Net-Zero Industry Tracker 2023
The second edition of the Net-Zero Industry Tracker report provides a detailed analysis of the progress heavy industrial and transport sectors are making worldwide, in their efforts to achieve net-zero emissions by 2050. These sectors, which account for more than 40% of global greenhouse gas emissions, need multifaceted solutions that accelerate the speed of technology development, build supporting infrastructure, and raise necessary capital to finance the transformation. A robust and ambitious policy agenda, supported by collaboration across sectors and between countries is critical to align the decarbonization of heavy industrial and transport sectors with the pathways aligned with net-zero emissions by 2050.
The World Economic Forum’s Net-Zero Industry Tracker 2023 Edition provides a detailed analysis of the progress emission-intensive industrial sectors are making worldwide, in their efforts to achieve net-zero emissions by 2050. This analysis focuses on sector-specific accelerators and priorities in the harder-to-abate aspects within production (i.e. steel, cement, aluminium and ammonia), energy (i.e. oil and gas) and transport (i.e. aviation, shipping and trucking). Collectively, process- and energy-related emissions from these sectors account for more than 40% of global greenhouse gas (GHG) emissions, which is higher than the emissions of any individual country. For that reason, transparency on the progress these sectors are making is essential for timely and effective interventions to ensure we are on track for net-zero emissions by 2050.
While the pathway to net zero in industrial sectors will differ based on unique sectoral and regional factors, a blend of electrification (clean power), clean hydrogen and fossil fuels abated by carbon capture utilization and storage (CCUS) form the basis of industrial decarbonisation across most sectors. However, a robust enabling environment is necessary to allow them to achieve their respective decarbonization objectives. To help in this, the Net-Zero Industry Tracker applies a standardized conceptual framework, including emission drivers and enablers, that not only provides a collective measure of progress and gaps but also highlights opportunities for cross-sector collaboration.
The analysis shows that emission-intensive sectors are not aligned with the trajectory to reach net zero by 2050 – as determined by the International Energy Agency (IEA) and industry specific scenarios and targets. Over the past three years, absolute emissions have grown on average by 8% due to increased activity and demand and all sectors in scope depend on fossil fuels, most with over 90% reliance. Sectors such as cement and steel are facing the most complex decarbonization challenges due to their energy intensity. In fact, their use of energy is equivalent to more than 3 times that of the energy consumed in the US. Transitioning these industries to a net-zero future will require a collective investment of approximately $13.5 trillion, prioritizing the electrification of low to medium temperature industrial processes. That is what’s needed to scale up the essential technologies and sustainable infrastructure, but investments aren’t enough. They must be complemented by policies and incentives that can help the industries make the switch while ensuring access to affordable and reliable resources that are critical for economic growth.
The tracker reveals an encouraging, though variable, increase in awareness and action among industries towards achieving net-zero emissions. Yet, there is still tremendous opportunity for sectors to come together to drive innovation and address their challenges collaboratively through sharing knowledge and best practices, joint innovation, market access and consumer trust, risk mitigation and resiliency planning.
Box 1: Definitions
Table 1: Five key takeaways from the 2023 tracker
In conclusion, decarbonizing emission-intensive industries across production, energy and transport sectors requires a multi-faceted approach. Aligning the essential components of demand for sustainable products, policy incentives, capital for technology investments and infrastructure expansion is the key to accelerating progress. Positive signals are currently emerging, but much more needs to be done. Recognizing a new and evolving geopolitical context, a new equilibrium needs to be found on how collaboration across countries needs to happen to support this transition that should preserve the conditions for every living being and also create wealth. The 2023 tracker report recognizes that, despite the challenges, the global industrial community is making progress towards achieving net-zero emissions. By pulling the enabling levers and encouraging innovative collaborations, industries can pave the way for a greener, more resilient and prosperous future.