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What does decarbonization mean?

The Decarbonization describes the process of freeing the economy from greenhouse gas emissions, especially carbon dioxide (CO₂). At the heart of this transformation are the switch to renewable energies, the abandonment of fossil fuels, and the promotion of sustainable technologies. This concept is not only a crucial lever in the fight against climate change, but also a central component of the global climate goals, as defined in the Paris Agreement of 2015 were determined.

|  November 20, 2024

🕓 Reading time 10 minutes

Carbon Credits

1. What is decarbonization?

 

Decarbonization means the drastic reduction or elimination of Greenhouse gas emissions from economic and social activities. This includes measures such as:

  • Renewable energy: Use of solar, wind and hydropower instead of fossil fuels.
  • Increased efficiency: Optimization of production and supply chains to minimize energy losses.
  • Technological innovations: Development of low-emission technologies such as CO₂ capture and storage.

The goal: By no later than 2050 Net zero emissions and limit global warming to 1.5°C to limit.

Origin of the term decarbonization

The term Decarbonization comes from English (decarbonization) and describes the reduction or elimination of carbon emissions, particularly in the energy sector. It became central after the 2015 Paris Climate Agreement, when measures to limit global warming to below 2°C were formulated. The term combines "de-" (distance) and "carbon" (carbon) and represents the transition to emission-free energy.

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2. Why is decarbonization important?

 

Climate change is manifested by extreme weather events, rising sea levels, and shrinking ecosystems. The main drivers of these developments are the increasing concentrations of greenhouse gases in the atmosphere. Decarbonization threaten:

  • Irreversible climate changeExceeding the 1.5-degree limit leads to cascading effects such as melting polar ice caps and uncontrollable weather extremes.
  • Economic damage: Destruction of infrastructure, decline in agricultural productivity and rising costs due to natural disasters.
  • Social inequality: Exacerbation of poverty and migration due to climate impacts.

Decarbonization is therefore not only an environmental project, but also an economic and justice project.

3. Which areas have great potential for decarbonization?

1. Decarbonization in industry

The industry causes almost two thirds of global emissions through energy consumption. Possible measures:

  • Use of renewable energies.
  • Introduction of low-emission technologies such as hydrogen production.
  • Compensation of unavoidable residual emissions through climate protection projects.

2. Decarbonization of buildings

Outdated buildings are among the largest energy consumers. Three approaches to reducing energy use:

  • Energy-efficient renovation: Improvement of insulation and energy efficiency.
  • Switching to renewable heating systems like heat pumps.
  • use synthetic energy source for fossil heating systems.

3. Decarbonization in transport

Transport contributes significantly to CO₂ emissions. Strategies for reduction:

  • Expansion of the E-mobility and sustainable means of transport.
  • Promotion of Traffic avoidance and shift to low-emission alternatives.
  • Introduction of stricter Emission limits.
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4. How can companies contribute to decarbonization?

Companies play a central role in Decarbonization. Not only can you create your own CO₂ footprint reduce emissions, but also act as a pioneer of sustainable innovations. Decarbonization The following steps are carried out, among others:

1. CO₂ accounting

Companies must first identify and quantify their emission sources. This is done via the CO₂ accounting along the entire value chain:

    • Scope 1: Direct emissions from own or controlled sources (e.g. production).
    • Scope 2: Indirect emissions from the generation of purchased electricity, heat or steam.
    • Scope 3: All other indirect emissions along the supply and use chain.

This analysis provides the basis for prioritizing effective measures to reduce emissions.

2. Objectives

After the analysis, companies should set science-based targets (Science-Based Targets, SBTs) that are consistent with the Paris climate goals.

3. Implementation of measures

Companies should invest in emission-reducing technologies and processes. Key measures include: 

  • Renewable energies: switching to solar, wind or hydropower.
  • Energy efficiency: optimization of production processes and building technology.
  • Circular economy: reducing waste and promoting resource-efficient practices.
  • Partnerships: Working with suppliers to reduce emissions throughout the supply chain.

4. Transparency and monitoring

Regular monitoring and reporting of emissions data are critical to measuring progress and being transparent with stakeholders. This builds trust and enables timely adjustments to the strategy.

  1.  

Example: Ørsted

The Danish energy company reduced its emissions from 2006 to 2019 by 87% and transformed from a coal-intensive provider to the market leader in offshore wind energy. Ørsted shows that Decarbonization is not only possible but also economically profitable.

5. Conclusion

The Decarbonization describes the process of freeing the economy and society from CO₂ emissions in order to limit global warming and create a sustainable future. It includes the transition to renewable energies, the optimization of processes, and the introduction of innovative technologies. Despite challenges such as high investment costs and technological change, there are also many advantages: Companies with low emissions benefit from better market opportunities, cost savings, and increased innovation.

Given the urgency of climate change, it is imperative that companies act now. Early investments in Decarbonization not only secure regulatory advantages, but also strengthen the competitive position and promote the creation of a future worth living.

A decisive step towards Decarbonization for companies is the precise measurement and analysis of the CO₂ footprint. Green Vision Solutions We support you in exactly this:

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From the quintessence of our practical experience, our team at Green Vision Solutions has developed a clear and TÜV-certified process – and has already successfully applied it to over 200 companies.

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Sources

Ørsted – Sustainable transformation and CO₂ reduction: https://orsted.de/presse-media/news/2024/01/orsted-corporte-knights-nachhaltigkeit Accessed on November 20, 2024

Federal Ministry for Economic Cooperation and Development (BMZ) – Reducing greenhouse gas emissions: https://www.bmz.de/de/themen/klimawandel-und-entwicklung/minderung Accessed on November 20, 2024

Plan A – What is Decarbonization?: https://plana.earth/de/glossary/decarbonization Accessed on November 20, 2024

ClimatePartner – Decarbonization: https://www.climatepartner.com/de/knowledge/glossary/decarbonization Accessed on November 20, 2024

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ACTING NOW IS WORTH IT

When it comes to sustainability or ecological viability, climate change and human influence on it are central, as in hardly any other area can environmental impacts be measured and documented so well with figures. The indicator here is anthropogenic emissions, i.e., greenhouse gas emissions caused by humans that contribute to global warming.

What does this mean in the context of sustainable business? Every company should keep its greenhouse gas emissions – which are unavoidable in the provision of business services – as low as possible. Sustainable business cannot be achieved at the push of a button, but a continuous optimization process based on ecological indicators is the crucial approach.

By recording the greenhouse gas emissions generated by your company, product, or service, you can identify potential for emission reduction. This enables you to optimize your processes and also save costs. You communicate to your customers and suppliers that you take responsibility for the emissions for which you are responsible. This allows you to build trust and adapt to the requirements of your business partners.

Acting now is worthwhile

Knowing your emissions will prepare you for predictable, more stringent regulatory requirements, such as increasing greenhouse gas emissions taxes or the mandatory implementation of investment-intensive measures. Incorporating this component into your corporate risk management is essential in the long term.

Due to the ongoing social demand for Climate protection, even the European Central Bank under Christine Lagarde has now taken the inevitable course of giving capital preferential treatment to companies that can demonstrably Climate protection The same trend is evident in the capital flow of large asset managers, such as BlackRock. Their chairman, Larry Fink, wrote in a letter to his CEOs that companies that do not address environmental issues seriously and transparently are no longer viable and will therefore no longer be invested in.

Climate protection Therefore, operating your company professionally and verifiably is inevitable in the near future. If your company is among the first to address this situation, you will establish a pioneering effect that prepares you for the foreseeable legal requirements, results in lower capital costs in the long term, and guarantees market advantages!

ACTING NOW IS WORTH IT

When it comes to sustainability or ecological viability, climate change and human influence on it are central, as in hardly any other area can environmental impacts be measured and documented so well with figures. The indicator here is anthropogenic emissions, i.e., greenhouse gas emissions caused by humans that contribute to global warming.

What does this mean in the context of sustainable business? Every company should keep its greenhouse gas emissions – which are unavoidable in the provision of business services – as low as possible. Sustainable business cannot be achieved at the push of a button, but a continuous optimization process based on ecological indicators is the crucial approach.

By recording the greenhouse gas emissions generated by your company, product, or service, you can identify potential for emission reduction. This enables you to optimize your processes and also save costs. You communicate to your customers and suppliers that you take responsibility for the emissions for which you are responsible. This allows you to build trust and adapt to the requirements of your business partners.

Acting now is worthwhile

Knowing your emissions will prepare you for predictable, more stringent regulatory requirements, such as increasing greenhouse gas emissions taxes or the mandatory implementation of investment-intensive measures. Incorporating this component into your corporate risk management is essential in the long term.

Due to the ongoing social demand for Climate protection, even the European Central Bank under Christine Lagarde has now taken the inevitable course of giving capital preferential treatment to companies that can demonstrably Climate protection The same trend is evident in the capital flow of large asset managers, such as BlackRock. Their chairman, Larry Fink, wrote in a letter to his CEOs that companies that do not address environmental issues seriously and transparently are no longer viable and will therefore no longer be invested in.

Climate protection Therefore, operating your company professionally and verifiably is inevitable in the near future. If your company is among the first to address this situation, you will establish a pioneering effect that prepares you for the foreseeable legal requirements, results in lower capital costs in the long term, and guarantees market advantages!

ACTING NOW IS WORTH IT

When it comes to sustainability or ecological viability, climate change and human influence on it are central, as in hardly any other area can environmental impacts be measured and documented so well with figures. The indicator here is anthropogenic emissions, i.e., greenhouse gas emissions caused by humans that contribute to global warming.

What does this mean in the context of sustainable business? Every company should keep its greenhouse gas emissions – which are unavoidable in the provision of business services – as low as possible. Sustainable business cannot be achieved at the push of a button, but a continuous optimization process based on ecological indicators is the crucial approach.

By recording the greenhouse gas emissions generated by your company, product, or service, you can identify potential for emission reduction. This enables you to optimize your processes and also save costs. You communicate to your customers and suppliers that you take responsibility for the emissions for which you are responsible. This allows you to build trust and adapt to the requirements of your business partners.

Acting now is worthwhile

Knowing your emissions will prepare you for predictable, more stringent regulatory requirements, such as increasing greenhouse gas emissions taxes or the mandatory implementation of investment-intensive measures. Incorporating this component into your corporate risk management is essential in the long term.

Due to the ongoing social demand for Climate protection, even the European Central Bank under Christine Lagarde has now taken the inevitable course of giving capital preferential treatment to companies that can demonstrably Climate protection The same trend is evident in the capital flow of large asset managers, such as BlackRock. Their chairman, Larry Fink, wrote in a letter to his CEOs that companies that do not address environmental issues seriously and transparently are no longer viable and will therefore no longer be invested in.

Climate protection Therefore, operating your company professionally and verifiably is inevitable in the near future. If your company is among the first to address this situation, you will establish a pioneering effect that prepares you for the foreseeable legal requirements, results in lower capital costs in the long term, and guarantees market advantages!

ACTING NOW IS WORTH IT

When it comes to sustainability or ecological viability, climate change and human influence on it are central, as in hardly any other area can environmental impacts be measured and documented so well with figures. The indicator here is anthropogenic emissions, i.e., greenhouse gas emissions caused by humans that contribute to global warming.

What does this mean in the context of sustainable business? Every company should keep its greenhouse gas emissions – which are unavoidable in the provision of business services – as low as possible. Sustainable business cannot be achieved at the push of a button, but a continuous optimization process based on ecological indicators is the crucial approach.

By recording the greenhouse gas emissions generated by your company, product, or service, you can identify potential for emission reduction. This enables you to optimize your processes and also save costs. You communicate to your customers and suppliers that you take responsibility for the emissions for which you are responsible. This allows you to build trust and adapt to the requirements of your business partners.

Acting now is worthwhile

Knowing your emissions will prepare you for predictable, more stringent regulatory requirements, such as increasing greenhouse gas emissions taxes or the mandatory implementation of investment-intensive measures. Incorporating this component into your corporate risk management is essential in the long term.

Due to the ongoing social demand for Climate protection, even the European Central Bank under Christine Lagarde has now taken the inevitable course of giving capital preferential treatment to companies that can demonstrably Climate protection The same trend is evident in the capital flow of large asset managers, such as BlackRock. Their chairman, Larry Fink, wrote in a letter to his CEOs that companies that do not address environmental issues seriously and transparently are no longer viable and will therefore no longer be invested in.

Climate protection Therefore, operating your company professionally and verifiably is inevitable in the near future. If your company is among the first to address this situation, you will establish a pioneering effect that prepares you for the foreseeable legal requirements, results in lower capital costs in the long term, and guarantees market advantages!

ACTING NOW IS WORTH IT

When it comes to sustainability or ecological viability, climate change and human influence on it are central, as in hardly any other area can environmental impacts be measured and documented so well with figures. The indicator here is anthropogenic emissions, i.e., greenhouse gas emissions caused by humans that contribute to global warming.

What does this mean in the context of sustainable business? Every company should keep its greenhouse gas emissions – which are unavoidable in the provision of business services – as low as possible. Sustainable business cannot be achieved at the push of a button, but a continuous optimization process based on ecological indicators is the crucial approach.

By recording the greenhouse gas emissions generated by your company, product, or service, you can identify potential for emission reduction. This enables you to optimize your processes and also save costs. You communicate to your customers and suppliers that you take responsibility for the emissions for which you are responsible. This allows you to build trust and adapt to the requirements of your business partners.

Acting now is worthwhile

Knowing your emissions will prepare you for predictable, more stringent regulatory requirements, such as increasing greenhouse gas emissions taxes or the mandatory implementation of investment-intensive measures. Incorporating this component into your corporate risk management is essential in the long term.

Due to the ongoing social demand for Climate protection, even the European Central Bank under Christine Lagarde has now taken the inevitable course of giving capital preferential treatment to companies that can demonstrably Climate protection The same trend is evident in the capital flow of large asset managers, such as BlackRock. Their chairman, Larry Fink, wrote in a letter to his CEOs that companies that do not address environmental issues seriously and transparently are no longer viable and will therefore no longer be invested in.

Climate protection Therefore, operating your company professionally and verifiably is inevitable in the near future. If your company is among the first to address this situation, you will establish a pioneering effect that prepares you for the foreseeable legal requirements, results in lower capital costs in the long term, and guarantees market advantages!

ACTING NOW IS WORTH IT

When it comes to sustainability or ecological viability, climate change and human influence on it are central, as in hardly any other area can environmental impacts be measured and documented so well with figures. The indicator here is anthropogenic emissions, i.e., greenhouse gas emissions caused by humans that contribute to global warming.

What does this mean in the context of sustainable business? Every company should keep its greenhouse gas emissions – which are unavoidable in the provision of business services – as low as possible. Sustainable business cannot be achieved at the push of a button, but a continuous optimization process based on ecological indicators is the crucial approach.

By recording the greenhouse gas emissions generated by your company, product, or service, you can identify potential for emission reduction. This enables you to optimize your processes and also save costs. You communicate to your customers and suppliers that you take responsibility for the emissions for which you are responsible. This allows you to build trust and adapt to the requirements of your business partners.

Acting now is worthwhile

Knowing your emissions will prepare you for predictable, more stringent regulatory requirements, such as increasing greenhouse gas emissions taxes or the mandatory implementation of investment-intensive measures. Incorporating this component into your corporate risk management is essential in the long term.

Due to the ongoing social demand for Climate protection, even the European Central Bank under Christine Lagarde has now taken the inevitable course of giving capital preferential treatment to companies that can demonstrably Climate protection The same trend is evident in the capital flow of large asset managers, such as BlackRock. Their chairman, Larry Fink, wrote in a letter to his CEOs that companies that do not address environmental issues seriously and transparently are no longer viable and will therefore no longer be invested in.

Climate protection Therefore, operating your company professionally and verifiably is inevitable in the near future. If your company is among the first to address this situation, you will establish a pioneering effect that prepares you for the foreseeable legal requirements, results in lower capital costs in the long term, and guarantees market advantages!

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