The World Economic Forum has announced that Danfoss has joined the First Movers Coalition (FMC), a global coalition to decarbonize hard-to-abate industries. Danfoss joins the FMC aluminum sector, committing that at least 10% (by volume) of all the company’s primary aluminum procured per year will be low carbon by 2030. Additionally, Danfoss commits to ensuring that at least 50% of all aluminum used annually is composed of secondary aluminum by 2030.
As a member of the FMC, Danfoss joins a group of industry players harnessing purchasing power to create a market for low-carbon aluminum, sending a strong market demand signal for the emerging technologies essential for a net-zero transition. This commitment by members focuses on creating a sustainable value chain for aluminum and achieving a 50% reduction in CO2 emissions from primary aluminum production by 2050. Danfoss has already entered into negotiations and begun contractual agreements with suppliers for low-carbon aluminum.
Ravichandran Purushothaman, President, Danfoss India Region says: “As a sustainable organization serving the world’s energy efficiency needs for 9 decades now, joining FMC is a testimony of Danfoss’ strong commitment towards decarbonization and sustainability at the global level. This development could be an inspiration for Indian manufacturing sector, industry bodies and the govt., for a consortium on this line that will drive the economy of scale for procurement and localization of netzero solutions and make them affordable as well as accessible across value chains. The initiatives like FMC will accelerate India’s net-zero transformation for a greener and sustainable tomorrow.”
Led by the World Economic Forum and the US Government, the FMC targets hard-to-abate sectors including aluminum, aviation, chemicals, concrete, shipping, steel, and trucking, which are responsible for 30% of global emissions. For these sectors to decarbonize at the speed needed to keep the planet on a 1.5-degree pathway, they require low-carbon technologies that are not yet competitive with current carbon-intensive solutions.
Jürgen Fischer, President, Danfoss Climate Solutions, says: “Our customers are increasingly demanding products with a lower carbon footprint – and they’re right to do so. By joining the First Movers Coalition we are responding to this demand by fostering the critical development of low-carbon aluminum production, and thereby accelerating its entry to market. Being part of the coalition also aligns with our own commitment as a leader in the green transition, to achieve carbon neutrality across Danfoss’ global operations by 2030 and to reduce our value chain emissions by 15% by 2030.”
FMC member companies commit to purchasing a percentage of near-zero or zero-carbon solutions from suppliers, which may come at a premium cost. If a critical mass of global companies commits a certain percentage of their future purchasing to clean technologies in this decade, this will create a market tipping point that will accelerate their affordability and drive long-term, net-zero transformation across industrial value chains. The FMC is currently composed of 82 members, all global players in their markets.
Rob van Riet, Interim Head, First Movers Coalition, said: “We are thrilled to welcome Danfoss to the First Movers Coalition, and are eager to work together towards the scaling up of the low-carbon aluminum market globally. Our joint focus will be on surfacing solutions to decarbonize aluminum and accelerate their deployment with committed organizations like Danfoss, aiming to bring these solutions to commercial scale.”
The aluminum industry generates approximately 2% of global emissions , but it also has the strongest potential to become carbon negative by 2050. Switching to low-carbon electricity is the biggest step the industry can take to deliver a sector compatible with net zero targets.
Danfoss has committed to achieve CO2 neutrality in its global operations (Scope 1 & 2) by 2030 – supporting the business ambition to limit global warming to 1.5°C, which has been validated by the Science Based Targets initiative (SBTi), and includes a reduction in value chain emissions (Scope 3) by 15% by 2030. In addition, Danfoss has a dedicated target of reaching 25% emissions reduction from its suppliers by 2030 compared to the 2019 baseline. This commitment is included in the targets of Danfoss’ three step-change initiatives on Decarbonization, Circularity, and Diversity, Equity & Inclusion.
Already Danfoss has seen progress in decoupling environmental impact from business growth by delivering a 7% decrease in Scope 1 and 2 emissions while growing 15% organically in 2022.