The World Economic Forum released the first edition of a report on the state of the net-zero transition in key industrial sectors, the Net-Zero Industry Tracker 2022. The report highlights the need to fully understand the scope and scale of the challenge for these sectors and identifies a significant gap versus the pace of decarbonization necessary to achieve net-zero goals to limit global warming to 1.5C by 2050. The urgency for industrial decarbonization is reinforced by high energy prices and energy supply chain disruptions.
This initiative establishes a common, fact-based understanding of the industrial sector’s net-zero transformation enabling cross-industry and multistakeholder collaboration. The report introduces a holistic framework for a 360-degree perspective and standard metrics needed to measure progress, as well as key recommendations for industrial firms, policymakers, consumers, and other stakeholders.
Progress-tracking and transparency are essential to help industries determine the trajectory of their decarbonization, maintain steady progress, and inform necessary course corrections along the way.
The report provides qualitative and quantitative measures to track the evolution of key enabling dimensions such as maturity of technology, access to enabling infrastructure, supporting policy frameworks, demand for low-emission products and availability of capital for investments in low-emission assets. It assesses the state of these enablers, which need to advance simultaneously, and highlights sector-specific accelerators and priorities in five heavy industries – steel, cement, aluminum, ammonia, and oil and gas, which together generate 80% of industrial emissions.
Given the cross-sector nature of barriers and priorities for industrial net-zero transformation, innovative forms of partnership within and across sectors, and with other stakeholders, will be fundamental to addressing the challenge. Other measures include consensus on defining “low-emission” industrial products and processes, robust and stable green demand signals, and risk-sharing mechanisms to attract necessary capital in technology and infrastructure development.
The report points out that over $2 trillion will be required to make low-emission industries a reality and that the first full-scale commercial projects still hold significant risks for companies to invest in.
The report, available here, underlines that concerted efforts also should include policy-makers, financial institutions and consumers.