Existing annual CapEx vs. additional annual required by 2050 by sector and ecosystem ($ billions)FIGURE 19 Steel Cement AluminumAviation Primary chemicalsTruckingShipping Oil and gas Existing annual CapEx Average additional annual CapEx required by ecosystem by 2050 Average additional annual CapEx required by sector by 2050968 170 179 44 20 71 91 286 213 107 320 111 39 90 129 147 35 16 23 51520 86 118 114 506 24 17 4123251 Way forward To decarbonize high-emission sectors, companies can use several capital-raising strategies. Green debt issuance, such as green bonds or sustainability-linked loans (SLLs) can provide the required funding by linking loan terms (e.g. interest rate) to sustainability metrics. This incentivizes companies by linking financial impact directly with sustainability performance. For example, voestalpine, an Austria-based steelmaker, has successfully issued the first green corporate bond for around $550 million to finance sustainable projects. Among these is voestalpine’s greentec steel, which refers to the production of high-quality steel with a reduced carbon footprint.70 Green securitization can unlock financing in debt capital markets for smaller-scale, low-carbon and climate- resilient assets, improving access to capital and reducing costs.71 Moreover, special funds are helping to decarbonize high-emission sectors, such as the Climate Investment Funds (CIF), which recently announced the launch of its Industry Decarbonization Program. This programme offers up to $1 billion to support the transition of heavy-emitting sectors in developing countries. The programme will spur innovation, provide proof of concepts for new technologies and advance a just transition.72 In addition, public-private partnerships (PPPs) can help in raising capital for decarbonization efforts. For instance, the US Department of Energy has allocated $2.2 billion in funding for the Appalachian Hydrogen Hub and the Gulf Coast Hydrogen Hub.73 National and regional development banks can enhance private sector investment by mitigating risks and facilitating access to capital, while development finance institutions (DFIs) improve the bankability of green projects through de-risking instruments and technical assistance. Private equity firms are also increasingly investing in long-term decarbonization opportunities for high- emitting sectors. For example, Ara Partners focuses on investing in technologies that replace polluting industrial processes, as well as in businesses that support decarbonization platforms through their products and services.74 Capital recycling also serves as an effective financing strategy for long-term decarbonization projects. By selling or leasing assets that have transitioned to a lower-risk phase, firms can repurpose the capital to invest in new green initiatives. This approach enhances asset efficiency while providing ongoing funding for decarbonization efforts.75Source: Accenture analysis based on MPP , S&P , DNV, Center for Global Commons and IEA data Net-Zero Industry Tracker: 2024 Edition 34

Net Zero Industry Tracker 2024