Reduce, reuse, recycle: How to make decarbonisation good for business

euronews (in English)

By 2030, 53% of the world’s energy input will be wasted as excess heat. How can we put this to good business use?

Transcript

00:00We need to get the entrepreneurial spirit back in Europe. That could supply the whole

00:06heat supply for Frankfurt in 2030. So it's really just good business.

00:17Welcome to The Big Question, the series from Euronews addressing some of the biggest topics

00:21on the business agenda. I'm Hannah Brown, and today I'm joined by CEO and President

00:25of Danfoss, Kim Fausing.

00:27So thank you very much for joining us. We hear a lot about Europe's struggling competitiveness

00:31and the need for less but better regulation to improve the situation. But in your opinion,

00:36what else can European businesses do to become more competitive?

00:39So what can we do in Europe? I think there are several things we need to do. We need

00:43to get the entrepreneurial spirit back in Europe. We need to get investments and believe

00:50in the future back. So we need to invest more, change costs money. And I would like to say

00:55that, you know, in a Danfoss perspective, one of the big opportunities I think we have

01:00when we talk competitiveness is really competitive decarbonisation. We have it in our genes.

01:08In Europe, we have the technologies here, and it can make a very big difference on competitiveness.

01:13And actually, just to sum it up, I think it is also the right perspective for decarbonisation

01:21because we would not like to decarbonise and become not competitive and not being able

01:25to compete out there.

01:26So can you give me a little example of exactly what does competitive decarbonisation look like?

01:37What I'm talking about is really this mainstream decarbonisation, and it starts with efficiency

01:45in our infrastructure. So first example could be sort of this basic energy efficiency story

01:50is that today, you know, most electrical motors that are in all sorts of industrial

01:56applications are on off. So it means either they run 100% or they are stopped 100%. That's

02:02very inefficient. If you combine it with a variable speed drive, Europe could save, you

02:08know, 10 billion euro just for that one single base application. And you know, it's a huge

02:16saving and it's all competitiveness in the end of the day. And for the sector coupling,

02:20where we use a lot of the excess heat being generated, so that would be take data centres,

02:26they are growing fast. And the big thing here is how do we use all that energy? And if we

02:31would just integrate that excess heat being produced by the data centres in the proximity

02:37of Frankfurt, that could supply the whole heat supply for Frankfurt in 2030, right?

02:43So it is very, very powerful, right? That's what we mean with competitive decarbonisation.

02:49For businesses that want to go down this path, what do they need to be thinking about to

02:52make this transition?

02:53We are decarbonising Danfoss as fast as we can. And it's going very well, by the way.

02:58We have very large sites that are already carbon neutral today. So what they need to

03:03think about is to find all the projects where you have very short payback time. So it's

03:07really just good business. So when we decarbonise our large manufacturing sites, for example,

03:13we don't do any projects that has a payback time in more than three years.

03:17Oh, wow.

03:18So it means, you know, de facto today Danfoss is more profitable because we have been doing

03:23decarbonisation projects. And we actually have around 200 projects continuously running

03:28in the company. Example, now we are sitting in the proximity of our big headquarter site

03:33where we have 250,000 square metres on the roof. We have there reduced 70% of our heat

03:39consumption and we are not less people or producing less there. We have saved around

03:4450% of our electricity consumption. And of course, that's a lot of money and it's money

03:51we can use for investing in innovation or whatever we do with it.

03:54Yeah, that's brilliant. And you know, you said that you don't do anything that takes

03:58more than three years to pay back. You know, that's quite a short return on investment.

04:03So I mean, do you think for maybe smaller businesses, it is feasible? It is an investment

04:08that all businesses can make?

04:10Yes, it is. And I think the challenge for smaller businesses is that, you know, if you

04:15are a very small company, you do not have the same resources as Danfoss or somebody

04:20else. And therefore, it's maybe hard to sometimes know exactly what you can do. But the examples

04:26are there in all sectors. There are great projects you can do. It's the same story,

04:31short payback time and make the company more competitive. You know, I think we have to

04:35be better in the different countries to actually maybe support the smaller mid-sized companies

04:43with the systematic approach and the insights of how to, like we try to do here in Denmark.

04:49But it's definitely something everybody can do.

04:51Okay, brilliant. And thinking about the technologies needed, does everything that's needed already

04:56exist or what still needs to come?

04:58I would say a vast majority of what we need is here. It's existing. We can do it. Especially

05:04if you talk about this base decarbonization or the competitive decarbonization, the short

05:10payback time, that is something we have already. We can do it now. We actually do it as we

05:15speak. So I would say all the technology is there. So I'm not concerned about the technology.

05:21I'm very concerned about the lack of consistent regulation because, you know, right now we

05:27have a fast move on launching renewables. I also think back to COP28, it seems that

05:34we are almost trailing towards tripling the renewables by 2030, but we are not picking

05:41up on energy efficiency. And that is needed if we want to hit our targets, right? So that's

05:46really the big thing. And it's also where we have the short payback times and so on.

05:50So I think my concern is that we do not have today an effective and longer term regulation

06:02and attractive incentive schemes, where if some of our small companies, they find the

06:07projects that they could maybe have a tax reduction or something that they could understand

06:12and apply immediately, right? That's what we need. And that's what we are arguing how

06:16to get.

06:17So thinking about these targets, if, you know, kind of regulation and incentives get to the

06:24level that you know that you're suggesting, do you think we will achieve targets on time

06:30or when do you think is the most feasible?

06:32I think we could achieve targets on time. I think the power and the knowledge is there.

06:39I think what is unfortunate right now is we have landed this stop and go. So let me give

06:44you a few examples. You know, EV market in Europe is right now in a distress or in trouble.

06:51Heat pump market is down 50% in Germany year over year. Actually, I just saw a survey where

06:59they looked at 10 largest heat pump markets in Europe and 9 out of 10 are not seeing any

07:08development in the heat pump side, whereby we know it's the most effective, at least

07:13one of the most effective technologies, right? We see it in large heat pumps and in industrial

07:18applications because companies like Danfoss, we commit to science-based targets and most

07:23companies, large companies do that. And that's actually really growing fast, large industrial

07:27heat pumps. But if you go to the residential side, it's way down, right? The same for district

07:33heating, it's down and therefore we need to get that back on track.

07:38Yeah, brilliant. Thank you so much for your time today. It's been really fascinating to

07:41talk to you.

07:43Thank you very much. Thanks for the invite.

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