables projects contracted to mining companies completed in 2021.
Additionally, gradual progress will be made in replacing typically diesel-powered mining truck fleets with electric alternatives. For instance, Anglo American will begin operating the first full-power hydrogen fuel cell electric vehicle (FCEV) mining truck.
Read more about the 2021 trends related to carbon emissions.