In the quest for a sustainable future, the World Economic Forum’s ‘Net-Zero Industry Tracker’ 2023 Edition released on Tuesday, sheds light on the developments and challenges in emission-intensive industrial sectors worldwide. With a keen focus on key players in production, energy, and transport, this report unveils a comprehensive analysis of the industries responsible for over 40 per cent of global greenhouse gas emissions.
The Global Landscape: A critical 40 per cent
Process- and energy-related emissions from sectors such as steel, cement, aluminium, oil and gas, aviation, shipping, and trucking collectively contribute to more than 40 per cent of global greenhouse gas emissions, surpassing those of any individual country. Transparency in their progress becomes imperative for timely interventions and ensuring we remain on course for net-zero emissions by 2050.
Pathways to Net-Zero: A blend of solutions
The journey to net-zero varies across sectors, but a common thread emerges — a combination of electrification (clean power), clean hydrogen, and fossil fuels abated by carbon capture utilisation and storage (CCUS) form the bedrock of industrial decarbonisation. However, a robust enabling environment is crucial, supported by a standardised conceptual framework, to meet sector-specific decarbonisation objectives.
Five Key Takeaways from the 2023 Tracker
1. Technology: Gradual growth demands rapid acceleration
Low-emission technologies are making strides, with promising early signs in sectors like aluminium and trucking. However, a significant acceleration is needed to support commercial deployment by 2030. Prioritising material circularity, recycling, and transition fuels can bridge the gap until technologies become more widely available.
2. Infrastructure: Balancing financing needs and investments
Financing requirements for low-emission technologies are substantial, overshadowed by larger infrastructure investments. Clean hydrogen, CCUS, and electrification dominate, emphasising the need for shared infrastructure hubs to accelerate decarbonisation, especially in remote locations.
3. Demand: Navigating the green premium
Standardised definitions for low-emission products gain consensus, signalling early market demand across sectors. Challenges like reporting standards, supply chain instability, and transparency gaps persist, with business-to-business (B2B) green premiums largely untested at scale.
4. Policy: A shifting landscape demands global alignment
Evolution in policy landscapes, driven by industrial initiatives in select countries, bolsters investment. However, the risk of concentrating industrial activity in developed nations necessitates multilateral cooperation. Global alignment on emissions reduction requirements and policies tailored to individual country needs are imperative.
5. Capital: A call for investment in sustainable solutions
Sectors need approximately $11 trillion in additional investments for clean energy adoption and legacy asset retrofitting. Strong business cases are lacking, emphasising the need for market-stabilising policies and companies embedding decarbonisation into their strategies to attract capital.
Charting the course to net-zero
Achieving net-zero emissions requires a multi-faceted approach across production, energy, and transport sectors. The 2023 tracker report recognises progress but underscores the need for collaborative efforts, aligning demand, policy incentives, capital, and infrastructure expansion. As industries navigate this net-zero frontier, innovative collaborations and leveraging enabling levers can pave the way for a greener, more resilient, and prosperous future. The report acknowledges the challenges but emphasises the global industrial community’s positive trajectory towards a sustainable tomorrow.
