Energy mix Progress in evolving the energy mix has been relatively slow, as fossil fuels continue to be the primary source of energy, forming a 90% share of the energy mix on average across the sectors in scope. In comparison, fossil fuels form 81% of the total global energy supply,29 which shows that the sectors in scope are lagging behind in their energy transition journey. Heavy industry sectors like aluminium, steel and primary chemicals have increased the use of electricity in place of coal for generating heat for their production processes. Additionally, the aluminium sector is using nuclear energy for its production. Heavy transport sectors are yet to significantly replace fuel oil with alternative fuels, though slight progress has been made in the trucking sector, where the use of biofuels has increased. 2022 energy mix by sector (fossil fuels include coal, oil and gas) FIGURE 9 Fossil-fuels Electricity Biofuels Nuclear Others1% 100% 20% 40% 60% 80% 0%Shipping 100% Trucking 96% 4% Steel 83% 14% 3% Cement 8% 92% Aluminium 61% 39% 1% Primary chemicals92% 7%1% Oil and gas 100%Aviation 100% Sources: Accenture analysis based on IEA, IMO and IAI. Value chain emissions and offsets Value chain emissions (or Scope 3 emissions) remain high in the heavy industry sectors, largely because their upstream supply chains (e.g. raw materials) are highly carbon intensive or the products they produce rely on petrochemical feedstocks (such as plastics). Carbon offsets that result in additionality continue to be a valuable short-term solution towards emissions reduction, until the technologies and alternative fuels required for industry deep-emission reduction are commercially available. Heavy transport sectors like aviation and shipping have seen growth in the use of offsets, supported by industry-wide carbon offset policies such as voluntary carbon offsetting in aviation, and book and claim in shipping. The oil and gas sector is also one of the largest users of offsets to compensate for emissions that cannot be easily reduced through operational changes. Net-Zero Industry Tracker: 2024 Edition 18

Net Zero Industry Tracker 2024