It’s fantastic to see that greenhouse gas emissions in Aotearoa New Zealand fell for a third consecutive year in 2022. Gross emissions at 78.4 million tonnes CO2-equivalent were at the lowest level in the 21st century.
Official figures lag quite a long way behind. But it’s clear we are starting to see emissions reductions from a few areas kicking in. Wind and solar in Aotearoa New Zealand currently make up about 7% of electricity generation, a big increase in recent years, and we are yet to see all the new capacity, such as Lodestone’s solar farms, coming online.
Electric vehicles are starting to figure in the transport mix too, with the Clean Car Discount leading to a rapid increase in sales of both new and used EVs and hybrid vehicles. Since the Clean Car Discount was repealed in late 2023, sales of cleaner vehicles have plummeted, but the initiative has kickstarted the EV supply chain in our country at long last, and every trip made in an EV is one less made in a fossil fuel vehicle.
These are certainly positive points. We are bending the emissions curve. However, it’s apparent we need to do a lot more and quickly. Rapid deployment of now well-established technologies like wind, solar and electrified transport is necessary, but will not of itself suffice if we are to have any chance of keeping the planet within 1.5 degrees of warming.
In fact, looking outside Aotearoa New Zealand the climate landscape looks rather more bleak. Atmospheric concentration of carbon dioxide has just seen its highest ever 12-month increase, up 4.7 parts per million to 426. The world has also just spent its first ever 12-month period above the 1.5 degree threshold.
That’s why the Climate Change Commission is calling for more ambitious emissions reduction targets.
At the Climate Venture Capital Fund, we invest in the companies that can deliver faster and greater emissions reductions than we have seen to date. Many of our investments are in so-called “hard to abate” emissions areas, which have proved largely resistant so far. Examples include steel, concrete, chemicals, plastics, process heat (for manufacturing), shipping and aviation. (For Aotearoa New Zealand, another “hard-to-abate” emissions source is the country’s largest – methane from ruminant livestock – and one we are studying closely.)
Another source of emissions reduction will come from “decarbonising everything”. This means transforming everyday products and services onto a much lower emissions footing.
An example is our investment in Cleanery (which is also a SBN investor / member).
It targets a major emissions category – cleaning and personal care products like hand wash that are plastic and water heavy.
The impact is simple. Every refill you use of Cleanery powdered products around your household means a competing product isn’t required. Typically, the competition is selling single-use plastic bottles, which are mainly filled with water and come with a hefty carbon footprint. Cleanery, plus a bottle refilled with water from your own tap, equals emissions savings of around 99% on a like-for-like basis.
The product is lightweight (~16g makes a 500mL bottle), so transport isn’t emissions-intensive. It’s so small there is hardly any space needed for inventory. The plastic required for a sachet refill is just 1% of a single-use bottle: the more times you re-use your bottle, the more plastic you save. And as its product ingredients are all natural and biodegradable, it’s even kinder on our waterways. Boom!
Cleanery is an example of a next generation product with intrinsically lower emissions due to its powdered format.
Investing in this kind of climate impact really works. It’s going to drive the next generation of emissions reduction. And as the businesses involved grow and prosper, their investors stand to benefit.
We’re currently taking expressions of interest from prospective investors in our second Climate Fund, known as the Climate VC Fund Extension or CVCFe.
If you would like further information on CVCFe, please get in touch.
Rohan MacMahon is a partner in the Climate Venture Capital Fund, a member of SBN.