The First Movers Coalition (FMC) — a group of large private-sector firms aiming to decarbonise hard-to-abate industries — is working on its emission reduction pledges and aiming to expand further ahead of the UN Cop 27 climate conference, but supportive policies remain key to driving investment in green technologies.
The partnership focuses on seven industries, accounting for almost a third of global emissions, according to the World Economic Forum (WEF), which spearheaded the initiative with US presidential climate envoy John Kerry. The FMC started out with 34 companies when it was launched during Cop 26 in Glasgow last year and now has 55 members with a total market value of $8.5 trillion from sectors including steel, aviation, shipping, aluminium and CO2 removal.
Some countries also support the initiative, and all members must deliver on their commitments by 2030. In its first year, the coalition has expanded, with the governments of Denmark, India, Italy, Japan, Norway, Sweden and the UK joining the US to create "early markets for clean technologies through policy measures and private-sector engagement", Kerry says. The coalition plans to continue to expand its membership and launch in additional sectors, he adds. The chemicals and concrete sector will be included during Cop 27, in Sharm el-Sheikh, Egypt.
Steel buyers in the FMC have pledged that at least 10pc of their procured product will be low-carbon by 2030. The idea behind FMC is that it will send investors a signal that demand will be there in the future. As well as encouraging investment in nascent green technologies, the initiative aims to realign supply relationships. Buyers that do not have contracts with steelmakers with near-zero plans will either need to encourage their suppliers to decarbonise, or seek out new ones. Using a sliding scale, the FMC defines near-zero emissions steel as output emitting under 0.4t CO2 per tonne of crude steel produced, with 0pc scrap inputs, and under 0.1t of CO2, with 100pc scrap inputs. No steel produced today on an industrial scale has such low emissions.
Measuring performance against the FMC voluntary commitments is difficult, because net-zero technologies remain in their infancy, and where they exist — in aviation and shipping, for example — they have not been widely adopted.
Shape up or ship out
Under the FMC initiative, shipowners and operators committed to have at least 5pc of deep-sea shipping powered by zero emission fuels by 2030, and cargo owners at least 10pc of their volume of goods shipped internationally on vessels powered by zero-emission fuels by 2030, rising to 100pc by 2040. Three of the 10 shipping FMC members have made moves to support production of the type of fuels they will need to hit their emissions targets.
Danish shipowner Maersk has formed partnerships to produce 730,000t of green methanol by the end of 2025. It has also ordered 12 ships . Trafigura has pledged to convert six of its own vessels to run on zero-emissions fuels by 2030, representing 18pc of its fleet. The firm tells Argus it is on track to meet these targets. It invested €20mn ($20.2mn) in a study into green ammonia in Norway and is co-sponsoring German engineering company Man Energy Solutions' green ammonia engine, with the first of these scheduled for delivery by 2025.
Norwegian fertiliser producer Yara is also backing the production and availability of ammonia as a bunker fuel. Other members — including Amazon and Agility — have been less clear about how they intend to meet FMC targets.
Airlines and air transport companies in the FMC have pledged to replace at least 5pc of their fossil jet fuel with sustainable aviation fuels (SAFs). Of the 19 aviation companies that made the commitment, there are only two passenger airlines — US Delta Air Lines and United Airlines — and two air cargo carriers — Germany's DHL and US delivery firm FedEx.
But the world's largest aircraft manufacturers — Europe's Airbus and the US' Boeing — support the initiative. Boeing recently became the FMC's "aviation sector champion", committing to support greater commercialisation of SAFs — a huge task, considering only 53 airports out of over 15,000 globally currently supply SAF, according to the UN International Civil Aviation Organisation (Icao). Boeing is backing biofuels producer SkyNRG's planned SAF production project in the US, in which Alaska Airlines is also a partner.
Trafigura head of fuel decarbonisation Rasmus Nielsen says he "would like to see [the FMC] increase in scale" in order to boost the potential for larger offtake in the future, but he also says that, for shipping, he would like to see the group push the International Maritime Organisation (IMO) further. The shipping industry "needs a clear signal from Cop to IMO negotiators", the Maersk McKinney Moller Center for Zero Carbon Shipping, a research group led by Maersk, says.
There is a consensus that more leadership is required from the IMO to usher in the next stage of the transition and encourage large-scale investment. Nielsen says that if the IMO does not act quickly, he thinks alternative marine fuels will make up less than 5pc of demand by 2030. "Without clarity on regulation, we cannot expect companies to go and invest in scale," he says.
Up in the air
In aviation, policy support will be crucial for an industry that is still not on the path to decarbonisation. But only two countries out of nine that support FMC have included the aviation sector in their net-zero emissions targets by 2050. "Knowing that government policies will support the same goal and timeline globally will enable the sector, especially its suppliers, to make the needed investments to decarbonise," the International Air Transport Association says.
In the steel industry, the EU's carbon border adjustment mechanism, combined with the emissions trading system, will make conventionally produced steel more expensive, theoretically hastening the transition to low-carbon alternatives. Many large steel end-users, such as automakers, are signalling that they want to decarbonise their supply chains, as well as their own vehicles. Automaker Volvo — part of the FMC — has indicated that its tests on material from Swedish steelmaker SSAB's pilot plant at Lulea yielded positive results.
European steelmakers, often with significant government help, are investing in decarbonisation through a range of technologies — from ArcelorMittal's "smart carbon" plan of reducing emissions in current blast furnace production to new exponential technologies that could dramatically cut carbon intensity. SSAB says it hopes its Hybrit joint venture with Swedish mining group LKAB and state-owned utility Vattenfall — an FMC member — will be in production by 2026. The site will produce steel using fossil fuel-free electricity and hydrogen, reducing Swedish and Finnish carbon emissions by 10pc and 7pc, respectively.
But technological barriers, cost and market factors continue to constrain the move, with some participants seeing the launch of "green steel" brands in Europe as a marketing gimmick, given the continued carbon intensity of most production. And, so far, the majority of the FMC signatories in steel have a significant European presence, some already with close ties to soon-to-be low-CO2 steelmakers, such as ArcelorMittal and SSAB. Finding buyers willing to make a similar commitment in India and China, where the bulk of the world's blast furnace capacity is located, might be more difficult, but would have more impact.
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