Net-zero emissions by 2050 not possible without industries' contribution: WEF 2022 report  

Achieving the goal of net-zero emissions by 2050 can be far-fetched without the contribution of industries, according to the World Economic Forum's recent report titled Fostering Effective Energy Transition 2022 Edition. The report states that industries account for over 30 per cent of anthropogenic emissions or emissions of greenhouse gases and aerosols.  

Industries are faced with a gamut of challenges in this area-- lack of competitive low-emission technology, limited development of enabling infrastructure and scarce availability of capital to transform. It mentions, “Going forward, “clean demand” signals could be a turning point to accelerate “clean supply”.” 

As per the report, top contributors to industrial emissions include sectors like electricity, agriculture, transportation, building, oil and gas, cement, steel, chemicals and coal mining.  

It also added that global energy demand can see a massive change across sectors given the net-zero emissions by 2050 is accomplished. Sectors to be impacted if the net-zero goal is achieved include aluminium, cement, ammonia, steel, natural gas and oil.  

Any transition entails a lot of time and effort and is easier said than achieved. In case of net-zero transitions, the big challenge is the lack of viable alternatives to heavy industry products (steel, cement, chemicals and aluminium). For example: new cement chemistries can be less carbon-intensive but may substitute only a small share of global market due to scarcity of resource supply (fly ashes, calcinated clay) and differences in properties of the completed product.  

Same is the case with steel as “its high strength, recyclability and durability, the ease with which it can be used to manufacture goods and it’s relatively low cost make its wholesale substitution unlikely” even almost 30 years down the line. In such cases, only potential solution is aggressive decarbonisation of these sectors, which comes with its own set of challenges.  

These sectors are referred to as “hard to abate” since they have energy-intensive and complex supply chains that generate process emissions at times. For instance 60 per cent of cement emissions come from the calcination of limestone whereas 42 per cent of oil and gas emissions come from vented and fugitive methane, as per the report.

Heavy industry sectors are highly capital-intensive with long investment cycles and low margins due to which major overhauls in operations (significantly cutting carbon emissions, relining or plant building) take place in 2-3 decades. Production facilities are usually located near natural resources (coal mine, quarry) and/or demand centres can be very far from clean energy sources (solar, hydropower).  

Besides these changes can also weaken their competitive position in domestic economy as well as global markets. Heavy industries often have a large workforce and extensive networks of local suppliers and customers. G20 countries produce 85 per cent of global industrial output and are responsible for 75 per cent of global greenhouse gas emissions, as per the report.  

The industry can act in a three-pronged manner to keep the net-zero by 2050 within reach. This involves three archetypes – collaboration between customers and suppliers, collaboration between industry and cross-industry peers and collaboration between the wider ecosystem of stakeholders.  

As per WEF, “These 'next generation' collaborations differ from past partnerships due to a step change in ambition level, greater focus on emission reductions, new types of partners and new areas of emphasis. The sense of urgency combined with the steepness of the net-zero pathways have led leaders from both the public and private sectors to view collaborations as a key transition catalyst.” 

It furthermore stated, “Leaders now favour collaboration and transparency over competition, and increasingly consider decarbonisaton as a win-win situation that does not necessarily entail extra costs.” 

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