The 2023 report from the World Economic Forum Net-Zero Industry Tracker evaluates the progress made toward achieving net-zero emissions in eight industries responsible for 40% of global greenhouse gas emissions. To effectively transition to a sustainable, carbon-neutral future, the report, produced in collaboration with Accenture, underscores the need for $13.5 trillion in investments by 2050, particularly in the production, energy, and transportation sectors.
The industries covered in the report, including steel, cement, aluminium, ammonia, oil and gas, aviation, shipping, and trucking, heavily rely on fossil fuels and present significant challenges for decarbonization. The report emphasizes the necessity of global funding and enhanced policy incentives to expand the adoption of clean power, clean hydrogen, and carbon capture technologies in industrial clusters.
In comparison to the 2022 edition, the updated report broadens its scope to include transportation sectors and employs a comprehensive framework to identify strategies for achieving net-zero industrial transformation. The urgency highlighted in the report aligns with the recent United Nations call at COP28 for substantial climate action.
The $13.5 trillion investment requirement, outlined in the report, is based on average costs for clean power generation, electrolyzer costs for clean hydrogen, and carbon transport and storage costs. The report emphasizes the importance of creating a conducive environment for industrial and transport decarbonization through low-emission technologies, infrastructure development, policies, and investments.
The Net-Zero Industry Tracker proposes a comprehensive framework that measures progress, identifies gaps, offers scorecards for each industry, and suggests opportunities for cross-sector collaboration. The report stresses the need for an enabling environment, including low-emission technologies, infrastructure, demand for green products, policies, and investments.
The analysis indicates that emission-intensive sectors are not in line with the trajectory required to achieve net zero by 2050, as outlined by the International Energy Agency (IEA) and industry-specific scenarios and targets. Over the past three years, absolute emissions have increased by an average of 8% due to heightened activity and demand, and all the sectors considered rely on fossil fuels, with most having a dependence of over 90%. Sectors like cement and steel face intricate challenges in decarbonization due to their high energy intensity, surpassing three times the energy consumption of the United States. Effecting a transition to a net-zero future for these industries necessitates a collective investment of approximately $13.5 trillion, with a focus on electrifying low to medium temperature industrial processes. Investments alone are insufficient; they must be complemented by policies and incentives facilitating the industries’ transition while ensuring access to affordable and reliable resources crucial for economic growth.