Tech Companies Lead Global Decarbonization EffortsBy Cas Biekmann | Tue, 04/13/2021 - 16:18
Of the Top 10 largest US companies in regards to market value, five of them have full net zero emission ambitions by 2050, reports Bloomberg News, and all five come from the tech sector. Amazon, Facebook, Apple, Microsoft and Google all operate in Mexico and their decarbonization plans will likely influence the Mexican market. The rest of the companies in the Top 10 also aim to cut down emissions. What sets tech companies apart from the rest of the companies is their efforts to decarbonize those in their supply chain.
How this decarbonization is achieved remains up to debate. For instance, the concept of purchasing carbon offset credits is being questioned by one of the US’ top sellers of the offsets, according to Bloomberg News. One of the ‘simpler’ steps in the process, however, is less controversial. By switching a company’s energy supply from traditional fossil fuels to cleaner energies such as natural gas or even renewables, companies can swiftly cut down a large part of their emissions.
Even though experts agree that in the Mexican context companies are more interested in clean energy for its cost-saving potential than for paving the way toward decarbonization, many international companies operating in Mexico do see net zero goals as a priority. Still, some Mexican companies in various supply chains are pushed toward such goals by their main clients. The current energy climate in Mexico could pose a challenge, nonetheless.
State-owned utility CFE operates largely on natural gas and other fossil fuel-based sources. This means that companies looking for clean energy have to secure their own energy supply through private companies specialized in clean energy that arrived after the 2014 Energy Reform. Various options exist, including on-site, off-site and distributed generation assets, as well as participation in the country’s wholesale electricity market. But in an effort to rescue its very own PEMEX and CFE, the López Obrador administration has been constructing barriers toward private participation in the sector. Other than shaking the faith of investors, the government has drastically slowed down its handing out of power generation permits. “If CRE does not release more permits, we will experience a shortage in the supply of renewable energy in a few years,” said Sean McCoy, Director of Energy Services for Mexico at Edison Energy. Analysts therefore expect that through USMCA, Mexico could feel pressured by the US to provide further opportunity for private investors and to respect previous contracts.