The Uncertain Phase-Out Of Fossil Fuels

Sign up to Interline Insiders to receive our weekly analysis in your inbox every Friday.

Download The DPC Report 2023

Before we get into the hard topics of this week’s news analysis, The Interline team is pleased to be closing the year on a very high note with the release of our second report on digital product creation in fashion.

Over more than 225 pages, with 17 editorials and interviews from brand leaders, educators, and industry figures, 16 technology vendor profiles and executive interviews, and a deep market analysis, The DPC Report 2023 tells the next chapter in the story of fashion’s biggest transformation.

Another switchback on the road to eliminating fossil fuels

With the end of the year just a few weeks away, the 2023 United Nations Climate Change Conference (commonly known as COP28 – which FYI stands for Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC)), was likely the last big event on the calendar for many people. And it’s been a long year for those in the fashion industry involved in mitigating the devastating effects of climate change. There were high expectations for the outcome of the plenary gathering, and it almost ended on a very high note for the fashion industry. Almost.

In the crescendo – the final deal – after almost two weeks of discussions, there was a glimmer of hope of changing the status quo around fossil fuels radically for the better. But when it came down to the final language chosen for the agreement, there was a collective sigh of disappointment and disillusionment for those in the industry advocating for a more sustainable fashion future in the near-term.

Currently, the fashion industry contributes heavily to environmental pollution (responsible for 2–8% of annual carbon emissions) a lot of which is attributable to its use of fossil fuels in various stages of the supply chain. The extraction and processing of raw materials – petroleum-based synthetic fibres (including rayon, polyester, spandex, and nylon) – all involve the use of fossil fuels. And due to the rise of fast fashion, these fibres are being used more than ever. Fashion companies have also long been using energy primarily generated from coal, a source linked to significant health concerns for workers and communities near coal power facilities, especially in major supplier countries like Vietnam and China. What’s more, along with the harmful and energy-intensive processes in manufacturing, the industry relies on fossil fuels to power transportation; which with the globalised nature of the industry often involves long distances – both forwards and, coinciding with stratospherically high return rates, in reverse. 

Fast fashion has again further exacerbated the problem, as the quick turnover of styles and the need for rapid production contribute to increased energy consumption and emissions, which are doubled when consumers return goods that don’t fit or were bought mindlessly.

Going back to COP28,  the crux of the outcome is this: the agreement needed the 197 countries (plus the EU) to align on the wording around fossil fuels, and (at what seemed like the finish line) the draft language explicitly advocating for the phaseout of fossil fuels was removed from the final deal. What did make the cut was a diluted message for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science.” The final agreement also calls on nations to work toward “accelerating efforts towards the phase-down of unabated coal power.” This denouement is perhaps fitting, given that the conference was hosted in Dubai – a prominent producer of oil and gas. And while commercial interests and climate action were intended to be separated, the reality was never going to be that clean.

This to us at The Interline feels a bit…familiar. We’ve seen this show before.

Here is how it plays out: a lot of influential people – who have the kind of power to change the trajectory of history – show up to an important event. They engage in lengthy discussions around real and urgent issues, and arrive at the cusp of setting some significant progress into motion. However, as the moment arrives to finalise the details and commit to actions that could alter the future’s course, a significant retreat occurs when commerce enters the picture. Loopholes and ambiguities are introduced, providing room for manoeuvring and raising questions about the sincerity of the commitments.

We saw something like this happen earlier this year, where the European Union’s directive on ESG disclosures surprised analysts and brands alike by weakening the requirement for mandatory, universal disclosure, and replacing it with discretionary disclosure under the definition of “materiality”. As for COP28, we found this analysis from The Verge sums up this latest episode well: “That brings us back to the language coming out of COP28 to phase down unabated coal. Using the word “unabated” — whether for coal, oil, or gas — carves out a huge loophole for fossil fuels. It means that polluters can continue burning fossil fuels as long as they pair it with emerging technologies that capture greenhouse gas emissions (though typically not 100 percent of those emissions) that are still unproven at scale.” 

The picture that is emerging is that alongside the talks and theatrics, technology (and technology that has not been given sufficient stress-testing to be held out as a solve-all for a crisis this big and complex) is being used to distract from the primary task of stopping the use of fossil fuels. COP28 included a parade of technological “solutions” for the climate crisis. Among them was the usual suspect of AI, alongside solar-powered “responsible” yachts, and artificial indoor vertical farms producing food for our eventual (and inevitable, at this point) life on Mars. But there have been other endeavours this year that have been more subtle. We recently wrote about one example: Zara’s parent company, Inditex, collaborating with Maersk to reduce greenhouse gas emissions in shipping through the ECO Delivery Ocean program. The initiative aims to replace fossil fuels with alternative, sustainable options, such as green methanol or second-generation biodiesel, potentially cutting emissions by 80%. H&M Group and Amazon also joined the program. 

While definitely a step in the right direction, it is crucial for fashion to acknowledge that carbon capture cannot replace the imperative to reduce emissions. The entire system must undergo transformation, and every company in the fashion industry should be actively eliminating fossil fuels and coal power, not spending time, effort, and resources to be more innovative when it comes to carbon capture.

A brand that understands this and is constantly working to be more environmentally and socially responsible is Stella McCartney, who was at COP28. McCartney herself commented: “I am proudly attending COP28 to represent the fashion industry. I want to bring to the forefront the significant role the fashion sector has to play in environmental sustainability and the urgency of transitioning towards more eco-friendly practices. I will take the opportunity to meet with those stakeholders who have the ability to enforce real change. I want to be in the room in order to drive this conversation forward.” 

The designer may have just unknowingly identified one of the conundrums with conferences like this one: conversations are had, ideas are shared – this is progress. There are people who care, who learn things, who become even more committed to change. But there are many who respond and don’t agree. Then the parlay is never translated into action. 

One has to wonder, how much of this is performative? In the case of COP28, the illusion has not lasted long. The curtain was pulled back to reveal that the United Arab Emirates’ COP28 President, Dr Sultan Al Jaber, used his position to lobby for oil and gas deals, according to an investigation by the BBC and the Centre for Climate Reporting. And it seems that he was not alone in treating business as the main act, with climate change as the sideshow as, according to the advocacy group Kick Big Polluters Out (KBPO), the number of fossil fuel representatives at this year’s conference has almost quintupled in the past three years. In 2021, at the COP26 gathering in Glasgow, Scotland, there were just 503 fossil fuel lobbyists, compared to the 2,456 that showed up this year in Dubai.

To wrap up on an encouraging note: even if there is more conversation than implementation at the moment, it would be far worse than if nothing was being said at all. Because eventually action will happen; as long as the point is driven home that capturing carbon is no substitute for cutting emissions and ramping up clean energy. The whole system needs to change and each company in the fashion industry needs to be phasing fossil fuels and coal power out – more than moving away, or phasing down.

For now, in the ongoing saga of climate activism within the fashion industry and beyond, the show must go on.

The best from The Interline: 

Dakota Murphey explores how a shift in consumer attitudes, combined with deeper and broader adoption of technology, could help move the needle away from one of fashion’s most problematic business models.

In their latest eBook Lectra explores how leading brands nail discounting each season. The answer lies in AI competitive intelligence…

The Interline talks to Bill Brewster of PTC, about how fashion retail can successfully move away from softer, self-set sustainability targets towards certification and compliance requirements.

From diversifying their sourcing bases, to changing inventory strategies, Matthew Gore shares why fashion businesses need to find new ways to blunt the impact of supply chain risk.

In the second instalment of our two-part series on foundational fashion technology, from SOURCING at MAGIC and The Interline, our new sustainability-focused guide examines the long journey that fashion will need to travel in order to create a more responsible, sustainable status quo.