Sustainability

As part of its climate commitment, GE Vernova approached PwC US to help it understand market mechanisms that implement carbon pricing (exchanges between entities that produce greenhouse gas emissions and those that remove or reduce them). Though they are an important component of the world’s multi-pronged net zero targets and goals, market mechanisms have suffered from a lack of credibility in many of their underlying projects. For example, one such mechanism, carbon offsets, should ideally be deployed to address residual emissions only once other decarbonisation levers have been exhausted — but this isn’t always the case.

GE Vernova knew it could address the core issue of trust in these markets with decarbonisation programmes that can be measured, verified, reported and exchanged reliably. But it needed to determine the appropriate path to achieve this.

PwC US assembled a global, multidisciplinary team from various firms within the PwC network that conducted extensive research and analysis on carbon markets, identifying the key factors that will influence GE Vernova’s approach and role in the market, such as a shift in buyer preferences to technology-based and engineered carbon market offerings. The team identified six new business opportunities centred around meeting corporate demand, scaling engineered solutions, localisation and exploring emerging technologies based on a careful analysis of market trends, optimal timing and financial implications.

As GE Vernova invests for 2050 and well beyond, the value of this initiative lies in providing a measure of certainty to guide an uncertain future. 

India has set an ambitious target to achieve net zero emissions by 2070. The carbon market in India has been designed to mobilise capital flows and incentivise industries to adopt innovative technological solutions for decarbonisation. In this context, a team from PwC India was selected based on their robust approach and methodology to serve as the advisors to India’s Bureau of Energy Efficiency (BEE) on their carbon market implementation journey.

This engagement is now in its second year. During the first year, PwC India supported BEE in developing a regulatory and policy framework, drawing on extensive insights, assessments, and studies of policies implemented in other countries. Concurrently, work began on creating a central IT platform called the Registry. This platform will enable the registration of projects, provide access and portals for all market participants — including project developers, traders, verification agencies, and validators — and feature a trading platform for carbon credits.

The next phase involves assisting BEE in conducting stakeholder consultations with industry leaders, academia, and regional and state governments. BEE has been organising these consultations across key cities in India to discuss and shape policy frameworks and documents critical to establishing a practical carbon market in India. A standout feature of this engagement has been the leadership from the Prime Minister’s office which has brought together key ministries to work towards a common goal with measurable outcomes.

Through this engagement, we aim to help create a robust carbon market that will play a pivotal role in India's decarbonisation journey.

The European Union's ReFuelEU Aviation regulation is encouraging aviation fuel suppliers to switch from kerosene to SAF by requiring them to blend a minimum of 2% SAF with kerosene in 2025, rising to 70% by 2050. However, the International Energy Agency expects planned production capacity worldwide to provide only between 1% and 2% of SAF demand by 2027, leaving airlines facing a major challenge of how to access the SAF they require.

Iberia engaged PwC Spain to analyse whether Spain's SAF producers have the potential to make enough for Spain’s own needs and also potentially for export. SAF is currently made from used cooking oil, farm or forestry waste. Iberia asked PwC Spain to look at both the availability in Spain of biowaste for generating SAF in the short term, and also at the potential for creating synthetic fuel from green hydrogen in the future, a process which is in the very early stage of development.

The airline also wanted to understand the size of the investment needed to build up production capacity in Spain, and to consider how carbon pricing would affect the future cost of SAF which is currently three to five times more expensive than kerosene. The final part of the project was to conduct an economic impact assessment of the potential to create good quality jobs in a new SAF industry.

PwC Spain found that Spain has the potential to not only meet the national demand for SAF by 2050, but also become an exporter, dependent on the availability of agricultural waste and the potential to expand renewable energy production. Building and running the 30-40 production plants required to produce the 5 million tonnes of SAF needed a year could also generate €56 billion for the Spanish economy by 2050 and create 270,000 jobs. An added social impact would be that many of the sites, and therefore jobs, could be created in more sparsely populated rural areas where there is access to bio-waste from farming and food production.

Iberia is now working with fuel producers on ways to accelerate the development of SAF to increase production and bring down the price.