Carbon neutrality as an opportunity for value creation

*This article is in the February issue of Decarbonisation Technology

Additional headwinds are expected to be forthcoming in the global fight against climate change and the broader sustainability objectives of companies, notably in anticipation of the new US administration. We anticipate:

• US withdrawal from the Paris Agreement: Rejoining the global climate deal was one of the Biden administration’s first executive orders, so it would be symbolic for the Trump administration to reverse this decision immediately. The Paris Agreement’s three-year exit period is another factor to motivate an early announcement of the US withdrawal from participation (UNFCCC, 2015). Such instability in government policy is clearly not conducive to a positive investment environment.

• US scrapping of non-business-oriented climate funding: A full repeal of the Inflation Reduction Act is unlikely, as it would hurt business interests in Republican states and is ultimately in the control of Congress. In the short term, defunding of other climate policies (such as funding for agencies and research projects) under the Trump administration is more likely.

“ Investors increasingly prioritise companies with robust decarbonisation strategies, recognising that addressing climate risks is essential for long-term business resilience and growth"

However, despite such setbacks, carbon neutrality still represents a significant opportunity for creating strategic value. Greenwashing was possible for some time, but with climate risks becoming increasingly apparent, fiduciary duty forces investors and industrial companies to be real and factual about climate risks to their portfolios and supply chains. Investors increasingly prioritise companies with robust decarbonisation strategies, recognising that addressing climate risks is essential for long-term business resilience and growth.

To achieve carbon neutrality, companies focus on value creation strategies such as asset decarbonisation, leveraging green premiums, developing new growth platforms, managing risks from supply chain vulnerabilities and carbon pricing, and shifting portfolios. Tight timelines add to this urgency: achieving net-zero targets by 2050 requires a rapid transition to carbon-negative operations by 2030. However, a significant percentage of the technologies needed to meet these goals are still in early adoption or pre-commercial stages. Technologies like green hydrogen are currently too expensive, and carbon capture and utilisation (CCU) has not yet reached commercial scalability. Addressing these gaps requires early-stage investment, which is critical for developing scalable solutions.

To achieve its climate targets, the EU will require additional annual investments of about 2% of gross domestic product (GDP) between 2025 and 2030, comparable to the EU’s R&D spending in 2022, which was estimated at 2.2% of GDP (Eurostat, 2024). With the European Green Deal, the EU has positioned itself as the global frontrunner in climate policy. Given the political economy of global climate action and the likely withdrawal of the US from the Paris Agreement, the success of the European Green Deal is vital for global decarbonisation to stand a chance. From this global perspective, it should be recalled that the cost of climate action is far lower than the cost of inaction.

How companies achieve their net-zero targets

Reaching net-zero goals requires a clear, strategic approach that combines different solutions:

• Deep decarbonisation by reducing emissions through technology and operational efficiencies.

• Carbon removal, both within and beyond the value chain, to address emissions that cannot be eliminated.

• Compensation through offsetting, which ensures residual emissions are balanced.

Success depends on aligning financial resources with these strategies. Companies with lower capital may start with efficiency improvements, while those with more resources can invest in advanced technologies or explore new business opportunities. Businesses that approach carbon neutrality as a chance to grow and innovate rather than as a cost can meet their goals while creating long-term value.

“We need to shift from viewing carbon neutrality as a cost to seeing it as an opportunity for value creation“

Key carbon neutrality levers and technologies

Decarbonisation relies on a range of technologies that address emissions reduction and removal across industries. Energy efficiency is a foundational element in optimising industrial processes to reduce emissions. Transitioning to alternative fuels, such as renewable energy and biofuels, is equally critical. Substituting traditional materials with low-carbon alternatives further reduces embedded emissions. Digital technologies, including AI and advanced analytics, are instrumental in optimising resource use and enhancing decision-making across value chains. By leveraging data-driven insights, businesses can identify inefficiencies, streamline processes, and scale climate tech solutions more effectively. The integration of digital tools into decarbonisation strategies represents a vital step in future-proofing industries for a sustainable economy.

Circularity is essential

Circularity could deliver up to 45% of the global greenhouse gas (GHG) emissions reductions needed to achieve net-zero worldwide (Ellen MacArthur Foundation, 2021) and up to 56% of the carbon reductions needed to achieve net zero in the EU (McKinsey & Co, 2024). By reusing materials and minimising waste, circular systems reduce dependency on virgin resources and align with decarbonisation goals. They also create operational efficiencies and new opportunities for growth. Beyond recycling, circularity involves redesigning systems to eliminate waste entirely. Secondary raw materials can replace primary inputs, significantly lowering emissions. Negative emission technologies, such as nature-based solutions and carbon capture, further address emissions that cannot otherwise be avoided.

Circular concrete

Every year, the world produces 4.1 billion tonnes of cement, which accounts for 8% of global CO2 emissions. At the same time, 3 billion tonnes of concrete waste is downcycled or discarded each year. Previously, no scalable or affordable technology existed to process waste concrete beyond downcycling, in which the material is downgraded or reused in lower-value applications like roadbeds. Globally, much of the discarded waste concrete rubble continues to be sent to landfill.

Based in the Netherlands, C2CA (concrete to cement and aggregates)…

Continue reading on the February issue of Decarbonisation Technology