Wednesday, December 30, 2009

This promises to be the moment when green goes mainstream

For the past two years, one phrase has appeared so often on BusinessGreen.com that we really ought to use it as a tag line. The details vary depending on the story, but it always tends to run a little something like this: "the product/project/car will be available from/come online in 2010/11/12".
Regardless of the unsatisfying fudge delivered at Copenhagen and the fact that the negotiations to deliver a binding deal will now dominate next year in the same way that the build up to Copenhagen dominated the past 12 months, 2010 marks the beginning of a critical period in the development of the low-carbon economy. This promises to be the moment when green goes mainstream.

Some will argue that this has already happened and if Copenhagen demonstrated one thing conclusively it is that climate change and the environment are now firmly entrenched as a central feature of the global political narrative. We might not be in agreement on how to tackle it, but we are in agreement that it is an unprecedented and potentially catastrophic challenge, and that it provides unprecedented and potentially gargantuan opportunities for the business community.

But if low-carbon thinking has become a normalised component of political and corporate thinking over the past three or four years, 2010 is the year when it really begins the long journey towards changing both the way businesses operate and people live.

Take electric vehicles as just one example. For the last couple of years, electric cars have been largely synonymous with the G-Wiz and other small quadricycles, which while highly successful will remain unlikely to break into the mainstream. All that will change in 2010 as the first wave of electric vehicles from conventional car manufacturers hit the roads. Nissan will launch the all-electric Leaf next year, while Peugeot, Mitsubishi, BMW, Daimler and others are all set to start selling electric vehicles either next year or in early 2011. Perhaps most significantly, GM looks set to win the race to launch a plug-in hybrid with the first Chevy Volt's slated to roll off the production line in late 2010.

The industry will be watching closely to see how these cars fare, but with early trials promising and generous incentives in place from governments around the world the prospects are good, not least because, electric engine aside, they vary little from conventional cars. Some of these zero emission electric vehicles will boast top speeds in excess of 100 miles per hour and ranges of between 100 and 150 miles between charging. They will work for most people for most journeys. Moreover, GM's plug in hybrid, which will be rapidly followed by rival models from Toyota and others, will allow drivers to travel 40 miles before the conventional engine kicks in, providing staggering fuel efficiency and an overall range of 300 miles.

This phenomenon is being repeated in countless industries. In 2010, mainstream energy companies will continue to accelerate investment in renewable energy and more and more wind farms, solar parks, biomass plants and even marine energy devices will come online. Similarly, we will see more airlines undertaking test flights utilising blends of biofuel, more technology firms debuting devices that use ever lower amounts of power, and more businesses re-engineering supply chains and refurbishing buildings to cut their emissions.

It seems that in a way the car companies were right when they used the excuse that it took them years to develop new low-carbon vehicles in order to avoid more demanding emission standards. Businesses really started to think about the imperative to develop cleaner and more sustainable products back in 2006, and now, precisely on schedule, a wave of increasingly mainstream clean technologies is arriving.

Policy measures will also continue to accelerate the adoption of these technologies, most notably in the UK in the form of the Carbon Reduction Commitment and the Clean Energy Cashback feed-in tariff scheme, both of which come into effect in the spring and both of which should serve to further normalise board-level interest in energy efficiency and the installation of small-scale renewable energy systems.

And there will be further evidence of the mainstreaming of environmental issues in May (or possibly March) when climate change policy promises to play a surprisingly prominent role in the British election.

Meanwhile, on the other side of the Atlantic, it is currently looking just about odds on that President Obama will win his tussle with the Senate and get a US climate bill passed at some point during the first few months of the year.

None of this is to suggest that 2010 will deliver a genuine step change in the global economy's development of low-carbon technologies and business models. The high-profile 10:10 campaign for everyone to cut emissions by 10 per cent in 2010, for example, is a well intentioned pipe dream.

But the next 12 months will fire the starting pistol on a decade which, if the pace of technical development continues to accelerate at its current rate, will ensure that the concept of a green business becomes meaningless. Not because they start to disappear, but because with lower carbon businesses dominating the mainstream virtually all businesses will be striving to be as green as possible.

F3DM start selling its first electric car

Chinese battery and car maker BYD (1211.HK), backed by U.S. billionaire Warren Buffet, said it has raised its 2010 sales target, as it prepares to roll out its first electric cars.

BYD, 10 percent owned by Warren Buffett's Berkshire Hathaway (BRKa.N), aims to sell 800,000 vehicles next year, up from a previous target of 700,000 units, said Paul Lin, manager of the company's marketing department.

He attributed the revision to robust demand from Chinese consumers following Beijing's 4 trillion yuan ($586 billion) economic stimulus plan, which includes several measures specifically aimed at boosting car sales.

"The company already reached its 2009 target of 400,000 vehicles in November, so now we are setting our 2010 target to double that number at 800,000 units," Lin said, adding that this year's final sales should come in at around 440,000 units.

BYD's F3 sedan was the best-selling car in China in the first 11 months of this year, leading other popular domestic and foreign models, such as, Hyundai Motor's (005380.KS) new Elantra and Chery Automobile's QQ, official data showed.

To help meet market demand, BYD's new bus plant in the central Chinese city of Changsha and a car plant in the northwestern city of Xian will start operation next year, adding up to 700,000 units of capacity, Lin said.

Henry Li, general manager of BYD Auto's export arm, told Reuters in July that the firm aims to be a major global player by 2025, with vehicle sales of 8-9 million. [ID:nHKG366761]

BYD, which had sold several hundred of its plug-in hybrid, F3DM, unveiled in December of 2008, plans to start selling its first electric car, the e6, in China in the first quarter of 2010, Lin said.

The e6 had passed government safety inspections in the country and received other necessary permits, he said, adding the firm remained committed to export the model to the United States next year.

BYD's shares, traded in Hong Kong, have surged more than 422 percent since the beginning of this year, leading a roughly 49 percent gain in the broader market .HSI and bolstering its founder, Wang Chuanfu, to the top of Forbes 2009 list of China's wealthiest.

The shares fell 3.78 percent in early afternoon trading on Wednesday, lagging a 0.51 percent fall of the market.

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