Looking ahead to the Innovation Zero World Congress 2025

Ahead of the Innovation Zero World Congress 2025, which welcomes global corporate leaders, investors and policy makers to London this month, Nikunj Panchal, Ricardo's Global Vice President of Energy, Infrastructure Transition, outlines some the themes and priorities that he hopes will be debated by fellow panellists and attendees.

Incentives are essential, but we need sticks as well as carrots

Decarbonising the global economy will require big bets on developing new technologies at scale, whilst simultaneously supporting thousands of smaller projects in local communities. Either way, engaging with the global finance sector will be crucial to the progress we make. 

A good place to start is incentives. The basic principles of investing means finance currently flows towards fossil fuel projects because that is what investors understand. It's less of a less risk.  At Ricardo, through our work with policy makers, businesses and financiers across the world, we recognise how pivotal incentive programmes can be in helping to de-risk climate initiatives and make them financially attractive. 

Tax breaks, subsidies and grants, for example, are widely used. But we should also be bolder in utilising performance-based incentives – e.g. investment tax credits – that connect financial rewards to achieving specific targets. We should also explore more behaviour-oriented incentives, such as cap and trade schemes, that encourage shifts to lower-carbon products. During the upcoming Congress I'm keen to hear about any other recent novel approaches that have successfully attracted investment.

Furthermore, as well as carrots we also need sticks. Governments need to shift from setting out policy to establishing mandates that spell out their expectations of different sectors and clarify the penalties for organisations that fail to take sufficient action. If we’re willing to reward, then we should be equally prepared to penalise.

 
Support collaboration with supply chains 

Regulatory delays, opaque standards and complex financing mechanisms stifle innovation and raise costs for suppliers. 
 
To accelerate product development, we need to enable more collaboration between regulators, industries and the supply chain.
 
Sustainable Aviation Fuels (SAF), for example, have long been seen as the most viable route for the sector’s decarbonisation (IATA estimates they can contribute around 65% of its emissions reductions). But challenges around bringing new products to market - such as the fragmentation of feedstock supply, and drawn-out certification processes - has bred scepticism within the industry as to whether SAF production will ever be sufficiently scaled.
 
Initiatives such as the EU’s Clearing House, developed by the industry with support from Ricardo, have provided platforms for manufacturers and regulators to work together, for example, on test and certification processes. The initiative has helped alleviate some of the uncertainties of developing new SAF products. In turn, the operational side of the aviation sector is becoming more confident about investing in the required distribution infrastructure for SAF.

More focus on resilience  

It’s encouraging to see discussions around resillience feature prominently in the Congress schedule. Compared to progress in reducing greenhouse gas emissions, initiatives focused on managing the impacts of changing climates remain in short supply. 
 
Resilience planning – particularly in critical infrastructure – clearly calls for in-depth assessments of current and emerging threats, and thoughtful consideration of their potential impacts.

But major investment decisions are based on realistic pricing, not speculative numbers. As such, whether aiming to secure public or private financial support, initiatives must demonstrate pragmatism and scalability. They should also be prepared to demonstrate full transparency: investors expect full information about the risks residing in their portfolios.

Simplify our message

The sheer breadth of issues to be discussed across the various presentations, panel debates and exhibit areas at the Congress demonstrates just how complex and interconnected the net zero challenge is. 

But whilst it will be a timely showcase of the progress we are making and the benefits we can reap, I do wonder if the positive news gets diffused across competing press statements, publications and sales brochures. I fear that the core message of what we still need to achieve as a global community gets lost amidst the noise. 

Communities across the world are starting to feel the costs zero-emission policies on livelihoods and lifestyles. In turn, this is helping to fuel conflicting claims and counterarguments on the impacts of climate change and the value of green investments. 

I’d like to see global meetings like Congress emphasise the importance of consistency in how we communicate the net zero challenge. We need to get better at telling our story.
 
Nikunj Panchal is a panellist on “Driving Climate Solutions: UK-Middle East Innovations and Partnerships” 10:00 -12:00pm, April 29th, Working Groups Theatre. Meet Nikunj at Innovation Zero.