CLIENT
GE Vernova
INDUSTRY
Energy
FEATURING
Carbon markets value chain strategy
A multi-decade carbon markets value chain strategy leveraging GE Vernova’s unique positioning and experience to drive global decarbonization
Six new business opportunities evaluated under two decarbonization scenarios in four regions
Provided an outlook on the 2030 and 2050 carbon markets, along with prime areas of impact
Transparent, verifiable carbon credits make global decarbonization efforts more trustworthy
SITUATION
Global in scope, unprecedented in scale
Climate change is a defining dilemma of our time. It’s a problem so difficult and costly, with so many determining factors — emerging technology, consumer behavior and government policy, to name a few — that it seems unlikely that any one entity can make a meaningful impact.
But not for a company that helps generate a significant portion of the world’s electricity. GE Vernova views decarbonization as both an opportunity and responsibility. To help guide its mission of electrifying the world while simultaneously working to help decarbonize it, the company sought a trusted advisor to assist in understanding market mechanisms that implement carbon pricing — exchanges between entities that produce greenhouse gas emissions and those that remove or reduce them. One such mechanism, carbon offsets, should be deployed to address residual emissions once other decarbonization levers have been exhausted — and yet, this isn’t always the approach taken. Though they’re 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.
GE Vernova knew it could address the core issue of trust in these markets with decarbonization programs that can be measured, verified, reported and exchanged reliably. But it needed to determine the appropriate path to engage.
As complex as it gets
There’s no denying the urgency or intricacy of mass-scale decarbonization. Every industry and region has its own unique energy needs and its own capacity to decarbonize. This is why carbon market mechanisms form a major piece of the puzzle.
But carbon market mechanisms themselves are almost as complex. Government regulations are in a constant state of flux. The cost, trustworthiness and feasibility of existing nature-based solutions, in comparison to engineered solutions like direct air capture, are major factors in their adoption. As a result, it can be a challenge for companies to understand how carbon markets can be a credible part of their overall decarbonization strategy.
SOLUTION
Preparing for decarbonization in an unpredictable environment
The future of decarbonization is a key part of GE Vernova’s mission and vision — evident as General Electric Company prepares to combine its Renewable Energy, Power and Digital businesses into one independent company to help lead the energy transition. The company’s leadership began by challenging their own assumptions. “We needed a trustworthy, fact-driven, independent opinion on what we’d been thinking,” says Gagan Porwal, Chief Commercial and Strategy Leader in Energy Consulting Services at GE Vernova.
PwC assembled a global, multidisciplinary team including members of its sustainability and transformation practices. The group 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. It also identified milestones and trigger points for shifts in national, regional and global trends. Finally, the team identified six new business opportunities — centered around meeting corporate demand, scaling engineered solutions, localization and exploring emerging technologies — based on market trends, optimal timing and financial implications.
"Delivering a decarbonization solution at this scale requires understanding how all these pieces fit together,” says David Linich, Principal, Sustainability, at PwC. “With our experience in complex ecosystems, we were able to bring together the right people and perspectives to drive real results."
Every link in the chain
The analysis outlines two broad areas of focus — physical solutions, which include engineered direct air capture as well as carbon capture and sequestration; and digital solutions for the monitoring, verification and exchange of carbon credits, which are largely software-based. With its vast energy generation capacity and measurement capabilities, GE Vernova is well-positioned to address the former, but the latter meant examining new technologies and partnerships that would expand the company’s capacity and strengthen global decarbonization efforts. One promising area of opportunity is the development of a blockchain-based digital carbon value chain, which can also bring much-needed transparency and credibility to the carbon marketplace.
PwC’s analysis also identifies “no-regret” actions that can position GE Vernova to help address a variety of scenarios in taking a leading position in this space. These provide a reliable foundation in an unpredictable sphere influenced by many factors beyond the company’s control.
RESULTS
The power to transform
GE Vernova has a clear mission in mind — electrifying the world while simultaneously working to decarbonize it. In a space where many of the early entrants are start-ups with little experience or name recognition, its presence alone helps bring credibility to the carbon markets value chain. With an approach focused on building trust, the company aims to set and raise the standards for the entire sector. “GE Vernova is positioned to become a major player in a trustworthy carbon market value chain,” Linich says.
But the most profound outcome may be helping to secure our future. Even if renewable energy overtakes fossil fuels, net zero is far from settled. In sectors where carbon abatement is especially challenging, such as agriculture, chemicals and steel, credible carbon offsets are likely to be a key lever in an overall decarbonization approach. Beyond carbon markets, PwC’s work contributes to GE Vernova’s broader commitment to provable, high-performance sustainability — helping to shape its strategy and improve visibility of its sustainability performance along the way.
As GE Vernova invests for 2050 and well beyond, the value of this initiative lies in a measure of certainty to guide an uncertain future. While there’s no such thing as a carbon crystal ball, GE Vernova is ready to do its part in powering the world’s energy transition with clarity and transparency.
“PwC understands our business, climate and decarbonization, and gives us the clarity and confidence to take aggressive action.”
“PwC delivered one of the most effective experiences I’ve had working with a consulting advisor.”
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