Corporate Clean Energy Investment

* Corporate research, development and deploymentAutomobile Sector
(RD&D) into clean energy has continued to growThe top two clean energy developers in this sector
year on year, reaching a total of $10.5bn in 2007, upwere Toyota ($240m) and Honda ($220m), with
from $8.37bn in 2006. The figures show the EMEADaimler and Volkswagen also standing out ($200m
(Europe Mid-East and Africa) region taking the largestand $110m respectively). As would be expected, a
share, with AMER (Americas) closely following andlarge share of RD&D is on biodiesel, bioethanol,
ASOC (Asia-Pacific) somewhat lagging behind.hybrids and cleaner conventional engines in a bid to
* 57.6% of clean energy RD&D investmentreduce vehicle emissions in the short term. However,
came from EMEA based companies, 33.8% fromthere is growing research in other areas: aerodynamic
AMER and 8.6% from ASOC. Utility / energyand lightweight vehicles, recyclability (Volkswagen has
companies and technology firms have the highestset a goal of developing cars with 95% recyclability
clean energy RD&D budgets in general, with theat the end of life-cycle), and increased efficiency in
top 5 firms being GE, United Technologies, BP, E.ONthe manufacturing process (Nissan has put in place a
and BASF in descending order.target of reducing CO2 emissions by 2050, on 2000
* However, energy companies’ investment intolevels). Last but not least, fuel cell technology is seen
clean energy RD&D still only accounts for aroundas a long-term solution; one that requires further
2% of overall energy RD&D expenditure.development to be marketable, but one that will also
General Electric (GE) stands out among all the firmsreplace conventional fuels and even biofuels in the
analysed (47 in total) with a RD&D budget forlong run.
2006 of $900m, which is 54% of global technology /Chemical Sector
industrial RD&D spending. Furthermore, GE hasThis emerged as a sector where clean energy
committed to increasing this budget under theirRD&D facts and figures were less available and
‘Ecomagination’ program to $1.5bn annuallyless clearly presented. Out of the chemical businesses
by 2010, which will be directed to the developmentexamined in the research for this note, BASF was
of renewable energies, more efficient aircraft enginesnot only the clearest reporter but also by far the
and less energy-intensive solutions to waterhighest spender, with a total of $600m directed to
purification and re-use.clean energy RD&D (this accounted for one
Sector Breakdown and Analysisthird of BASF’s total RD&D budget in 2006).
Utility / Energy SectorBASF was heavily involved in the development of
Spending by utilities on clean energy RD&Dnew materials for organic solar cells, innovative
covered a wide variety of initiatives andstorage media for hydrogen and advanced
developments: BP continued its research into solar,technologies for improved insulation such as nanopore
wind, hydrogen fuel cells, biofuels, combined cycle gasfoams. Bayer continued to research super-lightweight
turbines (CCGT) and natural gas, mostly through BPplastics for improved energy efficiency in vehicles
Alternative Energy, which was created in 2005 withalong with energy efficient building design. The same
an investment of $8bn over the period 2005-2015. BPtrend was seen for STMicroelectronics and Dow
aims to build two of the world’s first industrialChemical, which has also committed to a reduction in
–scale hydrogen power plants by 2015.energy intensity by 25% over the period 2005-2015.
Shell’s RD&D was in much the same vein,DuPont had a slightly different approach which
though with extra focus on biofuels, which now putsincluded the development of new biofuels and the
Shell as the world’s leading distributor of biofuels.design of high performance materials such as textiles
Endesa and Enel were pushing forward carbonfrom renewable sources. AIR Liquide had a different
capture and sequestration, while RWE maintainedset of research criteria still, with much work carried
research into increasing the efficiency of its coal-firedout on clean coal, biomass, hydrogen fuel cell and
plants, being well aware of its status asgasification technologies. As is seen across all sectors,
“Europe’s largest emitter of CO2” dueall the chemical firms were also furthering research
to its large use of coal reserves. EDF’s maininto efficiency on their manufacturing operations with
RD&D interests lay in PV, solar thermal andan overall aim of reducing emissions in the long-term.
biomass, along with electric vehicles, of which EDFConstruction Sector
has the world’s largest fleet. As with the otherThe cement industry accounts for 5% of all
French utilities (Total, Suez, and Gaz de France) aman-made CO2 emissions around the world so it
large portion of electricity production comes fromwould be reasonable to expect this sector to be
nuclear power – in fact 95% of EDF’sengaged in emission reductions and climate change
electricity generation does not emit any greenhousemitigation research. This proved to be the case, with
gases. The primary area of RD&D for Suez wastransparent reporting throughout. Lafarge ($120m
waste and water management and since theclean energy RD&D budget) was involved in
company merged with Gaz de France, a target hascreating advanced cements and cement substitutes
been set for 10% of electricity generation to comewhich are less energy intensive and developing
from renewable sources by 2012 (current level: 3%).carbon capture / storage techniques. Heidelberg
In the US, Exxon Mobil was directing the majority ofCement ($100m) looked for ways of increasing the
its clean energy RD&D to cogeneration facilities,effective use of alternative raw materials and fuels in
which reduce the company’s CO2 footprint bythe production of cement, while also setting a target
10.5m tonnes/yr. Chevron was developing biofuelsof reducing specific emissions by 15% over the
and hydrogen fuel cells for transport, and renewablesperiod 1990-2010. This sort of commitment was
for power generation, whereas Exelon’scommon amongst construction companies: Holcim set
spending sought further advances in clean coalitself a goal of reducing specific emissions by 20%
technology, solar cells and wind power. Pacific Gasfrom 1990-2010 and Cemex made a pledge to
and Electric Company continued research into solarreduce its specific emissions by 25% by 2015 on
technology, maintaining its position as the leading solar1990 levels. In the steel industry, Arcelor Mittal is
utility in the US.coordinating the Ultra-Low CO2 Steelmaking
Technology SectorProgramme between 48 industrial firms. The
As stated earlier, GE was the clear leader in cleanprogramme develops cutting edge technologies and
energy RD&D in 2006. The $900m budget wasaims to cut CO2 emissions in the long-term by 50%.
spent across multiple divisions, including renewablesRetail Sector
(wind, solar and biomass), fuel efficiency of aircraftThere is limited activity within this sector on clean
engines, efficiency of power generation and lessenergy RD&D, with only Tesco providing clear
energy-intensive solutions to water purification anddata ($144m). The company is developing gasification
re-use. Airbus also worked on the fuel efficiency oftechnology to turn food waste into power and is also
aircraft engines, along with advanced productioninvolved in wind, solar, biomass and combined heat
technologies to minimise energy and waterand power research. Further to this, Tesco is also the
consumption during the manufacturing process. TheUK market leader in biofuels and is intending to spend
remaining firms in this sector followed suit, with$720m on low-carbon technologies over the period
United Technologies making a significant contribution2006-2010.
of $700m to the total figure.