Sector decarbonisation

Transforming the energy system requires that we reshape not only energy provision, but also energy consumption across the economy. The ETC therefore aims to accelerate the transition to net-zero emissions across multiple energy-intensive sectors. Through our sectoral analyses, we are confident that solutions exist to fully decarbonise every carbon-emitting sector of the economy. We are now focusing our efforts on the harder-to-abate sectors in heavy industry and heavy-duty transport, which represent about one-third of global CO2 emissions today.

decarbonisation
ETC Sectors

We do so by inspiring, seeding, informing and supporting ambitious industry initiatives which bring together corporate leaders from key harder-to-abate value chains to define net-zero roadmaps and drive their implementation. This work is primarily undertaken through the Mission Possible Platform – a joint venture with the World Economic Forum which was launched at the UN Climate Action Summit in September 2019 and has developed into a major multi-stakeholder initiative involving several hundred companies and a dozen delivery partners.

To drive tangible progress towards sector decarbonisation in the 2020s, we are encouraging collaborations on early-stage technologies; developing ambitious industry-backed policy recommendations to underpin engagement with governments; helping to create initial markets for low-carbon materials/services in partnership with coalitions of buyers; and promoting a dialogue between industry leaders and the finance community on the financing of the energy transition.

ETC Decarbonisation

Industry

Industry is responsible for more than 12 gigatonnes of CO2 emissions globally, if accounting for the provision of power and heat to the sector. Heavy industry – cement, chemicals, steel and aluminium – represents the lion’s share of those emissions. Cutting emissions demands a profound reshaping of our industrial model towards a more circular economy. But bringing heavy industry to net zero will also require the deployment of entirely new production processes and of carbon capture.

Transport

Freight and passenger transport represents roughly one-quarter of global CO2 emissions from energy, of which 60% comes from heavy-duty transport – trucking, shipping and aviation. Mobility needs are strongly correlated with global economic growth. While the future of surface transport appears to be electric, decarbonisation of long-distance shipping and aviation will likely require low-emissions liquid fuels from bio or synthetic sources. Supply chain efficiency and modal shifts can also constitute reservoirs of emissions reduction.

Buildings

Building energy demand amounts to roughly 30% of final global energy demand. Most of this is already electrified and will be decarbonised as emissions are brought down in the power sector. Considerable energy efficiency improvement can also be achieved in both building envelopes and equipment. But decarbonising building heating is a tougher, although geographically localised, issue to solve – especially  due to seasonal peak demand.

Finance

The finance industry is not an energy-intensive sector in itself, but it has a major role to play in driving decarbonisation by investing in low/zero-carbon activities and in the transition of high-emissions sectors. The incremental investment required to achieve net-zero emissions globally amounts to just 1% to 1.5% of global GDP. But shifting financing flows implies a reset of portfolio management practices and the development of new financing products, including blended finance products.