Transitioning to a more sustainable and carbon-neutral future, $13.5 trillion in investments will be needed by 2050, particularly in the production, energy and transport sectors, according to a 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% of their energy demand and pose some of the most technological and capital-intensive decarbonization 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 decarbonization 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, utilization and storage (CCUS) will be needed to accelerate industrial decarbonization across most sectors.”
Roberto Bocca, Head of Centre for Energy and Materials, World Economic Forum, said:
“Decarbonizing these industrial and transport sectors, which emit 40% 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. 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 $13.5 trillion in investments is “derived from average clean power generation costs of solar, off-shore and on-shore wind, nuclear and geothermal, electrolyzer 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 decarbonize existing industrial and transport asset bases, further investment is needed to build a clean-energy infrastructure.”
The report acknowledges that recent policy developments “can push the industrial net-zero transformation in the right direction. 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 report also calls for industrial sectors to “focus on the following five areas, and details specific actions for each of the sectors as part of its individual scorecard:”