A group of major international corporations has urged governments to speed up the electrification of business to reduce reliance on “volatile fuel markets”, Reuters reported today, citing a letter penned by the heads of the companies.
“Continued reliance on volatile fuel markets exposes economies to disruptions that drive price spikes, destabilise supply chains and delay investment,” the companies wrote in the letter. The group wrote. There were 112 signatories to the letter, including Ikea, Nestle, Volvo Cars, Nikon, Iberdrola, and Uber. The group has some $1.5 trillion in combined annual revenues, Reuters noted.
Calls for the electrification of everything have intensified since the start of the war between the United States, Israel, and Iran, with the motive changed from emission reduction to energy security. Proponents of electrification claim that reliance on electricity reduced energy supply uncertainty stemming from geopolitical developments.
While there is some merit to the argument in favor of electrification, reliable electricity – the kind that businesses need – still comes overwhelmingly from hydrocarbons plus nuclear, meaning the global energy system remains dependent on supply chains vulnerable to adverse geopolitical events.
Still, business leaders appear convinced that the successful and reliable electrification of the economy is only a question of government policies. “To reach the required scale, the transition to electrification notably needs to be accelerated through predictable and enabling policy frameworks,” according to H&M’s senior sustainability climate manager, Kim Hellström, as quoted by Reuters.
Last week, Reuters released a poll suggesting that the majority of global business leaders expect their operations to be “largely electrified” by 2035. The poll was conducted by Public First, under commission from three climate change-focused organizations among business leaders in 18 countries. The survey also found that 90% of respondents believe switching from hydrocarbons to wind and solar would be conducive to economic growth.
By Irina Slav for Oilprice.com
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