Why Intel refused to participate in the Science Based Targets initiative

The number of companies with corporate net-zero plans validated by the Science Based Targets initiative grew to more than 500 as of mid-November. You won’t find chipmaker Intel on this list.

Intel, the world’s second-largest chipmaker, with revenue of about $70 billion in fiscal 2022, said its emissions reduction strategy is “aligned” with the net-zero guidelines recommended by SBTi, but does not follow guidelines for “multiple reasons” related to how the company reports past and future progress, it said in its Climate Transition Action Plan published late last year.

“We’re much more focused on how we scale down over time,” Todd Brady, vice president of global public affairs and chief sustainability officer at Intel, said in an interview. “It’s a good framework for companies that haven’t thought about it until very recently.”

The science of “science-based” goals

SBTi is a non-profit organization established in 2015 to help companies set voluntary “science-based targets” that bring their greenhouse gas emissions reductions in line with the Paris Agreement’s goal of limiting global temperature rise to 1.5 degrees Celsius.

The organization confirms whether the commitments of individual companies meet this commitment, giving more credibility to their claims. As of November, more than 2,000 companies had sought SBTi’s blessing for their corporate net-zero plans over the next two years.

To meet this demand, SBTi became an independent entity in September after years of working as a partnership of CDP, the UN Global Compact, We Mean Business, the World Resources Institute and the World Wide Fund for Nature. It created an independent technical board to review its criteria and increased the number of individuals dedicated to validating corporate goals.

Intel’s dilemma: a long history of cuts

Intel began investing in measures to reduce its emissions two decades ago. In its November progress report, the chipmaker said process improvements, chemical substitutions, energy conservation, investments in renewable energy and other measures helped it avoid more than 64 million metric tons of carbon dioxide equivalent (CO2e) over the decade to 2022. This compares with 16 million metric tons of CO2e actually emitted.

During the same time period, Intel’s manufacturing output tripled.

The problem is that Intel’s absolute emissions aren’t going down. In 2021 and 2022, Intel reported 1.54 million metric tons of emissions, up from 1.36 million in 2020. This is contrary to SBTi’s requirements for short-term reductions, which do not allow companies to report avoided emissions.

“While Intel’s long-term net-zero GHG goals are consistent with the 1.5 degree emission reduction scenario required by SBTi, we are challenged by the short-term reduction requirement without the ability to account for significant historical reductions,” the company said in its report.

Intel’s Climate Transition Action Plan calls for a 10 percent reduction in absolute Scope 1 and Scope 2 emissions by 2030 based on a 2019 baseline. It seeks to reach net zero by 2040 for scope 1 and 2 and by 2050 for its upstream emissions 3.

Another problem for Intel is that the SBTi framework does not account for emissions reductions or other potential benefits from using new technologies in climate solutions, such as artificial intelligence, which can reduce energy consumption. Intel is part of the Semiconductor Climate Consortium, established in 2022, which is working on potential options to set an SBTi-approved target.

“Intel’s priority is to actively reduce its emissions, in line with international standards and climate science,” the company said.

Urgent need to address emissions from industry

Notable Intel rivals and partners, including Advanced Micro Devices, Applied Materials and Qualcomm, have targets validated by SBTi, according to the nonprofit’s target board, but fast-growing AI chip maker Nvidia does not.

SBTi does not offer sector-specific guidance for the semiconductor industry, but as production increases to meet the appetite for artificial intelligence and other digital services, emissions from these companies are rising. A conservative scenario modeled by McKinsey predicts that Scope 1 and 2 emissions will double from 2020 to 2030, reaching 183 million metric tons of CO2e. “To reach a net-zero trajectory by 2030, the semiconductor industry will benefit from a coordinated effort to fully implement current strategies while developing and adopting new technologies,” McKinsey said.

Major changes are needed to replace existing process gases such as nitrogen trifluoride; heat transfer fluids; and existing fuel supplies, the firm said.

In a November research report, the Boston Consulting Group emphasized the need for more manufacturers to act, calling current efforts “insufficient” to reach net zero by 2050. “If the current growth path continues unchecked, carbon emissions from semiconductor manufacturing will increase by around 8 percent per year in the coming years and as far back as 2045,” the firm predicted.

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