Net Zero

Net zero 2030

Companies and governments need to take urgent action to curb emissions if they are to achieve Net Zero 2030 targets, leveraging both existing and developing technologies as well as sustainable practices to combat climate change and cap global warming.

Net Zero is a term that’s become central to conversations around climate action and environmental responsibility. Simply put, achieving “net zero” emissions means balancing the amount of greenhouse gases (GHGs) added to the atmosphere with the amount removed, resulting in no net increase in atmospheric levels. Before industrial times, Earth’s carbon cycle balanced itself naturally through various “carbon sinks” – forests, oceans, and soil – that absorbed as much carbon as was released. However, human activities, especially fossil fuel combustion, have heavily disrupted this balance, increasing atmospheric GHGs, which trap heat and drive climate change.

What is net zero?

“Net Zero” is a term that is regularly used by governments and businesses as they strive to reduce their greenhouse gas emissions and contribute to the fight against climate change and global warming. But what does Net Zero actually mean? Before the Industrial Revolution, the Earth’s natural systems maintained a carbon balance in the atmosphere, with greenhouse gases such as carbon dioxide absorbed by sinks including plants, the oceans and soil. But human activities – in particular the combustion of fossil fuels to obtain energy – have upset this balance, pumping more GHG into the atmosphere. The accumulation of these gases in the atmosphere – which literally act like a greenhouse, trapping heat – is the root cause of climate change and global warming.

Net Zero refers to redressing the balance of these greenhouse gases in the atmosphere, both by drastically reducing emissions through the increased use of renewables, for example, as well as exploring technology such as carbon capture. The aim is to see the world achieve zero net carbon emissions by the middle of the current century.

The concept gained popularity after the historic Paris Agreement was reached in 2015 at the United Nations Climate Change Conference (COP 21), when the 196 participants agreed to hold the increase in global temperatures to 2ºC above pre-industrial levels, and pursue efforts to limit the same increase to 1.5ºC. To do this, according to the United Nations, greenhouse gas emissions will have to peak before 2025 at the latest and decline 45% by 2030. Then in 2018, the Intergovernmental Panel on Climate Change (IPCC) released its Special Report on 1.5°C, which warned that global emissions must drop to net-zero by 2050 if the most catastrophic impacts of climate change were to be avoided.

As a result there is a growing coalition of countries, cities, businesses and other institutions that are pledging to reach net-zero emissions, with 2030 a key date in this objective. According to the United Nations, some 9,000 companies, more than 1,000 cities and the same number of educational institutions, as well as over 600 financial institutions, have all joined the “Race to Zero”, committing to taking immediate action to halve global emissions by the year 2030.


Iberdrola, committed against climate change 

The SBTi Initiative: How it works and its importance in the development of Net Zero

The Science Based Targets initiative (SBTi) is a corporate climate action organisation that works to help companies and financial institutions to set targets to reduce their emissions. Their tools and guidance, as well as the standards that they develop, are aimed at keeping global warming below catastrophic levels for the planet and the achievement of Net Zero by 2050 at the latest. The SBTi is a UK-based charity, and partners with the Carbon Disclosure Project (CDP), which works to help companies and institutions to disclose their environmental impact, as well as the United Nations Global Compact, the We Mean Business Coalition, the World Resources Institute (WRI), and the World Wide Fund for Nature (WWF).

What’s more, in October 2024, the SBTi launched a new services website, at www.sbtiservices.com, to provide companies who want to set decarbonisation commitments with information and resources. The venture was in response to the huge growth that the SBTi has seen in recent years in demand from businesses using their standards and tools to set science-based targets for emissions reductions and then validate them. In just the nine months previous to the launch, the number of businesses with validated targets rose by 60%.

Global context and Net Zero commitment

Scientists from all over the world agree that urgent action needs to be taken to reduce GHG emissions to avoid an increase of global temperatures above 1.5ºC compared to pre-industrial times. But the latest Net Zero Economy Index from consultancy PWC shows that the reduction in carbon intensity on a worldwide level has stalled to its lowest level in a decade. Their analysis suggests that the world needs to decarbonise 20 times faster if global warming is to be limited to 1.5ºC, and that bold action is required now if climate ambitions are to be realistically met. The 2024 PWC report does, however, point to a strong growth in renewable energy capacity on a global scale. But the demand for energy continues to grow, with fossil fuel reliance also on the rise and the energy mix still dominated by non-renewable resources.

Emissions of carbon dioxide from the energy sector are still worryingly high, reaching a record of 37,4 gigatonnes in 2023, according to the International Energy Agency (IEA). What’s more, demand for fossil fuels actually increased after the 2022 invasion of Ukraine by Russia, as did investment in supply. On the global level, governments need to align their public policies with innovation within the private sector, according to PWC, while the private sector needs to take steps such as deploying technologies to improve energy efficiencies, adopting circular business models and implementing advanced manufacturing processes. Greater international cooperation is also required to realistically move toward the Net Zero targets.

Steps to Zero Emissions: Implications for Businesses

Rather than being an obstacle for businesses, taking steps toward zero emissions can actually be a win-win situation for firms, as well as people and the planet. According to the latest Net Zero Economy Index report from consultancy PWC, tackling global energy demand could reduce energy intensity by 31% and mean $2 trillion in annual savings if these actions are put into place before 2030.

The report’s recommendation is that companies should adopt energy-efficiency measures, and also foment collaborations across industries, supply chains and the public sector in a bid to not only raise awareness but also encourage governments to implement policies that incentivise the reduction of energy intensity. The resulting changes from policymakers have the potential to see more competitive markets, greater incentives and tax reliefs, PWC argues. This in turn could bring down operating costs and enhance productivity.

Net Zero impact

The International Energy Agency (IEA) reports a mixed picture for 2023 on the path to Net Zero, with a reduction of global emissions in advanced economies, but an overall increase of CO₂ emissions in the power sector.

37.4

billion tonnes: Record global carbon dioxide emissions in the energy sector in 2023.

2.4ºC

Expected global warming by 2100 under current policies.

-4.5%

Emission reductions in advanced economies by 2023

Iberdrola's Zero Emissions Objectives and Projects

The Iberdrola Group is leading the way toward a decarbonised economy thanks to a sustainable and efficient business model. Iberdrola’s Climate Action Plan sets out an ambitious road map to achieve carbon neutrality for Scopes 1 and 2 by 2030, and net-zero emissions before 2040 for all scopes. Scope 1 emissions are direct greenhouse gas emissions that come from sources owned and controlled by an organisation, while scope 2 emissions are indirect GHG emissions that are associated with the purchase of electricity, steam, heat or cooling, according to the EPA’s definition. This means that by 2030, the company will aim to have achieved neutrality for direct emissions from electricity generation, as well as indirect emissions from transmission and distribution (T&D) and self-consumption.

By 2040, the objective is to reach net-zero emissions for the aforementioned scopes, as well as Scope 3, which includes the remaining indirect emissions that occur in sources that are neither owned nor controlled by the company. These include gas sales, the purchase of electricity for sale to the end customer, the generation of electricity for third parties and suppliers.

Iberdrola, going for Net zero

Iberdrola is the world leader in energy transition and the fight against climate change within the energy sector. Its Net Zero plans and targets are a key part of this. They include reducing the absolute emissions for the entire group by 90% in 2039, with the target of then neutralising the remaining residual emissions the following year. The transformation of the company to an organisation that is climate neutral is part of its objective to form part of a more efficient, competitive, clean and sustainable economic model. The work that Iberdrola has already done toward Net Zero goals has seen its carbon dioxide emissions in Europe fall to as low as 55 g/kWh, which is 80% below its European competitors.

The company is a global benchmark when it comes to the fight against climate change, and has adopted an active role in a series of Climate Summits, working in harmony with the objectives set out in the Paris Agreement. Iberdrola has also approved emissions-reduction targets on both a short and long term. These have been validated by the SBTi, which has verified Iberdrola’s science-based objective to achieve Net Zero by 2039.