US$13,5 tln needed to fastrack decarbonisation
GENEVA–TRANSITIONING to a more sustainable and carbon-neutral future, US$13,5 trillion in investments will be needed by 2050, particularly in the production, energy and transport sectors, according to a new World Economic Forum report.
The Net-Zero Industry Tracker 2023, published in collaboration with Accenture, takes stock of progress towards net-zero emissions for eight industries — steel, cement, aluminum, ammonia, excluding other chemicals, oil and gas, aviation, shipping and trucking — which depend on fossil fuels for 90 percent of their energy demand and pose some of the most technological and capital-intensive decarbonisation challenges. The report, published the same week as the United Nations called at COP28 for “dramatic climate action” to close an “emissions canyon”, outlines pathways to accelerate the decarbonisation of emission-intensive production, energy and transport industries.
While the pathway to net zero in these sectors will differ based on unique sectoral and regional factors, investments in clean power, clean hydrogen and infrastructure for carbon capture, utilisation and storage (CCUS) will be needed to accelerate industrial de carbon is at ion across most sectors .“De car bo ni sing these industrial and transport sectors, which emit 40 percent of global greenhouse gas emissions today, is essential to achieving net zero, especially as demand for industrial products and transport services will continue to be strong,” said Roberto Bocca, Head of Centre for Energy and Materials, World Economic Forum.
“Significant infrastructure investments are required, complemented by policies and stronger incentives so industries can switch to low-emission technologies while ensuring access to affordable and reliable resources critical for economic growth.”
According to the report, the US$13,5 trillion in investments is derived from average clean power generation costs of solar, off-shore and on-shore wind, nuclear and geothermal, electrolyser costs for clean hydrogen and carbon transport, as well as storage costs.
The Net-Zero Industry Tracker proposes a comprehensive framework of emissions drivers and enablers to measure progress and identify gaps, scorecards for each industry, and opportunities for cross-sector collaboration. Building on the 2022 edition, the updated report includes transportation sectors and applies the framework to identify strategies for net-zero industrial transformation.
The report’s findings underscore the urgency for creating a robust enabling environment, including low-emissions technologies, infrastructure, demand for green products, policies and investments. In addition to increasing capital expenditures to decarbonise existing industrial and transport asset bases, further investment is needed to build a clean-energy infrastructure. Share of global GHG emissions for heavy industrial and transport sectors
The majority of the technologies needed to deliver net-zero emissions are expected to reach commercial maturity after 2030, high- lighting the need for collaborative approaches to research, develop and scale them. This includes substituting legacy technologies with low-emission alternatives, increasing efficiency of processes and machinery, electrification and driving circularity.
“It is imperative that action is taken soon to both decarbonise and improve energy efficiency; otherwise, unabated fossil-fuel demand in the key industry sectors, which have grown 8 percent on average the past three years, will increase very significantly by 2050,” said Bocca.
“But industrial leaders can respond through new collaborative ways of working and innovating, for example within industrial clusters and by fostering best practices, sharing infrastructure in important areas like clean hydrogen and CCUS and building demand for lower-emissions products.” —World Economic Forum