Climate tech revolution: Industrial scale at digital speed

Every year, the world releases nearly 40 billion tons of CO2, with emissions continuing to rise. To reverse this trend, many industries are optimizing existing processes and boosting efficiency by using less energy, water and raw materials. Just as crucial is the complementary practice of scaling up climate tech, including renewable energies, advanced batteries, clean hydrogen, carbon capture, and other low-carbon innovations. Transitioning to low-carbon technology and driving long-term change requires overhauling traditional business models. This demanding effort will only grow over time, making immediate action essential.

What’s everyone saying?

• 35% of CO2 reductions needed by 2050 rely on technologies that are not yet commercially viable, says the International Energy Agency (IEA). Financing remains a major obstacle to scaling up these mature technologies. But there are others: we also need to speed up innovation and deployment. This is no easy task in an economy that is becoming increasingly complex as it shifts from fossil fuels to a diverse range of renewable energies.

• Time is running out to overcome these obstacles: “A broader and faster roll-out and scale-up of innovative climate-neutral technologies is paramount – the sooner, the better for the climate,” urges Margrethe Vestager, Executive VP of the European Commission.

What do we have to say?

• Climate tech is the next frontier for businesses aiming to decarbonize – and a recent Capgemini Research Institute report shows many organizations are now fully aware of this.

• However, adopting climate tech may drive up product costs: for example, producing low-carbon hydrogen is still 2 to 3 times pricier than conventional hydrogen.

• How much of that cost are companies ready to bear? Not much, it seems. According to the same report by the Capgemini Research Institute, firms are only willing to accept a ~9% “green premium”. Consequently, organizations plan only a modest 7.7% increase in climate tech investment over the next two years.

• Thankfully, technologies like AI or digital twins can help offset these costs by accelerating innovation. These solutions are a “must have” for manufacturing processes to deliver the required efficiencies. The climate tech transition is also a digital transition.

• Digital solutions can also optimize product performance and streamline testing and implementation processes. In this regard, another recent Capgemini study shows an integrated digital toolchain can halve the time-to-market for battery cells.

• While climate tech adoption may come with a price tag short term, it brings substantial benefits in the long run, as a growing number of companies are already finding out.

Who’s doing it right?

• Kouros , an emerging leader in sustainable energy transitions, recently created Hyliko, a world-class heavy mobility platform. Hyliko provides hydrogen and trucks as a service to freight transportation companies, integrating carbon-negative technology with valuable services like truck leasing and maintenance support. An innovative approach, supported by Capgemini, that greatly facilitates the shift from carbon-powered to cleaner freight vehicles.

What’s the bottom line?

Scaling up climate tech requires more than just reducing costs; it demands a complete rethinking of existing processes and the adoption of new habits. Just like choosing a healthier lifestyle to live longer comes with high barriers to entry, so does overhauling traditional business models and deploying climate tech on a large scale. Fortunately, we’ve identified five key ingredients you’ll need for this transformation:

• Balance tech with strategy. Dependable tech needs a strong business model for effective integration. Expert strategy guidance is crucial for leveraging tech to become more efficient.

• Out with the old, in with the new. Embrace innovative business models such as offtake agreements for financial viability and “as-a-service” models to simplify brownfield deployments. And while pilots will remain valuable, they will be created in virtual environments to reduce their costs and pave the way for faster investment and rollout.

• Think digital. Companies often overlook the importance of a digital-first approach. Continuous digital integration helps identify and solve production issues early, optimizing operations as technologies evolve and ensure carbon footprint calculation and traceability. Most of all, scaling up requires shortening deployment cycles, which can only be achieved with robust data, simulation and digital twin capabilities.

• Collaborate with your ecosystem across the value chain to overcome the complexities of climate tech adoption, to secure sourcing and to develop new value pools.

• Don’t forget to thoroughly assess the impact of climate tech adoption on your organization’s existing systems, including impact on overall costs, product performance, reliability, sustainability, and compliance.

To support this transition from ideation to factory setup, organizations need a partner with a diverse array of capabilities. Capgemini, with its expertise in prototyping, first-of-a-kind (FOAK) production, and industrial scale-up, is ideally positioned to guide organizations through their transformation to low-carbon technology.

Looking for more?

• Discover a new initiative with the Defense Advanced Research Projects Agency (DARPA) to investigate the use of quantum computing in the field of carbon capture. This project provides an opportunity for Capgemini to work alongside the US government to advance sustainability efforts and promote a greener future.

• Find out how French low-carbon battery giant Verkor is unleashing the power of digitalization in its gigafactory by watching this panel, recorded last month, at Hannover Messe ‘24, the world’s leading industrial fair.

And you, what are you saying?

How are you approaching climate tech integration? How far along is your organization in reinventing its business models to work toward carbon neutrality? Tell us in the comments section below!