Net-Zero Industry Tracker 2023 spotlights progress, pathways toward net-zero emissions

Published on November 28, 2023 by Kim Riley

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The World Economic Forum reports that $13.5 trillion in investments will be needed by 2050 toward a successful global transition to a more carbon-neutral future, particularly in the energy, transport, and production sectors.

“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,” said Roberto Bocca, head of the Centre for Energy and Materials at the World Economic Forum, which on Tuesday published its Net-Zero Industry Tracker 2023 report in collaboration with Accenture plc.

The new report examines how eight industries — oil and gas, shipping, trucking, steel, cement, aluminum, ammonia, and aviation — have made progress toward net-zero emissions, and outlines pathways to hasten the decarbonization of the emission-intensive production, energy, and transport industries. 

For instance, while each sector’s pathway to net zero will differ based on unique factors, the report says that investments in clean power, clean hydrogen, and infrastructure for carbon capture, utilization and storage (CCUS) will be needed to speed up industrial decarbonization across most sectors.

“Decarbonizing 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,” Bocca said.

At the same time, since most of the technologies needed to deliver net-zero emissions won’t reach commercial maturity until after 2030, there’s a critical need for collaborative research and development to scale up low-emission technologies, according to the report.

“It is imperative that action is taken soon to both decarbonize and improve energy efficiency,” said Bocca. “Otherwise, unabated fossil-fuel demand in the key industry sectors … will increase very significantly by 2050.” 

Industrial leaders also must devise new collaborative ways of working and innovating, he added, 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.

“Collaboration between the public and private sectors is critical to a successful energy transition, and technology can be a key enabler in both managing affordable and reliable access to clean energy and addressing the incremental cost of decarbonization,” said Muqsit Ashraf, who leads Accenture Strategy. “Widespread scaling and adoption of clean power, carbon capture and storage, and energy efficiency technologies across sectors are vital for progress.”

Simultaneously, to support the mobilization of needed investments, the report suggests carbon pricing, tax subsidies, public procurement, and the development of strong business cases.

And while raising capital for high-risk projects with unproven technologies may be challenging in the current macroeconomic environment, the report points out that institutional investors and multilateral banks can play important roles by providing access to low-cost capital that’s linked to emissions targets.

Equally vital is adapting financial models to the needs of various industries and regions, according to the report.

“Business model innovations can also help stimulate demand and accelerate industrial decarbonization — achieving net-zero objectives and a resilient energy transition,” Ashraf said.

Regarding policy, while some advanced economies are enacting large-scale policy measures, emerging economies — which will account for a larger share of future demand for industrial products and transport services — will need help accessing low-emission technologies and solutions.

The industrial sectors must align on emissions reduction requirements globally, with policies customized to suit individual country needs and enhance market transparency to increase emission-intensity visibility, the report says.

In addition to policy, the report calls for industrial sectors to focus on and take action in four other areas:

  • Technology: Prioritize clean power technology across most sectors, commercially scale CCUS in cement, and improve technology to reduce costs for clean hydrogen development.
  • Infrastructure: Promote shared infrastructure, such as industrial hubs and clusters.
  • Demand: Create a standardized framework for low-emissions products, a simple emissions-intensity calculator, and an auditable carbon-footprint assessment process toward improving consumer transparency.
  • Capital: Improve transparency for low-emissions and low-carbon alternatives, strengthen demand signals, and reduce capital expenditures through shared infrastructure development.

Overall, 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 decarbonize existing industrial and transport asset bases, further investment is needed to build a clean-energy infrastructure.

“The Net-Zero Tracker 2023 explores in detail how low-carbon solutions and infrastructure will contribute to increasing the pace of decarbonization in hard-to-abate industries,” said Stephanie Jamison, who leads Accenture’s global resources industry practice and global sustainability services. “This depth is essential to help companies create sustainable value and impact as they strive to achieve net-zero carbon emissions.”