If Europe is to be a climate neutral continent in 2050, the economy will need other raw materials: most cars should be battery powered instead of gasoline or diesel. Plastics manufacturers need to recycle more instead of always processing new crude oil. And steel mills want to burn hydrogen instead of coal coke. “The race for sustainability has begun,” writes consultancy firm Boston Consulting Group (BCG): As more governments and investors stand in the way of climate-damaging economies, many companies need to change.
And yet, the BCG authors are now limiting expectations a bit: the need for sustainable resources is likely to grow faster than supply in many areas, management consultants warn. “An era of sustainability scarcity awaits.” Many impending shortages are already visible today. It’s like a warning to business and government: those who fail to take precautions may initially run out of raw material for change.
For example, several large fashion manufacturers have announced that they want to process only sustainably grown cotton by 2025. But BCG has concerns: more recently, only a fifth of the world’s cotton has been produced sustainably. . The supply will increase “probably not fast enough to meet demand,” predicts the consulting firm. Initially, it costs farmers a lot of money to switch to sustainable cultivation.
The situation is similar with recycled plastic: many consumer goods manufacturers want to use more recycled plastic in their packaging. But at least until 2025, demand for recycled PET is expected to greatly exceed supply, according to BCG. After all: Companies like Nestlé or Unilever have already made several millions available in venture capital through funds so that more recycling systems can be created around the world and the supply can increase.
Businesses are not exposed to impending shortages without protection
Regarding the development of the automotive industry, the authors refer to researchers from the American company Cairn Energy Research. According to this, battery makers in 2030 will need three times more lithium or nickel, cobalt or manganese than what is currently available from these resources. “This poses a significant risk for companies that manufacture electric vehicles and energy storage systems,” warns the consulting firm.
Of course, companies are not at the mercy of these threatened shortages – on the contrary: they can also be turned into a competitive advantage, writes BCG. For example, automakers such as VW or Tesla have long-term contracts with commodity companies to ensure sufficient quantities of essential metals. “To benefit from sustainability, a company must act quickly,” the authors conclude.
This is also the case for hydrogen, which – generated with a lot of green electricity – could in the future power planes and ships, fuel chemical factories and steel plants, so that these branches of the economy have finally, alternatives to fossil resources. BCG predicts that in the coming decades, the world will have to produce 100 to 200 times more “green” hydrogen than today. But the capacities are still limited to build the necessary electrolysis systems, specifies the consulting firm. And it takes a lot of green electricity to produce hydrogen in a climate neutral way.
However, it can be said that the first systems and intermediate steps are emerging in the local industry. For example, the oil company Shell recently commissioned a hydrogen electrolyzer at Germany’s largest refinery in the Rhineland. Companies such as BP or Evonik are establishing partnerships in order to be able to use “green” hydrogen from northern Germany in the industry in the Ruhr in the future. And steelmakers like Thyssenkrupp or Salzgitter are considering new factories that initially process iron ore with natural gas instead of coal; which saves part of CO une emissions. As soon as “green” hydrogen becomes available on a large scale and at a lower cost, it will replace natural gas. The State wants to promote the rise of the hydrogen economy with several billion euros, and international partnerships are also to be created.
But what can companies do if their CO₂ emissions cannot be reduced quickly – for example because the necessary technologies are still lacking? More and more companies are buying certificates that are supposed to guarantee that the ton of greenhouse gases emitted is offset elsewhere – for example through international reforestation projects. BCG now predicts that even these so-called carbon credits will likely be scarce in the next ten years. So obviously the pressure to change.