Net Zero Industry Tracker 2024 Cross Sector Findings

–Many industrial sectors in scope require temperatures exceeding 500°C, making electrification challenging. For instance, the steel industry relies on high-temperature heat for 83% of its operations, while cement production requires it for 45%.36 –Many companies in these sectors operate with limited research and development (R&D) budgets due to relatively low profitability, limiting their ability to invest in innovative technologies for decarbonization. –The increasing doubts about the feasibility of green hydrogen and CCUS are causing targets and projects to be cancelled. Way forward: Several sectors are expected to rely heavily on technologies that are not currently commercially available, such as CCUS and clean hydrogen. For example, it is estimated that CCUS could reduce emissions in the cement sector by 60% by 2050.37 As a result, it is essential to focus on reducing energy consumption by improving the energy efficiency of processes, adopting clean fuels across sectors, switching to low-carbon power sources and scaling CCUS technologies. –Improving energy efficiency of processes: Enhancing energy efficiency is a cost-effective strategy to lower energy demand and CO2e emissions from fossil fuels. IRENA’s 1.5°C scenario suggests that improving efficiency could provide about 20% of the necessary CO2e reductions in shipping by 2050. Measures like high-efficiency propellers and waste heat recovery can significantly cut fuel consumption and emissions.38 –Adopting clean fuels across sectors: Transitioning to clean fuels, such as hydrogen and biofuels, is crucial for decarbonizing industries and transport. Clean hydrogen supply is expected to increase thirtyfold to 16.4 million tonnes (MT) by 2030 due to supportive policies. Regions with abundant renewable resources can produce green hydrogen for €3 to €5 per kilogram (kg).39 In the IEA’s 2°C Scenario, biofuels are projected to rise tenfold in the transport sector by 2060, reaching 30% of transport energy.40 – Switching to low-carbon power sources: Renewable energy sources will provide 85% of global electricity production in 2050, led by solar photovoltaic (PV) and onshore wind.41 Various sectors will need to electrify operations, although applications like electric arc furnaces (EAFs) in steelmaking may face challenges.42 In 2023, battery storage emerged as the fastest-growing energy technology, increasing over twofold year-on-year to add 42 gigawatts (GW) globally. Lithium-ion batteries experienced a remarkable price drop of 14% from 2022 to 2023,43 driven by advancements in manufacturing and economies of scale. –Scaling of CCUS technology: According to the IEA, CCUS could contribute over 25% of emissions reductions in iron and steel by 2050. CCUS is also emerging as a key solution for chemicals manufacturing.44 Expected commercialization date of major technologies by sector FIGURE 14 Cement Steel AluminiumAviation Primar y chemicalsTruckingShipping Oil and gasToday 2025 2030 HEFA Other biofuelsHydrogen Battery electric Fuel efficiency measures Power-to-liquids (PtL) Hydrogen-powered engines Ammonia-powered engines Battery electric trucks (BETs) DRI-EAF with carbon captureCarbon capture for cement kilns CCUS Inert anodes Electric boilers Mechanical vapour recompressionDecarbonization of electricity Downstream hydrogen CCUS Upstream electrification Switch to low-carbon powerMethane reduction flaringChemicals recycling CCUSElectrolytic hydrogen Bioenergy and renewablesElectrification It is essential to focus on reducing energy consumption by improving the energy efficiency of processes, adopting clean fuels across sectors, switching to low-carbon power sources and scaling CCUS technologies. Source: Accenture analysis based on IEA ETP Clean Energy Technology Guide and MPP Net-Zero Industry Tracker: 2024 Edition 12