Last week Air New Zealand announced plans that should see electric and green hydrogen planes in our skies by 2030. Blenheim-based Sounds Air had already beaten them to it, disclosing last month that by 2026 it would be first in Australasia to receive the 19-seater ES-19 from Sweden’s Heart Aerospace.
It sounds simple but it’s more than just buying an aircraft and the business moves on. Key infrastructure needs to be built, consumers need confidence in the new technology and legacy assets need to be disposed of.
Airlines sit at the intersection of an industry totally reliant on fossil fuels and consumers who are increasing concerned about climate and emissions. Once our world re-opens for travel, long haul flights to far-flung places like New Zealand may become less attractive to consumers concerned about their carbon footprint. Ignoring change and doing nothing isn’t an option.
And it is not just airlines that need to pivot their business for the future.
BHP, the multinational mining company, is working towards a sale of its oil and gas assets. While these interests across Australia, Algeria and the Gulf of Mexico make up over 10 per cent of revenue, it instead wants to focus on metals for electricity infrastructure and the green energy transition.
Investors didn’t see that coming a decade ago. Nor did they see companies like BHP accepting the science around climate change or companies like BP setting zero-carbon targets.
Established technology in high emission industries that are totally dependent on coal will need to change. Take steel production, which accounts for 8 per cent of global greenhouse gas emissions. Truck-maker Volvo-AB is taking delivery of its first “green steel”, where coal is replaced by renewable electricity and hydrogen.
Car companies from Volvo to Ford plan to go fully electric or carbon-neutral in the decade or so ahead. And it makes sense. Not only are consumers tilting towards lower emissions but law makers are making life trickier.
California has announced a ban on internal combustion engine car (ICE) sales by 2035. Europe is looking to do likewise and there’s talk of going a step further by banning ICE cars driving in cities from 2050.
Between consumer demands and regulatory change, companies are getting the message. Prepare for the transition to a lower carbon world or you risk being left holding obsolete industrial plants, out-dated technology or products no one wants to buy.
Climate change means change well beyond weather patterns for virtually every business across the globe. A business ignoring this trend risks being like a film camera maker usurped by digital cameras, a fax machine manufacturer made redundant by the rise of email and fluorescent light producers stranded in the wake of LED technology.
The tidal wave of business change coming doesn’t start and stop with the electric planes for Sound Air and Air New Zealand. If you’re thinking about your investments, including your KiwiSaver, for the next five, 10 or 20 years factor in that change.
Don’t think of it as overnight change happening in a decade’s time, think of it as a decade of change starting now.
(This article was originally published by Stuff September 20, 2021)
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