Industrial efficiency alone is not enough
Corporations cannot rely solely on improving the efficiency of fossil-fuel-powered machinery, since other countries would replicate this “dirty” model in a global economy that continues to grow.
Industrialized countries cannot simply keep their fossil-fuel-based machinery, even if it becomes more efficient. These domestic efficiency gains would be outweighed by global economic growth, as other countries adopt the same model in a world economy that could double by 2050.[1]
Corporations must transition to fully electrified processes
Corporations are slow to upgrade their machinery currently running on natural gas or diesel fuel to electric alternatives powered by green energy.
Leading corporations, especially those under public scrutiny, have pledged to cut emissions, with some already electrifying outdated equipment such as ovens, auxiliary power units, and machinery currently running on natural gas or diesel fuel.
Smaller firms face significant financial barriers to rapid electrification. Passing on these costs would reduce their competitiveness, so they generally wait for existing machinery to reach the end of its lifespan before investing in energy-efficient replacements.
Decarbonizing heavy industries such as steel and cement remains particularly challenging, and progress can only occur over timelines spanning years or even decades.
Industrial electrification would require additional power plants
Converting all industrial machinery to electric devices will necessitate an increase in electricity from clean power sources.
To support widespread industrial electrification, substantial investment in new power plants powered by renewable energy or nuclear power is required, contingent upon regulatory approval for building permits.
This investment might also necessitate legislative action to dismantle electrical monopolies, allowing for increased competition and improved access to the existing grid. Additionally, the national electrical grid may need significant upgrades to handle the increased demand for electricity transmission.
This effort requires not only corporate commitment but also decisive action from political authorities.
On-site renewable electricity generation for corporations
Corporations and businesses should be incentivized to reduce their reliance on external power plants by generating electricity locally through solar panels or wind turbines on their premises.
Corporations should be permitted to sell excess electricity back to the grid during peak production periods, as local battery storage remains expensive. To facilitate this, authorities must work towards upgrading the electrical grid into a “Smart Grid” capable of managing and billing both the inflow and outflow of electricity.
This approach to local electricity generation would minimize the need for extensive transmission infrastructure between consumers and energy providers.