5 Key Sustainability Trends for 2023: Electrification, Renewable Energy, and More
As the world continues to grapple with the pressing issues of climate change and energy transition, the World Economic Forum‘s 2023 Annual Meeting in Davos set the marker for the importance of sustainability in the coming year. The Giving to Amplify Earth Action (GAEA) initiative, launched at the meeting, aims to fund and grow partnerships between the public, private, and philanthropic sectors in order to unlock the $3 trillion of financing needed annually to achieve Net Zero emissions and other environmental targets.
This emphasis on sustainability is not limited to just global efforts. In Australia, both the Federal Government and individual state governments have set ambitious targets for emissions reduction and achieving Net Zero, further driving local councils and organisations to proactively work towards sustainability.
In light of this, we anticipate the following five key sustainability trends to drive further business transformation in 2023, and beyond:
1. Harnessing the Power of Electrification to Achieve Net Zero Emissions Targets
Electrification is expected to be a major sustainability trend in 2023, as the world works towards meeting Paris Climate goals by 2050. The WEF has given prominence to electrification, terming the 2020s as the “Electric Decade”.
According to WEF, to meet the Paris Climate goals by 2050,
- 30% of final energy consumption should shift to direct electricity by 2030, and at least 50% by 2050.
- This requires 3x growth in clean power capacity and infrastructure by 2030 and 9x growth by 2050.
The push towards electrification is also evident in Australia, where the Australian Renewable Energy Agency (ARENA) expanded its mandate in 2022 to support energy efficiency and electrification technologies aimed at reducing greenhouse gas emissions. These technologies include electric vehicle charging systems, heat pumps, and more.
With ARENA’s expanded mandate, companies in Australia will be looking to ramp up their electrification efforts this year, and the acceleration of electrification in the country is poised to continue in the coming years.
2. Heat Pump Sales to Experience a Global Boom
As part of the global trend towards electrification, heat pumps are becoming increasingly popular as organisations seek out more energy-efficient and cost-effective ways to heat their buildings and water. In fact, according to a report by the International Energy Agency (IEA), worldwide sales of heat pumps are expected to increase dramatically in the coming years due to the global energy crisis. The IEA report, The Future of Heat Pumps, goes on to state that heat pumps are a highly efficient and environmentally-friendly alternative to fossil fuels.
In Australia, air-source heat pumps saw a 76% increase in 2021 and are estimated to have grown by 46% in 2022. To drive the adoption of heat pumps, various subsidies and incentives are already in place, such as the Federal Government’s Small-scale Renewable Energy Scheme and the state government’s Solar Homes scheme in Victoria. With the growing focus on energy efficiency and electrification, 2023 and beyond promise to be exciting times for the heat pump industry.
All the pieces are in place for the heat pump market to take off, reminiscent of the trajectory we have seen in other key climate technologies like solar PV and electric vehicles.
– IEA Executive Director Fatih Birol
3. Local Councils and Organisations to Accelerate Emissions Reduction Efforts
In recent years, reducing greenhouse gas emissions has become a top priority for governments in Australia, with legislation passed in 2022 mandating a 43% reduction in emissions compared to 2005 levels by 2030 and a commitment to reach Net Zero by 2050. Soon, state governments like Queensland, Victoria and New South Wales also set ambitious targets, with Queensland committing to 30% emissions reduction by 2030 (compared to 2005 levels) and Victoria committing to 75% -80% reduction compared to 2005 levels, and New South Wales comitting to 70% reduction compared to 2005 levels.
Increased Emphasis on Developing Comprehensive Net Zero Roadmaps
To align with Federal and State Government targets, local councils and organisations have increased their efforts in reducing emissions. This has led to a heightened focus on developing comprehensive Net Zero Roadmaps as a key initiative, along with other initiatives like calculating baseline emissions, investing in renewable energy, and promoting energy efficiency, to achieve the ultimate goal of reaching net zero emissions.
A prime example of this is the launch of Australia Post‘s 2025 Sustainability Roadmap, making it the first Commonwealth government business enterprise to commit to achieving Net Zero greenhouse gas emissions by 2050.