2.1 Sustainability and Net Zero

European retailers that invest in sustainable refrigeration systems are appealing to a large segment of their customer base. According to a July 2022 McKinsey & Company article, "Decarbonizing Grocery," 37% of European consumers deeply care about sustainability – a concern that cuts across all generations.26

Sustainability also matters in the competition for talent and investment capital. “Employers that are perceived as sustainable stand a better chance to attract, retain, and inspire purpose-driven people,” says McKinsey. “Meanwhile, more and more investors are adopting environmental, social, and governance criteria and channeling capital to sustainable companies.”

Emissions stemming from refrigeration come under scopes 1 (direct emissions of refrigerants) and 2 (indirect emissions from electricity usage, tied to efficiency of refrigeration). About 4% of a typical grocer’s emissions fall under scopes 1 and 2, and many retailers have already set reduction targets for these emissions, according to McKinsey.

In some cases, grocers will be able to curb emissions simply by optimizing operations—for instance, by increasing the temperature in fridges. In another example, a British grocer installed technology to redirect cold air back into the fridges, resulting in a 15% reduction in energy use without having to install doors.

Many grocers are speeding up the pace at which they upgrade equipment, says McKinsey. For example, one Southern European grocer used to refurbish its stores every 10 years; now it has switched to a five-year cycle to reduce scope 1 and 2 emissions.

“Most of the top grocers in Europe have set net-zero targets for scopes 1 and 2, with one leading retailer committing some €1 billion to achieve net zero by 2040, while the most ambitious among them aspire to reach net zero as early as 2030,” says McKinsey.

Among industrial sectors, the heating and cooling sector is the most advanced in terms of net-zero pledges, according to the International Energy Agency (IEA).

Meanwhile, Race to Zero, a UN-backed global campaign, is rallying non-state actors – including companies, cities, regions, financial and educa- tional institutions – to take rigorous and immediate action to halve global emissions by 2030 and deliver a healthier, fairer zero-carbon world. The initiative mobilizes a coalition of leading net-zero initiatives, which last year representing 31 regions, 733 cities, 3,067 companies, 624 educational institutions, 173 investors and over 3,000 hospitals.

Race to Zero, among other groups, is supporting the Pathway to Net-Zero Cooling Initiative.27 The initiative includes three elements: passive cooling; super-efficient equipment and appliances; and ultra-low GWP refrigerants and insulation foam gases.

There is already a small but growing number of supermarkets around the world aspiring to be net zero in energy production, in addition to using natural refrigerants that are near zero in GWP. While expensive to build, these stores have vastly lower energy costs and make important contributions to their countries’ goal to become net zero overall.

In line with net zero, there are several food retailers and warehouses expanding implementation of rooftop solar panels at stores and warehouses and using thermal storage. Already Woolworths in Australia is committed to using 100% renewable energy by 2025.28

This aligns with more general trends. In 2020, renewable energy accounted for 23% of the total energy used for heating and cooling in the EU, steadily increasing from 12% in 2004 and 22% in 2019, according to Eurostat.29 Among the EU member states, Sweden stands out with two-thirds of the energy used for heating and cooling in 2020 coming from renewable sources.

Hand-in-hand with NatRefs

The more ambitious the net-zero targets, the faster the transition to natural refrigerant technologies. We expect targets to become increasingly ambitious in the period leading up to 2030 as climate action comes to the forefront of many political and business agendas, not only in a race to net zero, but to avoid a climate crisis.

Clean energy goes hand in hand with the use of natural refrigerants in a company’s sustainability portfolio. Companies that employ solar and the like – a growing number in the years ahead – will be also inclined to use natural refrigeration as well.

Moreover, in the “Pathway to Net-Zero Cooling” Report, the 2030 target is for all new cooling technologies across most applications to have ultralow-GWP or no-GWP solutions, assuming barriers have been successfully addressed. This obviously supports the uptake of natural refrigerants.