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Net-Zero

Industry Tracker

2023 Edition

INSIGHT REPORT

NOVEMBER 2023

In collaboration

with Accenture

Foreword

Executive summary

Introduction

1 Cross industry ﬁndings

2 Aviation industry net-zero tracker

3 Shipping industry net-zero tracker

4 Trucking industry net-zero tracker

5 Steel industry net-zero tracker

6 Cement industry net-zero tracker

7 Aluminium industry net-zero tracker

8 Ammonia industry net-zero tracker

9 Oil and gas industry net-zero tracker

Conclusion

Appendices

A1: Abbreviations and acronyms

A2: Mission and methodology

A3: Data sources

Contributors

Endnotes

Contents

Images: Getty Images

107

108

110

112

113

116

reserved. No part of this publication may

be reproduced or transmitted in any form

or by any means, including photocopying

and recording, or by any information

storage and retrieval system.

Disclaimer

This document is published by the

World Economic Forum as a contribution

to a project, insight area or interaction.

The ﬁndings, interpretations and

conclusions expressed herein are a result

of a collaborative process facilitated and

endorsed by the World Economic Forum

but whose results do not necessarily

represent the views of the World Economic

Forum, nor the entirety of its Members,

Partners or other stakeholders.

Net-Zero Industry Tracker 2023 Edition 2

Foreword

In a decade marked by economic expansion and

surging demand for goods and transport, we face a

paradoxical challenge: How can we address climate

change while fostering economic growth and resilience?

This challenge is particularly difﬁcult for companies

operating in the steel, cement, aluminium, ammonia,

energy and transport sectors. These companies

are critical to satisfying future demand and enabling

economic growth. Yet, they contribute over 40% of

the world’s greenhouse gas (GHG) emissions. Their

emissions are difﬁcult, but critical to abate.

It is encouraging that many businesses have

made signiﬁcant progress towards their 2050

net-zero goals. Yet most of that momentum is

seen in companies with easily abatable emissions,

substantial ﬁnancial resources to invest in

decarbonization, public accountability or those

operating in advanced economies with supportive

policies. A gap remains between those abatement

leaders and companies experiencing greater

emission intensity, operating in emerging economies

or lacking the ﬁnancial means to embark on a

substantial decarbonization journey. The challenges

facing these companies and sectors are pernicious –

and exacerbated by the fact that their technologies,

infrastructures and policy frameworks often fall short.

Through this effort, the World Economic Forum,

with support from Accenture, intends to accelerate

decarbonization of emission-intensive production,

energy and transport industries. Our aim is to

ensure that no company is left behind in the

transition to a more sustainable and carbon-neutral

future, for which timely and consistent monitoring of

industrial decarbonization is essential. This practice

is crucial to helping companies and industries

maintain a steady pace of progress. Still, it ﬁrst

requires a consensus on deﬁnitions and thresholds

of low-emission products and services from these

sectors. Without that, it will be difﬁcult to achieve

the transparency needed to build conﬁdence and

reinforce the momentum to net zero.

The Net-Zero Industry Tracker focuses on

production, transport and energy sectors.

Decarbonizing these industries’ processes and

value chains will require more than technological

advancements. The effort must encompass

business operations, regulations and wider

cross-sectoral collaboration. While some

countries are issuing supportive policies and

ﬁnancial commitments, the reality is that these

sectorsarelagging.

We believe a course correction is still possible. It

will require industrial leaders to champion innovative

business models and shared infrastructures, such

as hubs and clusters, that provide greater access to

development opportunities and promote equitable

sector growth. A successful transition will also require

signiﬁcant ﬁnancial commitments; we estimate

roughly $13.5 trillion will be needed to build the clean

power and electriﬁcation, hydrogen and carbon

capture utilization and storage (CCUS) solutions

and infrastructure to meet demand. Bi-directional

partnerships and cross-industry collaboration will

also be important in stimulating demand for (and

adoption of) low-emission products and clean

power-based technologies, developing industrial

applications and pursuing new market opportunities.

Sector-speciﬁc policies and regulations are essential.

So are cross-regional policies that can help bridge

disparities among regions.

Industrial decarbonization remains one of the

most daunting challenges of the energy transition.

Every country and industry must determine how to

incentivize domestic beneﬁts and create quality jobs

while ensuring the principles of free trade and open

markets. The key ﬁndings from the 2023 Global

Stocktake of the Paris Agreement conﬁrm that

reaching global net zero by 2050 requires much

more ambitious actions and far greater support than

we have seen. The reality is that the choices and

actions taken in this decade will signiﬁcantly shape

the trajectory of our collective futures.

Roberto Bocca

Head, Centre for Energy

and Materials; Member of

the Executive Committee,

World Economic Forum

Muqsit Ashraf

Global Strategy Lead,

Accenture

Net-Zero Industry Tracker

2023 Edition

November 2023

Net-Zero Industry Tracker 2023 Edition 3

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IncollaborationwithAccentureNet-ZeroIndustryTracker2023EditionINSIGHTREPORTNOVEMBER2023Images:GettyImages34Contents69Foreword2233Executivesummary4454Introduction65751Crossindustryfindings86972Aviationindustrynet-zerotracker1071083Shippingindustrynet-zerotracker1081104Truckingindustrynet-zerotracker1121135Steelindustrynet-zerotracker1166Cementindustrynet-zerotrackerNet-ZeroIndustryTracker2023Edition27Aluminiumindustrynet-zerotracker8Ammoniaindustrynet-zerotracker9Oilandgasindustrynet-zerotrackerConclusionAppendicesA1:AbbreviationsandacronymsA2:MissionandmethodologyA3:DatasourcesContributorsEndnotesDisclaimerThisdocumentispublishedbytheWorldEconomicForumasacontributiontoaproject,insightareaorinteraction.Thefindings,interpretationsandconclusionsexpressedhereinarearesultofacollaborativeprocessfacilitatedandendorsedbytheWorldEconomicForumbutwhoseresultsdonotnecessarilyrepresenttheviewsoftheWorldEconomicForum,northeentiretyofitsMembers,Partnersorotherstakeholders.©2023WorldEconomicForum.Allrightsreserved.Nopartofthispublicationmaybereproducedortransmittedinanyformorbyanymeans,includingphotocopyingandrecording,orbyanyinformationstorageandretrievalsystem.November2023Net-ZeroIndustryTracker2023EditionForewordRobertoBoccaMuqsitAshrafHead,CentreforEnergyGlobalStrategyLead,andMaterials;MemberofAccenturetheExecutiveCommittee,WorldEconomicForumInadecademarkedbyeconomicexpansionandTheNet-ZeroIndustryTrackerfocusesonsurgingdemandforgoodsandtransport,wefaceaproduction,transportandenergysectors.paradoxicalchallenge:HowcanweaddressclimateDecarbonizingtheseindustries’processesandchangewhilefosteringeconomicgrowthandresilience?valuechainswillrequiremorethantechnologicalThischallengeisparticularlydifficultforcompaniesadvancements.Theeffortmustencompassoperatinginthesteel,cement,aluminium,ammonia,businessoperations,regulationsandwiderenergyandtransportsectors.Thesecompaniescross-sectoralcollaboration.Whilesomearecriticaltosatisfyingfuturedemandandenablingcountriesareissuingsupportivepoliciesandeconomicgrowth.Yet,theycontributeover40%offinancialcommitments,therealityisthatthesetheworld’sgreenhousegas(GHG)emissions.Theirsectorsarelagging.emissionsaredifficult,butcriticaltoabate.Webelieveacoursecorrectionisstillpossible.ItItisencouragingthatmanybusinesseshavewillrequireindustrialleaderstochampioninnovativemadesignificantprogresstowardstheir2050businessmodelsandsharedinfrastructures,suchnet-zerogoals.Yetmostofthatmomentumisashubsandclusters,thatprovidegreateraccesstoseenincompanieswitheasilyabatableemissions,developmentopportunitiesandpromoteequitablesubstantialfinancialresourcestoinvestinsectorgrowth.Asuccessfultransitionwillalsorequiredecarbonization,publicaccountabilityorthosesignificantfinancialcommitments;weestimateoperatinginadvancedeconomieswithsupportiveroughly$13.5trillionwillbeneededtobuildthecleanpolicies.Agapremainsbetweenthoseabatementpowerandelectrification,hydrogenandcarbonleadersandcompaniesexperiencinggreatercaptureutilizationandstorage(CCUS)solutionsemissionintensity,operatinginemergingeconomiesandinfrastructuretomeetdemand.Bi-directionalorlackingthefinancialmeanstoembarkonapartnershipsandcross-industrycollaborationwillsubstantialdecarbonizationjourney.Thechallengesalsobeimportantinstimulatingdemandfor(andfacingthesecompaniesandsectorsarepernicious–adoptionof)low-emissionproductsandcleanandexacerbatedbythefactthattheirtechnologies,power-basedtechnologies,developingindustrialinfrastructuresandpolicyframeworksoftenfallshort.applicationsandpursuingnewmarketopportunities.Sector-specificpoliciesandregulationsareessential.Throughthiseffort,theWorldEconomicForum,Soarecross-regionalpoliciesthatcanhelpbridgewithsupportfromAccenture,intendstoacceleratedisparitiesamongregions.decarbonizationofemission-intensiveproduction,energyandtransportindustries.OuraimistoIndustrialdecarbonizationremainsoneoftheensurethatnocompanyisleftbehindinthemostdauntingchallengesoftheenergytransition.transitiontoamoresustainableandcarbon-neutralEverycountryandindustrymustdeterminehowtofuture,forwhichtimelyandconsistentmonitoringofincentivizedomesticbenefitsandcreatequalityjobsindustrialdecarbonizationisessential.Thispracticewhileensuringtheprinciplesoffreetradeandopeniscrucialtohelpingcompaniesandindustriesmarkets.Thekeyfindingsfromthe2023Globalmaintainasteadypaceofprogress.Still,itfirstStocktakeoftheParisAgreementconfirmthatrequiresaconsensusondefinitionsandthresholdsreachingglobalnetzeroby2050requiresmuchoflow-emissionproductsandservicesfromthesemoreambitiousactionsandfargreatersupportthansectors.Withoutthat,itwillbedifficulttoachievewehaveseen.Therealityisthatthechoicesandthetransparencyneededtobuildconfidenceandactionstakeninthisdecadewillsignificantlyshapereinforcethemomentumtonetzero.thetrajectoryofourcollectivefutures.Net-ZeroIndustryTracker2023Edition3ExecutivesummaryTheWorldEconomicForum’sNet-ZeroIndustryTheanalysisshowsthatemission-intensivesectorsTracker2023Editionprovidesadetailedanalysisofarenotalignedwiththetrajectorytoreachnettheprogressemission-intensiveindustrialsectorszeroby2050–asdeterminedbytheInternationalaremakingworldwide,intheireffortstoachieveEnergyAgency(IEA)andindustryspecificscenariosnet-zeroemissionsby2050.Thisanalysisfocusesandtargets.Overthepastthreeyears,absoluteonsector-specificacceleratorsandprioritiesinemissionshavegrownonaverageby8%duetotheharder-to-abateaspectswithinproductionincreasedactivityanddemandandallsectorsin(i.e.steel,cement,aluminiumandammonia),scopedependonfossilfuels,mostwithover90%energy(i.e.oilandgas)andtransport(i.e.aviation,reliance.Sectorssuchascementandsteelareshippingandtrucking).Collectively,process-andfacingthemostcomplexdecarbonizationchallengesenergy-relatedemissionsfromthesesectorsduetotheirenergyintensity.Infact,theiruseofaccountformorethan40%ofglobalgreenhouseenergyisequivalenttomorethan3timesthatofgas(GHG)emissions,whichishigherthanthetheenergyconsumedintheUS.Transitioningtheseemissionsofanyindividualcountry.Forthatindustriestoanet-zerofuturewillrequireacollectivereason,transparencyontheprogressthesesectorsinvestmentofapproximately$13.5trillion,prioritizingaremakingisessentialfortimelyandeffectivetheelectrificationoflowtomediumtemperatureinterventionstoensureweareontrackfornet-zeroindustrialprocesses.Thatiswhat’sneededtoemissionsby2050.scaleuptheessentialtechnologiesandsustainableinfrastructure,butinvestmentsaren’tenough.TheyWhilethepathwaytonetzeroinindustrialsectorsmustbecomplementedbypoliciesandincentiveswilldifferbasedonuniquesectoralandregionalthatcanhelptheindustriesmaketheswitchwhilefactors,ablendofelectrification(cleanpower),ensuringaccesstoaffordableandreliableresourcescleanhydrogenandfossilfuelsabatedbycarbonthatarecriticalforeconomicgrowth.captureutilizationandstorage(CCUS)formthebasisofindustrialdecarbonisationacrossmostThetrackerrevealsanencouraging,thoughsectors.However,arobustenablingenvironmentisvariable,increaseinawarenessandactionamongnecessarytoallowthemtoachievetheirrespectiveindustriestowardsachievingnet-zeroemissions.decarbonizationobjectives.Tohelpinthis,theYet,thereisstilltremendousopportunityforsectorsNet-ZeroIndustryTrackerappliesastandardizedtocometogethertodriveinnovationandaddressconceptualframework,includingemissiondriverstheirchallengescollaborativelythroughsharingandenablers,thatnotonlyprovidesacollectiveknowledgeandbestpractices,jointinnovation,measureofprogressandgapsbutalsohighlightsmarketaccessandconsumertrust,riskmitigationopportunitiesforcross-sectorcollaboration.andresiliencyplanning.BOX1Definitionsandgreenhydrogen(producedthroughelectrolysis).ThoughthepreferenceinmostCleanpower:Acombinationofsolar,off-shorecasesistowardsgreenhydrogen.wind,on-shorewind,nuclearandgeothermalenergyusedtoelectrifythermalprocessesinGreenpremium:Additionalproducts/fuelcostsproductionandasanalternativepropulsionpassedtobusinessesandendconsumers,sourceintransportsectors.associatedwithadoptionoflow-emissiontechnologies.Cleanhydrogen:Considersbothbluehydrogen(producedwithnaturalgasabatedbyCCUS)Net-ZeroIndustryTracker2023Edition4TABLE1Fivekeytakeawaysfromthe2023trackerTheuseoflow-emissiontechnologiesisgrowingatagradualpace;rapidaccelerationisneededtosupportcommercialdeploymentby2030.Thereadinessandadoptionoflow-emissiontechnologyremainslowacrossmostsectors.Aluminiumandtruckingaretwosectorsshowingearlypromise.Prioritizingmaterialcircularity,recyclingandtransitionfuelscanhelpindustriesbridgethegapuntiltechnologiesbecomeavailable.TechnologyFinancingneedsforlow-emissiontechnologiesaresignificantyetovershadowedbylargerinfrastructureInfrastructureinvestments.Industriesarelargelyreliantoncleanhydrogen,CCUSandelectrificationincludingrecharginginfrastructurefortransportsectors.WhilelocalcharacteristicslikecleanpowerandstoragesiteproximitywilldriveDemandearlytechnologyadoption,sharedinfrastructurehubsarevitaltoaccelerateddecarbonizationandimprovedaccessPolicyinremotelocations.CapitalStandardizeddefinitionsandthresholdsforlow-emissionproductsaregainingconsensus,essentialforencouragingfirstmovers.Earlymarketdemandsignalsareemerginginmostsectors.Overthelastyear,someproductionsectorshavewitnessedanincreaseinlow-carbonalternatives.Yetchallengeslikereportingstandards,supplychaininstabilityandtransparencygapspersist.Insomeinstances,businesstobusiness(B2B)greenpremiumsreachingupto400%,arelargelyuntestedatscale.End-productconsumersgenerallyexperiencerelativelymodestgreenpremiums,typically2-5%.Theevolvingpolicylandscape,drivenbysignificantindustrialpolicyinitiativesinselectcountries,isbolsteringinvestmentinlow-emissiontechnologiesandinfrastructure.However,thisshiftmayriskconcentratingindustrialactivityindevelopednations,necessitatingmultilateralcooperationtoaidmajorproducingregions.Globalalignmentonemissionsreductionrequirementsisneeded,withpoliciescustomizedtosuitindividualcountryneeds.Additionally,enhancingmarkettransparencynecessitatespolicymeasurestoincreaseemissionintensityvisibility.Sectorsneedadditionalinvestmentsofapproximately$11trilliontofundadoptionofcleanenergytechnologiesandretrofitlegacyassets,howevermostindustrieslackstrongbusinesscases.Suchashiftincapitalflowsshouldbesupportedbymarketstabilizingpoliciestoenhanceinvestmentattractivenessandcompaniesembeddinglong-termdecarbonizationsolutionsintotheirstrategiestotargetinggrowththroughsustainablevaluecreation.Capitalisalsoneededtoimproveemissionefficienciesforprocessesthatcannotbefullyelectrified.Inconclusion,decarbonizingemission-intensiveneedstobefoundonhowcollaborationacrossindustriesacrossproduction,energyandtransportcountriesneedstohappentosupportthistransitionsectorsrequiresamulti-facetedapproach.thatshouldpreservetheconditionsforeverylivingAligningtheessentialcomponentsofdemandforbeingandalsocreatewealth.The2023trackersustainableproducts,policyincentives,capitalreportrecognizesthat,despitethechallenges,thefortechnologyinvestmentsandinfrastructureglobalindustrialcommunityismakingprogressexpansionisthekeytoacceleratingprogress.towardsachievingnet-zeroemissions.BypullingPositivesignalsarecurrentlyemerging,butmuchtheenablingleversandencouraginginnovativemoreneedstobedone.Recognizinganewandcollaborations,industriescanpavethewayforaevolvinggeopoliticalcontext,anewequilibriumgreener,moreresilientandprosperousfuture.Net-ZeroIndustryTracker2023Edition5IntroductionTheNet-ZeroIndustryTrackeroffersadata-drivenTheunderlyingframeworkcombinestwoframeworktoassessandcomprehendtheprogresscomplementarylensestotrackindustries’progressofdecarbonizationacrossemissions-intensiveontheground–performanceandreadiness.Thisindustrysectors.year,toincreasetheoverallvolumeofemissionsbeingtracked,threetransportsectorshavebeenItskeyobjectivesincludesupportingtheglobalincluded.Consequently,the2023iterationoftheendeavourofindustrynet-zerotransformationbyframeworkforproductionandenergysectorsprovidingstakeholderswithadetailedframeworkremainsthesame,wherebythefieldofanalysisandmethodologytocomprehendthedrivingforcescoversscope1and2emissions.However,anbehindindustryemissionsandthefacilitatorsofadaptedversionhasbeendevelopedtoaccountnet-zerotransformation.Additionally,itprovidesbothforvarianceinreportingrequirementsforthenewlyquantitativeandqualitativescorecardstocontinuallyincorporatedtransportsectors,whichwillaccountmonitorindustryadvancementstowardsthenet-zeroforgreenhousegas(GHG)emissionsinthefuelgoal.Moreover,itidentifiespriorityareasforindustriessupplyandoperationalvaluechains(well-to-waketofocuson,promotingactionsthatacceleratetheiremissions)against2050targets.progressinthejourneytowardssustainability.BOX2DefinitionsInternationalAirTransportAssociation(IATA)NetZeroRoadmaps,InternationalAluminiumInstitute“Low-emission”productionisdefined(IAI)GHGPathways,InternationalCouncilonquantitativelyforeachindustryintermsofCleanTransportation(ICCT)Vision2050andproductemissionintensity(scope1and2).InternationalMaritimeOrganization(IMO)GHGStrategy.Businessasusual(BAU)trajectoriesTargetsreferto2030and2050emissionhavealsobeenconsideredbasedontheIEAintensitythresholdsbasedonsectornet-zeroStatedPoliciesScenarioandMissionPossibletrajectoriesusedfortheanalysis.ThesearePartnership(MPP)sectortrajectories.TheseproposedtrajectoriesbasedonanalysisoftrajectoriesareforthisanalysisonlyandnotafinaldatafromtheInternationalEnergyAgencyrecommendationfortheindustries.(IEA)NetZeroby2050,GlobalCementandConcreteAssociation(GCCA)ConcreteFuture,Net-ZeroIndustryTracker2023Edition6FIGURE1Net-ZeroIndustryTrackerframework–performanceNet-zeroindustryperformanceThefourdriversofindustrynetGHGemissions:ProductionProductionWhatisproduced:Howisitproduced:IndustryproductionvolumeProductionprocessemissionandmixandenergyintensityTransportTransportWhatisbeingtransported:Howitistransported:Industrytransportwork,Emissionandenergyintensity,volumeandmixtransportworkbyprocessNetGHGProductionemissionsWhatenergyisused:TypesofenergysourcesProductionconsumedWhatitcontributesto:Scope3emissionsandoffsetsTransportWhatfuelisused:TransportTypesoffuelsourcesWhatitcontributesto:consumedValuechainemissionsandoffsetsFIGURE2Net-ZeroIndustryTrackerframework–readinessNet-zeroindustryreadinessTheﬁveenablingdimensionsofindustrynet-zerotransformation:TechnologytodecarbonizeproductionprocessesCapitalTechnologyInfrastructuretotransformindustrytoenablelow-emissionassetbaseCapitalNet-zeroInfrastructureproductiontransformationPoliciesDemandtosupportlow-emissionenablerstobuylow-emissionbusinessmodelsproductsataPoliciesandpremiumpriceDemEachoftheenablersisassessedagainstfivestagesofreadiness,withtheassessmentcriteriaoutlinedinAppendixA2:Missionandmethodology.Net-ZeroIndustryTracker2023Edition7TABLE2ScoringmatrixfortransformationenablersKeyreadinessquestionsTechnologyInfrastructureDemandPoliciesCapitalIsthetechnologyIstheinfrastructureCanthemarketArethesupportingArereturnstoproducealow-toenableusepaytherequiredpoliciestoenablesufficienttoemissionproductoflow-emissiongreenpremiumforthegrowthoflow-driveinvestmentsatcompetitivecosttechnologiesthelow-emissionemissionindustrytowardslow-available?emissionassets?available?product?inplace?StageThelow-emissionThenecessaryThewholemarketPoliciesfullyLow-emissionproductioninfrastructurecanpaytherequiredcomplementinvestments5technologiesarerequiredbythegreenpremium.currentenvironmentgeneratesufficientfullyavailableandlow-emission(technology,returnforallcapitalStagecompetitivewithindustryisfullyMostofthemarketinfrastructure,expenditure(CapEx)high-emissioninplace.canpaytherequireddemand,capital),toflowtowards4alternatives.greenpremium.tosupportgrowthlow-emissionofthelow-emissionproductionassets.StageThelow-emissionThenecessarySomeoftheindustry.productioninfrastructuremarketcanpayLow-emission3technologiesarerequiredbythetherequiredgreenPoliciesstronglyinvestmentslargelycommerciallow-emissionpremium.complementgeneratesufficientStageandcompetitiveindustryislargelycurrentenvironmentreturnformostwithhigh-emissioninplace.Alimitedportion(technology,CapExtoflow2alternatives.ofthemarketcaninfrastructure,towardspaytherequireddemand,capital),low-emissionStageThelow-emissionThenecessarygreenpremium.tosupportgrowthproductionassets.productioninfrastructureofthelow-emission1technologiesrequiredbytheOnlyveryearlyindustry.Low-emissionarelargelylow-emissionadoptersintheinvestmentsdemonstratedindustryismarketcanpayPoliciesmoderatelygeneratesufficientincommercialpartiallyinplace.therequiredcomplementreturnforsomeconditions.greenpremium.currentenvironmentofCapExtoflow(technology,towardslow-Thelow-emissionThenecessaryinfrastructure,emissionproductionproductioninfrastructuredemand,capital),assets.technologiesrequiredbythetosupportgrowtharelargelylow-emissionofthelow-emissionLow-emissionprototypedindustryisindustry.investmentsatscale.emerging.generatesufficientLimitedpoliciesreturnforaThelow-emissionThenecessarycomplementminorityofCapExproductioninfrastructurecurrentenvironmenttoflowtowardstechnologiesrequiredbythe(technology,low-emissionarelargelyatlow-emissioninfrastructure,productionassets.conceptorearlyindustryneedsdemand,capital),prototypestage.tobedevelopedtosupportgrowthLow-emissionalmostentirely.ofthelow-emissioninvestmentsindustry.generatesufficientreturnforbarelyVerylimitedpoliciesanyCapExtocomplementflowtowardscurrentenvironmentlow-emission(technology,productionassets.infrastructure,demand,capital),tosupportgrowthofthelow-emissionindustry.Net-ZeroIndustryTracker2023Edition81CrossindustryfindingsNet-ZeroIndustryTracker2023Edition9Industrialsectors,acrossproductionandenergy,Decarbonizingtheseemissions-intensivesectorscontributeover30%ofglobalGHGemissions,isprimarilydependentonremovingtherelianceincreasingtoover40%whencombinedwithtransport(seeonfossilfuelsastheprimaryenergysourceandFigure3).Currently,noneofthesesectorsareoncourseswitchingtorenewablealternativessuchascleantoachievenet-zeroemissionsby2050.Progress,inpowerandcleanhydrogen,aswellasefficiencytermsofemissionsreductionandsectorreadinessimprovementsandabatingemissionsfromanyhasbeenlimitedinmostregionsoverthepastyear.remainingfossilfuels.FIGURE3GlobalGHGemissionsbysector27%15%8%Thetrackerrepresents:6%40%ofglobalGHGemissions85%ofmanufacturingemissions,2%56%oftransportemissions1%3%7%2%4%18%7%OilandgasSteelCementAluminiumAmmoniaAviationShippingTruckingOthertransportOtherindustriesBuildingsElectricitySource:BreakthroughEnergy,TheData,SectoralAnalysis,n.d.,https://breakthroughenergy.org/our-approach/the-data/sectoral-analysis/;IEA,NetZeroby2050,2021.Low-emissionproducts,fuelsandtechnologiesPositiveadvancementsareunderwayinregionsholdlessthan1%marketshareinmostsectors.suchastheUSandtheEU,wherelow-emissionThisisbecausetheyarecurrentlycostlyortechnologiesareprojectedtogaintractionbyhardtoscaleandmanysectorsprioritizenear-2030.Itiscrucialtoimplementacustomizedblendtermemissionreductionsolutions,whilethere’sofincentive-drivenandmandate-basedpolicies,insufficientregulation,standardsandconsumerconsideringtheeconomicconditionsofdevelopingawarenessaboutalternativeproductsandtheirnations.Globalcompaniesneedtotakemoreemission-cuttingpotential.substantialactionstoexpeditethetransition.Net-ZeroIndustryTracker2023Edition10Aspopulationgrowth,urbanizationandeconomicchains,transitioningtocleanerenergysources,expansiondriveincreaseddemandacrossallencouragingpolicycollaborationandraisingsectors,thecarbon-intensivenatureoftheseconsumerawareness.Energyefficiencyandenergyindustriesposesaformidablechallengeto1.5oCsavingscanoftenbeaquickwaytoachievesomealignedclimategoals.Prioritizingproactivereductionsinemissionsandenergyconsumption.decarbonization,coupledwiththecreationofHowever,thereneedstobeacomplementaryemploymentandwealth,isimperative.However,toolfordevelopingandscalingtechnologiesthatadoptingreactivemeasuresriskshighercosts,candeliverdeeperemissionscuts.Ultimately,inadiminishedcompetitivenessandafailuretomeet1.5oCalignedscenario,demandreductionthroughemissionsreductiontargets.Industriesneedtoefficiencyimprovements,productdiversificationde-coupleemissionsfromdemandbyembracingandsubstitutionwithlow-emissionalternativesinnovativetechnologies,optimizingsupplywillbeneeded.FIGURE4Demandincreasefrom2021to2050underIEAstatedpolicyandIEAnetzeroby2050scenarios6+317%25Aviation15(trillionRPK)59+95%115Shipping94(billioncargotonnemiles)25+140%60Trucking60(billiontonnekilometres)0102030405060708090100110120130Steel1,950+36%(milliontonnes(MT))1,878+49%2,547Cement1,509+66%(MT)+37%4,400Aluminium4,1005001,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,000(MT)6,1004,032Ammonia(MT)951031711501861852532280166+5%167Oilandgas175(mboe/d)3920406080100120140160180020212022BAUscenarioNet-zeroscenarioThousandbarrelsofoilequivalentperday;RevenuepassengerkilometreSource:IEAstatedpolicyscenarioandIEAnet-zeroscenarioNet-ZeroIndustryTracker2023Edition11PerformanceFossilfuelscomprisemorethan90%ofthecurrentintensitybysubstitutingfossilfuelswithrenewables,energymix,forsectorsinscope.Assuch,thenewenergysourcesandincreasingefficiency.volumeofabsoluteemissionsincreasesalongsideacceleratingglobaldemand.AbsoluteemissionsEmissionsintensitieshaveshownlittlereductionincreasedby8%between2019and2022acrossoverthesametimeperiod,suggestingthatallmostsectorsinscope.Thoughproductionandsectorsrequirelarge-scaleprocessandtechnologytransportdemanddecreasesareevidentinthedataimprovements.Itiscrucialtorecognizethatthroughthecourseofthepandemic.Mostsectorsefficiencyimprovementsthatareimportanttohaverecoveredtoorsurpassedpre-pandemicreduceemissionsmayreachaplateauduetodemandlevels,leadingtoasubsequentincreaseinherentprocesslimitations.Therefore,fossilfuelinemissions,emphasizingtheneedtodissociatesubstitutionisequallykeytoreducingemissionsemissionswithdemandgrowthandreduceenergyintensitiesinlinewith1.5°Cscenarios.TABLE3KeyperformancemetricsSectorAbsoluteemissionsAbsoluteemissionsEmissionsintensityEmissionsintensitygrowthgrowthgrowthgrowth(2019-2022)(trend)(2019-2022)(%)(2019-2022)(trend)(2019-2022)(%)Aviation-31ShippingTrucking2-13.7Steel-3.4Cement-0.30Aluminium4-2.9Ammonia30Oilandgas-4Source:IEAWorldEnergyOutlook2022Graphshowsmovementandtrendsacrosssectors,ratherthandirectunitbyunitcomparison;AviationemissionintensityandemissionsintensitygrowthexcludedduetoextremeoutliersacrossCOVID-19pandemicperiod;ShippingfiguresfromTheFourthIMOGHGstudy2020,arebasedon2018datathereforeexcludedfromthisassessment;Historicabsoluteemissionsdataunavailable;Dataavailablefrom2019-2021;Emissionsintensitytrendnotavailable.Net-ZeroIndustryTracker2023Edition12Theabsenceofprecisesector-specificdefinitionsasapercentageofproductionalignedwith2030forscientificallyquantifyingthresholdsisaprevailingtargets.Similarly,lessthan1%meetslow-emissionissue.Yet,thesignificanceofestablishingthesethresholds,definedasthepercentageofproductionbenchmarkscannotbeoverstated,giventhatthealignedto2050thresholds.Thetrendsoverthepredominantfocusofcurrentendeavoursremainslastfouryearssuggestthatnoneofthesectorsarecentredonhigh-emissiontrajectories.Currently,ontracktomeet2030targets,andasignificantaround7%ofproductionmeetstheexistingaccelerationofefficiencymeasuresandlow-thresholdsofreducedemissionproduction,definedemissiontechnologyadoptionisneeded.BOX3Definitions–Industrialproduction:TonnesofCO2equivalentpertonneofoutput(tCO2e/t)AbsoluteemissionsarethetotalGHGemissionsreleasedfromaspecificsource,measuredin–Oilandgas:KilogramsofCO2equivalentpergigatonnesofCO2equivalent(gtCO2e).Industrialbarrelofoilequivalent(kgCO2e/boe)production,oilandgasareassessedbyscope1and2emissions.Transportsectorsassessed–Aviation:GramsofCO2equivalentperrevenuebywelltowakeemissions.passengerkilometre(gCO2e/RPK)Emissionsintensityreferstothemeasureof–Shipping:GramsofCO2equivalentpertonnegreenhousegasemissionsperunitofactivitynauticalmile(gCO2e/t-nm)oroutputmeasuredin:–Trucking:GramsofCO2equivalentpertonnemile(gCO2e/tnm)Net-ZeroIndustryTracker2023Edition13ReadinessReachingnetzeroby2050acrossindustrialsectorssustainableandlow-intensityenergydemand,isdependentonadvancementsinfivekeyareas:developeffectivepolicies,andsecurethenecessarytechnology,infrastructure,demand,policyandcapitalinvestments.Achievingtheseobjectivescapital.Thisrequiresstrategicactionstobolstermandatesapragmaticandcoordinatedapproachtechnology,upgradeinfrastructure,stimulatetopromotesustainablegrowthandinnovation.TABLE42023industryenablersscores(arrowsdepictoverallchangeacrossindustriescomparedto2022scores)SectorTechnologyInfrastructureDemandPolicyCapitalAviationShippingTruckingSteelCementAluminiumAmmoniaOilandgasReadinessstages:Stage1Stage2Stage3Stage4Stage5Net-ZeroIndustryTracker2023Edition14Technology65%ofthe2050energyThetechnologylandscaperemainsverysimilartoparticularlyforcement:Withalackofviablelastyear,withmosttechnologiescurrentlyunderalternativesfornet-zerocement,researchandmixisexpectedtodevelopmentexpectedtoreachcommercialreadinessdevelopment(R&D),investmentandadditionalbecleanpowerby2030.Thetransformationofemissions-intensiveprojectsareneededtoimproveapplicationsindustrialandtransportindustries,wherechangestakeforsmallandremotefacilitiesandacceleratealongtimetoincubate,heavilyreliesontechnologicalcommercialscalingwithinthisdecade.innovation,activeinvestmentsandindustrialcoordinationandcollaborationtoshareandreplicate3.Accelerateddevelopmentofgreenhydrogenlearnings.Thesesectorsencounterdistinctchallenges,technology:Accesstogreenandblueoftencentredaroundtheimperativetoreducehydrogenisanimportantdecarbonizationtechnologycoststhroughstrategiessuchasscalingsolutionforseveralsectors.Despitepositiveupproduction,processoptimizationandderivingdevelopmentsinbluehydrogen,itisparticularlyinsightsfrominitialdeployments.Insomeinstances,importanttosignificantlyreducecostsgenuinetechnologicalrevolutionsareindispensable,andincreasesupplyofgreenhydrogentoasevidencedinsectorslikeaviationandcementdecarbonizeandreducefossilfueldependence.production.Assuch,threenet-zerotechnologieswarrantprioritizationforaccelerateddevelopment:Furthermore,sectortransitionextendsbeyondtheadvancementofoperationaltechnologies;itequally1.Increasecleanpower-basedtechnologyemphasizesthecriticalnecessityofintegratingadoptionacrossallsectors:Cleanpoweristheseinnovationswithestablishedbusinessexpectedtocompriseupto65%ofthefinalsystems.Toexpediteprogresstowardsachievingenergymixby2050andistheleastcomplexnet-zeroemissions,itbecomesimperativetomethodofdrivingemissionsreductions.prioritizetheaccelerationoftechnologyreadinesslevels(TRLs).Thisgoalcanberealizedthrough2.Commercialscalingofcarboncapturecollaborativeindustryeffortsandthedevelopmentutilizationandstorage(CCUS)technology,ofnewcross-industrypartnerships.FIGURE5Yearbywhichindustriescouldcommerciallydeploytechnologiesenablingthemtoreachtheir2050low-emissionintensitythresholdToday20252030AviationBiobasedSAFShippingMethanolAmmoniaTruckingBatteryelectrictrucks(BETs)SteelDRI-EAFwithcarboncaptureCementAluminiumInertanodesCarboncaptureforcementkilnsHydrogenfurnacesAmmoniaBluehydrogenOilandgasCombinationoftechnologiesrequired(seeoilandgastechnologypage)Source:Accentureanalysisbasedonmultiplesources,includingIEAandMPPNet-ZeroIndustryTracker2023Edition15Directreducediron-electricarcfurnaceSustainableaviationfuelsInfrastructureCleanpower,cleanhydrogenandfossilfuelsWithlessthan1%oftherequiredinfrastructureabatedbyCCUSwillneedtoaccountforcurrentlyinplace,theriskofcross-industryover90%ofthefinalenergymixfornetzerocompetitionforlimitedresourcesgrowsasdemandby2050withapplicationsacrossallsectorsforlow-emissionproductsandtransportrisesinscope,totallingaround$13.5trillionintowards2050.Totacklethis,promotingsharedinvestments(seeFigure7).Acceleratingcleaninfrastructuremodelslikeinfrastructurehubspowergenerationandenergystorageiscrucial.andindustrialclusterscanboostaccesstoTheshifttowardscleanpowersourcesrequiresdevelopment,encouragingmoreequalsectorsignificantchangesinelectricityprocurementandgrowthandcreatingadvantagesofscale.markets,placingagrowingemphasisonrenewableIndustriesshouldpartnerwithinfrastructureandenergyprocurementstrategies,suchasaccesstoenergyproviderstodevelopnewcontractsandandcoordinationofadiversesetofindustryplayerscomplementaryoperationalmodels.Bi-directionaltoincludesolar,nuclearandhydropower.Acleanpartnershipsbetweentwoormoreindustriesholdhydrogeneconomyisvitalforindustrieslikecement,thepotentialtodrivelow-emissionproductsteelandammonia,whilesectorslikeshippingdemandthroughmarketopportunitiesandandaviationareexploringhydrogen-derivedfuels.industrialapplications.Carboncapturecapacitymayneedtoincreaseby120-125timesby2050;however,inconsistentCCUSrevenuemodelsmustbeaddressed.FIGURE6Totalinfrastructureinvestmentsbyindustryandbyenablerby2050Aviation1,14090260ShippingTrucking1,92020180SteelCement1,3206501,350AluminiumAmmonia1,620890130Oil2,5705060240490120904010030Gas10040$,billions05001,0001,5002,0002,5003,0003,500CleanpowerCleanhydrogenCO2transportandstorageBiofuelsOtherSource:Accentureanalysisbasedonmultiplesources,includingIEA,IRENA,GlobalCCSInstituteandGMFNet-ZeroIndustryTracker2023Edition16FIGURE7Totalinvestmentsrequiredby2050byenablerTotalinvestmentsrequired=approximately$13.5trillion11%2%5%45%37%CleanpowerCleanhydrogenCO2transportandstorageBiofuelsOtherSource:Accentureanalysisbasedondatafromorganizationsincluding;GlobalCementandConcreteAssociation,InternationalAirTransportAssociation,InternationalEnergyAgencyNetZeroby2050reportandWorldEconomicOutlook.DemandTheindustryEarlymarketdemandsignalsareemerginginmostAcrossvarioussectors,severalkeyprerequisitesdilemmaregardingsectors,supportedbydevelopingpoliciesandanhaveemergedasessentialforcreatingdemandwhethertoincreaseinofftakeagreementsandgreensubsidies.forlow-emissionproductsandraisingconsumerstimulatedemandInitiativessuchastheFirstMoversCoalition(FMC)awarenessofproductandservicecarbonattributes.orsupplyrequireshavecontributedtocreatingastrongerdemandTheseprerequisitesinclude:immediatesignalforinnovative,cleantechnologiesinindustrialattentionandsectors.Manyproductionsectorshaveseenan1.Astandardizedframeworkforresolution.increaseinlow-carbonalternativesoverthelastlow-emissionproductsyear.However,alackofreportingstandards,supplychainstabilityandtransparencyare2.Asimple-to-deployemissionsconsistentchallengesacrossmostsectors,withintensitycalculatorassociatedgreenpremiumslargelyuntestedatthecommercialscale.Thecurrentindustry3.Anauditablecarbonfootprintdilemmaregardingwhethertostimulatedemandorassessmentprocess.supplyrequiresimmediateattentionandresolution.IndustryleadersandconsortiashareaunanimousNotably,theaviationsectorhasmadeprogressincommitmenttodevelopingnet-zeropathways,thoughpromotingtransparencythroughtheuseofcarbontheabsenceofreliablecustomerrevenuesignalsfootprintcalculators.Similarly,theconstructionbothintermsofpriceandvolumelimitexecution.Thissectorhastakenstepstocertifygreenproducts,uncertaintyposeschallengesforbusinesseslookingespeciallyinthecontextoflow-emissionbuildings,toinvestinandpursuepotentiallytransformativebutalthoughithashistoricallyexcludedprimaryuncertainopportunities.Industriesneedtocollaboratematerialsfromthesecertifications.Whiletheseacrossthevaluechaintocreatetransparencyaroundsectorsserveascommendableexamples,itisapplicationsofcleantechnologies,clarifyinfrastructureimperativeforotherindustriestofollowsuitanddemandrequirementsandprioritizeaccordingly,adoptsimilarmeasures.reducingtheenergyintensityofprocessactivities.Net-ZeroIndustryTracker2023Edition17FIGURE8Averagebusinesstobusiness(B2B)greenpremiumbycurrentestimatesAviation350Shipping50Trucking142Steel57Cement80Aluminium38Ammonia80Oil10Gas7%050100150200250300350Source:Accentureanalysisbasedonmultiplesources,includingMPP,ETC,BloombergandIEAFIGURE9Averagebusinesstoconsumer(B2C)greenpremiumbycurrentestimatesAviation15Shipping2Trucking2Steel0.5Cement3Aluminium0.5Ammonia30Oil6Gas3%051015202530Source:Accentureanalysisbasedonmultiplesources,includingMPP,ETC,BloombergandIEANet-ZeroIndustryTracker2023Edition18Policy20%ofcountrieshavePolicyplaysapivotalroleinsectoraldecarbonization,–Severalcountrieshaveintroducedpoliciestoservingdualobjectives:advancingclimategoalsenableCCUStechnologyandinfrastructurecarbonpricingandbolsteringdemandandeconomicresilience.Itdevelopments.Theseincludecarboncapturemechanismsmustalsonavigatethedelicateequilibriumbetweenandstorage(CCS)investmenttaxcreditsindomesticeconomicgrowthandtheexpensestiedtoCanada,theEU’sInnovationFundforCCSsupplychainonshoring.Majorproducingcountries/projects,andJapan’scommitmenttodeveloparegionssuchasChina,India,theUSandtheEUCCS-specificregulatoryframework.havenowcommittedtonet-zerotargets,makingitimperativeforbusinesseswithintheirjurisdictionsto–ComprehensivepolicypackageslikeUS’aligntheiroperationsandstrategieswiththeevolvingInfrastructureInvestmentandJobsAct(IIJA)regulatorylandscape.However,complexandandInfrastructureInvestmentandJobsActever-changingpolicyregimesresultinbusinesses(IRA)thatprovidefiscalstimulustomultipleallocatingsubstantialresourcestowardscompliance,areasofindustrialdecarbonizationhavealsoimpedingprogress.Establishingmoreconsistentbeendeployed.andstableregulatoryframeworkswithwell-definedtimelinesisimperativeformitigatingtheserisks.–Whiletheabovepoliciesaddressthesupplyside,demandsidemeasuressuchasgreenEmergingsignalsindicatearangeofcross-sectoralpublicprocurement(GPP)areadvancing,policysystemsbeingtestedworldwide:withCleanEnergyMinisterial’sIndustrialDeepDecarbonisationInitiative(IDDI)drivingglobal–Currently,20%ofcountrieshaveimplementedGPPcommitmentsinheavyindustries.variousformsofcarbonpricingtoincentivizeashiftawayfromemission-intensiveproductionroutes.1Whilethesepolicysystemsshowpromise,it’sAdditionally,importcontrolprogrammes,likeimportanttonotethattheirapplicabilityvariestheEU’sCarbonBorderAdjustmentMechanismacrossdifferentsectors,particularlyinaddressing(CBAM),complementthesemeasures.emissions-intensivesectorsacrossindustry,energyandtransport.Eachsectordemandsspecific,–IncountrieslikeChinaandIndia,national-well-definedpoliciesandregulationsthatalignwithlevelactionplansandroadmapsforcleanevolvingconsumerrevenuemodels.Furthermore,hydrogenhavebeenadoptedtoencouragethereisanurgentneedforeffectivecross-regionalinvestmentsacrossthehydrogenvaluechainpoliciesthatbridgethecurrentdisparitiesamongthataidlarge-scaleindustrialtransformation.regions,whichareimpedingglobalCO2emissionsAlso,theG20membercountrieshaveagreedreductionefforts.toguidingprinciplesthatenabletheproduction,consumptionandglobaltradeofcleanhydrogen.Net-ZeroIndustryTracker2023Edition19CapitalToimproveAnadditional$11trillionisrequiredbyprocurementandastrongbusinesscase.accesstocapitalindustriestoretrofitexistingassetswithcleanInstitutionalinvestorsandmultilateralbankscanandgeneratetechnologiesandorderanewzero-emissionplayacrucialrolebyprovidingaccesstolow-sustainablefleetoutsidetheBAUassetrenewalcycle.Forcostcapitallinkedtoemissionstargets.However,returns,improvedsomeindustries,likecement,thismeansattractingadaptingfinancialmodelstoalignwiththespecifictransparencyalmostdoubletheirannualCapExtoinvestinneedsofvariousindustriesandregionsisequallysurroundinglow-cleantechnologies.However,thecurrentmarketvitaltomobilizingthenecessarycapital.emissionandlow-landscapelackssufficientincentivestoinvestincarbonalternativeslow-emissiontechnologiesandposesarisktoearlyManycompanieshavedemonstratedtheirisneeded.investorsacrossmostsectors.commitmenttoreducingemissionsbyintegratingemissionconsiderationsintotheirdecision-Industrycollaborationisimperativetoreducemakingprocesses.Somecompaniesexhibitacosts,acceleratelearningcurvesandestablishmorecomprehensiveapproach,providingdetailedmarketstabilitytoincentivizegreaterinvestmentinemissionsreportingandclearemissionreductiondecarbonizationefforts.Industrialdecarbonizationtargets.However,asignificantportionofcompaniesrequiresthepoolingofcollectiveknowledgeandlagbehind,limitedtobasicemissionreportingandresourcesacrosssectors;bothstart-upsandreductiontargets,particularlyindevelopingcountries.incumbentshavearoletoplay.CollaborationallowsfortheefficientexchangeofexpertiseCurrentindustryprofitmarginsindicatethatmanyandassets,leadingtothedevelopmentofmoreindustriesareill-preparedtoabsorbadditionaleconomicallyviabledecarbonizationtechnologies.costswhilegeneratingsufficientreturns.ToThiscooperativeapproachnotonlyalleviatesimproveaccesstocapitalandgeneratesustainablethefinancialburdenonindividualsectorsbutreturns,improvedtransparencysurroundinglow-alsocreatesmarketpredictability.Astableandemissionandlow-carbonalternativesisneeded.predictablemarketenvironmentisparamountinStrengtheningdemandsignals,particularlyforattractingincreasedinvestmentsindecarbonizationnewtechnologyapplications,iskey.Collaborativeinitiativesandcultivatingstakeholderconfidence.infrastructuredevelopmentacrossregionscanplayapivotalroleinmitigatingearlyinvestorrisk,RedirectingcapitalforindustrytransformationreducingCapExrequirementsforindividualsectors,requiresstrategicpolicyinterventions,includingandultimatelyleadingtomoresubstantialandcarbonpricing,technologysubsidies,publicsustainablereturnsoninvestment.FIGURE10EstimatedannualCapExvsBAUannualCapEx($,billion)78Aviation18536Shipping1718Trucking7896Steel1742Cement3020Aluminium723Ammonia36690Oilandgas320100200300400500600700BAUCapExAdditionalCapExrequiredSource:AccentureanalysisbasedonmultiplesourcestoincludeIEA,EMSA,MPPandIATANet-ZeroIndustryTracker2023Edition20FIGURE11ActionstosupportnetzeroindustrialtransformationForpolicy-makers:Forindustry:Forcompanies:1Implementnationallytailored1Supportregulationsandstandards1Embedmeasurablenetzeroincentiveandmandate-basedandclarifyingnetzeroandtargetsandpathwaysintotheirpolicies,suchastaxsubsidiestransitiontechnologiestoimprovelong-termstrategies.andemissionscapstostimulatetransparencyforproducers,demandforlow-emissioninvestorsandend-consumers2InvestinR&Danddeploymenttotechnologies,especiallyinacceleratethelearningcurvefordevelopingregions.Policy2Collaborateacrosssectorsforlagginglow-emissiontechnologies.measuresneedtobetailoredimprovedinfrastructureaccessandtonationalcircumstancesandfasterdevelopment.3Enhanceaccesstoinfrastructureﬁscalcapabilities.andimplementdecarbonisation3Increasethenumberofsolutionswithinthisdecade.2Implementcarbonpricinginallofftakeagreementsby2030tomajorproductionregionsandstimulateearlylow-emissionmaintransporthubs.technologydemand.3Increasegreenpublicprocurementandpublic/privatepartnershipstoprovideearlydemandsignalsforlow-carbonproductsandmitigateearlyinvestorrisks.Decarbonizingindustrialsectorsrequirescollectivecollaborationamongpolicy-makers,industryconsortiaandcompanies.Net-ZeroIndustryTracker2023Edition212Aviationindustrynet-zerotrackerSAFareconsideredkeytodecarbonizingaviation,butcurrentcommerciallimitationsmeanthatSAFonlyprovidesaround40%emissionsreduction.Key2%0.98gtCO2e-25%emissionsdata2,3,4,5ContributiontoglobalOperationalandfuelsupplyEmissionsgrowthGHGemissionschainemissions(2019-2022)>99%83gCO2e2-5timesFossilfuelsinthefuelmixEmissionsintensityemittedExpecteddemandincrease(2022)perpassengerkm(2020)by2050Net-ZeroIndustryTracker2023Edition22ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–Net-zeroemissionsby2050.9Twoleadingdecarbonizationpathwayshaveemerged:matureSAFand–73%10oflargepubliclytradedlessmaturenovelpropulsiontechnologies.However,themostadvancedpathwayis2-5timeshighercostthantraditionaljetfuel.6aviationcompaniesconsiderclimatechangeintheirInfrastructuredecision-makingprocesses.$2.4trillion7ininfrastructureinvestmentisrequiredtosupportEmissionfocusthedevelopmentandscalingofaviationtechnologyby2050.areasfortrackerDemandAviationemissionscanbedividedintotwomaincategories:AlthoughSAFadoptionwaslessthan1%8offlightsin2022,thereisagrowingshifttowardssustainablebusinessmodelsandagreements1.Well-to-tankmainlysupportingitsuse.upstreamemissionsfromproductionanddistributionPolicyoffossilfuelsCurrentpoliciesprimarilytargetdevelopedcountries,butfurtherpolicy2.Tank-to-wakeprimarilydueadvancementsareneeded,liketaxsubsidies,directfundingandadditionaltocombustionoffossilfuels,fuelstandards,toincentivizebiofuelsinfrastructure.predominantlyjetfuel,usedduringflightoperations.CapitalTheindustryneedsapproximately$5trillionby205011,farexceedingcurrentairlineinvestments.Low-profitmarginsanda7%weightedaveragecostofcapital(WACC)makeithardtoattractprivatecapitalforlow-emissionassets.12SectorprioritiesExisitingtransportReducenear-termemissionsintensityby:–Increasingthenumberofoperationalsyntheticfuelprojects–Increasingbiofuelsrefiningcapacitytosupportadditionalcommercialscalehydroprocessedestersandfattyacids(HEFA)projects–Usingefficiencyanddesignimprovementopportunitiesatanacceleratedpace.NextgenerationtransportAcceleratebatteryelectricandhydrogentechnologydevelopment,toreduceabsoluteemissionsby:–InvestinginnextgenerationtransportR&Dandacceleratingthelearningcurve–Developinghydrogenstoragecapacityandrefuellingcapabilities–Investingincleanpowerinfrastructure.EcosystemDe-riskcapitalinvestmenttoscaleinfrastructurecapacityby:–Increasingthenumberofofftakeagreements,strengtheningmarketdemandsignals–Acceleratingpowertoliquids(PtL)development,mitigatingbiofuelssupplychainlimitations–Implementingablendofpolicies,primarily,taxsubsidies,directfundingandadditionalfuelstandards,incentivizingbiofuelsproduction.Net-ZeroIndustryTracker2023Edition23PerformanceEmissionsprofileAbsoluteemissionsingigatonnesofCO2areEmissionsintensity,measuredasCO2emittedimpactedbyfuelburn,loadfactors,aircrafttypeperpassengerkilometre,isinfluencedbyaircraftandrouteoperated,amongotherfactors.Thetypeandroutes.In2022,emissionsintensitypermostsignificantemissionsreduction,around65%,passengerkilometrewashigherthanpre-pandemicisexpectedbetween2030-2040asSAFbecomeslevelsduetodemandbeingaround80%of2019morewidespread.Furtherefficiencymeasureslevels.14Emissionsintensityisnowdecreasinginlinehavethepotentialtoenhancefuelefficiencybywithgrowingdemand.However,aviationneedsto30-40%by2050.13reduceitsemissionsintensitytonetzeroby2050,withover70%15ofthereductionexpectedbetween2030to2050asSAFadoptionincreasesalongsideincreasedefficiencymeasuresandoffsetting.FIGURE12FuelGHGemissionsintensitytrajectoryforaviationtCO2e/tonne100908888882050BAU60scenario88204088tCO2e/tonne8083Net-zeroscenario2050net-zero70scenario6023tCO2e/tonne50205040302010020302020Source:AccentureAnalysisbasedonICAOandIEAdataBAUscenarioBOX4OffsetsCarbonOffsettingandReductionSchemeforprecisefiguresremainuncertain.AlthoughInternationalAviation(CORSIA),mandatesparticipationiscurrentlyvoluntary,itisanticipatedoffsettingCO2emissionsexceedingpre-pandemictoincrease,alongsideassociatedregulations,aslevels(2019)thatcannotbereducedbyothertheschemeadvancesthroughdefinedphases.methods.16In2021,roughly9%ofaviationPhase1issettocommencein2024.emissionswereeligibleforoffsets,althoughNet-ZeroIndustryTracker2023Edition24PathforwardThekeydecarbonizationstrategyinvolvessustainablefeedstockR&D.DespitethecurrentsubstitutingtraditionalfuelswithSAFtoreducedominanceoffossilfuels,projectionsindicatein-flightemissionsby75-95%,coupledwitha65%emissionsreductionby2030-2040asefficiencymeasures.17Achieving85%SAFSAFscalesupto50%ofthefuelmixalongsideadoptionby2050necessitatescoordinatedeffortsincreasedefficiencymeasures,ultimatelyreachingfromstakeholders,governmentsandadvisoryan85%reductionby2050.19Furtherreductionsbodies.18Prioritiesincludepromotinglow-emissionby2050stemfromnovelpropulsiontechnology,fuels,stimulatingSAFdemandandadvancingalbeitinsmallerproportions.FIGURE132020fuelmix0.06%99.94%0%10%20%30%40%50%60%70%80%90%100%FossilfuelsNon-fossilfuelsFIGURE14MPP2050net-zeroscenario41%22%19%10%2%5%5%0%10%20%30%40%50%60%70%80%90%100%110%EfﬁciencyimprovementsFischer-Tropsch(FT)andalcohol-to-jet(AtJ)PtLHydrogenUnabatedfossilfuelsHEFABatteryelectricNote:Totalsdonotaddupto100%asnotafuelmixNet-ZeroIndustryTracker2023Edition25AVIATION2TechnologyTwoleadingdecarbonizationpathwayshavequantities,thoughincreasedcommercialavailabilityemerged:SAFandnovelpropulsiontechnologies.isexpectedbefore2025.20Novelpropulsiontechnologies,suchasbattery-electricandhydrogen,SAFincludesbiofuelsmadethroughtheHEFA,FTarelessmatureandanticipatedtobecommerciallyandAtJpathways,aswellassyntheticaviationfuelsreadyby2040.21Currently,thetotalcostofmadefromcapturedcarbonandgreenhydrogenownership(TCO)forHEFAis2-5timeshigherthanelectrolysis,calledpower-to-liquids(PtL).HEFAisthetraditionaljetfuel,andlessthan1%ofmostadvancedandiscurrentlyavailableinsmalltheglobalfleetuseslow-emissiontechnologies.22SAFpathwaysUptoFuelswitchingto100%renewabledrop-infuelsrefiningcapacityandincreasedproductioncostshasthepotentialtocutin-flightemissionsby(upto5timesjetfuel26).95%75-95%whilematchingjetfuel’srange(uptoemissions15,000km).23However,withSAFcurrentlylimitedSyntheticfuels,thoughlessmature,areadvancing,reductiontoa50%blendrate,emissionsreductionpotentialwithcommercialavailabilityexpectedaroundpotentialstandsatamaximumofaround40%.242025.27Despitehigherproductioncosts(upto9timesjetfuel)andlaggingcleanhydrogenandHEFAisthemostmature,poisedforcommercialdirectaircapture(DAC)infrastructuredevelopment,availabilityby2025,whileotherFTandAtJprojectstheirsyntheticnatureaddressesfeedstockaremostlyinlargeprototype-demonstrationstage,availabilitychallenges.AcceleratedR&Dandalsotargetingcommercialreadinessby2025.25adoptionofPtLhavethepotentialtoalleviateHowever,commercialscalabilityislimitedbythesupplychainchallengesinSAFproduction.finitenatureofbio-basedfeedstocks,insufficientNovelpropulsiontechnologiesBattery-electricaircraftandhydrogenaircraftoffertheInSeptember2022,Eviation28conductedthefirstlowestemissionalternativestojetfuelupto100%testflightof“TheAlice”,theworld’sfirstcommerciallyemissionsreduction.However,theirlimitedrange,scalablefullyelectricaircraft.Commercialoperationsprolongedsafetyapprovals,highR&Dcostsandaresettobeginin2027,withover50ordersbyinsufficientavailabilityofcleanhydrogenandcleanpowerJune2023valuedat$4billion,indicatingstronginfrastructuredelaywidespreadadoptionuntilthe2040s.marketdemandandconfidenceinelectricaviation.Net-ZeroIndustryTracker2023Edition26RechargingandrefuellingtechnologiesWithon-boardbattery-electricandhydrogentheirrequiredavailability.Asnovelpropulsionfuelcelltechnologylimitedatprototypestage,technologiesdevelop,additionalR&Dtoimprovetechnologyprovisionsforfastchargingandthetechnicalcapabilitiestomatchcurrentaviationrefuellingtechnologiesarenascent,inlinewithbusinessmodelswillbeneeded.TechnologypathwaysFIGURE15EstimatedTRLandyearofavailabilityforkeytechnologypathwaysEarlyadoptionMature91110Demonstration8HEFA(pre-2025)7FT(~2025)Largeprototype6PtL(~2025)AtJ(~2025)5Hydrogen(2040s)Battery-electric(2040s)Smallprototype43Concept21Source:Accentureanalysisbasedonmultiplesources,includingIEAandMPPNet-ZeroIndustryTracker2023Edition27AVIATION2InfrastructureThecurrentinfrastructureisinadequatetosupporthydrogeninfrastructureandimplementingDAC,thedevelopmentandscalingofdecarbonizationequivalentto95milliontonnesperannum(MTPA)ofpathways,especiallyregardingSAFproductioncleanhydrogenand490MTPAofcapturedcarboncapacityandfeedstockavailabilityforSAF.asfeedstockforPtLproduction.33Lessthan1%oftherequiredSAFinfrastructurecurrentlyexists.It’sestimatedthat$2.4trillion29inAscleanhydrogenandcleanpowertechnologiesinfrastructureinvestmentswillbenecessarytomeetadvance,downstreaminfrastructurerequirementsSAFdemandby2050,with$0.9-1.5trillionwithinareexpectedtoemerge,includingcleanhydrogentheaviationindustry’simmediatescope.30storage,chargingstations,electrifiedgroundpowerandgridconnectioninfrastructureoron-sitepowerThemajorityoftheseinvestmentsshouldgenerationcapacity.IndustryplayersarealreadyfocusondevelopingupstreamSAFproductiontakingstepsinthisdirection.Forinstance,ininfrastructure:31About18%oftotalinvestmentsNovember2022,AirbusjoinedHyPort,34aventurebyshouldgotowardsbiofuelsrefiningcapacity,ENGIESolutionsandAREC,todevelopapioneeringresultinginestablishingapproximately7,000cleanhydrogenproductionanddistributionstation.biorefineries,equivalentto12exajoules(EJ)ofThefacilityissettocommencehydrogenproductionHEFAandotherbiofuelsby2050.32Theremainingin2023,capableofpoweringupto50ground73%shouldbedirectedtowardscreatingcleanvehiclesandscalableforfuturehydrogenaircraftuse.FIGURE162050investmentrequirementsInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredCO2transportUpto6%490andstorage$90MTPAbillionCleanhydrogenUpto76%95production$1.1MTPAtrillionBiofuelsUpto18%335$260MTPAbillionCleanpowerDataDataDatagenerationunavailableunavailableunavailableSource:AccentureanalysisbasedonmultiplesourcesincludingIATAMPP,IEAandGlobalCCSInstituteNet-ZeroIndustryTracker2023Edition28AVIATION2DemandSAF,whichrepresentslessthan1%ofthecurrentComparingtheTCOtojetfueluse,theadoptionofaviationfuelmix,remainsuntestedintermsofitsHEFAcarriesa300%fuelcostincrease,resultingabilitytoabsorbthegreenpremiumdueto2022’sinabusinesstobusiness(B2B)greenpremiummarketdemandbeinglessthan1%.35,36However,ofmorethan45-60%.38HEFAcarriesanaveragethereisagrowingshifttowardssustainableB2Cgreenpremiumof3-12%perplaneticket.39businessmodelsandSAFofftakeagreements.Althoughpassengersandairlinescurrentlycoverthesehighercosts,thismarketscenarioisnotBy2030,SAFproductionisexpectedtoreachsustainableandposesrisksforearlyinvestors,approximately17.3billionlitres,drivenmainlybyhinderingcommercialscalabilityandadoption.CostNorthAmerica,EuropeandAsia.Tomeetthereductionisessentialtoensurebothsupplyand2050targetofaround475billionlitresannually,demandoflow-emissiontechnologies.productioncapacityneedstoincreaseby27timesfrom2030to2050.37FIGURE17EstimatedB2BandB2CgreenpremiumServiceprovider+300-ConsumerAvgEndconsumerFuelproducer400%Airline+3-12%PassengerperlitreperticketoffuelSource:AccentureAnalysis,basedonMPPandAccenturedataTheadoptionofSAFtechnologieswillrequireThereareearlysignsofgrowingmarketdemandbusinessmodeldiversificationintheupstreamwithindustryplayersadoptingmeasurestoboostaviationfuelvaluechain.ThereareeightAmericandemand.AirlineslikeLufthansaofferoptionalfareSocietyforTestingandMaterials(ASTM)certifiedincreasestooffsetcarbon,whileAir-FranceKLMproductionpathways,40however,thediversityimposesmandatorygreensurcharges.InDecemberofbiomassoptionsandblendratespresents2022,AirFrance-KLMandTotalEnergies41signedchallengesinstandardizationandsupplychainamemorandumofunderstanding(MoU)forTotalstability.ExistingbusinessmodelsarerelativelyEnergiestosupply800,000tonnesofSAFtoAirsimple.However,sourcingastablefeedstockFrance-KLMover10years.Moreover,approximatelysupplyforbiobasedSAFandaccesstogasmarkets42offtakeagreementswereannouncedin2022,tosourcecapturedCO2andcleanhydrogenforPtLtotallingaround22millionlitresofSAF.However,willrequirethecreationofnewmarkets,contracts,regulatoryincentivesandanincreaseinpublic-ecosystemsandsupplychains.Theseactivitiesaddprivatecontractsarerequiredtoensuredemandcomplexitytothemarketenvironment.Still,theyaregrowth,alongsidetheseindustryefforts.necessarytoensurethestabilityofSAFsupplyandprovideopportunitiesforsmallerindustryplayerstodriveinnovationinSAFdevelopment.Net-ZeroIndustryTracker2023Edition29AVIATION3PolicyPoliciesAviation’sdecarbonizationwillrequireamixofemissionscomparedtothebaselineof89MJ/kgasarescarceinpolicytools.CurrentpolicieshavemainlyfocuseddefinedbyCORSIA.WhilecertainSAFalternativesdevelopingondevelopedcountries,butfurtherpolicycanreachupto95%,withaminimumthresholdofeconomiesandadvancementsareneeded,suchastaxsubsidies,65%requiredtoqualifyforsustainablecertification.44needtoexpanddirectfundingandadditionalfuelstandards,totoachievetheincentivizebiofuelsinfrastructure.AlthoughCORSIAhascertifiedeightSAFproductionprojectedSAFmethods,theavailabilityofdiversebiomassoptions,productionWhileaviationoperatesglobally,individualcountriesfeedstocksandblendratespresentschallengesintargets.handleairlineregistration,andfuelproductionextendsestablishingconsistentstandardsandregulations.beyondcarrierregions.ToeffectivelydriveaviationAssuch,theemissionsreductionpotentialofsectordecarbonization,internationalregulationsCORSIA-approvedfuelscanrangefrom10%withmustbecomplementedbyregionalpolicies.LCAFtoSAF,whichhasthepotentialtoreduce95%ofemissions.ThediversityinSAFproductionDevelopedeconomies,notablytheUS,havetakenalsohampersstandardization,regulationandtheleadinimplementingpoliciesthataddresstraceabilityofuseacrossthevaluechain.variousreadinessenablers.42However,similarpoliciesarescarceindevelopingeconomies,andTomeetICAOtargets,policiesshouldencouragepolicycoverageneedstoexpandthroughoutthelow-emissionfueluseandoperationalefficiency.2020stoachievetheprojected2billionlitresofSAFKeyactionsincludeenforcingfuelstandards,productioninAsiaby2030.43streamliningapprovals,enhancingR&DpoliciesandconsideringSAFmandates,CarbonContractsforLowercarbonaviationfuel(LCAF)isfossil-basedDifferences(CCfDs),book-and-claimsystemslikejetfuelthatisproducedwithatleast10%fewerAvelia45andfiscalincentives.ExistingpolicylandscapeTABLE5Policysummary46EnablerPolicyPolicyKeyexamplesImpactTechnologytypeinstrumentsIncentivizesemissionreductionamongairlinesbutMarket-isconstrainedbyfreeallowancesandreducedbasedCarbon–EU-EmissionTradingSchemecarbonprices.Currentlylimitedtointra-EUflights,pricing(ETS)47expandingtoallEUentriesin2024.Emissionscap–CORSIA48Projectedemissionmitigationpotentialisaround2.5gigatonnesofCO2equivalent(gtCO2)by2035Mandate-Performanceviaoffsets.49Limitedtovoluntaryparticipation,basedstandardsandmandatoryoffsetsfrom2027,withincreasingcertificationemissionsreductionasprogresscontinues.Directtaxation–EnergyTaxationDirective:FitProjectedtodecreaseEUaircraftemissionsfor55(proposed)51by66%by205050IncentivizesSAFadoptionviataxationofjetfuel.Incentive-Subsidies,–USBlender’sTaxCredit(BTC)52$1.25-1.75pergallontaxcreditsforSAFbasedtaxcreditsproducers–around17%higherthanotherfuels–AlternativeFuelInfrastructuresuchasbiodiesel.53InfrastructureMandate-DirectRegulation(AFIR)54basedregulationMandatorydeploymenttargetsforcleanpowerinfrastructuretoboostdevelopmentofbattery-electricaircraft.Net-ZeroIndustryTracker2023Edition30TABLE5Policysummary46(continued)InfrastructureIncentive-Subsidies,–Cleanfuelproductioncredit55EncouragesSAF,cleanpowerandhydrogenbasedtaxcreditsinfrastructureforadvancingtechnologyin–UK:£580milliontowardsdevelopedeconomies.commercializationofSAFplantsandfueltesting56–InflationReductionAct(IRA)cleanpowerandgreenhydrogenproductiontaxcredits57DemandMandate-Fuel–CaliforniaLow-CarbonFuelProposedregulationtopenalizejetfueluseandCapitalbasedstandardsStandard(CALCFS)58boostSAFdemand.Incentive-Directfunding–ReFuelEUAviation:SAFPublic-privatepartnershipthatfundstechnologiesbasedblendingmandateforfuelthatreduceaviationemissionsby20-30%persuppliersatEUairports59aircraft.Targetsregional/short-mediumhaulflighttechnologies;notapplicabletolong-haulflights.–CleanAviationJointUndertaking(CAJU)60IncentivizesSAFproductionthrough$4.3billionininvestments.Projectedtoreduce20%ofUSTechnical–SAFGrandChallenge61aviationemissionsby2030.62roadmapAVIATION1CapitalTheaviationindustryfacesa$5trillion63CapExTheargumentinfavourofinvestinginaviationrequirementforits2050net-zerotransformation,assetswithlowemissionscontinuestolacknecessitatinganannualinvestmentofapproximatelystrength.Giventheaviationindustry’stightprofit$185billion,2.4timesthecurrentpassengermarginsandaweightedaveragecostofcapitalairlineinvestments.64(WACC)at7%,65thesectorisn’treadytoassimilatetheseextraexpensesandgeneratesatisfactoryreturnsexclusivelyfrominternalfundsortoallureprivateinvestments.FIGURE18Additionalinvestmentrequiredtoexistinginvestmentratio$78$1852.4billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredNet-ZeroIndustryTracker2023Edition31AccordingtoIATA,actorsinvolvedininvestinginfinancialinstitutionsistograntaccesstoaffordableaviation’snet-zerotransitionwillrequireaccesscapitalalignedwithsustainabilityobjectives.todifferentfundingandfinancingmechanismsdependingonthematurityoftheinvestmentApproximately74%oflargepubliclytradedopportunity.ThisisbecausetheriskisthehighestaviationcompaniesconsiderclimatechangeasaattheR&Dstageanddecreasesasthecommercialkeyconsiderationfortheirstrategicassessmentviabilityofthesolutiongrows.66Inordertochannelandintegrateitintotheiroperationaldecisionfundsintorevolutionizingtheindustry,policymaking.67Meanwhile,9%ofcompaniesaremeasuressuchascarbonpricing,incentivesforbuildingbasicemissionsmanagementsystemsandtechnologydevelopmentandthepromotionofSAFprocesscapabilities.Finally,12%ofcompaniesadoptionbecomeessentialtoensureprofitableacknowledgeclimatechangeasabusinessissue.returns.ThepivotalroleplayedbybanksandotherFIGURE19DistributionofcompaniesintheairlinessectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition0Level0:6.1%Unaware12.1%6.1%1Level1:33.3%Aware42.4%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingSource:TransitionPathwayInitiativeCentre,LondonSchoolofEconomicsand4Level4:PoliticalScience(LSE-TPICentre).LSE-TPICentreisnotresponsibleforanyofStrategicthesectoralsummariesinwhichtheirdataisused.assessmentNet-ZeroIndustryTracker2023Edition323Shippingindustrynet-zerotrackerDespitetheriseinemissions,amoreambitiousIMOstrategyandindustryactionstowardstechnologyadoptionpositionsshippingonapositivetrackforanet-zeropathway.Key2%0.76gtCO2e11.7gtCO2eemissionsdata68,69,70,71ContributiontoglobalInternationalshippingGHGEmissionsintensityGHGemissionsemissions(2018)(emittedpertonnenauticalmiles,2018)99%2timesFossilfuelsinthefuelExpecteddemandincreasemix(2021)by2050Net-ZeroIndustryTracker2023Edition33ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–UnitedNations(UN)specializedTransitioningtoclean,hydrogen-based,zero-emissionfuelsagencyIMOaimsforatleast20%,(ZEF)likemethanolandammonia,couldnearlyeliminatestrivingfora30%reductioninabsoluteshippingemissions.However,uptakefacescostsandemissionsby2030(vs2008)andnet-infrastructurechallenges.zeroemissionsbyoraround2050.74Infrastructure–51%oflargepubliclytradedshippingcompaniesconsiderclimatechangeCurrentlylessthan1%ofthenecessaryinfrastructureexists,intheirdecision-makingprocesses.75requiringabout$0.4-0.6trillioninvestmenttosupportthedevelopmentandscalingofshippingtechnologyby2050.72EmissionfocusareasfortrackerDemandShippingemissionscanbedividedintotwoGrowingdemandforlow-carbonshippingfacesuncertaintymaincategoriesconsideringwell-to-wake:asB2Bgreenpremiumof30-80%remainsmostlyuntestedatscale.731.OperationalemissionsareprimarilyduetothecombustionoffossilfuelsPolicyduringmaritimeoperations.TomeetIMOtargets,policiesshouldencouragelow-emission2.Fuelvaluechainemissionsaremainlyfuelsandoperationalefficiencythroughmeasureslikecarbonupstreamemissionsfromtheproductionpricing,fuelstandardsandincentivesforinfrastructure.anddistributionoffossilfuels.CapitalAdoptingZEFpropulsionforshipsby2050requiresupto$450billioninvestment,76adding47%toannualfleetownercosts,whicharecurrentlyaround$36billion.77SectorprioritiesExistingtransportReducenear-termemissionsintensityby:–AcceleratingdesignandefficiencyimprovementsalignedwithIMOguidelines–Increasingshareoffleetcapableofrunningonalternatefuelssupportedbytechnologystandards–Explorefeasibilityofcomplementarysolutionsintheinterim(e.g.wind-assistedpropulsion).NextgenerationtransportAcceleratecleanhydrogen-basedfuelsdevelopment,toreduceabsoluteemissionsby:–InvestinginnextgenerationfuelsandpropulsiontechnologyR&D–Rampinguptherequiredcleanhydrogen-basedfuelsproductioncapacity–Developingtherequiredbunkeringcapacity,withstorageandrefuellinginfrastructure.EcosystemDe-riskcapitalinvestmenttoscaleinfrastructurecapacityby:–Implementinggreencorridorsinmajorroutessupportedbycleanhydrogenhubs–BridgingthecostgapbetweenZEFsandconventionalfuelsthroughincreasednumberofprojects–Implementingablendofpolicies,primarilycarbonpricingandfuelstandards.Net-ZeroIndustryTracker2023Edition34PerformanceEmissionsprofileFuelcombustioninmaritimeoperationsaccountsShippingemissionsintensityvariesbasedonfactorsforover80%ofthetotalshippinglifecyclesuchasfossilfueluse,vesselloaduse,size,speedemissions,primarilyduetothecurrentrelianceandroutecharacteristics.Forexample,inthecaseofonfossilfuels.78Bulkcarriers,oiltankersandcontainerships,theSouth-EastAsiato/fromNorth-containershipsareresponsiblefor65%oftheseEastAsiashippinglanehasthehighestemissionemissions.79AsperIMOtargets,absoluteemissionsintensityamongthetop10tradelanesbyactivity,needtobereducedbyatleast20%by2030and35%abovetheaverageemissionintensitylevels.82atleast70%by2040comparedto2008.80AspastTomeettheIMOtargets,carbonintensitytrajectorytrendsshow,shippingemissionscontinuehasbeenconsidered(seeFigure20).Thistrajectorytoexceedthe2008benchmark.81requiresa40%reductioninintensitylevels(vs2008)andnear-zerointensitylevelsin2050.83FIGURE20Emissionsintensitytrajectory,net-zerovsBAUscenario.Possiblenet-zerotrajectoryasperIMOtargetsgCO2e/tnm2050BAUscenario1211.711.07.3gCO2e/tnm11.71010.38.786422050net-zeroscenario01.7201820400gCO2e/tnmNet-zeroscenario20302050BAUscenarioSource:AccentureanalysisbasedonIEAandIMOdataPathforwardthan90%ofthe2050energymix,facilitatingtheachievementofnetzero.84WhilethesefuelsMeetingtheIMOnet-zerotargetbyorarounddevelop,biofuels–and,toalimitedextent,liquified2050demandssubstantialcollaborationfromnaturalgas(LNG)–willserveastransitionfuels.Ingovernments,industrystakeholdersandresearchadditiontofuel-switching,emissionscanbefurtherinstitutions.Theindustry’sprimaryfocusshouldreducedthroughoperationalefficiencyenhancementscentreonadvancingcleanhydrogen-basedZEFsanddesignimprovements,whicharecrucialforandincentivizingtheirwidespreadadoption,tomeetingthenear-term2030IMOtargets.alignwithGlobalMaritimeForum(GMF)transitionstrategy.ZEFsareexpectedtooccupymoreNet-ZeroIndustryTracker2023Edition35FIGURE212021fuelmix851%99%0%10%20%30%40%50%60%70%80%90%100%FossilfuelsNon-fossilfuelsSource:IMOFIGURE222050net-zeroscenario95%5%0%10%20%30%40%50%60%70%80%90%100%Zero-emissionfuelsOthersSource:GMFNet-ZeroIndustryTracker2023Edition36SHIPPING3TechnologyUptoSwitchingentirelytocleanhydrogen-basedZEFs,adoptionincludehighervesselownershipcosts,suchasmethanol,ammoniaandliquidhydrogen,limitationsinthefuelsupplychain,theabsenceof80%increaseintotalholdsthepotentialtoachievenear-zerowell-to-globalbunkeringinfrastructure,andtheneedforwakeshippingemissions.Whilemethanol-fuelledmodificationsinonboardstorageconfigurations.ownershipcostsshipsareavailable,theycurrentlyrelyonnaturalTheTRLofZEFscanbeconsideredintermsoftheexpectedgas-basedfeedstock.Commercialavailabilitymaturityofthefuelproductionprocess,thematurityofammoniaandliquidhydrogenpropulsionofpropulsiontechnologiesandthereadinessoftechnologyisexpectedby2025.However,bunkeringtechnologies.Globally,thereareover200transitioningtothesefuelsmayincreasetotalR&Dprojectsdedicatedtoadvancingthesefuelsownershipcostsby30-80%.86Keybarrierstotheirandrelatedtechnologies.87ProductiontechnologiesCurrently,ammonia,methanolandhydrogentechnologiesneedtobesufficientlyscaledatanarederivedfromnaturalgasfeedstocks.CleanindustrialleveltoadvancetheproductionofZEFs.hydrogen-basedproductionforshippingapplicationsiscurrentlylimitedtodemonstrationprojects.InAnexampleofprogressisDanishenergycompanyadditiontocleanhydrogen,methanolproductionwillOrsted’sconstructionofEurope’slargestcleanrequireCO2,whichcanbesourcedfromindustrialmethanolplantinNorthSweden,settocommencepointsourcesorviaDACtechnologies.Cleanoperationsby2025.Itisexpectedtosupply50,000hydrogenproductionfacilitiesandcarboncapturetonnesofcleanmethanolannually.88PropulsiontechnologiesMethanolengineshavebeensuccessfullyoperatingtheworld’sfirstcontainershippoweredbydemonstratedandareintheearlyadoptionstageofcleanmethanol,withfurthershipsintheorderbook.90development.Currently,therearearound30vesselsAmmoniaandliquidhydrogenenginesarestillinrunningonmethanol.89In2023,Maerskwillstartdevelopmentandareexpectedtomatureafter2025.91Net-ZeroIndustryTracker2023Edition37BunkeringandonboardstoragetechnologiesMethanolbunkeringandonboardstorage/handlingtechnologieshavebeensuccessfullydemonstrated.Forammoniaandliquidhydrogen,thesetechnologiesneedtobeprogressedbeyondtheprototypestage.92OtherintermediatemeasuresAdditionaldecarbonizationpathwaysareessentialtechnicalefficiency.Forinstance,optimizingroutestoensurethattheshippingindustrymeetsthenear-andenhancingvesselusecanresultinemissiontermIMOtargetsfor2030.Transitionfuels,suchasreductionsofupto10%.93Additionally,innovativebiofuels,canbeconsideredaspotentialoptions.systems,suchaswind-assistedpropulsion,Moreover,achievingdecarbonizationinshippingareunderinvestigationtofurthercontributetonecessitatesimprovementsinoperationalandemissionsreduction.Technologypathways94FIGURE23EstimatedTRLandyearofavailabilityforkeytechnologypathwaysMature11Earlyadoption109Demonstration8Biofuels(available)LNG(available)Methanol(available)7Largeprototype65Hydrogen(2025)Ammonia(2025)Smallprototype43Concept21Note:TheTRLscaleherereferstotechnologyreadinessofpropulsiontechnologiesonly.Source:DNVNet-ZeroIndustryTracker2023Edition38SHIPPING2InfrastructureAdoptingZEFshingesonscalingcleanhydrogen,ZEFsneedtobesupportedbybunkeringCO2handlingandbunkeringinfrastructure,howeverinfrastructure,whichwillrequireanadditionallessthan1%currentlyexists.95Investmentsofup$132-176billionininvestment.100Notableeffortsto$0.8-2.1trillionwillbeneededby2050,96mainlyincludeYaraInternationalandAzaneFuelSolutionsforcleanhydrogen-basedfuelinfrastructure.Topartneringtocreatea“zero-emission”ammoniameetthe2050net-zeroscenario,cleanhydrogenfuelbunkernetworkinScandinavia,backedbyproductioncapacityof160MTPAisrequired,97around$9millioninpublicfunding.Thisnetworkwillnecessitatinganinvestmentof$0.6-1.9trillion.supply“zero-emission”ammoniatoshipsasearlyas2024,expeditingfueladoption.101Also,CleanBy2050,upto130MTPAofCO2willbeneededasaEnergyMarineHubs,apublic-privateplatformfeedstockforproducingZEFs.98IftheCO2issourcedbetweenenergy,maritime,shippingandfinancefromindustrialpointsourcesnotco-locatedwithstakeholders,hasbeenrecentlylaunchedtode-risktheZEFproducingfacility,adequateCO2transportinvestmentintothenecessaryZEFinfrastructureinfrastructuremustbeestablished.Thisisprojectedandacceleratepaceofdeployment.102torequireinvestmentsintherangeof$10-23billion.99FIGURE242050investmentrequirementsInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredCleanhydrogenUpto91%160production$1.9MTPAtrillionCO2transportUpto1%130andstorage$20MTPAbillionBunkeringUpto8%880$170MTPAbillionSource:Accentureanalysisbasedonmultiplesourcestoinclude;GMF,GTZandGlobalCCSinstituteNet-ZeroIndustryTracker2023Edition39SHIPPING2DemandDemandfordecarbonizedshippingservicesisrisingWhiletheincreaseinshippingcostsisexpectedtoasnationsandbusinessespursuestrictenvironmental,haveaminorimpactonend-consumers,resultingsocialandgovernance(ESG)goals.However,theinanapproximate1-2%greenpremium(seeFigurefeasibilityofcargoownersabsorbingtheestimated25),it’simportanttonotethatshippingcostsgreenpremiumof30-80%remainsuntestedonarepresentonlyasmallfractionofthefinalretailpricelargescale.103Asanindustryworkingonnarrowofproducts.104Nonetheless,thispremiumcanresultmargins,passingthecostsontocargoownerswillbeinsignificantabsolutecostincreasesforessentialchallengingandhence,increasedpolicyinterventionscommoditieslikeoil,grainsandmetals,particularlymaybenecessarytoreducethegreenpremium.affectingemerginganddevelopingeconomies.FIGURE25EstimatedB2BandB2CgreenpremiumServiceprovider+30-CargoownerAvgEndconsumerShippingcompany80%Retailer/industrial+1-2%ProductbuyerperperproductshipmentunitSource:AccentureanalysisbasedonDNVandGMFdataLow-incomeTheabilityofshippingcompaniestopassonorareactivelypromotingtheirofferingstomeetthiscountriesthatprofitfromthegreenpremiumofdecarbonizeddemand.Forinstance,MaerskECODelivery,usingheavilyrelyonshippingservicesdependsonthedemandfromfattyacidmethylester(FAME)biofuels,providesmaritimetradeindustrialorconsumersegmentsandthelocation.CO2-savingcertificates.105Hapag-Lloyd’sShipmayfeelmoreForinstance,low-incomecountriesthatheavilyGreenenables“climate-friendlycontainershipping”ofthegreenrelyonmaritimetradeforessentialcommoditiestoreduceoceanshipmentemissions.TheFMCpremiumimpact.mayfeelamoresignificantimpact.AsthemarketshippingmembershavecommittedtoZEFtargetsprogresses,regulatorymeasurescouldhelpreduceby2030,106withfleetoperatorspledging5%ofgreenpremiumsandpromotetheadoptionofdeep-seashippingandcargoownerscommittingdecarbonizedshippingservices,therebydrivingatleast10%ofgoodsvolumeviaZEF-poweredincreaseduptakeofZEFs.vessels.107ThesecommitmentsacrossthevaluechainhavethepotentialtodriveglobaldemandforTheadoptionofZEFsmayalsoneedbusinessdecarbonizedshipping.modelchangesacrosstheupstreamshippingvaluechain.Forexample,existingammoniaToenhanceconsistencyandcomparabilityproducersshouldmovebeyondtraditionaldemandofGHGemissionsdata,theindustryshouldapplicationsandbuildsupplycapabilitiestosupportadoptstandardizedquantificationandreporting,theincreasingneedforammoniafromshipping.exemplifiedbytheintroductionofISO14083Similarly,shipbuilderswillneedtodevelopshipsinMarch2023.108StandardizedreportingcapableofrunningonZEFsaspartoftheirproductempowersindustryplayerstostrategicallytargetportfolio.StableandpredictablepolicyframeworksGHGemissionscollectivelywhilealsocreatingwillberequiredtocreatethesenewmarkets,buildstricterpoliciestoencouragelow-emissionfuelsustaineddemandandreducetheriskofstrandedadoption,furtherboostingmarketdemand.assetsforearlymovers.TheimplementationofIMOregulations,EnergyEfficiencyDesignIndex(EEXI)andCarbonIntensityWithgrowingcustomeremphasisonclimateIndicator(CII)isanticipatedtoimprovevesselconsiderations,decarbonizedshippingisgainingperformancetransparencyandfurtherstimulatepopularityasaviablealternative.Industryleadersthedemandfordecarbonizedshipping.Net-ZeroIndustryTracker2023Edition40SHIPPING2PolicyTheglobalshippingindustryoperatesunderselectedTomeetIMOtargets,regionalpoliciesshouldflagstatessubjecttointernationalregulationsledincentivizeZEFadoptionandimproveoperationalbytheIMO.Theseregulationsarebolsteredbyefficiency.Keymeasuresincludecarbonpricing,supportingregionalpoliciesthatregulateshipsfuelstandards,greencorridors,fiscalincentivesenteringterritorialwaters.forlow-emissionfuelinfrastructure,bunkeringstandardsandperformancestandards.ExistingpolicylandscapeTABLE6PolicysummaryEnablerPolicyPolicyKeyexamplesImpactTechnologytypeinstruments$2.2billionunderEU-ETStofundshippingMarket-decarbonizationinnovation.112TheproposedUSbasedCarbon–EU-ETS109carbonpricingisprojectedtobringin$250billionpricinginlow-emissionfunding,overthenext10years.113–USInternationalMaritimeCarbonpricingunderIMOisstillunderdiscussionPollutionAccountabilityAct:andwillnotbeineffectbefore2027.$150pertonneofCO2emissionsproposed110–IMOeconomicmeasure,2023strategy111Mandate-Performance–EnergyEfficiencyDesignIndexMandatorystandardsthatshipsmustcomplybasedstandardsand(EEXI)114with,drivingcontinuoustechnicalandoperationalcertificationimprovements.–CarbonIntensityIndicator(CII)115InfrastructureIncentive-Taxesand–IRAcleanpowerandgreen50%reductioningreenhydrogenproductioncostsbasedsubsidieshydrogenproductiontaxcredits116thatcanboostscalingofgreenhydrogencapacityrequiredforlow-emissionfuels.117Thefeasibilityofsuchsubsidy-drivenpoliciesfordevelopingeconomiesisuncertain.Mandate-Direct–EUAlternativeFuelsInfrastructureReducesemissionsatportsbyprovidingcleanerbasedregulationRegulationmandateformajorelectricityasanalternativewithaspecifictimelineEUportstoprovideshoresideforportstoactionupon(by2030).119electricitytovessels118DemandIncentive-Green–ClydebankDeclaration:22Reducesrisksofadoptinglow-emissionfuelsbybasedcorridorscountriesassignatoriestocreatedeployingatalocalscaleandmobilizingdemand.sixgreencorridors21greencorridorinitiativesannouncedsofar,by2026120involvingover100stakeholders.122–GreencorridorpledgesatCOP27betweentheUS,theUK,theNetherlandsandNorway121Mandate-Fuel–FuelEUMaritimeinitiative123Providespredictablepathwaysforlow-basedstandards–USCleanShippingAct124emissionfuelsthatencourageadoptionanddrivedemand.–IMOtechnicalmeasure,2023strategy125CapitalIncentive-Directfunding–PublicfundingforgreenshippingFunds30%ofcostsofnew“green”ships.127basedprojectsinIndia126Net-ZeroIndustryTracker2023Edition41SHIPPING1CapitalIntheshippingindustry,retrofittingthecurrentfleetRecentdatasuggeststhebusinesscaseforandupcomingshipsorderswithZEFpropulsionzero-emissionshippinginvestmentremainstechnologynecessitatesanestimated$450billioninweakduetohighcostsanduncertainreturns.investmentby2050.128ThisbreaksdowntoanannualCurrentindustryprofitmarginsofaround32%131extracostof$17billionforfleetowners.129GivenandWACCof8-10%132suggesttheindustryisthecurrentannualCapExforshippingfirms,whichnotpositionedtoabsorbadditionalcostsandstandsatapproximately$36billion,thisrepresentsgeneratesufficientreturnssolelyfrominternalanadded47%investmentloadannually.130cashflows.133Fortunately,withtheexpansionoftechnologyandtherealizationofeconomiesofscale,itisanticipatedthatthefinancialdemandsforinvestmentwilldiminish.FIGURE26Additionalinvestmentrequiredtoexistinginvestmentratio$36$170.47billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredSource:Accentureanalysisbasedonmultiplesources,toincludeEMSA,DNVandUNCTADNet-ZeroIndustryTracker2023Edition42Historically,commercialbankloanshaveservedby2024,whichwillrewarduptakeoflowandastheprimarysourceoffinancingfortheshippingzero-carbonfuelsandprovidebillionsofdollarsofindustry.Nevertheless,forthesectortoachievefundingannuallyforalternativefuelproductionanditsnet-zeroobjectives,thereisagrowingneedforbunkeringinfrastructureindevelopingcountries.134increasedinvolvementfromthepublicsector.ThisinvolvementcantaketheformofdirectsubsidiesApproximately50%oflargepubliclytradedorblendedfinancemechanisms,bothofwhichareshippingcompaniesconsiderclimatechangeasdesignedtoincentivizeprivatesectorengagementakeyconsiderationfortheirstrategicassessmentinsustainableshippinginitiatives.TheInternationalandintegrateitintotheiroperationaldecision-ChamberofShipping(ICS)setoutaFundandmaking.135Meanwhile,19%ofcompaniesareRewardproposaltotheIMOforshipownerstobuildingbasicemissionsmanagementsystemsandmakemandatorycontributionspertonneofCO2processcapabilities.Finally,27%ofcompaniesemittedtocreateanewIMOfundtobeestablishedacknowledgeclimatechangeasabusinessissue.136FIGURE27DistributionofcompaniesintheshippingsectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition0Level0:3.9%Unaware26.9%19.2%1Level1:38.5%Aware11.5%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingSource:“TPIonlinetool”,LSE-TPICentre,n.d.,4Level4:https://www.transitionpathwayinitiative.org/sectors/shipping.StrategicassessmentNet-ZeroIndustryTracker2023Edition434Truckingindustrynet-zerotracker137Batteryandhydrogen-poweredelectrictrucksareconsideredvitalfornet-zerotrucking,butadoptiondependsonregion,dutycycleandsupportingpolicies.138Key5%1.6gtCO2e2%emissionsdata139,140,141ContributiontoglobalenergyOperationalandfuelsupplyEmissionsgrowthrelatedGHGemissionschainemissions(2019-2022)108gCO296%2-2.5timesEmissionsintensity(emittedFossilfuelsinthefuelmixExpecteddemandincreasepertonnemiles,2020)(2021)by2050Net-ZeroIndustryTracker2023Edition44ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–IndustrybodiesproposeTwokeyzero-emissionpathwaysareemerging,batteryelectrictrucks(BETs)anemissionsreductionandhydrogen-electrictrucks(HETs),whichcannearlyeliminatetailpipeemissions.of14%by2030andAdoptionislimitedtoaround1%partlyduetoincreasedownershipcosts(33-133%142).92%by2050.145InfrastructureEmissionfocusareasfortrackerInsufficientinfrastructure,lessthan1%oftheneededamount,hinderstechnologyscaling.Meeting2050goalsrequiresa$2-$3.2trillion143inTruckingemissionscaninvestment,primarilyintocleanpowerinfrastructure.bedividedintotwomaincategories:Demand1.Well-to-tankmainlyZero-emissionvehicles(ZEVs)held1%ofthemarketin2022.AB2Bgreenupstreamemissionsfrompremiumof10-15%maybenecessary,withabout1-3%affectingconsumers.144productionanddistributionHowever,thisremainsuntestedatscale.offossilfuels.Policy2.Tank-to-wakeprimarilyduetocombustionoffossilfuels,PublicpolicyencouragesZEVadoption,withtheEUtakingthelead,butthepredominantlydiesel,usedindustryisdiverseandregulatedatvariouslevels.Morepoliciesareneededduringtruckingoperations.tosupportinfrastructuredevelopment.CapitalAdditionalcapitalrequirements,includingretrofittingtheexistingfleetrequiresa$2.1trillion146ininvestment.However,thebusinesscaseremainsweakduetohighcostsanduncertainreturns,given6%industryprofitmarginsanda10%WACC.147SectorprioritiesExisitingtransportReducenear-termemissionsintensityby:–Acceleratingtheadoptionofdrop-inbiofuelsandsynfuelsintheinterim–Introducingstandardsandregulationsaroundlegacyvehicledecommissioningcycles–Makinguseofefficiencyanddesignimprovementopportunitiesatanacceleratedpace.NextgenerationtransportAcceleratecleanpowerinfrastructuredevelopment,toreduceabsoluteemissionsby:–InvestinginR&Dtoaccelerateultra-fastcharginginfrastructuredeployment–Investingincleanpowerinfrastructuretoincreaseaccesstorenewableenergysources–Acceleratingdevelopmentofhydrogen-electrictechnologiesforlong-haulapplications.EcosystemDe-riskcapitalinvestmenttoacceleratetechnologyadoptionby:–Increasingincentive-basedpoliciessuchastaxsubsidiestodrivecharginginfrastructuredeployment–ImplementingablendofpoliciestoincentivizeacceleratedfleetrenewaloutsideBAUcycles.Notes:1Thescopeofanalysiscoversthehard-toabateaspectoftheTruckingindustry,primarilyheavy-dutytrucking2Regionsinscopefortruckinganalysis,basedonMPPframework;US,China,India,EUNet-ZeroIndustryTracker2023Edition45PerformanceAbsoluteemissions,measuredbygigatonnesofEmissionsintensityinthetruckingindustrymeasuresCO2equivalent,areinfluencedbyvariousfactorstheamountofCO2releasedpergigajouleofenergysuchasfuelburn,loadfactors,vehicletypeandgeneratedthroughfuelcombustion.Thisintensityisroutetype.Currently,around64%oftheindustry’sinfluencedbyvehicletypesandcombustionrates.totallifecycleemissionsarisefromday-to-dayOverthelastfouryears,emissionsintensityhasoperations,includingvehicleuse,maintenanceandreducedbyaround14%dueinparttoefficiencyrepair.148Addressinglong-haulemissionscouldmeasures,operationalimprovementsandanincreasepotentiallydecarbonize86%149ofthefleetintheEU.inbiofuelsinthefuelmix.Currently,BETshaveaAsBETsandhydrogen-electrictrucks(HETs),scalehighemissionsintensityduetotherelianceoncoalupcommercially,absoluteemissionsareexpectedandotherfossil-basedfuelsforpowergeneration.toreducealmostequallybetween2030-2040andHowever,ascleanpowerscalesup,emissions2040-2050.intensityisexpectedtoapproachzeroby2030.Toachievenet-zerotargets,thetruckingsectorshouldaimtoreduceemissionsintensitybyroughly30%by2030andapproximately80%by2050.150FIGURE28EmissionsintensitytrajectoryfortruckingGramsofCO2epertonne-kilometre(gCO2e/tkm)120105.6109.3100109.3105.695.194.495.194.486.3802050BAU72.5scenario6065.664.4gCO2e/tkm402050net-zeroscenario2023.83.6gCO2e/tkm0202020212022203020402019BAUscenario2050Source:IEANet-zeroscenarioPathforwardIndustryThekeydecarbonizationstrategyistoreplaceinfrastructure,advancingR&Dforlong-haulBETsshouldprioritizedieselcombustiontruckswithBETs,withHETsandHETs,andstimulatingmarketdemandforinvestmentplayingasmallerrole.Immediatemeasurestozero-emissiontrucks(ZETs).Thesecoordinatedinchargingaccelerateemissionsreductionincludeincreasedactionsaimtoaccelerateinfrastructureandrefuellingoperationalefficiencyintransportanddistribution,developmentandreduceoverallownershipcosts,infrastructure,R&Dfuelefficiencymeasuresandmodalshiftfrompromotingadoptionthroughoutthisdecade.andstimulatingtruckingtorail.AchievingapredominantlyZEVfleetDespitethecurrentdominanceoffossilfuelsinthemarketdemand.by2050requirescollaborationamongindustryfuelmix,a53%emissionsreductionisprojectedstakeholders,governmentandglobaladvisers.151between2030-2040ascommercial-scaleBETsPrioritiesincludeinvestinginchargingandrefuellingbecomewidespread.152Net-ZeroIndustryTracker2023Edition46FIGURE292021fuelmix<1%96%4%0%10%20%30%40%50%60%70%80%90%100%FossilfuelsBio-fuelsElectricitySource:IEAFIGURE30Proportionofnewtruckssoldin2050–MPPacceleratedzero-emissionscenario53%47%0%10%20%30%40%50%60%70%80%90%100%ElectricityHydrogenSource:MPPNet-ZeroIndustryTracker2023Edition47TRUCKING2TechnologyTwoleadingzero-emissionpathwayshaveThemainchallengestowidespreadadoptionincludeemerged,withBETsbeingmoreadvanced.HETslimitedrange,challengesinchargingandrefuellingareexpectedtobecomecommerciallyavailablebyinfrastructure,andonboardstoragerestrictions,2025.BothBETsandHETshavethepotentialtoespeciallyforlong-haulapplications.Consequently,reducein-transitemissionstonear-zero.However,adoptionremainslimitedtoaround1%.154adoptingthesetechnologiescouldincreaseTCOby33-133%,153dependingondutycycleandrange.Propulsiontechnologies1%oftheglobalBETsandHETshavethepotentialtoreducelifeEnterprises,158forexample,signedanagreementcycleGHGemissionsbyupto84%155andtailpipewithAshokLeylandandBallardPowertolaunchfleetareBETs(tank-wheel)emissionstoaroundzero.BETapilotprojectin2023todevelopa55-tonnetechnologyiscurrentlycommerciallyavailableforhydrogenfuelcellelectrictruckformininglightandmediumdutytrucks,thoughadoptionisapplications,mostprojectsarelimitedtothelow,ataround1%156oftheglobalfleet.Hydrogen-demonstrationstage.electrictrucksarenotavailableatcommercialscale,withexpectedavailabilityaround2025.157TheimplementationofBETandHETtechnologiesHowever,sufficientonboardstorageofcleanincludesaTCOincreaseofupto1.3times159hydrogenandlargelithiumbatterycapacityduetotheretrofittingrequirements,fleetrenewalrequiresadditionalvehiclelength,restrictingtherequirementsandnecessarymodificationstotheapplicabilitytolong-haulapplications.WhileAdaniexistingfleet.Net-ZeroIndustryTracker2023Edition48ChargingandrefuellingtechnologiesUltra-fastRechargingofBETshasyettoachievecommercialIncomparison,refuellingwithcompressedchargingstationsparitywiththespeedandconvenienceofrefuellinghydrogentakeslessthan20minutes,whichiscouldreducedieselvehicles,chargingcantakeupto8hours.almostcomparabletoexistingdieselrefuelling.rechargingfromWhiletechnologyadvancementshavebeenmade,However,applicationsarelimitedbyonboard8hoursto45withcompanieslikebpannouncingtheirfirstultra-storagerequirements.minutes.fastchargingstationaimedatrechargingaheavy-dutytruck(HDT)in45minutes,similarprojectsaregenerallylimitedtothedemonstrationstage.160OtherintermediatemeasuresTransitionfuelsarelesscarbonintensivethanlegacyemissiontechnologies.However,thesefuelsarefuelsources,withemissionsreductionpotentialmoreemissiveintermsofbothabsoluteemissionsrangingfrom70-75%.161Renewablegas,synfuelsandintensitythanBETsandHETs,andinsomeandbiofuelsarecommerciallyavailabletodaycasesareblendedwithfossil-baseddiesel.andarebeingadoptedatahigherratethanlow-FIGURE31EstimatedTRLandyearofavailabilityforkeytechnologypathwaysEarlyadoptionMature91110Demonstration8Battery-electric(available)7Hydrogen(~2025)Largeprototype65Smallprototype43Concept21Source:IEANet-ZeroIndustryTracker2023Edition49TRUCKING2InfrastructureThecommercialscalingofBETsandHETshingesForBETstobecomefeasibleformediumandontheavailabilityofcrucialinfrastructure.Currently,long-haultransport,theyneedaccesstocharginglessthan1%ofthenecessaryinfrastructureisininfrastructure,bothon-siteandroadside.By2050,place,162fallingshortofwhat’sneededtoenabletheanestimated11millionchargingstationswillbeadoptionofBETsandHETs.ToenabletheindustryrequiredtomeettherisingdemandforBETs.167tomeet2050targets,substantialinvestmentsSomepromisinginitiativesareunderwayinEurope,rangingfrom$2.1to$3.3trillion163mustbeexemplifiedbyMilence,168ajointventurebetweenallocatedwithinthetruckingindustry.Volvo,DaimlerandTraton,aimingtoinstallatleast1,700ultra-fastchargingpointsacrossEuropebyTosupporttheprojectedtargetof53%BETsand2025.CompanieslikeSiemens169areexploring47%HETsontheroadby2050,164thetruckingalternativesolutionstotraditionalwiredcharging,industrywillrequireasignificantboostincleanpowerincludingoverheadcatenarychargingandin-transitcapacity.Specifically,thistranslatestoapproximatelywirelesscharging,170whichmayprovideavarietyof8.5timesthecurrentcleanpowercapacityoftheoptionsforfuturechargingrequirements.entireUKannuallyanda54-foldincreaseinglobalcleanhydrogencapacity.165TheassociatedcostsHETsrequireaccesstoonsitehydrogenrefuellingforthisareestimatedtobeupto$1.3trillion.166infrastructure.TomeetthedemandforHETsby2050,anestimated190,000refuellingstationswillneedtobeestablished,incurringcostsfrom$0.3-0.7trillion.171FIGURE32InvestmentsrequiredforenablinginfrastructureCleanpowerInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredgenerationUpto39%680$1.3GWtrillionCleanhydrogenUpto20%50production$650MTPAbillion11millionChargingandUpto41%BETstationsrefueling$1.3190,000trillionHETstationsSource:AccentureanalysisbasedondatafrommultiplesourcestoincludeMPP,IEA,IRENAandBloombergNEFNet-ZeroIndustryTracker2023Edition50TRUCKING2DemandIn2022,themarketdemandforZETsstoodZETsalesareexpectedtoconstitute100%oftheatapproximately1%.172Assuch,theabilityto2050net-zeroscenario.174Tostimulatedemand,absorba33-133%greenpremiumforBETsandestimatessuggestagreenpremiumof10-15%100-300%HETsremainsuntestedatscale,withwouldbenecessarytomaintainZETsaffordabilityHDTsattractingthehigherendofthisrange.173inthemarket.However,onlyasmallportionofThetightmarginsinlogisticssuggesttheindustrythepricepremium,around1-3%,isexpectedtowouldstruggletoabsorbthesepremiumsatbepassedtoendconsumersduetotransportcommercialscale.Presentadoptionratesfallcostsaccountingforaround5%ofaproduct’sshortoftheindustry’snet-zerotrajectory,whereretailprice.175FIGURE33EstimatedB2BandB2Cgreenpremium+33-+1-3%133%peritempervehicleManufacturerServiceproviderEndconsumerTruckmanufacturerFleetownerProductbuyerSource:AccentureanalysisbasedonMPPdataEmergingEffortstoincreasedemand-sidemarketmeasuresCurrently,fewmanufacturershavesuccessfullybusinessmodelsincludenear-termZEVsalesmandatesincountriesdemonstratedmodelsofzero-emissionHDTsforlikeTaaSandlikeChina,CanadaandNorway,whicharelong-haulapplication.178WithlimitedavailabilityBaaSmayhelpanticipatedtoaccelerateadoptiontowards2030.ofultra-fastcharginginfrastructure,operatorsaremanufacturersSomemajorcarriers,includingDPD,haveimposedexploringalternativebusinessmodelssuchascreatenewgreensurchargesrangingfrom14-27%onfossilfuelbattery-as-a-service(BaaS)tomeetgrowingZETrevenuestreams.use.176However,theunevendevelopmentofcleandemand.179UndertheBaaSmodel,fleetownerscaptiveandgrid-basedpowerinfrastructureposespurchasethetruckbody,whilebatteriesareownedarisksoftemporaryemissionsintensityspikesandmaintainedbyservicecompanies.Fleetownersinregionswherepowersourcesprimarilyrelyonsubscribetoamonthlyfee,andtheirdriverscanfossilfuels,untilcleanpowercapacitycatchesup.quicklyswapHDTbatteriesatchargingstationsAdditionally,slowerpolicydevelopmenttosupportinaslittleas2-3minutes.180TheChineseStatethegrowthofchargingandrefuellinginfrastructure,PowerInvestmentCompany(SPIC)hasalreadycrucialformaintainingregularbusinessoperations,sold10,000BaaS-enabledtrucksandestablishedmayresultincostpenaltiesforfleetowners,100chargingstations.181PrivatecompanieslikeandoversupplyissuesfororiginalequipmentGoldenConcordGroup(GCL)areadvancingthismanufacturers(OEMs).However,emergingbusinesseffort,with10stationsalongtheBeijing-Shanghaimodelsliketrucks-as-a-service(TaaS)177mayhelphighwaybyyear-end,andanadditional175OEMsmitigatetheserisks,creatinganadditionalplannedstationsinChina.182revenuestreamtoeasetheimpactofhighgreenpremiums,whilereducingCapExandon-sitechargingrequirementsforfleetowners.Net-ZeroIndustryTracker2023Edition51TRUCKING3PolicyTruckingpolicyhasevolvedtoincentivizetheEffectivepublicpoliciesshouldfacilitateZEVadoptionofZEVswithsalestargetsandpurchaseadoptionbydevelopingessentialcleanpower,subsidies,notablyledbytheEU.Thetruckinghydrogengenerationandcharginginfrastructure.industryishighlyfragmented,withamixofbothTheEUstandsoutwithcomprehensivepolicies,largeandsmallplayers,trucktypes,services,whileotherregionsalsoimplementmeasuresdutycyclesandloadtypes.ItisusuallyregulatedsuchasZEVsalestargets,fleetdecommissioningatsupra-national(EU),nationalandsub-nationalincentivesandpurchasesubsidiestodriveadoption.levels,dependingonregionaldynamics.Whiletailpipeemissionshavebeenafocus,addressingGHGemissionsisequallyimportant.ExistingpolicylandscapeTABLE7PolicysummaryEnablerPolicyPolicyKeyexamplesImpactTechnologytypeinstrumentsIncentivizesgradualadoptionofZEVsbyMarket-increasingoperatingcostsofdieseltrucks.basedCarbon–EU-ETSproposedexpansiontoincludeTheproposedEU-ETSexpansioncomesintopricingroadtransport183effectonlyafter2027.10-13%increaseindieselcosts.185Mandate-Fueltax–Canada’sfederalcarbontaxbasedondiesel184Fuel–India’sfuelconsumptionstandardsAimstoreducetheconsumptionofdieselfromefficiencyforheavydutyvehicles186thetruckingsector,whichcontributesto33%standardsofIndia’stransportsectoremissions.–BanondieseltrucknewsalesBansoninCaliforniaby2036187Gradualphaseoutofdieseltrucksleadingtonewsalereductionin25%oftransportemissions.188InfrastructureIncentive-Taxesand–IRAcleanpowerandgreenhydrogenIncentivizesbuild-outofcleanpowerandgreenbasedsubsidiesproductiontaxcreditsaswellasalternativehydrogencapacityaswellastherequiredfuelrefuellinginfrastructuretaxcredits189chargingandrefuellinginfrastructure.Mandate-Directbasedregulation–EUAlternativeFuelsInfrastructureAimstoequip100%oftheTEN-TcoreRegulationmandateforchargingstationsnetworkwithfastchargingstationsfortrucksacrosstheTrans-EuropeanTransportatadistanceofatleast60km.191Network(TEN-T)190DemandMandate-ZEVsales–2030targetsforcountriesincluding35%and50%ofnewheavy-dutyvehiclesalesCapitalbasedtargetsCanadaandselecttobeZEVby2030forNorwayandCanadaEUnationslikeNorway192respectively.ForChina,25%oflogisticsstockIncentive-PurchasetobeZEV.basedsubsidies–2025targetforChina193IncentivizesswitchtoZEVfleetduetolower–Complementarypoliciesacrossseveralupfrontcapitalcosts.countrieslikeAustralia,Canada,Finland,Italy,Japan,theUSetc.194Net-ZeroIndustryTracker2023Edition52TRUCKING1CapitalThetruckingindustrywillrequireanestimatedRecentdatasuggeststhebusinesscaseforinvesting$2.1trillionby2050,195requiring$78billionininzero-emissiontruckingremainsweakduetoadditionalannualinvestmentsforfleetownershighcostsanduncertainreturns.Theindustry’sforfleetownerstoretrofittheirtruckingfleetwithcurrentprofitmarginsofroughly15%197andWACCbatteryelectricpowertrains.Thisrepresentsfourof10%198suggestitmaystruggletoabsorbthesetimesthecurrentannualexpendituresintheextracostsandgenerateadequatereturnssolelytruckingindustryof$18billion.196frominternalcashflows.199Astechnologyscalesandeconomiesofscaletakeeffect,investmentrequirementsareexpectedtodecrease.FIGURE34Additionalinvestmentrequiredtoexistinginvestmentratio$18$784.33billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredSource:AccentureanalysisbasedonGlobalDrivetoZerodataWorldwide,Facilitatingthefundingnecessarytosupportthistodistributeelectricityandhydrogentoareaswheregovernmentsaretransformationindevelopingnationswillplayatruckswillrequiretheseresourcesiscrucial.stimulatingbothpivotalroleinenablingazero-emissiontruckingthedesireforandsector.InternationalmultilateralfinanceinstitutionsWorldwide,governmentsarestimulatingboththeavailabilityofZETsshouldadjusttheirinvestmentportfoliostoaligndesireforandavailabilityofZETsbyenforcingbyenforcingmorewiththerequirementsofthetruckingindustry.morestringentemissionsgoals,fuelcriteriaorstringentemissionsIntheUnitedStatesandEurope,whereinternalboth.Prominentlogisticsfirmsandmajortruckgoals,fuelcriteriacombustionengine(ICE)trucksaresubstantiallypurchasersarepledgingtoreducecarbonfootprintsorboth.moreexpensivethaninIndiaandChina,theupfrontandcutemissions,thuscreatinggrowingdemandnetcapitalinvestmentrequiredtoachievenetzeroforZETs.EstablishedOEMsandemergingis25%to30%morethancontinuingtousemostlyplayersaremakingsubstantialinvestmentsinthediesel.However,inIndiaandChina,whereICEadvancementofZETmodels,whilefleetoperatorstrucksarecheaper,theincrementalcostsofZETsarechannellinginvestmentsintoacquiringvehiclesandtheirinfrastructurearemoresignificant.200andestablishingon-siteinfrastructure.AnexampleofinnovativeZETdeploymentsincludesShiheziTheexistenceofZETsdependsonboththesupplyindustrialparkinChina,afleetof100BETsserveofthesevehiclesandthedemandforthem,whichbusinessbasedinthepark.Thetruckstypicallyareinterconnectedwiththeupstreamvaluechainsmaketripsofabout100kmandswapbatteriesatfacilitatingtheirproductionanduse.Policy-makersafacilityintheindustrialpark.201shouldfocustheirattentionupstreambyaddressingconcernsliketheethicalsourcingofessentialThefragmentednatureoftheindustrymakesrawmaterialsforZETcomponentsbyOEMs.aggregatingdataonnet-zerocommitmentsbyAdditionally,investingintheinfrastructurerequiredcompanieschallenging.Net-ZeroIndustryTracker2023Edition535Steelindustrynet-zerotrackerForprimarysteelmakingcleanhydrogen-basedDRI-EAFhasemergedasthemaindecarbonizationpathway,whereassecondarysteelneedstoswitchtocleanpowersources.Key8%3.7gtCO2e1.41tCO222%emissionsdata202,203,204,205ContributiontoScope1and2EmissionsintensityReducedemissionglobalenergyrelatedemissions(pertonneofsteel,productionGHGemissions2022)>85%1.4times<1%FossilfuelsinthefuelExpecteddemandCurrentlow-emissionmix(2022)increaseby2050productionNet-ZeroIndustryTracker2023Edition54ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–Theindustrytargetsa45%reductioninPrimarysteel206canusebothcleanhydrogenandCCUSintensityforprimarysteelanda65%fordecarbonization.Secondarysteel207canuseEAFwithreductionforsecondarysteelby2030,renewableelectricity.However,costsare40-70%208higherandnet-zeroemissionsby2050.211thantraditionalmethods.–70%212oflargepubliclytradedsteelInfrastructurecompaniesconsiderclimatechangeintheirdecision-makingprocesses.Inadequateinfrastructurerequires$1.8-2.4trillion209forcleanhydrogenandcleanpowerdevelopment.RegionswithEmissionfocusareassteelcapacityandaccesstoaffordablerenewablesandCO2fortrackerstorageshouldbeprioritized.SteelemissionscanbedividedintotwoDemandmaincategories:Near-zero-emissionsteelheldlessthan1%ofthemarketin1.Energy-relatedemissionsareprimarily2022.AB2Bgreenpremiumof40-70%maybenecessary,duetocoaluseintheblastfurnace-withabout1-2%affectingconsumers.210However,thisbasicoxygenfurnace(BF-BOF)andEAFremainsuntestedatscale.processestoproducemoltensteelforprimarysteelproduction.Policy2.Process-relatedemissionsemanateEarly-stagesteeldecarbonizationpoliciesareneededfromtheuseofcokeornaturalgasasaespeciallyinAsia-Pacific(with70%globalsteelproduction).reducingagenttoconvertironoreintoironPoliciesshouldfocusoncleanpower,hydrogen,R&Dandforprimarysteelproduction.greenprocurementforlow-emissionsteel.Capital$372billion213isrequiredby2050,with60%directedtowardsretrofittingexistingassets.However,thebusinesscaseremainsweak,given8.5%industryprofitmarginand10.1%WACC.214SectorprioritiesExistingassetsReducenear-termemissionsintensityby:–Deployingenergyefficiencyimprovementtechniques–ShiftingtotransitionaltechnologiessuchasDRI-EAFinregionswherenaturalgasisaffordableandavailable–Switchingtocleanpowersourcesforsecondarysteelproduction,wherecostcompetitiverenewablesarefeasible.NextgenerationassetsAccelerateinfrastructuredevelopmenttodriveabsoluteemissionsreductionby:–Investingincleanhydrogengenerationcapacitytosupporttransitionforprimarysteelmaking–RetrofittingassetswithCCUSwhereaccesstoCO2transportandstorageiseconomical–Enablingaccesstogrid-basedcleanpowerforsecondarysteel.EcosystemEnablingaccesstogrid-basedcleanpowerforsecondarysteelby:–Implementingablendofpolicies,principallyproductstandardsandincentivizinglow-emissionproduction–Reducingnear-zero-emissionproductioncoststhroughanincreasednumberofcleanhydrogenprojects–Enablingsharedinfrastructureandsupplychainstabilitythroughstrategicpartnerships.Net-ZeroIndustryTracker2023Edition55Performance75%ofsteel’sfuelTheproductionprocessofsteelisenergyintensiveAmericareliesonsecondaryprocessesforandgenerateshighCO2emissions,accounting70%217ofitssteelproduction.Othermajorsteel-mixcomesforupto95%ofitsemissions.ThecurrentfuelproducingregionslikeIndiaandtheEUexhibitafromcoalmixheavilyreliesonfossilfuels,predominantlymorebalanceddistributionbetweenprimaryandcoal,occupyingarounda75%share.Thecoalsecondarysteelmaking.dependencyhasremainedconsistentlybetween70-75%overthedecade,215substantiallyEnergyintensityinsteelproductionhasremainedcontributingtosteel’sabsoluteemissions.relativelystable,averagingbetween19-20gigajoulespertonne(GJ/t)ofsteeloverthepastOverthelastdecade,steelCO2emissionsrose5years,218duetoimprovedenergyefficiencyand2.5%annually,duetorisingproductiondrivenincreasedsecondarysteelproduction.Primarybydemandgrowthinemergingmarkets.steelproductionisparticularlyenergy-intensiveCurrently,78%216ofsteelisproducedusingduetothehightemperaturesrequiredtomeltiron.primarymethods,whiletheremainingportionBothprimarysteelproductionmethods,BF-BOFcomesfromsecondaryproduction.However,andDRI-EAF,requireupto25GJ/tofenergy.Inthisdistributionvariesglobally,withChinacontrastthesecondarysteelmethod(EAF),reducespredominantlyusingprimaryprocesses-mainlyenergyintensityby2.5times,downto10GJ/t,asBF-BOF–for90%oftheirsteel,whereasNorthmeltingscrapsteelrequiresmuchlessenergy.FIGURE35EmissionsintensitytrajectoryforprimaryandsecondarysteeltCO2e/tofsteel2.52.32.01.51.241.02050BAU0.50.67scenario0.00.33tCO2e/tonne20220.232050net-zeroSource:IEA2030scenarioPrimarysteel2050Secondarysteel0.05tCO2e/tonnePathforwardTheindustrytargetsa45%reductioninintensityforrequireasubstantialincreaseinCCUSdeployment.primarysteelanda65%reductionforsecondaryForprimarysteelproduction,acceleratedinvestmentssteelby2030.219The2050net-zerocompliantfuelareneeded,togetherwiththecommercializationofmixwillrequiredisconnectingsteelemissionsfromcleanhydrogenfuels,coupledwithimplementationthegrowthinmarketdemand.ThisentailsreducingofCCUS-enabledtechnologies.Inthecaseofnon-abatedfossilfuelsfromtheircurrentdominantsecondarysteelproduction,expeditingtheadoptionshareof86%inthefuelmixto30%,220whichwillofcleanpowerthroughEAFprocessesisparamount.Net-ZeroIndustryTracker2023Edition56FIGURE362021fuelmix74%3%1%14%8%0%10%20%30%40%50%60%70%80%90%100%CoalElectricityNaturalgasOilOthersincludingbioenergyFIGURE37Estimatedshareofproductionin205040%22%20%11%7%0%10%20%30%40%50%60%70%80%90%100%Scrap-basedsecondaryproductionHydrogen-basedproductionCCS-basedproductionBioenergyandCCUSUnabatedfossilfuelsSources:IEA,IronandSteelTechnologyRoadmap,2020,https://iea.blob.core.windows.net/assets/eb0c8ec1-3665-4959-97d0-187ceca189a8/Iron_and_Steel_Technology_Roadmap.pdf;“Steel:Pathwaystonetzero”,MPP,n.d.,https://dash-mpp.plotly.host/mpp-steel-net-zero-explorer/.Net-ZeroIndustryTracker2023Edition57STEEL2TechnologyTwoleadingdecarbonizationpathwayshaveproductionusing100%renewableelectricityisaemergedforprimarysteel:cleanhydrogen-matureandavailabletechnology.ProductioncostsbasedDRI-EAFisthemostdeveloped(TRL6-8),forthesetechnologiesare40-70%higher221thanandCCUSisrapidlydeveloping(TRL5-8).Fortraditionalsteelmakingprocesses.secondarysteeldecarbonization,EAF-basedProcessemissionsabatementmeasuresCleanhydrogenpotentialforprimarysteel:CCUStechnologieshavethepotentialtodecreaseUsingcleanhydrogeninproductionprocesseshasemissionsbyupto90%224comparedtoBF-BOF.thepotentialtoreduceemissionsbyupto97%,222Bioenergycarboncaptureandstorage(BECCS),however,itcomeswithanexpectedgreenpremiumamodifiedCCUStechnology,canachieveuptoof35-70%223whencomparedtoconventionalnegativeemissionsfromBF-BOF,thoughresultsareBF-BOFprocesses.However,constraintsarounddependentonthesourceofbioenergy.However,thecapacityofEAFsincomparisontolargerblastallCCUStechnologiesentailasignificantgreenfurnacesanddeploymentatsmallerfacilitiesimpactpremiumintherangeof65-120%.225AlthoughDRI-theapplicabilityofthistechnology.EAFwithCCUSiscurrentlyaccessible,itscarboncaptureefficiencyislimited.CCUStechnologyisCCUStechnologiesforprimarysteel:mostsuitedfordecarbonizingBF-BOFassets,MostCCUS-basedtechnologiesareprojectedtoespeciallygiventhehigherconcentrationofCO2becomecommerciallyavailableafter2028.Theseinblastfurnacegases.EnergyemissionsabatementmeasuresSteelEAF-basedsecondarysteelproduction:forinstance,isexpectedtowitnessanestimateddecarbonisationisPoweredby100%renewableelectricity,this70%growthinEAFproductionby2050comparedlikelytobefastermethodoffersapromisingpathwaytowardsnear-to2020levels.227Additionally,SSAB,thelargestinregionswherezero-emissionsteelatlowcost.EAFtechnologysteelmanufacturerinScandinavia,launchedSSABcompetitivelycanreduceemissionsby90-95%comparedZero™,producedfromemission-freerecycledsteel.pricedcleanpowertoBF-BOF,withonlyamarginalcostpremiumOneofitsmainadvantagesisitsnear-zero-carbonandscrapsteelareof8-13%.226Yet,therearelimitsaroundtheemissionsthroughoutthecompany’soperations,readilyavailable.applicationsforsecondarysteelduetovariancesincontributingtoanemission-freevaluechainforthequalityofavailablescrap.Adoptionislikelytobeend-users.However,thissustainabilitycomesatafasterinregionswherecompetitivelypricedcleanhighercostduetothemanufacturingprocess.228powerandscrapsteelarereadilyavailable.China,Net-ZeroIndustryTracker2023Edition58TechnologypathwaysFIGURE38EstimatedTRLandyearofavailabilityforkeytechnologypathwaysMature11Earlyadoption10Scrap-basedEAFwithgreenpower(available)9Demonstration87DRI-EAFwithCCS(2025)Largeprototype6BF-BOFwithCCS(2028)BF-BOFwithBECCS(2028)5BF-BOFwithCCUS(2028)SmallprototypeSmeltingreductionwithCCS(2028)4DRI-Melt-BOFwithCCS(2028)DRI-EAF100%greenhydrogen(2028)DRI-Melt-BOF100%greenhydrogen(2028)3Electrolyser-EAF(2035)Electrowinning-EAF(2035)Concept21Source:MPPNet-ZeroIndustryTracker2023Edition59STEEL1InfrastructureSteeldecarbonizationreliesontheavailabilityofarewell-suitedfornear-termadoptionofcleancleanhydrogen,CCUSandEAF-basedsecondaryhydrogen.CCUStechnologiesareadvantageoussteelproduction.EstablishinginfrastructureforinsettingswithCO2storageavailabilityorproximitynear-zero-emissionproductionrequiressignificanttoindustrialclusterswherecapturedcarboncanbeinvestments,estimatedbetween$1.8-2.6trillion.229usedasfeedstock.UnitedStatesSteelCorporationOfthis,90%shouldbedirectedtowardscreatingandCarbonFreeChemicalsHoldingshavesignedacleanhydrogenandcleanpowergenerationnon-bindingMoUtocollaborateoncapturingCO2capacity,withtheremainderforCO2transportandemissionsfromUSSteel’sGaryWorksplant.Theystorage.Around50%230ofcurrentsteelmakingwilldeployCarbonFree’sSkyCycletechnologycapacityisinregionswithaccesstolow-costwiththegoalofcapturingandmineralizingrenewablesorCO2storageandshouldbeapproximately50,000tonnesofCO2annually,prioritizedfortransition.equivalenttooffsettingthecarbonemissionsofnearly11,000passengercarseachyear.232Meetingthesteelindustry’scleanhydrogendemandwouldrequiresubstantialinvestmentsrangingfromCleanpowergenerationwillbeapriorityinregions$200-$890billion231foradditionalcapacity.RegionswheretheroleofEAFproductionisexpectedtowithaffordablenaturalgasandcleanpowerincrease,suchasChinaandNorthAmerica.FIGURE39InvestmentsrequiredforenablinginfrastructureCleanpowerInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredgenerationUpto61%830$1.6GWtrillionCleanhydrogenUpto34%70production$890MTPAbillionCO2transportUpto5%750andstorage$130MTPAbillionSource:AccentureanalysisbasedonmultipledatasourcesincludingIEAIRENABNEFandGlobalCCSInsitituteNet-ZeroIndustryTracker2023Edition60STEEL3DemandTheabilityofcustomerstoabsorbagreenpremiumA40-70%increaseinthepertonnecostofsteelof40-70%pertonne233isuntestedbeyondtranslatesintolowergreenpremiumsforendprototypeprojectsaslow-emissionsteelrepresentsconsumers.Itcanrangefrom0.5%forpassengerlessthan1%ofglobalsupply.carsto2%forbuildings.234FIGURE40EstimatedB2BandB2Cgreenpremium+40-+0.5%70%percarpertonneProducerofsteelConsumerEndconsumerSteelcompanyPassengercarsAutomobilecompanySource:MPPCircularTheabilityfortheindustrytopassalongthisTheCleanEnergyMinisterialIndustrialDeepeconomymodelspremium,ortomonetizenear-zero-emissionsteelDecarbonisationInitiative(IDDI)239isdevelopingshouldbeasadifferentiatingattributedependsonthetargetgloballyrecognizedtargetsforthepublicpromotedwhereconsumersegment(forexample,passengercarsprocurementofnear-zero-emissionsteel.Thesteelproducersvsbuildings),andgeography(developedvsIDDIissettointroducestandardizeddefinitions,canrecycleanddevelopingregions).Thelargestforecastedmethodologiesandguidelinesacrosstheindustry.reusetheirownincreasesinsteelconsumptiongloballyalignwithAdditionally,ResponsibleSteelhaveimplementedsteelscrap.themarketswithlikelythelowestabilitytoabsorbauditabletonear-zero-emissionsteelproductionasignificantgreenpremium.certifications,availabletoitsmembers.240TheseinitiativessignalapotentialshifttowardsboostingCurrently,severalmajorglobalplayersaretakingdemandandencouragingcollectiveeffortstowardsproactivestepstowardsdecarbonizingsteelnear-zero-emissionproducts,andultimatelydrivingproduction.ChinaBaowuGroup,theworld’slargestapositivetrajectorytowardsnet-zeroemissions.steelproducer,hassignedanMoUwithRioTintotojointlyexploregreensteelprojects.235They’veImprovingsupplychainefficiencyandpromotingalsoestablishedaGlobalLow-CarbonMetallurgicalcircularityisessentialtoacceleratesecondarysteelInnovationAlliancewithpartnersfrom15countries,productioninregionswithlimitedaccesstoscrapaimedatreducingGHGemissionsinsteelmaking.236steel.Intheseareas,optimizingsupplychainsbecomesparamounttoensureaconsistentflowIntheautomotiveindustry,bilateralofftakeofrecyclablematerials.Implementingconnectedagreementswithsteelproducersareimpactingthesupplychainnetworks,supportedbyAItechnologymarket,237offeringconvenientaccesstobuyersandblockchain,canenhancetransparencywhosecuretheirsupplyinadvance.Forinstance,andtraceability,reducingwasteandlosses.241VolkswagenGroupandSalzgitterAGhavesignedMoreover,promotingacirculareconomymodelanMoUtosourcenear-zero-emissionsteelstartingbyencouragingsteelproducerstorecycleandinlate2025.238reusetheirownsteelscrapcanreducerelianceonexternalsources.Byintegratingthesestrategies,regionsfacingscrapsteelshortagescanbolstertheirsecondarysteelproductioncapabilities.Net-ZeroIndustryTracker2023Edition61STEEL2PolicyPolicyeffortstopromoteandsupporttheWhilepolicymeasurestofacilitatedecarbonizationdecarbonizationofthesteelindustryarestillintheirarebeginningtoemerge,theywillrequiretimeearlystages,particularlyintheAsiaPacificregion,tofullymature.Localregulations,suchaswhichproduces70%oftheworld’ssteel.242EnvironmentalProductDeclarations(EPDs),oftenprioritizepollutioncontrol,lifecycleassessmentsGlobalsteelproductionishighlyconcentrated,andperformancestandardsbutmaynotsufficientlywiththetopfiveproducingcompaniesaccountingaddressCO2emissionsreduction.Currently,foraround75%ofproduction.PublicpoliciespolicydevelopmentismainlydrivenbyEuropeshouldbeaimedat:andtheUS.However,itiscrucialtostrengthenpolicyinitiativesintheAsiaPacificregion,givenits–Supportingthedevelopmentofcleanpowersubstantialcontributiontoglobalsteelproduction.andcleanhydrogeninfrastructureAssteelisahighlytradedcommodity,international–ProvidingR&Dsupportandmarket-basedcollaborationonpolicymeasuresisessentialtoincentivestoacceleratelow-emissionsteelpreventtheunevenapplicationofpoliciesthatcouldtechnologies,especiallyintheirearlystagesleadtomarketdistortions.–Implementingdemand-sideinterventionssuchasgreenpublicprocurementandupdatedproductcodestostimulatemarketdemandfornear-zero-emissionsteel.ExistingpolicylandscapeTABLE8PolicysummaryEnablerPolicyPolicyKeyexamplesImpacttypeinstrumentsTechnologyIncentive-DirectR&D–EUCleanSteelPartnershipCSP:Allocatedbudgetof$1.7billiontoachieveTRL8levels(CSP)243foridentifiedtechnologypathwaysby2030.Infrastructurebasedfunds/grantsJapanGreenInnovationFundJapan:$1.5billionallocatedtofundinnovativesteelmakingDemandtechnologies.244–EU-ETS245CaliforniaETS246IncentivizessteelproducerstoreduceemissionsbutimpactisMarket-Carbonprice–SouthKoreaETS247limitedbyfreeemissionallowancesandlowercarbonprices.based–ChinaETS248(announced)–EUCBAM(pendingEmission-intensivesteelexporterstotheEUfaceincreased–implementation)249costsofcompliance.Currently30%ofsteelconsumedisimportedfromnon-EUcountries.NeedstobecomplementedBorder–IRAtax-creditstocleanbytransparentandfaircarbonaccountingstandards.power250ProjectedtoacceleratecleanpowergenerationcapacityinUS,adjustmentwithcleanpowerforming80%ofthepowermixby2030.251FederalbuycleaninitiativeinSupportsfastertransitionof70%ofUSsteelproductiontotariffUS252cleanpower.KeysteelproducersasIDDICreatesaviablemarketfornear-zero-emissionsteelthroughIncentive-Direct–members–US,India,Japan253greenpublicprocurementcommitments–25%ofsteeldemandGSAlowembodied-carbonalreadycomesfrompublicprocurement.254basedfundingsteelstandardsinUS255Specifictargetsonembodiedcarboninsteelproductsprovidessupportclearguidelinestogreenpublicprocurement.Incentive-GPP–based–Mandate-Product–basedstandardsCapitalIncentive-Direct–EUpublicfundingtosteelMorethan$2billioninpublicfundingtoinstallhydrogen-basedplantstodecarbonize256DRIsteelplantsinEurope.basedfunding–IRAtax-creditstocleanPotentialtoreducecostofnear-zero-emissionsteelbyuptoTaxcreditspower,greenhydrogenand35%.257Withlimitedfundingavailableindevelopingeconomies,andCCUSinternationalfundingcollaborationmechanismscanbeansubsidiesoptiontoraisetherequiredcapital.Net-ZeroIndustryTracker2023Edition62STEEL1CapitalInthesteelindustry,transformingexistingCurrentindustryprofitmarginsof13%260andassetswithnear-zerotechnologiescouldrequireWACCof10%261suggestthattheindustryisnotcumulativeinvestmentsof$372billionby2050.258positionedtoabsorbtheseadditionalcostsandSucharequirementimpliesannualinvestmentsofgeneratesufficientreturnstofundinvestment$14billion,inadditiontotheregularannualCapExthroughowngeneratedcashflows.of$96billion–anadditional15%investment.259FIGURE41Additionalinvestmentrequiredtoexistinginvestmentratio$96$140.15billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredSource:AccentureanalysisbasedonGreenSteelandETCdataNet-ZeroIndustryTracker2023Edition63Todirectthecapitaltowardstransformingthesteelmakingassumesamajorrole.InIndiaandindustry,policyinterventionslikecarbonpricing,theUS,capitalflowswillneedtoaddressthesubsidies/incentivesfortechnologydevelopmentmaintenanceofexistingEAFassetbaseascapacityandpublicprocurementcommitmentswillneedtoexpansionwillbelimitedbyscrapavailability.beadoptedtoimprovereturns.Largeinstitutionalinvestorsandmultilateralbanks(WorldBank,AsianApproximately70%oflargepublicly-tradedDevelopmentBanketc.)canplayacrucialrolesteelcompaniesconsiderclimatechangeasabyprovidingaccesstolow-costcapitallinkedtokeyconsiderationfortheirstrategicassessmentstringentemissionreductiontargets.Additionally,andintegrateitintotheiroperationaldecision-capitalflowswithinthisindustryaretiedtoregion-making.262Meanwhile,12%ofcompaniesarespecifictechnologypathways.FortheEUandbuildingbasicemissionsmanagementsystemsandChina,thecapitalshouldmainlybedirectedtowardsprocesscapabilities.Finally,12%ofcompaniesexpandingtheirEAFassetbaseassecondaryacknowledgeclimatechangeasabusinessissue.FIGURE42DistributionofcompaniesinthesteelsectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition0Level0:2.4%Unaware12.2%12.2%1Level1:53.7%Aware19.5%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingSource:LSE-TPICentre4Level4:StrategicassessmentNet-ZeroIndustryTracker2023Edition646Cementindustrynet-zerotrackerWhileincreaseduseofalternativefuelsisapositivesignal,CCUSadoptionremainscriticalfornetzeroandneedstoscalefromlessthan1%to90%by2050.Key6%2.6gtCO2e-0.3%0.58tCO2emissionsdata263,264,265,266,267ContributionScope1andEmissionsgrowthEmissionsintensitytoglobalGHG2emissions(2019-2022)(pertonneofemissionscement,2022)1.5times<1%92%<1%ExpecteddemandCurrentlow-emissionFossilfuelsintheincreaseby2050productionReducedemissionfuelmix(2020)productionNet-ZeroIndustryTracker2023Edition65ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–Industryaimsfora25%emissionsCementcanuseCCUS(TRL6-9),cleanhydrogenandcleanintensityreductionby2030andpower(TRL5-6)fordecarbonization–however,productionnet-zeroemissionsby2050.271costsarenearlydoublethatofPortlandcement.–61%oflargepubliclytradedcementInfrastructurecompaniesconsiderclimatechangeintheirdecision-makingprocesses.Lessthan1%ofinfrastructureisinstalledtoday,requiringinvestmentsofupto$300billionby2050.268RichCO2streamsEmissionfocusareasfromclinkerpositioncementasaprimarycandidateforCCUS.fortrackerDemandCementemissionscanbedividedintotwomaincategories:Near-zero-emissioncementheldlessthan1%ofthemarketin2022.AB2Bgreenpremiumof60-100%maybenecessary,with1.Energy-relatedemissionsarisefromabout1-3%affectingconsumers.269However,thisremainsuntested.fossilfuelusedinkilnheating,materialgrindingandmachineryoperations.HighPolicytemperaturestransformrawmaterialsintoclinker,releasingCO2andotherGHGs.Early-stagecementdecarbonizationpoliciesneededespeciallyinAsia-Pacific(with70%globalcementproduction270).Policiesshould2.Processemissionsstemmainlyfromfocusontechnologyincentives,carbonpricing,near-zero-emissionchemicalreactionsduringrawmaterialcementstandardsandupdatedbuildingcodes.conversiontoclinker,emittingCO2throughlimestonecalcination.Capital$750-900billionCapExrequiredby2050.272Thebusinesscaseremainsweak,given11%industryprofitmarginand10%WACC.273SectorprioritiesExistingassetsReduceemissionsintensityofclinkerproductionby:–Increasingfuelsubstitutionwithbiomassandrenewablewaste274–Reducingthermalenergyconsumptionthroughefficiencyimprovements–Substitutingclinkerwithsupplementarycementitiousmaterials(SCMs)andreducingtheclinker-cementratio.275NextgenerationassetsAccelerateinfrastructuredevelopmenttodriveabsoluteemissionsreductionby:–InvestinginCO2storageandtransportinfrastructure–Retrofittingcementkilnswithcleanhydrogencapability–Enablingaccesstogrid-basedcleanpoweranddeployingelectrifiedkilns.EcosystemDe-riskcapitalinvestmenttoscaletechnologyby:–Implementingablendofpolicies,principallycarbonpricing–Incentivizingnear-zero-emissionproduction,reducinglow-emissionproductioncoststhroughanincreasedsharedCCUSprojectsatindustrialhubs–Enablingsharedinfrastructureandsupplychainstabilitythroughstrategicpartnerships.Net-ZeroIndustryTracker2023Edition66PerformanceTheclinkerproductionprocessistheprimaryis56%by2040.279Thetwinforcesofurbanizationcontributortoemissionsinthecementindustry,andpopulationgrowtharedrivingcementaccountingforroughly60%.Theremaining40%consumptioninChina(51%globaldemand)andisgeneratedthroughtheintenseheatingenergyIndia(9%globaldemand),280whichnecessitatesrequiredtoheatcementkilns,primarilysuppliedbyacceleratedactiontodecarbonizethesectortothecombustionofcoalandgas.276mitigatetheimpactsofincreasedproduction.AbsoluteCO2emissionsdeclinedbylessthan1%Energyintensityforcementproductionisafunctionoverthelastfouryearsamidincreasesinglobalofkilntype,combustion,fuelqualityandheatproduction.Emissionsintensityremainedstatictransferefficiencyandaverages2-3GJ/t.Overoverthesametimeperioddespitea9%riseinthelastfiveyears,globalcementenergyintensitytheclinker-to-cementratio.277Theaverageratioisdecreasedby2%,281duetoincreaseduseofcurrently72%,278whiletheproposedGCCAtargetbiomassandnon-renewablewasteinthefuelmix.FIGURE43Emissionsintensitytrajectory,net-zerovsBAUscenariotCO2e/tofcement0.60.580.580.580.580.580.580.580.580.580.510.50.40.432050BAUscenario0.42tCO2e/t0.30.20.210.1202020212022203020402050net-zeroBAUscenarioscenario020190.09tCO2e/tSource:IEA2050Net-zeroscenarioPathforwardTheGCCAistargetinga20%emissionsreductionthroughareductioninnon-abatedfossilfuelsfromby2030andnetzeroemissionsby2050(from202092%ofthefuelmixto10%,requiringasignificantlevels).282Inthenearterm,efficiencymeasures,stepupinCCUSdeployment.Thescenarioconsiderscircularitymeasures,clinkersubstitutionwithSCMsa10-foldincreaseintheproportionofbiofuelsintheanddecarbonizingthekilnheatingprocessmayfuelmixanda25%deploymentofrenewables,withcontributetoa25%emissionsreduction.283However,cleanhydrogenprojectedtorepresent5%.284FurthertheadditionalreductionwillrequiredecouplingscalingofCCUS,cleanelectrificationandhydrogencementemissionsfrommarketdemandincreaseswilllikelyberequiredinsomeregions.Net-ZeroIndustryTracker2023Edition67FIGURE442020fuelmix4%4%92%0%10%20%30%40%50%60%70%80%90%100%FossilfuelsunabatedNon-renewablewasteBiomassSource:IEAFIGURE452050fuelmix–net-zeroscenario31%19%19%14%9%8%0%10%20%30%40%50%60%70%80%90%100%FossilfuelwithCCUSBioenergywithCCUSBioenergywithoutCCUSElectricityUnabatedfossilfuelsHydrogenSource:IEACEMENT2TechnologyThreeleadingdecarbonizationpathwayshavestage(TRL5-6).Productioncostsfortheseemerged,andCCUStechnologiesarethemosttechnologiesarenearlydoublethecostofdeveloped(TRL6-9).CleanhydrogenandcleanPortlandcement.285power-basedtechnologiesarelimitedtoprototypeProcessemissionsabatementmeasuresScalingin-plantCCUSfromlessthan1%to90%totalemissions,thefacilityaimstobeoperationalbythe2040’s286tocapturetheCO2emittedduringby2026.Thismarksapositivesteptowardstheclinkerproductionprocessiscriticaltoachievetechnologyadoptionamongmajorindustryplayers.near-zero-emissions.TheCO2fromcementprocessInthenearterm,cementshouldworktocutemissionsisarichstreamandcanbeattractiveemissionsfromclinkerproduction,scalingthedeploymentofbothclinkersubstitution(SCMs)andtotheCCUSindustryalongsidetherightblendofalternativecementcomposition(greencement).Thoughcommercialityandscalabilitychallengesstillpoliciesandincentives.LehighCement,adivisionneedtobesolved,theseinnovationscomplementofHeidelbergMaterialsinAlberta,Canada,287issetthenear-zerodecarbonizationstrategies.tolaunchtheindustry’sinauguralfull-scaleCCUSfacility.Designedtocapturearound1MTPAofCO2emissions,equivalenttoabout95%oftheplant’sNet-ZeroIndustryTracker2023Edition68EnergyemissionsabatementmeasuresKilnelectrificationsuppliedbyclean,renewableHowever,mostprojectsarecurrentlyprototypedelectricityalongsidecleanhydrogentoreplaceatscale,energystoragerequirementstoovercomecoalandnaturalgasasfuelsourcestargettheintermittencyneedtobeconsidered,andcleanapproximately40%ofemissionsassociatedwithhydrogenisnotcurrentlycost-competitiveorwidelyfuelconsumption.Therequirementsforintenseheatavailable.Inthenearterm,increasingthevolumeenergyalignwithelectrificationandcleanhydrogenofbiomassinthefuelmixcanreduceenergyascriticalnet-zeropathways.emissionswhilenear-zerotechnologiesadvancetocommercialscale.TechnologypathwaysFIGURE46EstimatedTRLandyearofavailabilityforkeytechnologypathwaysEarlyadoptionMature91110Demonstration8On-siteCCUS(2025-2030)7Cleanpowerkilnelectriﬁcation(2040)Largeprototype6Cleanhydrogenfuelledkilns(2040)5Smallprototype43Concept21Source:GCCAandECRANet-ZeroIndustryTracker2023Edition69CEMENT2InfrastructureDecarbonizationofcementisdependentonthetransportandstoragenetwork,inwhichcementavailabilityofCCUS,cleanhydrogenandcleanpowercollaborateswithinfrastructureownersandotherinfrastructure.However,lessthan1%ofthenecessaryco-locatedindustrialplayerstoacceleratethebuild-infrastructurefornear-zero-emissionproductionhasoutofCCUSinfrastructure.beeninstalled.288ThetotalinfrastructurerequiredtosupporttheglobalcementindustryisestimatedatGiventhescaleoftheirdemand,cementplantsupto$300billionthrough2050.289mayneedtoconsidercaptiveon-sitegeneration,ascleanhydrogengridsmaynothavethecapacityTherichCO2streamsfromclinkerproductiontomeettheirintermittentcleanhydrogendemandpositionthecementindustryasaleadingcandidateprofilewithoutadditionalstorageinvestment.forinvestmentinCCUS.ItislikelythatcementproductioncanformoneoftheanchorsofCleanpowerisapre-requisitefordeliveringtheemergingCCUShubs,suchastheNorthernLightsCO2reductionpotentialofkilnelectrification.TheJVLongshipProject,290duetobecomeoperationalcostoftherenewablegeneration,transportandin2024andcaptureupto1.5MTPAofcaptureddistributionandlikelystorageforintermittencyiscarbon.LongshipisEurope’sfirstcross-borderCO2yettobequantified.FIGURE47CementinfrastructureinvestmentsCO2transportInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredandstorageUpto80%1,370$240MTPAbillionCleanhydrogenUpto20%5production$60MTPAbillionCleanpowerDataDataDatagenerationunavailableunavailableunavailableSource:Accentureanalysisbasedonmultipledatasources,includingGCCA,IRENA,IEAandBloombergNEFNet-ZeroIndustryTracker2023Edition70CEMENT2DemandTheabilityofcustomerstoabsorbagreenpremiumA60%increaseinthepertonnecostofcementof60-100%pertonne291isuntestedbeyondtranslatesintoa3%293increaseinthecostofabuiltprototypeprojects,aslow-emissioncementhouse.Whenconsideredasashareofthetotalrepresentslessthan1%ofglobalsupply.292lifetimeemissionsofabuilding,thegreenpremiumfornear-zero-emissioncementismorecompetitive.FIGURE48EstimatedB2BandB2CgreenpremiumProducer+60-Consumer+1-3%EndconsumerCementcompany100%HousingmarketConstructionperbuiltpertonnecompanyhouseofcementSource:AccentureanalysisbasedonmultipledatasourcestoincludeECRA,BloombergandFortuneTheabsenceTheabilityoftheindustrytopassalongthisTheabsenceofstandardizeddefinitions,ofstandardizedpremiumortomonetizenear-zero-emissioncertificationsandtraceabilitymechanismshasdefinitions,cementasadifferentiatingattributedependsonpreventedconsumersfromhavingthenecessarycertificationsthetargetconsumersegment(B2Bvsconsumer)transparencytofullyconsiderpayingthegreenandtraceabilityandgeography(developedvsdevelopingcostpremiumorfortheindustrytofullydefinethepreventsindustryofhousing).Thelargestforecastedincreasesinpathwaytounderstandthemarketpotentialatafromunderstandingcementconsumptiongloballyalignwiththemarketshighercostofproduction.TheintroductionofISOthemarketwithlikelythelowestabilitytoabsorbasignificant19694-3296inMarch2023mayimprovethetrackingpotential.greenpremium.ofCO2emissions.Whilecurrentadoptionislow,industrydemandforTheglobalconstructionlandscapeisshowingnear-zero-emissionand“green”cementproductssignsofchangeasindustriesmovetoreduceisemerging.Industryconsortia,suchastheFMC,CO2emissionsonvariousfronts.Breakthrougharemobilizingmarketdemandthroughpurchasedevelopmentssuchaslow-carbondesign,297commitments.In2023,theFMC294pledgedtonanotechnology,298algae-basedbiogeniccement299buy10%ofitsannualcementsupplyasnear-zero-alternativesand3Dprinting,whichcanreduceemissioncementby2030.Comparableinitiativesarethevolumeofcementusedinconstructionbyoccurringinthecementandbuildingmaterialssector.upto70%300maydisruptbusiness-as-usualInMarch2023,HoffmanCement295contractedrequirements.ThecementindustrymayneedtowithAlkernGrouptosupply28%oftheircurrentdiversifytraditionalportfoliosandadaptbusinessproductionasdecarbonizedcementuntil2027.modelstoremaincompetitiveandmaintainmarketsharethroughtheevolvinglandscape,balancingsupplywithdemandforanincreasingnumberoflower-emissionproducts.Net-ZeroIndustryTracker2023Edition71CEMENT3PolicyPolicymeasurestosupportthedecarbonizationstandardswithoutaddressingCO2emissionsofthecementindustryremainatanearlystage;reduction.Asuiteoftargetedpoliciesonthesupplyinparticular,policyframeworksareyettobesidecansubsidizetechnologyadoptionwhileestablishedintheAsiaPacificregion,where70%discouragingemissionsthroughcarbonpricingandofcementisproduced.301cross-boardedadjustments.Todrivedemand,atransparentdefinitionoflow-emissioncementisGlobalcementproductionisdominatedbyneeded,togetherwithgreenpublicprocurementmultinationalplayersalongsidesmallerlocalandupdatedbuildingcodeswithstandardsforplayers.Localregulations,forexampleaturbanwastematerialuseandco-processing,landfillbansormunicipallevels,oftenfocusonpollutionortaxesandregulationsonbuildingdemolition,andcontrol,lifecycleassessmentsandperformancemandatedminimumquantitiesofrecycledmaterials.ExistingpolicylandscapeImpactTABLE9Policysummary46$800millioninfundingforsixcementCCUSprojectsintheEU.EnablerPolicyPolicyKeyexamplesTechnologytypeinstrumentsIncentive-DirectR&D–EUInnovationFund302basedfunds/grantsSupporting–EUNet-ZeroIndustryAct303StrengthensregulationsandcreateregulationsanenablingenvironmenttoboostCCUStechnologydevelopmentandMarket-Carbonprice–EU-ETS304stimulateinvestments.Currentlyinbased–CaliforniaETS305theproposalstage.Border–ChinaETS306(inclusionofcementannounced,adjustmentIncentivizescementproducerstariffnotformalized)toreduceemissions.–CBAM307(pendingimplementation)Emission-intensivecement–ProveItAct308(underdiscussion)exporterstoEUfaceacostescalationofupto100%.NeedstoInfrastructureIncentive-Directfunding–PublicfundingofCCUShubsinEU309becomplementedbytransparentbasedsupportandcarbonaccountingstandards.toCCUS–ProvisionforCCUShubsunderBipartisaninfrastructureInfrastructureLaw310Over$6billioncommittedtodevelopCCUShubsintheUSandtheEU.DemandIncentive-GPP–PoliciesinplaceforgreenpublicprocurementofCreatesaviablemarketforlow-CapitalbasedconcreteproductsinGermany,theNetherlands,theemissioncementthroughGPPUK,Sweden311commitments.Mandate-Building/end-baseduse/product–FederalbuycleaninitiativeintheUS312Providesaclearmarketsignaltocodesand–KeycementproducersasIDDImembers–low-emissioncementproduction.standardstheUK,India31320-30%reductionincoststodeployIncentive-Taxcredits/CCUSincementplants.basedsubsidies–EmbodiedcarbonlimitpoliciesintheNetherlands,Sweden,FranceandGermany314–USGeneralServiceAdministration(GSA)lowembodied-carbonconcretestandardsintheUS315–CCUStaxcreditsunderIRA316Net-ZeroIndustryTracker2023Edition72CEMENT1CapitalThecementindustryisestimatedtorequire$750-industryprofitmarginsofapproximately16%319900billioninCapExforCCUSenabledplantsbyandWACCis10%.320Despiterelativelylowend2050.317Thistranslatesintoanannualinvestmentusegreenpremium,consideringtheheavyamountofapproximately$30billion,equivalentto71%ofofCapExinvolved,itmaybeachallengefortheexistingCapEx318(withoutaddingnewcapacityorindustrytoselffinanceintheabsenceofcarbongeneratingadditionalreturns).Furthercapitalwillbepricingincertainregions.321Cementcompaniesneededtoadoptcleanhydrogenandelectrifiedkilns.alsoneedtobalancecapitalallocationtowardslow-emissionassets,withcompetingobjectivesThebusinesscaseforinvestmentinnear-zero-offundingdividendsandsharebuybackstofulfilemissioncementassetsremainsweak.Currentinvestorexpectations.FIGURE49Additionalinvestmentrequiredtoexistinginvestmentratio$42$300.71billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredSource:AccentureanalysisbasedonmultipledatasourcestoincludeECRAandGlobalCCSInstituteNet-ZeroIndustryTracker2023Edition73FundingmechanismstodirectcapitaltodevelopingApproximately61%oflarge,publicly-tradedmarketcementproductiontoincentivizeinstitutionalcementcompaniesconsiderclimatechangeasainvestorsandmultilateralbankscouldbekeyconsiderationfortheirstrategicassessmentconsidered,linkingcapitaltoemissionreduction.andintegrateitintotheiroperationaldecision-OrganizationsliketheClimateBondsInitiative,322making.324Meanwhile,14%ofcompaniesarewhichintroducedcementsectorcertificationinbuildingbasicemissionsmanagementsystemsand2022,aimtoenhancetransparencyandguidanceprocesscapabilities.Finally,16%ofcompaniesaroundcleaninvestments,whichmayhelptoacknowledgeclimatechangeasabusinessissue.acceleratethiseffort.InEurope,theindustrywillneedtoreplace30%ofkilnsby2030andcapitalneedsshouldprioritizenewerassetswithCCUS.323FIGURE50DistributionofcompaniesinthecementsectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition0Level0:9.1%Unaware15.9%13.6%1Level1:50.0%Aware11.4%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingSource:LSE-TPICentre4Level4:StrategicassessmentNet-ZeroIndustryTracker2023Edition747Aluminiumindustrynet-zerotrackerToreachnetzero,theindustrywillneedtoincreaseuseofcleanpower,improvetheshareofrecycledaluminiumandprogresslow-emissionsmeltingandrefiningtechnologies.Key3%1.2gtCO2e4%11.2tCO2emissionsdata325,326,327,328,329,330ContributionScope1and2EmissionsgrowthEmissionsintensitytoglobalGHGemissions(2019-2021)(pertonneofemissionsaluminium,2021)1.7times<1%67%47%ExpecteddemandCurrentlow-emissionFossilfuelsintheincreaseby2050primaryproductionReducedemissionsmeltingpowerprimaryproductionmix(2021)Net-ZeroIndustryTracker2023Edition75ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–Currentindustrynet-zeroscenariosAluminiumshouldusecleanpowerandscraptoreduceitsemissions.proposea30%reductioninLow-emissionrefiningandsmeltingmethodsareproposedtobeemissionsintensityby2030andaccessibleby2030.Productioncostsforlow-emissionaluminiumcan97%emissionsby2050.336beupto40%higherthantraditionalmethods.331–71%337oflargepublicly-tradedInfrastructurealuminiumcompaniesconsiderclimatechangeintheirdecision-30%ofcleanpowerinfrastructureexistswhilecurrenthydrogenandCO2makingprocesses.transportinfrastructureisbelow1%ofwhatisrequiredby2050.332Investmentsofupto$560billion333areneededtoaccelerateinfrastructuredevelopment.EmissionfocusareasfortrackerDemandAluminiumemissionscanbedividedLow-emissionaluminiumheldlessthan1%ofthemarketin2022.intotwomaincategories:AB2Bgreenpremiumofaround40%334maybenecessary,withabout1-2%affectingconsumers.335However,thisremainsuntested.1.Energy-relatedemissionsprimarilyduetofossil-basedPolicyelectricityconsumptionduringsmeltingandthermalenergyGlobalaluminiumtraderequiresbothdomesticandinternationalconsumptionduringrefining.regulationsfordecarbonization.Keyproducingcountries,suchasChina,requiremoretangiblepoliciesespeciallyfocusedonimproving2.Processemissionsfromsmeltingaccesstocleanpowerinfrastructure.requiringthepresenceofcarbon-basedanodes.CapitalOver$200billioninCapEx338isrequiredby2050toretrofitexistingassetswithinertanodetechnologyandlow-emissionsmeltingtechnology.However,thebusinesscaseremainsweak,given8%industryprofitmarginand9%WACC.339SectorprioritiesExisitingassetsReducenear-termemissionsintensityby:–Switchingtocleanpowersourcesforsmeltingoperationswherefeasible–Retrofittingexistingfossil-fuel-basedcaptivepowerassetswithCCUS,whereaccesstocleanpowergridsisnoteconomical–Improvingend-userscrapcollectionratefrom70%currentlytomaximizesecondaryproduction.340NextgenerationassetsAcceleratetechnologyandinfrastructuredevelopmenttodriveabsoluteemissionsreductionby:–Investingincleanpowergridcapacitysupportedbyenergystoragesystemstosupporttransition–Acceleratingmarketreadinessforlow-emissionsmeltingtechnologieslikeinertanodes–Developanddeploylow-emissionrefiningtechnologieslikeelectricboilers,mechanicalvapourrecompression,etc.EcosystemDe-riskcapitalinvestmenttoscaleinfrastructurecapacityby:–Implementingpoliciesthatleveltheplayingfieldforlow-emissiontechnologies,enableaccesstocleanpowerinfrastructureandencouragescrapuse–Reducingproductioncostpremiumsthroughanincreasednumberoflow-emissionprojects–Enablingsharedinfrastructureandsupplychainstabilitythroughstrategicpartnerships.Net-ZeroIndustryTracker2023Edition76PerformanceNearly70%oftheemissionsfromthealuminiumenergyacrossthevaluechainresultsinafurtherproductionprocessariseduetoelectricity13%ofemissions.343consumptionduringsmelting.341Thiselectricityrequirementaccountsforaround4%ofglobalBothabsoluteemissionsandemissionintensityhavepowerconsumption,withupto70%sourcedfromremainedstableoverthepastthreeyearsduetothefossilfuels(predominantlycoal)andtheremainingsmeltingpowermixremainingalmostconstant.30%fromrenewables,primarilyhydropower.342Amongtheindustrialsectors,itfeaturesoneofTheenergyintensityofprimaryaluminiumisaroundthehighestlevelsofrenewableenergyusefor70GJ/tonne,makingitmoreenergy-intensivethanenergyrequirements.Processemissionsduringthesteelandcementonaper-tonnebasis.Secondarysmeltingprocesscontribute13%totheemissions,aluminiumproductionconsumesjust5%ofthewhiletheuseoffossilfuelsforprovidingthermalenergyrequiredforprimaryproduction.344FIGURE51Emissionsintensitytrajectory,net-zerovsBAUscenario345tCO2e/tofaluminium2016.92050BAUscenario16.116.017.4tCO2e/t1516.111.5105020302.22050net-zero2021scenario2040Net-zeroscenario0.5tCO2e/t2050BAUscenarioNote:BasedonprimaryproductiononlySource:IEAandIAIPathforwardAluminiumneedstoreduceitsabsoluteemissionsFurthermore,acceleratingtheadoptionofsecondaryby80%toreachnetzeroby2050.346Achievingthisaluminiumiskey.By2050,secondaryaluminiumreductionwillinvolveswitchingtocompletelycleanproductionisprojectedtoconstitute50%ofthepowersourcesforsmelting–eitherrenewablesproductionasperindustrynet-zeroprojections.347(solar,wind,hydro,nuclear,etc.)orthroughcaptivepowerplantsretrofittedwithCCUS.Net-ZeroIndustryTracker2023Edition77FIGURE522021primarysmeltingpowermix57%31%2%10%0%10%20%30%40%50%60%70%80%90%100%CoalHydropowerGasRenewablesSource:InternationalAluminiumInitiativeFIGURE532050primarysmeltingpowermix–net-zeroscenario48%23%20%10%0%10%20%30%40%50%60%70%80%90%100%CaptivepowerwithCCUSNuclearpowerRenewablesHydropowerSource:MPPNet-ZeroIndustryTracker2023Edition78ALUMINIUM3TechnologyThreeleadingdecarbonizationpathwayshaveprocesses,whicharestillmostlyinearlystagesandemerged.Twoofthesepathwaysarecurrentlyareexpectedtobecommerciallyavailableby2030available:shiftingtocleanpowerandtransitioningorafter.Deployingthesetechnologypathwayscantosecondaryaluminium.Thethirdpathwayleadtoproductioncostincreaseofaround40%.348exploreslow-emissionrefiningandsmeltingCleanpowerforsmeltingCleanpowersolutionsforaluminiuminclude;cost-competitiveinmanyareas,fossilfuelswithdecarbonizingelectricityinputthroughrenewableCCUScomewithacostpremiumofupto30%ingrids/purchasepoweragreements(PPAs)andsomeregions.350SmeltersneedcontinuoususingCCUSwithcaptivepowerplantswhereaccesstoelectricity.Thus,assetsswitchingaccesstorenewablesisnotfeasible.Usingtorenewableswithalowercapacityfactorwillnuclear-poweredsmallmodularreactorsisneedsupportingtechnologieslikebatterystorage,alsoanalternative,butthetechnologyisstillwhichcanfurtheraddtocosts.Innovativeemerging.Between30-35%ofthecurrentprimarytechnologieslikeEnPotthat,whichenablesproductionisalreadythroughhydro-basedsmelterstovaryenergyconsumptionbasedonelectricityproduction.349Whilerenewablesareavailablepowerwillalsobekey.351SecondaryproductionMaximizingsecondaryaluminiumproductionhaslevelsof70%tonear100%.353Also,technologiesgreatpotentialforemissionsreductionowingtoitsthatimprovescrapquality,likescrapsortingandlow-carbonfootprint.Transitioningtosecondarypurificationtechnologies,willbevital.Secondaryaluminiumcouldresultinuptoa25%reductioninproductionisreliantonfossilfuels(especiallyannualemissionsby2050,352byavoidingthelossofgas)forheat.Thereisanopportunitytomake15milliontonnesofmetalatend-of-life.However,thisproductionprocessnetzerobyswitchingtothishasastrongdependencyonincreasingcleanerenergysourceslikecleanpower,hydrogen,post-consumerscrapcollectionfromcurrentbiofuels,etc.Net-ZeroIndustryTracker2023Edition79Low-emissionrefiningandsmeltingtechnologiesLow-emissionLow-emissionrefiningtechnologieslikeuseofelectricLow-emissionsmeltingtechnologiesincludeinertrefiningboilers,andmechanicalvapourcompression(MVR)anodesandCCUS.Inertanodesarecriticaltotechnologieswillbecriticaltoremovethermalenergyemissionsremovetheprocessemissionsduringsmeltingandareexpectedfromtherefiningprocess.Electricboilersarealreadyareexpectedtobecommerciallyavailableaftertoincreaseavailableandhavebeensuccessfullytestedacross2030withaproductioncostincreaseof9%.productioncostsotherindustries.MVRtechnologyisexpectedtobeELYSIS,ajointventurebetweenAlcoaandRioby6-11%.availableafter2027.ThesetechnologiesaddressTinto,isworkingoncommercializingapatentedthedigestionprocess,whichcontributes70%ofinertanodetechnologywithsupportfromtherefiningenergyconsumption.354Theremaining30%Canadiangovernment.356ofenergyisconsumedbythecalcinationprocess,wheretechnologieslikehydrogencalcinersorCCUSinsmeltingapplicationsisstillinearlystages,electrifiedcalcinerscanreduceemissions.TheseandwithlowCO2concentrationsinsmeltingfluetechnologiesarestillemerging,withTRLlevelsof4-5.gas,itisexpectedcomewithincreasedcostsLow-emissionrefiningtechnologiesareexpectedtoofcarboncapture.increasetheproductioncostsby6-11%.355TechnologypathwaysFIGURE54EstimatedTRLandyearofavailabilityforkeytechnologypathwaysMature11Earlyadoption10Decarbonizationofelectricity(available)9Demonstration8Electricboilersforlowandmid-heatprocesses(2027)7Largeprototype6Inertanodes(2030)Mechanicalvapourrecompression(2027)5Hydrogen(unknown)SmallprototypeCCUS–processandthermalenergy(2030)43Concept21Source:IEANet-ZeroIndustryTracker2023Edition80ALUMINIUM3InfrastructureAluminiumdecarbonizationreliesprimarilyoninvestmentof$490billion.Asignificantchallengecleanpowergenerationforelectricityinsmelting,isproximitytocleanpowerplants,with30%ofsupportedbycleanhydrogeninfrastructureforglobalsmeltingfacilitiescurrentlyatriskofhavingrefining.CO2transportandstorageinfrastructurenoaccesstocleanpower.359TheseplantswilleitherwillberequiredifCCUStechnologyisscaled,toneedtorelocateoradoptCCUStechnologies.Foraddresssmeltingprocessemissions.Atotalofinstance,numerousChinesealuminiumplantsare30%357ofthecleanpowerinfrastructurerequiredmovingtoprovinceswithbetteraccesstolow-alreadyexists,whilehydrogenandCO2transportcarbonpower,360withupto50%oftheirsmeltersinfrastructurearebelow1%ofwhatisrequired.Theatriskofnoaccesstocleanpower.totalinfrastructureinvestmentrequiredtosupporttheglobalaluminiumindustryisestimatedatuptoTherequiredhydrogencapacityforrefiningis$630billionthrough2050.358estimatedtobeat9.3MTPAby2050,necessitatinganinvestmentof$40-120billion.361CO2transportTodecarbonizeprimaryaluminiumsmelting,andstorageinfrastructuretosupportCCUSapproximately240GWofcleanelectricitydeploymentinsmeltingwillneedafurthergenerationcapacityisneeded,requiringaninvestmentofupto$15billion.362FIGURE55InvestmentsrequiredforenablinginfrastructureInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredCleanpowerUpto78%240generation$490GWbillionCleanhydrogenUpto20%10production$120MTPAbillionCO2transportUpto2%90andstorage$15MTPAbillionSource:Accentureanalysisbasedonmultipledatasources,includingIAI,IEAandBloombergNEFNet-ZeroIndustryTracker2023Edition81ALUMINIUM4DemandThemarket’scapacitytoaccommodatea40%theFMCandseveralotherofftakeagreements.pertonnegreenpremium363remainsunverifiedAlso,consumergoodscompanieslikeApplearebeyondprototypeprojects.Atpresent,lessincreasinglytargetingtosourcelow-emissionthan1%ofaluminiumadherestoindustrynet-aluminiumfortheirelectronicproducts.364zerothresholdsforlow-emissionaluminium,asimpliedbycurrentnetzeroby2050scenarios.A40%increaseinaluminiumproductioncostsStill,thedemandforgreenaluminiumisgrowingtranslatestoa1-2%365increaseforendconsumerstronger,evidentbyitsinclusioninthescopeofindustriessuchasautomobilesorconsumergoods.FIGURE56EstimatedB2BandB2Cgreenpremium+36%+1%pertonnepercarofaluminiumProducerConsumerEndconsumerCarbuyerAluminiumAutomobilecompanycompanySource:Accentureanalysisbasedonmultipledatasources,includingCRU,INSEEandEuropeanAluminiumBusinessTopositiontheindustrytofulfillow-emissiondemand,alumina.368In2021,RusallaunchedALLOW,98%modelshiftshavebusinessmodelmodificationsmaybenecessary.ofwhichisclaimedtobeproducedusingrenewablebeenobservedThisincludeswideningthescopeofindustrialenergysuppliedbyhydropowerplantsinSiberia.369includinginvestingcustomersbeyondtraditionalapplications.Aluminiumandprioritizingisacriticalmetalfromatechnologiesperspective,asToincorporatetransparencyforendusers,RioTintosecondarysmeltingthefoundationofanet-zerofuture:electricvehicleshaslaunchedSTART,aimedatempoweringendoverprimary.(EVs),windturbines,photovoltaics,andenergyuserstomakeinformedchoicesabouttheproductsstorage.Therefore,regionssuchasChina,366whichtheybuy.370Inasimilarmove,TheLondonMetalareexpectedtowitnessagrowthindemandforExchange(LME)announcedthelaunchofLMEsuchtechnologies,willdemandmorelow-emissionpassports.Thisdigitalregisterstoreselectronicaluminiumascomparedtootherregions.certificatesofanalysisandsustainabilitycredentialsforLME-listedmetals.371PriceassessmentsofAbusinessmodelshiftthathasbeenobservedin“low-carbon”aluminiumbycommodityresearchtheindustry,whichincludesinvestingandprioritizingfirmssuchasStandard&Poor’s(S&P)alsoprovidesecondarysmeltingassetsoverprimary.367transparencyandenableconsumerdemand.372Companiesarealsointroducing“low-carbon”Theindustry,however,needstoadheretowardsproductsaspartoftheirportfolio.Forinstance,globallyrecognized,standardizeddefinitionsofAlcoaisexpandingitsEcoSource™low-carbonlow-emissionaluminium,tocomplywithnet-zeroaluminabrandtoincludenon-metallurgicalgradethresholdsandboostdemandsignals.Net-ZeroIndustryTracker2023Edition82ALUMINIUM2PolicyGlobalaluminiumproductionishighlyconcentrated,tocleanpowerinfrastructure,promotingR&DwithChinacontributing60%373ofthetotaloutput.alongsidemarket-basedapproachestoaccelerateHowever,itisalsoextensivelytraded,whichmeansearly-stagelow-emissionsmeltingandrefiningthatbothdomesticandglobalregulationssignificantlytechnologies,andencouraginghigherrecyclinginfluencealuminiumproduction.Thepolicylandscaperatesthroughinfrastructurebuildoutthatimprovesforcreatingalow-emissionaluminiumindustryissortingandpurificationofaluminiumscrap.stilldeveloping.Keyproducingregionsrequiremorerobustandtangiblepolicies,especiallywithregardCurrently,policymeasurestosupporttoimprovingaccesstocleanpowerinfrastructure.decarbonizationacrossthefourreadinessenablersarestillintheearlystages.WhileafewinitiativesPublicpoliciesshouldbedirectedtowardshavebeenexploredinCanada,theEUandChina,supportingthefollowingaspectsinthealuminiumtheneedformoreconcretepolicyactions,especiallysector:facilitatingcleanpoweradoptionandaccessinkeyproducingregions,remainsparamount.ExistingpolicylandscapeTABLE10PolicysummaryEnablerPolicyPolicyKeyexamplesImpactTechnologytypeinstruments$60millionindirectfundingpositionsELYSIStosupportfurtherR&DandachievecommercialIncentive-DirectR&D–Canada’sinvestmentinELYSIS’scale.374R&Dfundingsupporttoacceleratebasedfunds/grantsinertanodetechnologyinnovativetechnologiesneedtobesupportedbypoliciesthatenabletechnologyaccessandtransfertodevelopingcountries.Market-Carbonprice–EU-ETS375Incentivizesaluminiumproducerstoreducebasedemissions.Border–CBAM376Emission-intensivealuminiumexporterstotheadjustmentEUfaceincreasedcostsofcompliance.Currently,tariff50%ofaluminiumconsumedisimportedfromnon-EUcountries.Needstobecomplementedbytransparentandfaircarbonaccountingstandards.Mandate-Direct–InclusionofaluminiumintheEU’sImprovesthecircularityandsustainabilityofbasedregulationsCriticalRawMaterialAct377criticalrawmaterialslikealuminium.Stillintheproposalstage.InfrastructureMandate-Government–China’srenewableenergyuseDoublestheshareofrenewablesinthealuminiumbasedtargetstargetsforaluminiumenergymixby2045.378DemandMarket-Product–AluminiumStewardshipInitiative’sProvidestransparencyandstandardizationbasedstandardPerformanceStandard3,totheenvironmentalperformanceofrecognizedbyGreenBuildingaluminiumproducts.379CouncilofAustraliaCapitalIncentive-Subsidies–China:provinciallevelsubsidyPublicsupporttosmelterstomovetoincentivizebasedenergy-efficiencytechnologies.380Net-ZeroIndustryTracker2023Edition83ALUMINIUM1CapitalThealuminiumindustrywillrequiresignificantcapitalsubsidies/incentivesandR&Dfundingforinvestmentinlow-emissionsmeltingandrefiningtechnologydevelopmentwillneedtobeadoptedtotechnologiesbeyondpowerdecarbonization.guaranteereturns.LargeinstitutionalinvestorsandThecapitalrequirementscanbeestimatedwithmultilateralbanks(WorldBank,AsianDevelopmentsomedegreeofcertaintyforthepredominantBank,etc.)canplayacrucialrolebyprovidinglow-emissionsmeltingtechnology,inertanodes.accesstolow-costcapitallinkedtostringentRetrofittingexistingassetswithinertanodescouldemissionreductiontargets.requirecumulativeinvestmentsof$200billionby2050.381Thisimpliesannualinvestmentsof$7Thebusinesscaseforinvestmentremainsweakbillion,inadditiontotheregularannualCapExwithadditionalcostsof38%383anduncertaintiesof$20billion–anadditional38%investment.382aroundreturnsfromlow-emissionaluminium.Additionalcapitalwillbeneededtoimproverefining,Currentindustryprofitmarginsof13%384andrecyclingandsortingprocesses.WACCof9%385suggestthattheindustryisnotpositionedtoabsorbtheseadditionalcostsandTodirectthecapitaltowardstransformingthegeneratesufficientreturnstofundthroughitsownindustry,policyinterventionslikecarbonpricing,generatedcashflows.FIGURE57Additionalinvestmentrequiredtoexistinginvestmentratio$20$70.38billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredSource:AccentureanalysisbasedonMPPdataNet-ZeroIndustryTracker2023Edition84ThereisaneedforworkableandincreasedsupportApproximately70%oflarge,publicly-tradedforfundingforcleantechnologyvaluechainsacrossaluminiumcompaniesconsiderclimatechangeasenterprises.AkeydevelopmentincludesCanada’sakeyconsiderationfortheirstrategicassessmentinnovationfundingforinertanodetechnologythroughandintegrateitintotheiroperationaldecision-ELYSIS.Anothernotabledevelopmentincludesmaking.387Meanwhile,8%ofcompaniesarecollaborationbetweentoplenderstothealuminiumbuildingbasicemissionsmanagementsystemsandindustry–Citi,INGandSocieteGenerale–andtheprocesscapabilities.Finally,21%ofcompaniesRockyMountainInstitutetodevelopaclimate-alignedacknowledgeclimatechangeasabusinessissue.financingframework,currentlyinprogress.386FIGURE58DistributionofcompaniesinthealuminiumsectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition.0Level0:0.0%Unaware20.8%1Level1:8.3%Aware37.5%33.3%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingSource:LSE-TPICentre4Level4:StrategicassessmentNet-ZeroIndustryTracker2023Edition858Ammoniaindustrynet-zerotrackerWhileincreasedproductioncostsofblueandgreenammoniaremainachallenge,demandfromnewersectorslikeshippingandpowercanbekeyforammoniadecarbonization.Key10.46%gtCO2e22.6%tCO2emissionsdata388,389,390ContributionScope1and2emissionsEmissionsgrowthEmissionsintensitytoglobalGHG(2019-2022)(pertonneofemissionsammonia,2020)97%3times<1%2.2%FossilfuelsinthefuelExpecteddemandCurrentlow-Reducedemissionmix(2021)increaseby2050emissionproductionproductionNet-ZeroIndustryTracker2023Edition86ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–Theammoniaindustryaimsfora27%Cleanhydrogenproductioniscriticalforammoniadecarbonization.emissionsintensityreductionby2030Thegreenpremiumforlow-emissionammoniacanvaryfrom40%toanda96%reductionby2050.395over100%391dependingonproductionrouteandregion.Globally,steammethanereforming(SMR)/autothermalreforming(ATR)with–91%396oflargepubliclytradedCCUSischeaper.ammoniacompaniesconsiderclimatechangeintheirdecisions-Infrastructuremakingprocesses.Tomeettheincreaseindemand,infrastructureinvestmentsofaroundEmissionfocusareas$2.3trillionarerequired.392Themajoritydirectedtoincreasingcleanfortrackerpowercapacitiesto1,260GWby2050.393AmmoniaemissionscanbedividedintoDemandtwomaincategories:Greenpremiumsof10-100%394willbedifficulttoabsorbforfertilizer1.Energy-relatedemissionsprimarilycompanieswithoutpolicysupport.Demandwillbeboostedbyduetofossilfuelusetoproducetheshipping,powerandhydrogencarrierapplications.requiredprocessheatandpressureforproductionofhydrogen.Policy2.ProcessemissionsstemmainlyfromPoliciesforammoniaareemerging,particularlywithinthebroaderusingfossilfuelsasfeedstockinthehydrogenlandscape.Policiesshouldfocusonelectrolyserhydrogenproductionprocess.manufacturing,CCUSimplementationandregulatoryframeworks.Capital1.5timescurrentinvestmentsrequiredfordecarbonizationefforts.However,thebusinesscaseremainsweak,given13%industryprofitmarginand9%WACC.397SectorprioritiesExisitingassetsReducenear-termemissionsintensityby:–Retrofittingexistingfossil-fuel-basedproductionwithCCUSwhereaccesstoCO2handlinginfrastructureisfeasible–InvestinginCO2storageandtransporttoenableCCUS-basedhydrogenproduction–Adoptingenergyefficiencymeasuresacrossexistingplants.NextgenerationassetsAcceleratetechnologyandinfrastructuredevelopmenttodriveabsoluteemissionsreductionby:–Investinginelectrolyserplantstogenerateelectrolysis-basedgreenhydrogen–Investinginsufficientcleanpowercapacity,acceleratingthematurityofmethanepyrolysisandbiomassgasificationthroughpilotsacrosslowestcostregions.EcosystemDe-riskcapitalinvestmenttoscaleinfrastructurecapacityby:–InvestinginR&Dtoreducecosts,scaleuptheelectrolysercapacityandthedeploymentofCCUS–Supportingpoliciesthatstimulatedemandfromnewapplications–Enablinginfrastructureaccessthroughstrategicpartnerships.Net-ZeroIndustryTracker2023Edition87PerformanceApproximately98%ofammoniavaluechainof2.4tCO2epertonne.400Coalgasification,emissionsstemfromthehydrogenproductionaccountingfor26%ofammoniaproduction,stage,whichisheavilyreliantonfossilfuels,carriesanevenhigheremissionintensityofaroundparticularlynaturalgas,forbothfeedstock3.9tCO2epertonne.Tomeettheindustrynet-zeroandenergyneeds.398trajectoryby2030,emissionsmustbereducedby37%.401Overthepastfiveyears,ammoniascope1and2emissionshaveplateauedatapproximately0.42Theoverallenergyintensityofammonia,averagingatgtCO2.399CurrentproductionprocesseslikeSMR34GJ/t,402isafunctionofvariousfactorsincluding:andATR,relyheavilyonnaturalgas,relyheavilyhydrogenproduction,fossilfueluseandthereactiononnaturalgasandcontributeto73%ofammoniakineticsinvolvinghighpressuresandtemperaturesproduction,resultinginahighemissionintensitynecessarytofacilitatetheformationofammonia.FIGURE59AmmoniaemissionsintensitytCO2e/tofammonia2.52.22.22.22.01.92050BAUscenario1.8tCO2e/t1.51.41.00.60.50.0203020402050net-zero2022Net-zeroscenarioscenario0.1tCO2e/t2050BAUscenarioSource:IEAAmmoniaTechnologyRoadmapPathforwardThe2050net-zerofuelmixnecessitatesreducinginapotential93%reductionincumulativeemissionsthefossilfuelsharefrom99%toaround30%.403Thisby2050.404Toachievenetzero,thesepathwaystransitioncanbeprimarilyachievedbydecarbonizingshouldbecomplementedbybiomass-basedthehydrogeninput,eitherthroughelectrolysis-basedammoniaproductionormethanepyrolysis.hydrogenorCCUS-basedbluehydrogen,resultingNet-ZeroIndustryTracker2023Edition88FIGURE602021fuelmix70%3%1%26%0%10%20%30%40%50%60%70%80%90%100%NaturalgasCoalElectricityOilSource:IEAStatedPoliciesScenarioFIGURE612050fuelmix–net-zeroscenario69%4%27%0%10%20%30%40%50%60%70%80%90%100%CleanpowerFossilfuelswithCCUSOthersSource:MPPNet-ZeroIndustryTracker2023Edition89AMMONIA3TechnologyTodecarbonizetheammoniasector,theprimarySMR/ATRprocesses.Theproductioncostincreasepathwayinvolvescleanhydrogenproduction.forlow-emissionproductioncanvaryfrom40%toThiscanbeachievedthroughgreenammonia,over120%dependingontheproductionrouteandusingelectrolysispoweredbycleanpower,orblueregion.405Globally,SMR/ATRwithCCUSischeaperammonia,whichcombinesCCUSwithexistingthanelectrolysis,thoughregionalvariationsexist.GreenammoniaElectrolysisforhydrogenproductionoffersaaround180MT,with50%ofthatexpectedtobemeanstoeliminateCO2emissionsentirelyfromonlineby2030.406Greenammoniaproductionammoniaproductionandbreakawayfromfossiltechnologiesaregainingmomentum.Forinstance,feedstocks.However,itisexpectedtobeavailableThyssenKruppIndustrialSolutionshasdevelopedaonlyafter2025andmightcomeataproductiontechnologythatcanproducegreenammoniafromcostincreaseofaminimumof120%.Thecurrentwater,airandelectricitygeneratedfromrenewablesplannedelectrolysisprojectpipelinecapacityisusingalkalinewaterelectrolysistechnology.407Net-ZeroIndustryTracker2023Edition90BlueammoniaTodecarbonizefossilfuel-basedammoniaproductionThefutureroleofsupportingtechnologieslikeviaSMRorATR,capturingemissionsthroughCCUSmethanepyrolysisandbiomassgasificationinlow-iscrucial.Capturetechnologieslikeamine-basedemissionammoniaproductionremainsuncertainscrubbingarealreadyestablishedtocapturerichduetotechnicalchallengessuchaslowhydrogenCO2processstreams,buttechnologiesforcapturingpurityandbiomassavailability.Methanepyrolysisisdilutestreamsneedtobefurtheradvanced.expectedtobecommerciallyavailableby2025,butProducingblueammoniaincursaproductioncostthereadinessofbiomassgasificationisuncertain.increaseofaminimumof40%.Currently,around1%oftheproductionisblueammonia,withaplannedcapacityofapproximately40MT.408FIGURE62EstimatedTRLandyearofavailabilityforkeytechnologypathwaysEarlyadoptionMature1110SMR/ATRwithCCUS(available)9Demonstration87Gridconnectedelectrolysis(2025)DedicatedVREelectrolysis(2025)Methanepyrolysis(2025)Largeprototype65Biomassgasiﬁcation(unknown)Smallprototype43Concept21Source:IEANet-ZeroIndustryTracker2023Edition91AMMONIA1InfrastructureMeetingathree-foldincreaseindemandforlow-Currently,technologieslikemethanepyrolysisandemissionammoniaby2050409requiressignificantbiomassgasificationareprojectedtoplayaveryinvestmentsincleanpowercapacityandCO2smallpartinammoniamanufacturingby2050,413andhandlinginfrastructure,estimatedat$2.6trillion.410theirinfrastructurerequirementsremainuncertain.MostoftheseinvestmentswillbeneededforcleanThechoiceoftechnologyadoptionwilldependonpowercapacitytogenerateelectrolysis-basedregionalinfrastructureavailability.Inregionswheregreenhydrogen,whichwillaccountforaround70%CO2transportandstorageinfrastructurewillbeofammoniain2050.411Toachievethis,theindustryaffordable,technologieslikeSMRandATRwithwillneedupto1,320GWofcleanpowercapacityCCUSwillcontinuetoscaleup.Suchgeographiesby2050,equivalenttotheentiregenerationshowingearlypromiseincludeNorthAmericaandcapacityoftheUS.412theNorthSea.Similarly,cleanhydrogenmaybeadoptedinlocationswherelow-costcleanpowerTheremainingfundswillbeallocatedforCO2sourcesarealreadyaccessible.Forinstance,ENGIEstorageandtransporttoenableCCUS-basedandMitsuiarecollaboratingononeoftheworld’shydrogenproduction.Astechnologyadvancesandfirstindustrial-scalecleanpower-basedhydrogenthelearningcurveprogresses,CapExfortheseprojectstosupplyfeedstocktoYara’sexistinginfrastructureneedsisexpectedtodecrease,ammoniaoperationsinWesternAustralia.414potentiallyacceleratingtheiradoption.FIGURE63InvestmentsrequiredforenablinginfrastructureCleanpowerInvestmentsrequiredPercentageoftotalinvestmentsCapacityrequiredgenerationUpto98%1,270$2GWtrillionCO2transportUpto2%55andstorage$50MTPAbillionSource:AccentureanalysisbasedonmultiplesourcestoincludeMPP,IEAandIRENANet-ZeroIndustryTracker2023Edition92AMMONIA2DemandTheabilityofcustomerstoabsorbagreenpremiumsecuringearlyofftakeagreementstoensuremarketof40-120%pertonneremainsuntestedbeyondfoothold.However,severalfactorscanimpacttheprototypeprojectsaslow-emissionammoniaeventualdemandforlow-emissionammonialikerepresentslessthan1%ofglobalsupply.415weakregulationsoravailabilityofsubstituteslikeavailabilityofmethanolasashippingfuelorlong-Higherfertilizerpricesresultingfromtheaddeddistancepipelinenetworktotransporthydrogen.productionoflow-emissionammoniacouldleadtoanincreaseinfoodpricesbyupto15%,posingaRecentevidenceindicatesemergingdemandrisktofoodsecurity.416Therefore,demandforlow-signals.Thefirstshipmentofindependently-emissionammoniafromconventionalapplicationscertifiedblueammoniahasalreadyarrivedinislikelytoremainlimiteduntilpolicymeasures,suchJapanforuseasfuelinpowergeneration.418Theascross-industrysubsidies,comeintoeffect.ammoniawasproducedbySABICAgri-NutrientswithfeedstockfromAramcoandsoldbyAramcoEmbracinglow-emissionammoniawillhaveaTradingCompanytotheFujiOilCompany.Also,thedisproportionateimpactonlow-incomeandlaunchofthenewPlattsammoniaforwardcurvedevelopingcountries,wherefertilizerpricesareisanindicationofthegrowinginterestingreenmorecloselylinkedtofoodsecurity.417andblueammonia,419underscoringtheincreasingimportanceofpricetransparencyinthissector.TheAmmoniaplayerswillneedtostrategicallyadaptabsenceofstandardizeddefinitions,certificationstoeffectivelyaddressincreaseddemandfromnewandtraceabilitymayhinderconsumersfrommakingapplicationslikeshipping,powerandhydrogeninformeddecisionsonpayingapremiumforgreentransport.Thiswillincludescalingtherequiredammoniaandlimitedtheindustry’sunderstandinglow-emissionproductioncapacityandproactivelyofmarketpotential.FIGURE64EstimatedB2BandB2CgreenpremiumProducer+40-Consumer+30%Endconsumer+15%Ammoniaplant120%FertilizerFoodpricespertonnepertonnepertonneoffertilizeroffoodofammoniaSource:BloombergNEFNet-ZeroIndustryTracker2023Edition93AMMONIA2PolicyManyproducingPublicpoliciessupportingcleanammoniaFurthermore,policiesshouldaimtostimulateregionsareproductionareemerging,particularlywithinthedemandforammoniainnewapplications,suchadoptingpolicybroaderhydrogenpolicylandscape.However,asafuelinshippingorasahydrogencarrier.measuresacrossadditionalpolicyframeworksareessentialtechnology,tofacilitatethenecessarytechnologyandManyproducingregionsarebeginningtoadoptinfrastructure,infrastructuredeployment.Policiesshouldalsodrivepolicymeasuresacrossthefourreadinessenablers,demandanddecarbonizationwhilesafeguardingfoodsecurity.especiallythosewithcleanhydrogenconsumptioncapital.targets.Forinstance,theUSandtheEUhaveThesepoliciesshouldpromotetheexpansionimplementedencouragingpolicyframeworksthatofelectrolysermanufacturingcapacitiesandincludeinnovationfunds,infrastructuresupportandtheimplementationofCCUStechnologiestoproductiontaxcredits.facilitatecleanammoniaproduction.RegulatoryframeworksshouldencouragethegrowthofcleanpowergenerationandCO2transportandstorageinfrastructure.ExistingpolicylandscapeTABLE11PolicysummaryEnablerPolicyPolicyKeyexamplesImpactTechnologytypeinstrumentsR&Dgrantsofaround$2billiontogreenhydrogenprojects,includinggreenammoniaIncentive-DirectR&D–EUInnovationFund420productionprojects.421basedfunds/grantsMarket-Carbonprice–EU-ETS422Incentivizesammoniaproducerstoreducebasedemissions.Border–EUCBAM(pendingEmission-intensiveammoniaexporterstotheadjustmentimplementation)423EUfaceincreasedcostsofcompliance.Pre-tariffUkraine,ammoniaimportstotheEUamountedto20%oftotalconsumption.424NeedstobeInfrastructureIncentive-Directfunding–USfundingofcleanhydrogencomplementedbytransparentandfaircarbonbasedsupporthubsaccountingstandards.$8billionallocatedtowardsthecreationofhydrogenhubsacrosstheUS.425DemandMandate-Industrial–India’sgreenhydrogen10%greenhydrogenconsumptiontargetsCapitalbasedconsumptionconsumptionobligationpolicyforfertilizerandrefiningindustriesby2030–targetsequivalenttoademandof1.3MTPA.426Directtargets–RePowerEU’simporttargetsofTargetstoimport4MTPAofcleanhydrogeninammoniaasahydrogencarriertheformofammonia–equivalenttoademandof20MTPAofammonia.427Incentive-Taxcredits–IRAtax-creditsforcleanhydrogen50%reductionincleanhydrogenproductionbasedandsubsidiesproductioncoststhatcanboostscalingofcleanhydrogen-derivedammonia.428Net-ZeroIndustryTracker2023Edition94AMMONIA1CapitalTheammoniaindustrywillneedalmost1.5timescycleinthenext10years,sotheinvestmenttheamountofcurrentinvestmentsannuallytoshouldfocusonlow-emissionassetstoavoidtransitiontolow-emissionassetswithcapitalemissionslock-in.431directedtowardsdeployingelectrolysersandCCUS.429ThesetechnologiescouldrequireCurrentindustryprofitmarginsof21%432andWACCcumulativeinvestmentsof$970billionby2050.of9%433suggestthattheindustryisnotpositionedThisimpliesannualinvestmentsof$36billion,toabsorbtheseadditionalcostsandgenerateinadditiontotheregularannualCapExof$23sufficientreturnstofundthroughitsowngeneratedbillion.430Ammoniaplantshavelonglifespans(upcashflows.Someregion-specificinvestmentto50years).Thecurrentaverageageisaroundmomentumexists.Forexample,NeomGreen25years,butthisvariesregionally.PlantsinEuropeHydrogenCompanyhasachievedfinancialclose(9%ofproduction)arearound40yearsoldonontheworld’slargestgreenhydrogenproductionaverageandexpectedtowitnessaninvestmentfacilityatatotalinvestmentvalueof$8.4billion.434FIGURE65Additionalinvestmentrequiredtoexistinginvestmentratio$23$361.56billionbillionAdditionalinvestmenttoexistingmultipleExistinginvestmentTransformationinvestmentrequiredSource:AccentureanalysisbasedonMPPandIEAdataNet-ZeroIndustryTracker2023Edition95VariousfinancingmodelscanbeconsideredbasedontowardsdeployingammoniaassetswithCCUSassectoralandregionalcontext.Theearlyinvestmentofcomparedtoregionswithlowercostrenewables,topublicfunds,whichcouldbedoneefficientlythroughearmarkcapitalforelectrolyserdeployment.developmentbanks,couldleadtofasterdeploymentofthetechnologiesandhenceafasterdeclineinApproximately91%oflargepubliclytradedtheircost.Thiscouldcreatecompetitiveadvantagescompaniesconsiderclimatechangeasakeytocountriesandregionsthatactfastandpositionconsiderationfortheirstrategicassessmentandthemselvesaheadofthecurve.Regionalvariationinintegrateitintotheiroperationaldecision-making.435capitalrequirementswilldependonthetechnologyMeanwhile,5%ofcompaniesarebuildingbasicrouteandaccesstocapital.Regionswithlow-costemissionsmanagementsystemsandprocessCO2transportandstorageandexistinginvestmentcapabilities.Finally,4%ofcompaniesacknowledgemomentumlikeNorthAmericacoulddirectcapitalclimatechangeasabusinessissue.FIGURE66DistributionofcompaniesintheammoniasectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition0Level0:0.0%Unaware3.5%5.3%1Level1:63.2%Aware28.1%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingNote:Scopeofdataforthisassessmentcoverschemicalscompanies,4Level4:includingammonia.StrategicassessmentSource:LSE-TPICentreNet-ZeroIndustryTracker2023Edition969Oilandgasindustrynet-zerotrackerAddressingmethaneandflaringemissionsremainthekeypriorityfortheindustry,butachievingnetzeroneedsincreaseduseofelectrificationandCCUSacrossthevaluechain.Key15%5.1gtCO2e-4%90kgCO2eemissionsdata436,437,438,439ContributionScope1andEmissionsgrowthEmissionsintensitytoglobalGHG2emissions(2018-2022)(emittedperemissionsbarrel,2022)0.6times<1%100%9-11%ExpecteddemandCurrentlow-emissionFossilfuelsintheincreaseby2050productionReducedemissionfuelmix(2019)productionNet-ZeroIndustryTracker2023Edition97ReadinesskeytakeawaysStatedenergytransitiongoalsTechnology–Toalignwithnet-zeroambitions,Maturetechnologieslikemethanemonitoringandmitigation,zeroflaring,theindustryaimsfora50%electrificationandCCUSforgasprocessingfacedeploymentlimitations.Dueemissionsintensityreductionbyinparttoupfrontcosts,policyincentives,standardsandinfrastructureaccess.2030and80%reductionby2050.442Low-emissionrefinerytechnologiesareinearlystagesofdevelopment.–93%oflargepubliclytradedoilInfrastructureandgascompaniesconsiderclimatechangeintheirDecarbonizationoftheoilandgassectorwillneedcleanpowergenerationdecision-makingprocesses.443capacityforelectrification,CO2handlingcapacityforCCUSdeploymentatprocessingplantsandrefineries,andcleanhydrogengenerationcapacityforEmissionfocusareasrefineries.Requiredinvestmentsareestimatedtobeuptoc.$300billion.440fortrackerDemandOilandgasemissionscanbedividedintotwomaincategories:Currentgreenpremiumsremainbelow10%,441butthemarketmayswitchtocost-competitivelow-emissionalternatives,particularlyin1.Energy-relatedemissionsprimarilydevelopedeconomies.duetoenergyconsumptionacrossthevaluechain.Policy2.ProcessemissionsstemEffectivepoliciesarevital,includingincentivesforlow-emissiontech,mainlyfromventedandfugitivestandards,taxation,flaringbansandR&Dfunding.Althoughmajormethaneemissions,gasflaring,productionareashaveoutlinedemissiontargets,actionplansandtransportationofcrudeoil,oilmeasurement,reportingandverification(MRV)guidelines,moreeffortisproductsandnaturalgasoverneededtoturnthesepoliciesintopractical,widelyembracedinitiatives.longdistances,andprocessemissionsfromrefining.CapitalThesectorcaninvestindecarbonizationbydirectingcapitaltolow-emissiontechnology,includingmethanereduction,electrification,CCUSandrefinerytransformation.Investmentsneededby2050couldbeupto$870billion,about4-6%ofannualindustryCapEx.444Highlevelsoffreecashflowscouldfundtheseinvestments.SectorprioritiesExisitingassetsReducenear-termemissionsintensityfromupstreamandmidstreamoperationsby:–Deployingavailablemethaneabatementandzeroflaringtechnologies,supportedbyrobustMRVstandards–Electrifyingupstreamandliquidnaturalgas(LNG)operationswherefeasibleandenhancecarboncapturegasprocessing–Optimizingassetportfoliosbydirectingcapitalallocationtowardslow-emissionintensiveassets.NextgenerationassetsAcceleratedownstreamtechnologyandinfrastructuretodriveabsoluteemissionsreductionby:–DeployingCCUStocapturecarbonfromrichCO2streamsinrefining–Enablingaccesstocleanhydrogenforheatingandprocessapplicationwhererefineriesareco-locatedwithcleanhydrogeninfrastructure–Diversifyingproducts–fromtraditionalrefiningproductstobiofuelsandsyntheticfuels.EcosystemDe-riskinvestmentstoscaleinfrastructurecapacityby:–Usingpolicyincentivesforadvancedtechnologies,whileexpandingaccesstoexistinginfrastructure–Progressingthetechnicalmaturityoflow-emissionrefineryapplicationsthroughR&Dandpilotprojects–Deployingstrategicpartnershipstocollaborateontechnologyadvancement,infrastructurebuildoutandofftakeagreementsforlow-emissionproducts.Net-ZeroIndustryTracker2023Edition98PerformanceOverhalfofscope1and2emissionsresultfromMethaneemissionsincreasedby4%from2020methaneventing,fugitiveemissionsandgasto2022duetorecoveringoilandgasdemand,447flaring.Energyconsumptionacrossthevaluechainbut150countrieshavepledgedtoreducethembyconstitutesapproximately15%oftheemissions,30%below2020levelsby2030undertheGlobalwiththeremainingfromprocessemissions(refining,MethanePledge.448naturalgasprocessingandmidstreamoperations).Globally,theemissionsintensityofoperationsFlaringemissionshavedroppedby3%between2020average90kgCO2e/boe,butthisvariesbyoperatorand2022,witha12%reductioninflaringintensityandassettype.445Forinstance,MiddleEastern(flaredvolumeperbarrelofoilproduced).449TheZeroassetsare,onaverage,26%lessemission-intensiveRoutineFlaringby2030initiativeisendorsedby35thantheirNorthAmericancounterparts.446countriesand54oilandgascompanies.450FIGURE67OilandgasemissionsintensitytrajectorykgCO2e/boe1201051008060652050BAU53scenario4033kgCO2e/boe29200203020502050net-zero2022scenario8kgCO2e/boeOilGasSource:IEANote:BAUprojectionsforscope1and2emissionsintensityarenotavailable.PathforwardToalignwithnet-zeroambitions,theindustryaimstechnologies,eliminatingnon-emergencyflaring,toachievethefollowingby2030:amorethan50%electrifyingoilandgasfacilities,adoptingCCUSreductioninscope1and2emissionsintensity,aingasprocessinganddecarbonizingrefinery75%reductioninmethaneemissions451anda95%operationsthroughCCUSandcleanhydrogen,reductioninflaringemissions.452Achievingthesewherepossible.Energyefficiencywillalsobevital.objectivesrequiresdeployingmethaneabatementNet-ZeroIndustryTracker2023Edition99OILANDGAS4TechnologyFiveleadingdecarbonizationpathwayshaveavailablewithlittletonocostincrease.CCUSemergedtoaddressenergyandprocess-relatedtechnologyforgasprocessingoperationsisemissions:methaneabatement,zerogasflaring,availablewithacostincreaseof7%.453However,electrification,CCUSandcleanhydrogen.Methanerefiningdecarbonizationmeasures,includingCCUSandflaringreductiontechnologies,alongwithandcleanhydrogen,arestillintheirearlystagesupstreamelectrificationtechnologies,arealreadyandareexpectedtoraiserefiningcostsby7-9%.454UpstreamandmidstreamemissionsabatementmeasuresBarrierstoManymethaneabatementtechnologies,likeTheelectrificationofoilandgasfacilitiesreducestechnologyvapourrecoveryunitsandleakdetectionandrepairdependenceondieselornaturalgasforenergydeploymentinclude(LDAR),enablemethanecaptureandreductionrequirements.TechnologiesforelectrifyingupstreamlimitedaccesstowithoutaddedcostswhenconsideringthevalueoperationsandLNGprocessesarereadilyavailablegasmarkets,higherofrecoveredgas.However,barrierstotechnologyandcanbedeployedwithincrementalproductionupfrontcostsfordeploymentincludelimitedaccesstogasmarkets,costs.Forinstance,bp’sUSshalesubsidiary,smalleroperatorshigherupfrontequipmentcostsforsmalleroperatorsbpx,hasalreadyelectrified80%ofitsPermianandtheabsenceandtheabsenceoftechnologystandards.Theseoperationswiththeaimtoincreasecoverageupoftechnologytechnologiesalsorequiresupportfromeffectiveto95%bytheendof2023.457Toaddressenergystandards.methanedetectiontoolsandreportingguidelines.Toconsumptionandassociatedemissions,energyenhancemethanedetectionandmitigation,theUNefficiencyinitiativesarealsobeingexplored,introducedtheMethaneAlertandResponseSystemincludingenergydemandoptimizationusingdigital(MARS)atCOP27,asatellite-basedsystemthatandAI-basedtechnologies.Someexamplesnotifiesgovernments,companiesandoperatorsofincludetheuseofdigitaltwinstooptimizethemethaneleaksforfasterresponsetimes.455powerconsumptionofelectricsubmersiblepumps,reducingtheenergyconsumptionofturbinesZero-flaringtechniquesinvolveon-sitegasuse,usinganalyticsanddata-drivenassetmaintenancetreatment,storageordistributiontoexistinggasprogramstoimproveefficiency.458,459markets,aidedbyappropriateinfrastructurelikegaspipelines,on-sitegascompressionandgasDecarbonizationtechnologiesforgasprocessing,reinjection.MostofthistechnologyisavailablesuchasCCUS,arecommerciallyavailable,albeitwithminimalcostincrease.Manymajorplayersarewithamodest7%increaseinproductioncosts.460committedtoeliminatingroutineflaring,asseenwithExxon’scessationofallroutineflaringintheirPermianoperations.456Net-ZeroIndustryTracker2023Edition100RefiningdecarbonizationmeasuresCCUSistheprimarydecarbonizationpathwayforsuitable.Additionally,emergingtechnologieslikerefineries,particularlyforreducingemissionsfromcleanhydrogenandelectrificationofheatandburningwastefuelgasesandpetcoke.Refinerypowersourcesofferpotentialdecarbonizationhydrogenproductionunitsgenerateasufficientlyalternatives,albeitatearlystagesofdevelopment.purestreamofCO2,makingcarboncaptureTechnologypathwaysFIGURE68EstimatedTRLandyearofavailabilityforkeytechnologypathwaysMature11Earlyadoption10Methaneabatement(available)Zeroﬂaring(available)9Upstreamelectriﬁcation(available)Demonstration8LNGelectriﬁcation(available)CCUSingasprocessing(available)7Largeprototype65CCUS(reﬁning)(unknown)CCUS(upstream)(available)SmallprototypeGreenhydrogen(upstream)(unknown)4Electriﬁcation(upstream)(unknown)3Electriﬁcation(reﬁning)(unknown)Cleanhydrogen(reﬁning)(unknown)Concept21Source:IEA;MPPNet-ZeroIndustryTracker2023Edition101OILANDGAS2InfrastructureDecarbonizationoftheoilandgassectorreliesTomeetthedemandforcleanhydrogenonthreekeyfactors:thecapacityofcleanpowerinrefineries,anadditional8MTPAofcleangenerationavailableforfacilityelectrification,robusthydrogengenerationcapacityisneeded,requiringCO2handlingandstoragecapacityforCCUSinvestmentsof$30-90billion.463deploymentatprocessingplantsandrefineries,andcleanhydrogengenerationcapacityforrefineries.Theconstructionofupto380MTPAofCO2handlingTherequiredinfrastructureinvestmentsareinfrastructureisnecessary,withover50%ofitsestimatedtobeupto$300billion,461afigurethatcapacitydedicatedtomanagingcarboncapturedfallsbelowtheindustry’sannualCapEx.Consideringduringgasprocessing,andtheresttosupporttheindustry’sexperienceinCCUS,naturalgasandrefineries.464Approximately28MTPAofCO2handlinghydrogeninfrastructure,andrenewablespositioninfrastructureisalreadyinplaceforexistinggastheindustryasapotentialleaderindevelopingprocessingoperations.465Buildingthisinfrastructureinfrastructurehubs.willrequireaninvestmentof$30-70billion.466Exxon’sacquisitionofDenbury,aproviderofcarbontransportElectrifyingproductionsitescanbeachievedandstoragesolutions,isasignificantdevelopmentthroughgrid-sourcedrenewableelectricityorthatpositionsthecompanytoexpandsitsCO2captivepowergenerationsystems,necessitatinganhandlinginfrastructure,notonlyforitsoperationsinvestmentofapproximately$120billiontoenablebutforadjacentindustrieslikecleanammonia,70GWofcleanpowercapacityby2050.462cleanhydrogenandsynthetictransportationfuels.467FIGURE69InvestmentsrequiredforenablinginfrastructureInvestmentsrequired%ageoftotalinvestmentsCapacityrequired$1204370CleanpowerUptobilliongeneration%GWCleanhydrogenUpto32%10production$90MTPAbillionCO2transportUpto25%400andstorage$70MTPAbillionSource:Accentureanalysisbasedonmultipledatasources,includingIEA,IRENA,BloombergNEFandGlobalCCSInstituteNet-ZeroIndustryTracker2023Edition102OILANDGAS3DemandTheabilityofoilandwholesalegasbuyerstoabsorbGovernmentinterventionwillbeneededtoagreenpremiumof7-10%remainsuntestedatsafeguardlower-ncomehouseholdsaffectedbyscaleaslow-emissionoilandgasrepresentslessrisingfuelprices.than1%ofglobalsupply.468A10%increaseinproductioncostsleadsto3-10%greenpremiumHowever,greenpremiumstoendconsumerswillforendusers.469Historically,themarkethasshowndisproportionatelyaffectdevelopingcountriesandlimitedpriceelasticityofdemand,indicatingthatitemergingeconomies,whichareimportersofoilandcanabsorbtherequiredgreenpremiums.gas,especiallywithoutsufficientpolicysupport.470FIGURE70EstimatedB2BandB2CgreenpremiumProducer+10%Endconsumer+6%OilandgasperbarrelAutomobileperlitrecompanyofoilownerofgasolineProducer+7%Endconsumer+3%OilandgasPermmbtuElectricityperMWhcompanyofgasconsumersofelectricitySource:AccentureanalysisbasedonIEAandEIAdataMarketswillToachieveearlybreakevenandsustaineddemandIncreasedtransparencyonemissionscanimproveshifttowardsforlow-emissionproducts,theoilandgasindustrydemandsignalsforlow-emissionoilandgas.low-emissionwillneedtoidentifytherightmarket-sectorSomestandards,guidelinesandframeworksexistsubstituteslikeclusters.ExamplesincludepetrochemicalfeedstockcurrentlytostandardizetheMRVofemissionsbiofuels,cleaninAsianmarkets,heavytransport,fuelandgasasacrosstheoilandgasvaluechain.TheOil&GashydrogenandatransitionfuelforpowerinSouth-EastAsia.InMethanePartnership2.0(OGMP2.0)providesarenewableenergythelongterm,especiallyindevelopedcountries,robust,measurement-basedreportingframeworkastheybecomemarketswillshifttowardslow-emissionsubstitutesforindustry’smethaneemissions.473TheGlobalcostcompetitive.likebiofuels,cleanhydrogen-basedfuelsforReportingInitiative(GRI)SectorStandardfortransportandrenewableenergyforpowerastheyOilandGas,effectivefrom2023,providesabecomecost-competitive.ThereisanopportunityreportingframeworkanddisclosureguidelinesforforoilandgascompaniestoalsodiversifyasthesustainabilitytopicsincludingGHGemissions.474marketforthesesubstitutesgrow.Forexample,TheInternationalGroupofLiquefiedNaturalShellplanstoofferbiofuel-basedSAFforaviationGasImporters’(GIIGNL)MRVandGHGNeutralcustomersfromitsRotterdamplantby2025.471FrameworkprovidesconsistentdefinitionsandStrategiccollaborationswithdownstreamconsumersemissionsmeasurementapproachforLNGwillalsobevitalasthecompaniesdiversify.Akeycargoes.ThefirstLNGcargoalignedtothisdevelopmentincludesbpandcarrentalserviceframeworkwassuppliedbyShelltoTaiwan’sstateproviderHertzplanningtoworktogetheronrefinerCPCinJanuary2023.475installinganetworkofEVchargingsolutionsinNorthAmericatoservicethecarrentalcustomers.472Net-ZeroIndustryTracker2023Edition103OILANDGAS3PolicyTheoilandgasindustryisstrategicallyvitalfortechnologystandards,methaneMRVguidelines,regionsandnationsduetoitsroleinensuringmethanetaxation,flaringbansandR&Dfunding.energysecurity.Therefore,effectivepoliciesandregulationsarecrucialfordecarbonizingthesector.WhilekeyproducingregionshaveannouncedToreachnet-zerotargets,acomprehensiveblendemissionstargets,actionplansandMRVguidelines,ofpoliciesisessential.Thesepoliciesshouldmoreactionisrequiredtotranslatethesepoliciesincentivizetheadoptionofzero-methaneandintotangibleimplementationandwidespreadzero-flaringtechnologieswhilepromotingCCUSadoption.CountrieslikeNorway,theUSandimplementationacrosstheoilandgasvalueCanadaareleadingthewaybydemonstratingchain.Policytoolstosupportthiseffortmayambitiouspolicycommitmentstoaddressoilincludeincentivesforlow-emissiontechnologies,andgasemissions.ExistingpolicylandscapeTABLE12PolicysummaryEnablerPolicyPolicyKeyexamplesImpactTechnologytypeinstrumentsOilandgasfacilitiestobecharged$900/tonneMandate-ofmethane,risingto$1,500/tonnefrom2026,basedDirecttaxes/–MethanefeeundertheIRA476incentivizinglegacyassetstodeploymethanefeesabatementtechnologies.477Targets–Canada’stargettoreduceCanada:reducemethaneemissionsoilandgasmethaneemissionsfromoilby75%by2030vs2012level.Nationalandgas478roadmapsNigeria:eliminationofroutinegasflaringby–Nigeria’stargetstoeliminate2030anda60%reductioninfugitivemethaneroutineflaringandfugitiveemissionsby2031.480methaneemissions479Multiplepolicymeasuresincludingreduction–NationalMethaneActiontargets,methanetax,MRVguidelinesetc.Plan–theEU,theUS,NorwaycoveringmethaneemissionsfromallsectorsandCanada481includingoilandgas.Outofover100countrieswhohavesignedtheGlobalMethanePledge,MRV–Colombia’snationalMRVonlyaround30countrieshaveamethaneactionguidelinesstandards482planinplace.Market-Carbonprice–EU-ETS484TechnicalstandardsandguidelinesforfugitivebasedandflaringemissionsMRVforupstreamoilandInternational–USandUnitedArabEmirates’gasoperations.483Incentive-collaborationPartnershiptoAcceleratebasedTransitiontoCleanEnergy485Incentivizesoilrefinerstoreduceemissions.InfrastructureInfrastructureIncentive-capacity–NorwaygovernmentelectricityJointeffortstoreducemethaneandCO2acrossbasedexpansioncapacityupgradetargetstooilandgasvaluechainbyincreasedinvestmentsplanssupportelectrificationofLNGinlow-emissiontechnologies.DemandMandate-assets486CapitalbasedStandardsTargetsgridexpansionandrenewablescapacityand–GIIGNLframeworkforGHGby2030tosupportelectrificationofNorway’sIncentive-frameworksneutralLNGMRV488onlyLNGplant.487basedDirect–IRAmethaneemissionsreductionStandardizedMRVframeworkfollowedattechnologyprogramme489internationallevelfollowedbyallplayersacrossfundingtheLNGvaluechain.Approximately$1.6billionprovidedtoUSEnvironmentalProtectionAgency(EPA)toprovidefinancialassistancetooilandgasfacilitiesformethanereductiontechnologydeployment.490Net-ZeroIndustryTracker2023Edition104OILANDGAS3CapitalTheoilandgassectoriswell-positionedtoinvestForexample,Petrobrasplanstoinvest$4.4billioninsectoraldecarbonization.Oilandgaswillneedinlow-carboninitiativesintheupcomingfiveyears,tore-directcapitaltowardsdeployinglow-emissionwhichrepresents6%oftotalCapEx.Ofthat$4.4technologiesacrossthevaluechain,includingbillion,$2.1billionwillbeinvestedinlow-carbonmethaneandflaringreductiontechnologies,solutionsfornewupstreamprojects.495upstreamelectrification,CCUSforgasprocessingandtransformingrefineries.491InvestmentsrequiredThebusinesscaseforinvestmentisattractiveinby2050canreachupto$880billionor$32billionupstream,wherethesaleofcapturedmethaneinannualinvestments.492Thisrepresentsonly4-6%generatessufficientreturnsforinvestors.TheofthetotalannualCapExoftheindustry,andwithbusinesscaseforinvestinginrefiningneedstobeindustryaverageprofitabilityof20%493andWACCstrengthened,astechnologiesremainintheearlyof9%,494theindustryisinagoodpositiontofundstageandreturnsremainuncertain.itsadditionalCapExbyself-generatedcashflows.FIGURE71Additionalinvestmentrequiredtoexistinginvestmentratio$6900.05billionAdditionalinvestmenttoexistingmultiple$33billionExistinginvestmentTransformationinvestmentrequiredSource:AccentureanalysisbasedonIEA,DNV,GlobalCCSInstituteNet-ZeroIndustryTracker2023Edition105Oilandgassupermajors,largeindependentsandApproximately92%oflargepublicly-tradedoilandmostnationaloilcompaniesarewellcapitalizedtogascompaniesconsiderclimatechangeasakeyfundtheirdecarbonizationefforts.Smallerplayersconsiderationfortheirstrategicassessmentandwillrelyonindustrialcollaborationandgovernmentintegrateitintotheiroperationaldecision-making.496supportinsomeregionsforraisingtherequiredMeanwhile,4%ofcompaniesarebuildingbasiccapital.Investorsandpolicy-makerswillalsoplayaemissionsmanagementsystemsandprocesscrucialroleforcreatingtherightenablingconditionscapabilities.Finally,4%ofcompaniesacknowledgeforinvestment.Thegeographicdistributionclimatechangeasabusinessissue.ofoilandgasproducingnationsandexistinginfrastructureaidsthetransitionasCapExneednotbeconcentratedinaparticulargeography.FIGURE72DistributionofcompaniesintheoilandgassectoraccordingtothemanagementoftheirGHGemissionsandofrisksandopportunitiesrelatedtothelow-carbontransition0Level0:0.0%Unaware3.8%3.8%1Level1:45.3%Aware47.2%2Level2:BuildingcapacityLevel3:3Integratingintooperationaldecision-makingSource:LSE-TPICentre4Level4:StrategicassessmentNet-ZeroIndustryTracker2023Edition106ConclusionInthisdecadecharacterizedbyeconomicones.Thisrequiresactiveparticipationfromexpansionandsoaringdemandforgoodscompaniesthroughoutthevaluechainsofsupplyandtransport,theparadoxicalchallengeofanddemand,aswellaspolicy-makers.Aligningthesimultaneouslyaddressingclimatechangeandessentialcomponentsofdemandforsustainablecreatingeconomicgrowthandresilienceremainsproducts,policyincentives,capitalfortechnologyever-present.Whilethereisanotableincreaseininvestmentsandinfrastructureexpansionisthekeyawarenessandactionwithinindustriesstrivingtoacceleratingprogressintheseindustries.fornet-zeroemissions,itisapparentthatnoneoftheemissionsintensiveindustrysectors,acrossIndustrialdecarbonizationstandsasoneoftheproduction,energyandtransport,iscurrentlyonmostdauntingchallengesintheongoingenergycourseforachievingnet-zeroemissionsby2050,transition.Everycountryandindustryfacesthesignifyingthatsubstantialchallengeslieahead.intricatetaskofstrikingadelicatebalance,onethatinvolvestheneedtopromotedomesticTosteertowardsthepathofprogress,individualbenefitsandcreatequalityjobswhileupholdingcompaniesandindustriesmustforgeaheadontheprinciplesoffreetradeandopenmarkets.multiplefronts.However,itiscrucialtorecognizeInthismultifacetedendeavour,cooperationandthattheycannotembarkonthisjourneyincoordinatedeffortsamongallstakeholders,bothisolation.Anentireecosystemofstakeholdersdomesticandinternational,willbecriticaltoandfactorsmustcontributeandunitetowardssurmountthechallengesandrealizeasustainable,thecommongoalofmakingnewtechnologiesresilientanddecarbonizedfuture.Whilechallenging,commerciallyviableandrapidlyscalingexistingthetimeforactionisnow.Net-ZeroIndustryTracker2023Edition107AppendicesA1AbbreviationsandacronymsAtJAlcohol-to-jetDACDirectaircaptureAFIRAlternativefuelinfrastructureregulationDPDARECAgenceRégionaleÉnergieClimatDNVGeopost(formerlyDynamicParcelASTMAmericanSocietyforTestingandMaterialsDistributionGroup)ATRAutothermalreformingBaaSBatteryasaserviceDetNorskeVeritasBAUBusinessasusualBECCSBioenergywithcarboncaptureandstorageDRI-EAFDirectreducediron-electricarcfurnaceB2BBusinesstobusinessB2CBusinesstoconsumerEAFElectricarcfurnaceBETsBatteryelectrictrucksBF-BOFBlastfurnace-basicoxygenfurnaceEEXIEnergyEfficiencyDesignIndexbpxBritishPetroleumExplorationBTCBlender’staxcreditEIAUSEnergyInformationAdministrationCALCFSCaliforniaLow-CarbonFuelStandardCAJUCleanAviationJointUndertakingEJExajoulesCapExCapitalexpenditureCBAMCarbonBorderAdjustmentMechanismEPAUSEnvironmentalProtectionAgencyCCfDCarbonContractsforDifferenceCCSCarboncaptureandstorageEPDEnvironmentalproductdeclarationCCUSCarboncapture,utilizationandstorageCIICarbonintensityindicatorESGEnvironment,sustainabilityandgovernanceCO2CarbondioxideCO2eCarbondioxideequivalentETSEmissionsTradingSchemeCORSIACarbonOffsettingandReductionSchemeCPCforInternationalAviationEUEuropeanUnionCSPTaiwanChinesePetroleumCleanSteelPartnershipEU-ETSEuropeanUnion-EmissionsTradingSchemeEVElectricvehicleFAMEFattyacidmethylesterFMCFirstMoversCoalitionFTFischer-TropschGCCAGlobalCementandConcreteAssociationGHGGreenhousegasGIIGNLGJInternationalGroupofLiquefiedNaturalGasImpmortersGigajouleGCLGoldenConcordGroupgCO2GramsofCO2g/CO2/MJGramsofCO2permegajoulegCO2e/RPKgCO2e/t-nmGramsofCO2equivalentperrevenuepassengerkilometreGramsofCO2equivalentpertonnenauticalmileNet-ZeroIndustryTracker2023Edition108gCO2e/tnmGramsofCO2equivalentpertonnemileMPPMissionPossiblePartnershipGPPGreenpublicprocurementMRVMeasurement,reportingandverificationMilliontonnesGRIGlobalReportingInitiativeMTMilliontonnesperannumGSAMechanicalvapourrecompressionGTGlobalArrangementonSustainableSteelandMTPAOriginalequipmentmanufacturersAluminiumPurchasepoweragreementsPower-to-liquidsGigatonnesorbilliontonnesMVRResearchanddevelopmentSustainableaviationfuelsgtCO2eGigatonnesofCO2equivalentOEMsSupplementarycementitiousmaterialsGWGigawattPPAStandard&Poor’sSteammethanereformingHDTHeavydutytrucksPtLChineseStatePowerInvestmentCompanySwedishSteel(SvensktStålAB)HEFAHydroprocessedestersandfattyacidsR&DTotalcostofownershipTonnesHETsHydrogenelectrictrucksSAFTonnesofcarbondioxideEquivalenttonnesofcarbondioxideIAIInternationalAluminiumInstituteSCMTonnesofCO2equivalentpertonneofoutputTrans-EuropeanTransportNetworkIATAInternationalAirTransportAssociationS&PTechnologyreadinesslevelUnitedNationsICAOInternationalCivilAviationOrganizationSMRUnitedStatesVariablerenewableenergyICEInternalCombustionEngineSPICWeightedaveragecostofcapitalWorldResourcesInstituteICSInternationalChamberofShippingSSABZeroemissionfuelsZero-emissiontrucksICCTInternationalCouncilonCleanTransportationTCOZeroemissionvehiclesIDDIIndustrialDeepDecarbonisationInitiativetIEAInternationalEnergyAgencytCOIMOInternationalMaritimeOrganization2IRAInfrastructureInvestmentandJobsActJVJointventuretCOe2tCO2e/tTEN-TkgKilogramsTRLUNkgCO2e/boeeKqilougivraalmenstofCO2equivalentperbarrelofoilUSLCAFLow-carbonaviationfuelLDARLeakdetectionandrepairVRELMELondonMetalExchangeWACCLNGLiquifiednaturalgasWRILSE-TPIZEFMARSLondonSchoolofEconomicsTransitionZETPathwayInitiativeMethanealertandresponsesystemMoUMemorandumofunderstandingZEVNet-ZeroIndustryTracker2023Edition109A2MissionandmethodologyAnadaptedversionoftheperformanceframeworkThe2023iterationoftheframeworkforproductionhasbeendevelopedtoaccountforvarianceinsectorsremainsthesame.reportingrequirementsforthetransportsector.Thetransportsectorframeworkwillaccountforgreenhousegas(GHG)emissionsintheoperationalandfuelsupplyvaluechainsagainst2050targets.FIGURE73TheNet-ZeroIndustryperformanceframeworkTrackprogressofthefourdriversofindustrynetGHGemissions:Whatisproduced:ABHowitisproduced:IndustryproductionEmissionandenergyvolumeandmixIndustryProductionintensityofproductionoutputprocessprocessNetGHGemissionsWhatitcontributesto:DCWhatenergyisused:Upstream/downstreamTypeofenergysourcesemissionsandoffsetsScope3EnergyconsumedandoffsetssourcesTrackprogressofthefourdriversofindustrynetGHGemissions:Whatisbeingtransported:ABHowitistransported:Industrytransportwork,EmissionandenergyvolumeandmixIndustryOperationalintensity,transportworkoutputprocessbyprocessNetGHGWhatfuelisused:emissionsTypesoffuelsourcesconsumedWhatitcontributesto:DCValuechainemissionsandoffsetsValuechainFuelemissionssourcesNet-ZeroIndustryTracker2023Edition110TABLE13CriteriaforassessingreadinessstagesoftransformationenablersTechnologyInfrastructureDemandPoliciesCapitalAvailabilityofInfrastructureMarketIndustry-/product-Abilitytotechnologyrequirementsdynamicsspecificpoliciesattractcapital–Technologyoptions–Infrastructurecapacity–Sizeofmarket–Productspecification–Availabilityofforlow-emissionrequiredby2050standardsadequatetaxonomyproduction–Historicalprice–Infrastructurevolatility–Productuse–Profitability/levelof–Technologyemissioninvestmentsrequiredstandardsreturnsabatementpotentialby2050–Priceelasticityofdemand–Publicprocurement–Cashavailability–Technologyreadiness–Infrastructurestandardslevel(TRL)deployment–Availabilityand–Creditratingscalabilityof–Productemission–Technologymaturity–Infrastructuresubstitutesregulation/penalties–Costofcapitaltimelinedeploymentlevel–Greenpremiumfor–Impactofexisting–Environment,–Competitivenessofdirectcustomers/policiessustainabilityandtechnologywholesalecustomersgovernance(ESG)–Coverageofexistingrating–Technologyimpacton–Greenpremiumforpoliciesproductioncostendconsumers–Expectedreturnsasa–Policygapsdifferentiatedproduct–Technology–Businessmodeldeploymentreadiness–Competitivenessof–Capitaldeploymenttechnology–Technologyadoption/–Standardsand–Scaleofinvestmentsdeploymenttraceabilityoflow-–Carbonpricingneededemissionproducts–Carbonborder–Numberofprojects–Availabilityoflow-adjustmentinvestedcarbonsubstituteinmechanismsthemarket–Amountofgreen–Emissionregulationcapitalexpenditure–Effectivegreen(CapEx)demand–Publicregulation–Amountofgreen–Marketshareoflow-–Publicaction/projectsbondsemissionproducts–Taxbreaks–AmountofR&D–Volumeandstrengthinvestmentsofdemandsignals–Subsidies(e.g.regulation,public–Amountofventureprocurement)capitalinvestments–Amountofgovernmentfunding–Risktoearlyinvestors–GeographicdistributionofassetsNet-ZeroIndustryTracker2023Edition111A3DatasourcesMethodologysourcesInternationalAluminiumInstitute(IAI)InternationalCouncilonCleanTransportation(ICCT)AluminiumStewardshipInitiative(ASI)InternationalEnergyAgency(IEA)BloombergNEF(BNEF)TransitionPathwayInitiativeCentre,LondonCommoditiesResearchUnit(CRU)SchoolofEconomicsandPoliticalScienceFirstMoversCoalition(LSE-TPICentre)GlobalCCSInstituteMissionPossiblePartnershipGlobalCementandConcreteAssociation(GCCA)Standard&Poor’sGlobal(S&PGlobal)GlobalMaritimeForumWorldSteelAssociationInternationalAirTransportAssociation(IATA)OtherdatasourcesInternationalRenewableEnergyAssociation(IRENA)MaerskMcKinneyMollerCenterforZeroCarbonAccentureShipping(MMM)AirTransportActionGroup(ATAG)NationalInstituteofStatisticsandEconomicABBStudies(INSEE)BiogasworldNYUSternBreakthroughEnergyRefinitivDetNorskeVeritas(DNV)RockyMountainInstitute(RMI)DrivetoZeroRoyalDutchShell(Shell)EmberRystadEnergyInformationAdministration(EIA)Sea-LNGEnergyTransitionsCommission(ETC)SustainableGasInstitute(ImperialCollegeLondon)EuropeanCementResearchAcademy(ECRA)SwedishSteel(SSAB)EuropeanMaritimeSafetyAgency(EMSA)TheGeographyofTransportSystemsFinancialTimesOrganisationforEconomicCooperationandFoodandAgricultureAssociationoftheUnitedDevelopment(OECD)Nations(FAO)UnitedNationsConferenceonTradeandFortuneBusinessInsightsDevelopment(UNCTAD)GeorgiaInstituteofTechnologyUnitedStatesGeologicalSurvey(USGS)GreenSteelUniversityofWyomingHolcimUSDepartmentofEnergyIndustryTrackerValeroEnergyInternationalCivilAviationOrganisation(ICAO)VerifaviaInternationalGasUnion(IGU)WoodMackenzieInternationalMaritimeOrganization(IMO)WorldBankNet-ZeroIndustryTracker2023Edition112ContributorsRobertoBoccaHead,CentreforEnergyandMaterials;ProjectteamMemberoftheExecutiveCommitteeAccentureVladimirBorodinSpecialist,AirportsofTomorrowMuqsitAshrafGlobalStrategyLeadEspenMehlumSagnikDeyHead,EnergyTransitionIntelligenceandRegionalConsultant,StrategyandConsulting,EnergyAcceleration,CentreforEnergyandMaterialsSagarKalraConsultant,StrategyandConsulting,EnergySarahMoinJadeOakleyProgrammeAnalyst,CentreforEnergyandMaterialsConsultant,StrategyandConsulting,EnergyDavidRableyRenéeVanHeusdenManagingDirectorandGlobalEnergyTransitionHead,OilandGasIndustryLead,EnergySamikshaSrivastavaHarshVijaySinghConsultant,StrategyandConsulting,EnergyManager,EnergyandIndustryTransitionFrancescaTateIntelligence,CentreforEnergyandMaterialsManager,StrategyandConsulting,EnergyThibaultVillienDeGabioleWorldEconomicForumLead,IndustryDecarbonization,TruckingMohammedAlgeerProductionProjectFellow,CentreforEnergyandMaterialsLaiaBarbaràLaurenceDenmarkActingHead,ClimateStrategyCreativeDirector,StudioMikoSophieEbbageDesigner,StudioMikoMarthaHowlettEditor,StudioMikoGeorgeMesserDesigner,StudioMikoAcknowledgementsTheWorldEconomicForumacknowledgesandAdvisoryBoardMembersthankstheexperts,withoutwhosesupporttheNet-ZeroIndustryTracker2023editionwouldnothaveMorganBazilianbeenpossible.ThisreportdoesnotreflecttheviewsProfessorofPublicPolicyandDirector,ofthesecompaniesandindividuals.ExpertadvicePayneInstitute,ColoradoSchoolofMinesispurelyconsultativeinnatureanddoesnotimplyanyassociationwiththetakeawaysorconclusionsLinBoqiangpresentedwithinthisreport.Dean,ChinaInstituteforStudiesinEnergyPolicy,XiamenUniversityNet-ZeroIndustryTracker2023Edition113MichaelaCampanelliKellyDriscollHead,ClimateStrategy,RiskMitigationResearchManager,CRUandDisclosure,EniAsaEkhdahlLucyCraigHead,EnvironmentandClimateChange,WorldDirector,InnovationandDigitalization,DNVSteelAssociationRabiaFerroukhiCedericdeMeeusDirector,Knowledge,PolicyandFinanceCentre,Vice-President,GroupPublicAffairsandInternationalRenewableEnergyAgency(IRENA)GovernmentRelations,HolcimGroupBertrandMagneElisabethFauvelleMunckafRosenscholdSeniorEconomist,EuropeanInvestmentBank(EIB)GlobalSustainabilityManager,IKEASupplyAGDavidePuglielliAraceliFernandezHead,ScenarioPlanningandGroupStrategicHead,TechnologyInnovationUnit,InternationalPositioning,EnelEnergyAgency(IEA)JohnScottSamuelFlückigerHead,SustainabilityRisk,ZurichInsuranceHead,EUClimatePolicy,ThyssenKruppFridtjofUnanderAndrewGaddChiefEconomist,AkerHorizonsPrincipalMarketingSustainabilityProjects,BHPDavidVictorAl-KarimGovindjiProfessorofInnovationandPublicPolicy,GlobalHead,PublicAffairs,EnergySystems,DNVUniversityofCalifornia,SanDiego(UCSD)ThomasGuillotRigobertoArielYepez-GarciaChiefExecutiveOfficer,GlobalCementandManager,InfrastructureandEnergySector,ConcreteAssociation(GCCA)Inter-AmericanDevelopmentBank(IDB)NatalieGuptaExpertsDirector,Bunkering,ValueChainPartnerships,YaraCleanAmmonia,YaraKatrinaAbholdSeniorProjectManager,Decarbonisation,MaxHeldGlobalMaritimeForumManager,SystemiqDomagojBaresicJaakkoKooroshyResearchFellow,UniversityCollegeLondon(UCL)GlobalHeadofSustainableInvestmentResearch,FTSERussellHusseinBasmaResearcher,HeavyDutyVehicles,InternationalAtulKulkarniCouncilonCleanTransportation(ICCT)SeniorAnalyst,CRUChrisBaylissShivakumarKuppuswamyDirector,Standards,AluminiumStewardshipInitiativeDevelopmentandInnovationDirector,ResponsibleSteelRobertBoydGlobalSustainabilityPolicyandPartnerships,BoeingClaudeLoreaInnovationandESGDirector,GCCAClareBroadbentHead,Communications,WorldSteelAssociationMatthewLoughreyPrincipalTechnologyConsultant,GlobalCCSInstituteAntonioCarilloDobaldoHead,ClimateandEnergy,HolcimOwenMacDonnellTechnicalProjectManager,CalstartAlbertCheungDeputyChiefExecutiveOfficerandHead,OskarMeijerinkGlobalTransitionAnalysis,BloombergNEFHead,FutureFuels,SkyNRGClaireCurryAlexMenottiGlobalHeadofTechnology,IndustryVice-President,GovernmentAffairs,andInnovation,BloombergNEFPolicyandSustainability,LanzajetNet-ZeroIndustryTracker2023Edition114AndrewMinsonAndrewSpencerDirector,ConcreteandSustainableConstruction,Vice-PresidentCorporateAffairs,SustainabilityGCCAandEnterpriseRisk,CemexFredericNyssenLukeStaffordDirector,NetZeroPrioritiesandOpportunities,BASFManager,GovernmentRelationsandRegulatoryStrategy,LondonStockExchangeGroup(LSEG)LudimillaOspovaResearcher,ICCTMegWhittyVice-President,MarketingandCorporateKatherinePalmerRelations,LanzajetShippingLead,ClimateChampionsAndrewWoodAndrewPurvisDirector,SustainableInvestmentandLegal,Director,SustainableManufacturing,WorldSteelAluminiumStewardshipInitiativeAssociationAlexZapantisXavierSaraGeneralManager,ExternalAffairs,SeniorManager,Scouting,BASFGlobalCCSInstituteNet-ZeroIndustryTracker2023Edition115Endnotes1.WorldEconomicForum,FosteringEffectiveEnergyTransition,2023,https://www3.weforum.org/docs/WEF_Fostering_Effective_Energy_Transition_2023.pdf.2.InternationalEnergyAgency(IEA),Aviation,https://www.iea.org/energy-system/transport/aviation#tracking.3.AccentureanalysisbasedonAccenturecarboncalculator.4.InternationalCivilAviationOrganisation(ICAO),MethodologyforActualLifeCycleEmissions,June2022,https://www.icao.int/environmental-protection/CORSIA/Documents/CORSIA_Eligible_Fuels/ICAO%20document%2007%20-%20Methodology%20for%20Actual%20Life%20Cycle%20Emissions%20-%20June%202022.pdf.5.AviationBenefits,Waypoint2050,September2021,https://aviationbenefits.org/media/167417/w2050_v2021_27sept_full.pdf.6.MissionPossiblePartnership(MPP),MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.7.InternationalAirTransportAssociation(IATA),EnergyandNewFuelsInfrastructureNet-ZeroRoadmap,May2023,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/energy-and-new-fuels-infrastructure-net-zero-roadmap.pdf.8.AccentureanalysisbasedonAccenturecarboncalculator.9.MPP,MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.10.TransitionPathwayInitiative,ManagementQuality:Airlines,https://www.transitionpathwayinitiative.org/sectors/airlines.11.Accentureanalysisbasedon:IATA,NetZeroRoadmap,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/finance-net-zero-roadmap.pdf.12.AccentureanalysisbasedonS&PCapitalIQDataandSternNYUData.13.MPP,MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.14.Ibid.15.InternationalCouncilonCleanTransport(ICCT),Vision2050-AligningAviationWithTheParisAgreement,June2022,https://theicct.org/wp-content/uploads/2022/06/Aviation-2050-Report-A4-v6.pdf.16.ICAO,CarbonOffsettingandReductionSchemeforInternationalAviation(CORSIA),July2023,https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx.17.MPP,MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.18.Ibid.19.Ibid.20.Ibid.21.Ibid.22.Ibid.23.Ibid.24.Ibid.25.Ibid.26.Ibid.27.Ibid.28.Euronews,All-ElectricAircraft“Alice”MakesitsFirstTestFlightinaMilestoneforZeroCarbonAviation,30September2022,https://www.euronews.com/next/2022/09/30/all-electric-aircraft-alice-makes-its-first-test-flight-in-a-milestone-for-zero-carbon-avi.29.MPP,MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.30.Ibid.31.IATA,EnergyandNewFuelsInfrastructureNet-ZeroRoadmap,May2023,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/energy-and-new-fuels-infrastructure-net-zero-roadmap.pdf.32.Ibid.33.Ibid.Net-ZeroIndustryTracker2023Edition11634.Airbus,AirbusTeamsUptoAdvanceGreenHydrogenAvailabilityatAirports,November2022,https://www.airbus.com/sites/g/files/jlcbta136/files/2022-11/EN_Press%20Release_Airbus_teams%20up%20to%20advance%20green%20hydrogen%20airport.pdf.35.TravelandLeisure,AirfareDollarsBreakdown,29November2022,https://www.travelandleisure.com/airlines-airports/airfare-dollars-breakdown.36.AccentureanalysisbasedonAccenturecarboncalculator.37.AviationBenefits,Waypoint2050,September2021,https://aviationbenefits.org/media/167417/w2050_v2021_27sept_full.pdf.38.MPP,MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.39.Accenture,FlySAF(E),November2022,https://www.accenture.com/ch-en/blogs/travel/fly-safe.40.ICAO,CarbonOffsettingandReductionSchemeforInternationalAviation(CORSIA),July2023,https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx.41.Boeing,SAFDashboard,IATA,SAFDeploymentPolicy,2023,https://www.iata.org/contentassets/d13875e9ed784f75bac90f000760e998/saf-policy-2023.pdf.42.IATA,PolicyNet-ZeroRoadmap,2023,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/policy-net-zero-roadmap.pdf.43.IATA,SAFDeploymentPolicy,2023,https://www.iata.org/contentassets/d13875e9ed784f75bac90f000760e998/saf-policy-2023.pdf.44.InternationalCivilAviationOrganization(ICAO),CORSIAEligibleFuels–LifeCycleAssessmentMethodology,June2019,https://www.icao.int/environmental-protection/CORSIA/Documents/CORSIA%20Supporting%20Document_CORSIA%20Eligible%20Fuels_LCA%20Methodology.pdf#page=12.45.ShellGlobal,AccentureandAmexGBTLaunchOneoftheWorld’sFirstBlockchain-PoweredDigitalBook-and-ClaimSolutionsforScalingSustainableAviationFuel(SAF),20June2022,https://www.shell.com/business-customers/aviation/news-and-media-releases/news-and-media-2022/shell-accenture-and-amex-gbt-launch-one-of-the-worlds-first-blockchain-powered-digital-book-and-claim-solutions-for-scaling-sustainable-aviation-fuel-saf.html.46.IATA,PolicyNet-ZeroRoadmap,2023,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/policy-net-zero-roadmap.pdf.47.EuropeanCommission,EUEmissionsTradingSystem(EUETS),https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en.48.ICAO,CarbonOffsettingandReductionSchemeforInternationalAviation(CORSIA),July2023,https://www.icao.int/environmental-protection/CORSIA/Pages/default.aspx.49.AviationBenefits,CORSIAexplained,https://aviationbenefits.org/environmental-efficiency/climate-action/offsetting-emissions-corsia/corsia/corsia-explained/.50.EuropeanCommission,EuropeanGreenDeal:NewLawAgreedtoCutAviationEmissionsbyPromotingSustainableAviationFuels,26April2023,https://ec.europa.eu/commission/presscorner/detail/en/ip_23_2389.51.EuropeanCouncil,Infographic:Fitfor55:HowtheEUPlanstoReviseEnergyTaxation,https://www.consilium.europa.eu/en/infographics/fit-for-55-energy-taxation/.52.U.S.DepartmentofEnergy,AlternativeFuelsDataCenter:BiodieselProductionandBlendingTaxCredit,22August2007,https://afdc.energy.gov/laws/5831.53.NBAA,WhatWilltheSAFBlendersCreditMeanforOperators?,January/February2023,https://nbaa.org/news/business-aviation-insider/2023-jan-feb/will-saf-blenders-credit-mean-operators/.54.EuropeanCouncil,AlternativeFuelsInfrastructure,https://www.consilium.europa.eu/en/press/press-releases/2023/07/25/alternative-fuels-infrastructure-council-adopts-new-law-for-more-recharging-and-refuelling-stations-across-europe.55.U.S.EnergyCommunities,CleanFuelProductionCredit,https://energycommunities.gov/funding-opportunity/clean-fuel-production-credit-26-u-s-code-%C2%A4-45z/.56.DepartmentofTransport,PathwaytoNetZeroAviation:DevelopingtheUKSustainableAviationFuelMandate,March2023,https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147350/pathway-to-net-zero-aviation-developing-the-uk-sustainable-aviation-fuel-mandate.pdf.57.CenterforStrategicandInternationalStudies(CSIS),Howthe45VTaxCreditDefinitionCouldMakeorBreaktheCleanHydrogenEconomy,22May2023,https://www.csis.org/analysis/how-45v-tax-credit-definition-could-make-or-break-clean-hydrogen-economy.58.CaliforniaAirResourcesBoard,LowCarbonFuelStandard,https://ww2.arb.ca.gov/our-work/programs/low-carbon-fuel-standard.59.EuropeanUnionAviationSafetyAgency(EASA),Fitfor55andReFuelEUAviation,https://www.easa.europa.eu/en/light/topics/fit-55-and-refueleu-aviation.60.EuropeanUnion,CleanAviationJointUndertaking,https://european-union.europa.eu/institutions-law-budget/institutions-and-bodies/search-all-eu-institutions-and-bodies/clean-aviation-joint-undertaking_en.Net-ZeroIndustryTracker2023Edition11761.OfficeofEnergyEfficiency&RenewableEnergy,SustainableAviationFuelGrandChallenge,https://www.energy.gov/eere/bioenergy/sustainable-aviation-fuel-grand-challenge.62.KirstiePickering,AirportIndustryReview,What’sInsideBiden’sNewSAFGrandChallengeRoadmap?,https://airport.nridigital.com/air_oct22/biden_us_saf_grand_roadmap.63.Accentureanalysisbasedon:IATA,NetZeroRoadmap,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/finance-net-zero-roadmap.pdf.64.AccentureanalysisbasedonS&PCapitalIQData.65.SternNYU,WACCData:CostofEquityandCapital,January2023,https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.html.66.Accentureanalysisbasedon:IATA,NetZeroRoadmap,https://www.iata.org/contentassets/8d19e716636a47c184e7221c77563c93/finance-net-zero-roadmap.pdf.67.TransitionPathwayInitiative,ManagementQuality:Airlines,https://www.transitionpathwayinitiative.org/sectors/airlines.68.Accentureanalysisbasedon:IEA,InternationalShipping,https://www.iea.org/energy-system/transport/international-shipping.69.Accentureanalysisbasedon:InternationalMaritimeOrganization(IMO),MarineEnvironmentProtectionCommittee,EnergyEfficiencyofShips,10September2022,https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Air%20pollution/MEPC%2079-6-1%20-%20Report%20of%20fuel%20oil%20consumption%20data%20submitted%20to%20the%20IMO%20Ship%20Fuel%20Oil%20ConsumptionDatabase...%20(Secretariat).pdf.70.IMO,FourthGreenhouseGasStudy2020,https://www.imo.org/en/ourwork/Environment/Pages/Fourth-IMO-Greenhouse-Gas-Study-2020.aspx.71.Accentureanalysisbasedon:UnitedNationsConferenceonTradeandDevelopment,ReviewofMaritimeTransport2022,https://unctad.org/rmt2022.72.InternationalRenewableEnergyAgency(IRENA),DecarbonizingShipping2021,https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Oct/IRENA_Decarbonising_Shipping_2021.pdf.73.Accentureanalysisbasedon:DNVGL,ComparisonofAlternativeMarineFuels,5July2019,https://safety4sea.com/wp-content/uploads/2019/09/SEA-LNG-DNV-GL-Comparison-of-Alternative-Marine-Fuels-2019_09.pdf.74.IMO,RevisedGHGReductionStrategyforGlobalShippingAdopted,7July2023,https://www.imo.org/en/MediaCentre/PressBriefings/pages/Revised-GHG-reduction-strategy-for-global-shipping-adopted-.aspx.75.Accentureanalysisbasedon:TransitionPathwayInitiative,Shipping,https://www.transitionpathwayinitiative.org/sectors/shipping.76.Accentureanalysisbasedon:Safety4sea,PotentialofAmmoniaasFuelinShipping,26September2023,https://safety4sea.com/wp-content/uploads/2019/09/SEA-LNG-DNV-GL-Comparison-of-Alternative-Marine-Fuels-2019_09.pdf.77.AccentureanalysisbasedonS&PCapitalIQProdata.78.Accentureanalysis.79.InternationalMaritimeOrganization(IMO),FourthGreenhouseGasStudy2020,https://www.imo.org/en/ourwork/Environment/Pages/Fourth-IMO-Greenhouse-Gas-Study-2020.aspx.80.IMO,RevisedGHGReductionStrategyforGlobalShippingAdopted,7July2023,https://www.imo.org/en/MediaCentre/PressBriefings/pages/Revised-GHG-reduction-strategy-for-global-shipping-adopted-.aspx.81.Accentureanalysisbasedon:IEA,InternationalShipping,https://www.iea.org/reports/international-shipping.82.Accentureanalysisbasedon:BSR,2020GlobalShippingTradeLaneEmissionsFactors,October2021,https://www.bsr.org/files/clean-cargo/BSR-Clean-Cargo-Emissions-Report-2021.pdf.83.Accentureanalysisbasedon:https://www.u-mas.co.uk/wp-content/uploads/2023/07/MEPC-80-overview-FAQs-UMAS-.pdf.84.GlobalMaritimeForum(GMF),AStrategyfortheTransitiontoZeroEmissionShipping,https://www.globalmaritimeforum.org/content/2021/10/A-Strategy-for-the-Transition-to-Zero-Emission-Shipping.pdf.85.Accentureanalysisbasedon:IMOMarineEnvironmentProtectionCommittee,EnergyEfficiencyofShips,September2022,https://wwwcdn.imo.org/localresources/en/OurWork/Environment/Documents/Air%20pollution/MEPC%2079-6-1%20-%20Report%20of%20fuel%20oil%20consumption%20data%20submitted%20to%20the%20IMO%20Ship%20Fuel%20Oil%20ConsumptionDatabase...%20(Secretariat).pdf.86.Accentureanalysisbasedon:https://safety4sea.com/wp-content/uploads/2019/09/SEA-LNG-DNV-GL-Comparison-of-Alternative-Marine-Fuels-2019_09.pdf.87.Accentureanalysisbasedon:UMASandUNClimateChangeHighLevelChampions,ClimateActioninShipping:ProgressTowardsShipping’s2030Breakthrough,https://climatechampions.unfccc.int/wp-content/uploads/2022/09/GTZ_ClimateActionInShipping.pdf.88.EnergyWatch,EuropeanEnergyBreaksGroundonGrandE-MethanolFacility,16May2023,https://energywatch.com/EnergyNews/Renewables/article15826730.ece.89.Accentureanalysisbasedon:https://afi.dnv.com/map.Net-ZeroIndustryTracker2023Edition11890.Maersk,EquinorandMaerskPartnerUptoEnsureContinued“GreenMethanol”SupplyfortheWorld’sFirstMethanol-enabledContainerVessel,8September,https://www.maersk.com/news/articles/2023/09/08/equinor-and-maersk-partner-to-supply-first-methanol-enabled-container-vessel.91.DNV,MaritimeForecast2023,https://www.dnv.com/maritime/publications/maritime-forecast-2023/index.html.92.Accentureanalysisbasedon:Lloyd’sRegister,ZeroCarbonFuelMonitor,https://www.lr.org/en/expertise/maritime-energy-transition/maritime-decarbonisation-hub/zcfm.93.IMO,IMO’sWorktoCutGHGEmissionsfromShips,https://www.imo.org/en/MediaCentre/HotTopics/Pages/Cutting-GHG-emissions.aspx.94.IEA,ETPCleanEnergyTechnologyGuide,14September2023,https://www.iea.org/data-and-statistics/data-tools/etp-clean-energy-technology-guide.95.DNV,MaritimeForecast2023,https://www.dnv.com/maritime/publications/maritime-forecast-2023/index.html.96.Accentureanalysisbasedon:GlobalMaritimeForum(GMF),StrategyfortheTransitiontoZero-EmissionShipping,2021,https://www.globalmaritimeforum.org/content/2021/10/A-Strategy-for-the-Transition-to-Zero-Emission-Shipping.pdf.97.Ibid.98.Ibid.99.Ibid.100.Accentureanalysisbasedon:EnergyTransitionsCommissionfortheGettingtoZeroCoalition,TheFirstWave:Ablueprintforcommercial-scalezero-emissionshippingpilots,11November2020,https://www.globalmaritimeforum.org/content/2020/11/The-First-Wave-–-A-blueprint-for-commercial-scale-zero-emission-shipping-pilots.pdf;RENA,DecarbonizingShipping2021,https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2021/Oct/IRENA_Decarbonising_Shipping_2021.pdf.101.Riviera,YaratoSetupWorld’sFirstCarbon-FreeAmmoniaBunkeringNetwork,1April2022,https://www.rivieramm.com/news-content-hub/news-content-hub/yara-to-set-up-worlds-first-carbon-free-ammonia-bunkering-network-70502.102.CleanEnergyMinisterial,ANewCleanEnergyMarineHubsAnnouncedattheGCAEF,23September2022,https://www.cleanenergyministerial.org/a-new-clean-energy-marine-hubs-announced-at-the-gcaef/.103.Accentureanalysisbasedontechnologytracker.104.GettingtoZeroCoalition,TheFirstWave:ABlueprintForCommercialScaleZeroEmissionShippingPilots,11November2020,https://www.globalmaritimeforum.org/content/2020/11/The-First-Wave-–-A-blueprint-for-commercial-scale-zero-emission-shipping-pilots.pdf.105.Maersk,MaerskECODelivery,https://www.maersk.com/transportation-services/eco-delivery.106.Hapag-Lloyd,ShipGreen,https://www.hapag-lloyd.com/en/online-business/book/ship-green.html.107.U.S.DepartmentofSenate,LaunchingtheFirstMoversCoalitionatthe2021UNClimateChangeConference,4November2021,https://www.state.gov/launching-the-first-movers-coalition-at-the-2021-un-climate-change-conference/.108.ISO,ISO14083:2023,March2023,https://www.iso.org/standard/78864.html.109.EuropeanCommission,EUEmissionsTradingSystem(EUETS),https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en.110.SheldonWhitehouse,BillstoReduceOceanShippingEmissions,6August2023,https://www.whitehouse.senate.gov/news/release/on-world-oceans-day-whitehouse-and-padilla-introduce-pair-of-bills-to-reduce-ocean-shipping-emissions.111.IMO,StrategyonReductionofGHGEmissionsfromShips,2023,https://www.imo.org/en/OurWork/Environment/Pages/2023-IMO-Strategy-on-Reduction-of-GHG-Emissions-from-Ships.aspx.112.EuropeanCommunityShipowners’Association,NewETSLaw:EarmarkedRevenuesCanMarkaTurningPointforShipping’sDecarbonization,18April2023,https://www.ecsa.eu/news/new-ets-law-earmarked-revenues-can-mark-turning-point-shippings-decarbonisation.113.Safety4Sea,USSenatorsIntroduceLegislationtoEliminateIn-PortShipEmissions,9June2023,https://safety4sea.com/u-s-senators-introduce-legislation-to-eliminate-in-port-ship-emissions/.114.DNV,EEXI–TheEnergyEfficiencyeXistingshipIndex,https://www.dnv.com/maritime/insights/topics/eexi/index.html.115.DNV,CII–CarbonIntensityIndicator,https://www.dnv.com/maritime/insights/topics/CII-carbon-intensity-indicator/index.html.116.CSIS,How45vTaxCreditDefinitionCouldMakeorBreakCleanHydrogenEconomy,22May2023,https://www.csis.org/analysis/how-45v-tax-credit-definition-could-make-or-break-clean-hydrogen-economy.117.ICCT,CantheInflationReductionActUnlockaGreenHydrogenEconomy?,3January2023,https://theicct.org/ira-unlock-green-hydrogen-jan23/.118.Safety4Sea,EUAFIR:PortsMustProvideShore-sideElectricityby2030,25July2023,https://safety4sea.com/eu-afir-ports-must-provide-shore-side-electricity-by-2030/.119.Ibid.120.UKGov,COP26ClydebankDeclaration,13April2022,https://www.gov.uk/government/publications/cop-26-clydebank-declaration-for-green-shipping-corridors/cop-26-clydebank-declaration-for-green-shipping-corridors.Net-ZeroIndustryTracker2023Edition119121.UKGov,MaritimeSectorGivenGreenBoostwithMajorCOP27Pledge,7November2022,https://www.gov.uk/government/news/maritime-sector-given-green-boost-with-major-cop27-pledge.122.GMF,AnnualProgressReportonGreenShippingCorridors,2022,https://www.globalmaritimeforum.org/content/2022/11/The-2022-Annual-Progress-Report-on-Green-Shipping-Corridors.pdf.123.EuropeanCouncil,FuelEUMaritimeInitiative,25July2023,https://www.consilium.europa.eu/en/press/press-releases/2023/07/25/fueleu-maritime-initiative-council-adopts-new-law-to-decarbonise-the-maritime-sector/.124.OffshoreEnergy,U.S.:CleanShippingAct2023IntroducedtoHelpCurbGHGEmissionsfromShips,9June2023,https://www.offshore-energy.biz/us-clean-shipping-act-2023-introduced-to-help-curb-ghg-emissions-from-ships/.125.IMO,StrategyonReductionofGHGEmissionsfromShips,2023,https://www.imo.org/en/OurWork/Environment/Pages/2023-IMO-Strategy-on-Reduction-of-GHG-Emissions-from-Ships.aspx.126.MaritimeExecutive,IndianGovernmenttoPaySubsidytoBuildGreenShipping,23May2023,https://maritime-executive.com/article/indian-government-to-pay-30-subsidy-to-build-green-shipping.127.MercomIndia,DailyNewsWrap-Up:GovernmenttoBear30%ofGreenShippingCost,24May2023,https://www.mercomindia.com/daily-news-wrap-up-government-green-shipping-cost.128.Accentureanalysisbasedon:DNV,MaritimeForecastto2050,https://www.dnv.com/maritime/publications/maritime-forecast-2023/index.html#:~:text=Already%20by%202030%2C%205%25%20of,all%20fossil%20fuels%20are%20eliminated.129.DNV,MaritimeForecast2023,https://www.dnv.com/maritime/publications/maritime-forecast-2023/index.html.130.AccentureanalysisbasedonS&PCapitalIQdata.131.Ibid.132.SternNYU,WACCdata:CostofEquityandCapital,January2023,https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.html.133.AccentureanalysisbasedonS&PCapitalIQProdata.134.InternationalChamberofShipping(ICS),ICSReaffirmsCommitmentto2050NetZero,15February2023,https://www.ics-shipping.org/press-release/the-international-chamber-of-shipping-reaffirms-commitment-to-2050-net-zero/.135.TransitionPathwayInitiative,Shipping,https://www.transitionpathwayinitiative.org/sectors/shipping.136.Ibid.137.Thescopeofanalysiscoversthehard-toabateaspectofthetruckingindustry,primarilyheavy-dutytrucking.138.Regionsinscopefortruckinganalysis,basedon:MPPframework;US,China,India,EU.139.IEA,TrucksandBuses,July2023,https://www.iea.org/energy-system/transport/trucks-and-buses#tracking.140.IEA,IEANetZeroby2050,May2021,https://www.iea.org/reports/net-zero-by-2050.141.IEA,IEAWorldEnergyOutlook,October2022,https://www.iea.org/reports/world-energy-outlook-2022.142.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.143.Accentureanalysisbasedon:DrivetoZero,RetrofittedTruckstheFastestWaytoDecarbonisetheTransportWorld,7November2022,https://www.drivetozero.fr/en/2044-retrofitted-trucks-the-fastest-way-to-decarbonise-the-transport-world/;MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.144.Accentureanalysisbasedon:MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.145.Ibid.146.Accentureanalysisbasedon:DrivetoZero,RetrofittedTruckstheFastestWaytoDecarbonisetheTransportWorld,7November2022,https://www.drivetozero.fr/en/2044-retrofitted-trucks-the-fastest-way-to-decarbonise-the-transport-world/;MPP,MakingZeroEmissionsTruckingPossible.147.AccentureanalysisbasedonS&PCapitalIQdataandSternNYUWACCdata.148.TransportationResearchIndustryPerspectives,EnvironmentalPerformanceofFourDifferentHeavy-DutyPropulsionTechnologiesUsingLifeCycleAssessment,September2021,https://www.sciencedirect.com/science/article/pii/S2590198221001342?ref=cra_js_challenge&fr=RR-1.149.EuropeanFederationforTransportandenvironment:EasyRide:WhytheEUTruckCO2TargetsareUnfitforthe2020s,2021,https://www.transportenvironment.org/wp-content/uploads/2021/10/202108_truck_CO2_report_final.pdf.150.Shell,DecarbonisingRoadFreight:GettingintoGear,2021,https://www.shell.com/energy-and-innovation/the-energy-future/decarbonising-road-freight/_jcr_content/root/main/section/item.multi.stream/1667916603112/3efb462f0ef05d4273d2eda5339d510c91ee1cde/decarbonising-road-freight-industry-report.pdf.151.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.152.Ibid.Net-ZeroIndustryTracker2023Edition120153.Ibid.154.Ibid.155.ICCT,BatteryElectricTrucksEmit63%LessGHGEmissionsthanDiesel,26February2023,https://theicct.org/battery-electric-trucks-emit-63-less-ghg-emissions-than-diesel/.156.IEA,TrucksandBuses,July2023,https://www.iea.org/energy-system/transport/trucks-and-buses#tracking.157.IEA,ETPCleanEnergy,TechnologyGuide,14September2023,https://www.iea.org/data-and-statistics/data-tools/etp-clean-energy-technology-guide?selectedSector=Road.158.TimesofIndia,Warmingup:India’sRacetoNetZeroTrucking,12June2023,https://timesofindia.indiatimes.com/blogs/voices/warming-up-indias-race-to-net-zero-trucking/.159.Accentureanalysis.160.bp,BPOpensitsFirstElectricTruckChargingFacilities,27July2022,https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-opens-its-first-electric-truck-charging-facilities-to-support-the-decarbonisation-of-transport.html.161.Bio-gasWorld,RenewableNaturalGasHeavyDutyVehicles,5February2019,https://www.biogasworld.com/news/renewable-natural-gas-heavy-duty-vehicles/.162.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.163.Accentureanalysisbasedon:DrivetoZero,RetrofittedTruckstheFastestWaytoDecarbonisetheTransportWorld,7November2022,https://www.drivetozero.fr/en/2044-retrofitted-trucks-the-fastest-way-to-decarbonise-the-transport-world/.164.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.165.Accentureanalysis.166.Ibid.167.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.168.Reuters,LogisticsSectorMullsHowKeepingTruckingNetZeroFuture,12June2023,https://www.reuters.com/sustainability/boards-policy-regulation/logistics-sector-mulls-how-keeping-trucking-net-zero-future-2023-06-12/.169.Siemens,DynamicChargingInfrastructure,https://www.mobility.siemens.com/global/en/portfolio/road/ehighway.html.170.ICCT,ChargingSolutionsForBattery-ElectricTrucks,December2022,https://theicct.org/wp-content/uploads/2022/12/charging-infrastructure-trucks-zeva-dec22.pdf.171.Accentureanalysisbasedon:MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.172.Ibid.173.Ibid.174.Ibid.175.Ibid.176.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.177.TruckingInfo,Trucks-as-a-ServiceModeltoHelpDriveEVAdoptionbyFleets,2June2023,https://www.truckinginfo.com/10200014/trucks-as-a-service-model-to-help-drive-ev-adoption-by-fleets.178.GlobalCommercialVehicle,DrivetoZero:Zero-EmissionTruckandBusMarketUpdate,October2022,https://globaldrivetozero.org/site/wp-content/uploads/2022/10/ZE_TruckBus_update.pdf.179.TheInternationalCouncilonCleanTransportation,ChargingSolutionsForBatteryElectricTrucks,December2022,https://theicct.org/wp-content/uploads/2022/12/charging-infrastructure-trucks-zeva-dec22.pdf.180.Ibid.181.Ibid.182.YiCaiGlobal:GCL,DeepwaytoBuildHeavy-DutyTruckBattery-SwapNetworkAlongBeijing-ShanghaiHighway,2022,https://www.yicaiglobal.com/news/gcl-deepway-to-build-heavy-duty-truck-battery-swap-network-along-beijing-shanghai-highway.183.MayerBrown,EUETSReformTighterScheme,9January2023,https://www.mayerbrown.com/en/perspectives-events/publications/2023/01/eu-ets-reform-tighter-scheme-inclusion-of-shipping-and-transport-building-fuel.184.CleanProsperity,Canada’sCarbonTax,https://cleanprosperity.ca/about-carbon-taxes/canadas-carbon-tax/.185.NovaScotia.CA,FuelRegulationsChangeinResponsetoFederalCarbonReductionInitiatives,2June2023,https://novascotia.ca/news/release/?id=20230602004.Net-ZeroIndustryTracker2023Edition121186.TransportPolicy,IndiaHeavyDutyFuelConsumption,https://www.transportpolicy.net/standard/india-heavy-duty-fuel-consumption-2/.187.NewYorkTimes,CaliforniaDieselTruckSaleBan,29April,https://www.nytimes.com/2023/04/29/us/california-diesel-truck-sale-ban.html.188.CNBC,CaliforniaBanstheSaleofNewDieselTrucksby2036,28April2023,https://www.cnbc.com/2023/04/28/california-bans-the-sale-of-new-diesel-trucks-by-2036.html.189.OfficeofEnergyEfficiency&RenewableEnergy,FinancialIncentivesforHydrogenandFuelCellProjects,https://www.energy.gov/eere/fuelcells/financial-incentives-hydrogen-and-fuel-cell-projects.190.EuropeanCouncil,EuropeanGreenDeal,28March2023,https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1867.191.ICCT,EuropeanUnionAlternativeFuelInfrastructureRegulation(AFIR),April2023,https://theicct.org/wp-content/uploads/2023/04/AFIR-EU-Policy-Update-A4-Final.pdf.192.IEA,GlobalEVPolicyExplorer,26April2023,https://www.iea.org/data-and-statistics/data-tools/global-ev-policy-explorer.193.BoltEarth,EVLandscapeinChina,21August2023,https://bolt.earth/blog/ev-landscape-in-china.194.OECD/IEA/NEA/ITF,AligningPoliciesforaLow-carbonEconomy,2015,https://www.oecd.org/environment/Aligning-Policies-for-a-Low-carbon-Economy.pdf.195.Accentureanalysisbasedon:DrivetoZero,RetrofittedTruckstheFastestWaytoDecarbonisetheTransportWorld,7November2022,https://www.drivetozero.fr/en/2044-retrofitted-trucks-the-fastest-way-to-decarbonise-the-transport-world/.196.AccentureanalysisbasedonS&PCapitalIQdata.197.Ibid.198.SternNYU,WACCData:CostofEquityandCapital,January2023,https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.html.199.AccentureanalysisbasedonS&PCapitalIQdata.200.MPP,MakingZeroEmissionsTruckingPossible,July2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/11/Making-Zero-Emissions-Trucking-Possible.pdf.201.Ibid.202.MPP,MakingNet-ZeroSteelPossible,2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-Net-Zero-Steel-possible.pdf.203.IEA,Steel,https://www.iea.org/reports/iron-and-steel.204.WorldSteelAssociation,AnnualProductionSteelData2022,https://worldsteel.org/steel-topics/statistics/annual-production-steel-data/?ind=P1_crude_steel_total_pub/CHN/IND.205.AccentureanalysisbasedonCRU.206.Primarysteelreferstosteelproducedfromironoretraditionallyusingblastfurnaces(BF-BOF)forthesmeltingandrefiningprocesses.207.Secondarysteelreferstosteelproducedfromsteelscrap,traditionallyusingEAFforthesmeltingandrefiningpurposes.208.MPP,MakingNet-ZeroSteelPossible,September2022,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-Net-Zero-Steel-possible.pdf.209.Accentureanalysisbasedon:IRENA,RenewablePowerGenerationCostsin2021,July2022,https://www.irena.org/publications/2022/Jul/Renewable-Power-Generation-Costs-in-2021;MPP,Steel:PathwaystoNetZero,https://dash-mpp.plotly.host/mpp-steel-net-zero-explorer/.210.MPP,SteelTransitionStrategy,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2021/10/MPP-Steel-Transition-Strategy-Oct-2021.pdf.211.Accentureanalysisbasedon:IEA,Steel,https://www.iea.org/energy-system/industry/steel;MPP,Steel:PathwaystoNetZero,https://dash-mpp.plotly.host/mpp-steel-net-zero-explorer/.212.TransitionPathwayInitiative,Steel,https://www.transitionpathwayinitiative.org/sectors/steel.213.Accentureanalysisbasedon:EnergyTransitionsCommission,SteelingDemand:MobilisingBuyerstoBringNet-ZeroSteeltoMarketBefore2030,June2021,https://www.energy-transitions.org/publications/steeling-demand/.214.AccentureanalysisbasedonS&PCapitalIQdataandSternNYUWACCdata.215.Accentureanalysisbasedon:IEA,IEAWorldEnergyOutlook,October2022,https://www.iea.org/reports/world-energy-outlook-2022.216.WorldSteel,WorldSteelinFigures,2022,https://worldsteel.org/wp-content/uploads/World-Steel-in-Figures-2022-1.pdf.217.Ibid.218.WorldSteel,SustainabilityIndicators2022Report,December2022,https://worldsteel.org/wp-content/uploads/Sustainability-Indicators-2022-report.pdf.Net-ZeroIndustryTracker2023Edition122219.Accentureanalysisbasedon:IEA,Steel,https://www.iea.org/reports/iron-and-steel;MPP,Steel:PathwaystoNetZero,https://dash-mpp.plotly.host/mpp-steel-net-zero-explorer/.220.Ibid.221.MPP,MakingNet-ZeroAviationPossible,October2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.222.Ibid.223.Ibid.224.Ibid.225.Ibid.226.Ibid.227.Shell,DecarbonisingShell:ForgingNewPathsTogether,https://www.shell.com/shellenergy/marketingandtrading/_jcr_content/root/main/section/simple/promo_2130259397/links/item0.stream/1669392117011/5b1f673472d02633f82125fef387d13c266a454d/shell-decarbonising-steel-digital.pdf.228.SSAB,Fossil-FreeSteel,https://www.ssab.com/en/fossil-free-steel/ssab-zero.229.Accentureanalysisbasedon:IRENA,RenewablePowerGenerationCostsin2021,July2022,https://www.irena.org/publications/2022/Jul/Renewable-Power-Generation-Costs-in-2021.230.WorldSteel,WorldSteelinFigures,2022,https://worldsteel.org/wp-content/uploads/World-Steel-in-Figures-2022-1.pdf.231.Accentureanalysisbasedon:IRENA,RenewablePowerGenerationCostsin2021,July2022,https://www.irena.org/publications/2022/Jul/Renewable-Power-Generation-Costs-in-2021.232.ESGNews,USSteelandCarbonFreeTeamtoCaptureCO2EmissionsatOneoftheLargestIntegratedSteelMillsinNorthAmerica,2March2023,https://esgnews.com/u-s-steel-and-carbonfree-team-to-capture-co2-emissions-at-one-of-the-largest-integrated-steel-mills-in-north-america/.233.MPP,MakingNet-ZeroAviationPossible,2021,https://missionpossiblepartnership.org/wp-content/uploads/2023/01/Making-Net-Zero-Aviation-possible.pdf.234.Ibid.235.Bloomberg,RioTinto,ChinaBaowutoJointlyExploreGreenSteelProjects,12June2023,https://www.bloomberg.com/news/articles/2023-06-12/rio-tinto-china-baowu-to-jointly-explore-green-steel-projects#xj4y7vzkg.236.Reuters,TopSteelFirmChinaBaowuUnveilsGlobalAlliancetoCutEmissions,18November2021,https://www.reuters.com/business/sustainable-business/top-steel-firm-china-baowu-unveils-global-alliance-emissions-effort-2021-11-18/.237.GreenSteelWorld,GreenSteelPartnerships,19May2022,https://greensteelworld.com/green-steel-partnerships-a-lynchpin-for-auto-industrys-real-transformation.238.Volkswagen,VolkswagenGroupandSalzgitterAGSignMemorandumofUnderstandingonSupplyofLow-CO2SteelfromtheEndof2025,21March2022,https://www.volkswagen-news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72.AccentureAnalysisbasedon:EuropeanCementResearchAcademy(ECRA),https://ecra-online.org/research/technology-papers/.273.AccentureanalysisbasedonS&PCapitalIQdataandSternNYU,WACCdata.274.Renewablewastereferstofuelsourcessuchasbiomass,woodchipsandagriculturalresidueandwastecookingoil.275.CommonSCMsincludeslag,flyashandnaturalpozzolans.276.AccentureAnalysisbasedon:IEA,GlobalThermalEnergyIntensityandFuelConsumptionofClinkerProductionintheNetZeroScenario,https://www.iea.org/data-and-statistics/charts/global-thermal-energy-intensity-and-fuel-consumption-of-clinker-production-in-the-net-zero-scenario-2015-2030.277.IEA:Industry,Cement,https://www.iea.org/energy-system/industry/cement.278.IEA:Reports,Cement,https://www.iea.org/reports/cement.279.GCCA,ConcreteFutureRoadmap,https://gccassociation.org/concretefuture/wp-content/uploads/2022/10/GCCA-Concrete-Future-Roadmap-Document-AW-2022.pdf.280.U.S.GeologicalSurvey,Cement,January2023,https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-cement.pdf.281.IEA:Industry,Cement,https://www.iea.org/energy-system/industry/cement.282.Ibid.283.GCCA,GettingtoNetZero,https://gccassociation.org/concretefuture/getting-to-net-zero/.284.IEA,IEAWorldEnergyOutlook,October2022,https://www.iea.org/reports/world-energy-outlook-2022.285.AccentureanalysisbasedonECRA.286.ExpertinterviewswithGCCA.Net-ZeroIndustryTracker2023Edition124287.HeidelbergMaterials,FirstGlobalNetZeroCarbonCaptureintheCementIndustry,6April2023,https://www.heidelbergmaterials.com/en/pr-2023-04-06.288.IEA,CCUSProjectsDatabase,March2023,https://www.iea.org/data-and-statistics/data-product/ccus-projects-database.289.Accentureanalysisbasedon:IEA,IEAWorldEnergyOutlook,October2022,https://www.iea.org/reports/world-energy-outlook-2022;GCCA,ConcreteFutureRoadmap,https://gccassociation.org/concretefuture/wp-content/uploads/2022/10/GCCA-Concrete-Future-Roadmap-Document-AW-2022.pdf;GlobalCCSInstitute,CarbonCaptureandStorageHubStudy,November2020,https://cmc.nt.gov.au/__data/assets/pdf_file/0006/1052898/q20-0114-gccsi-nt-css-hub-study-final-report.pdf.290.NorthernLights,AbouttheLongshipProject,https://norlights.com/about-the-longship-project/.291.AccentureanalysisbasedonECRA.292.IEA,NetZeroby2050,May2021,https://iea.blob.core.windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d840027/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf.293.Accentureanalysisbasedon:Bloomberg,U.S.HousingConstructionCosts,3June2021,https://www.bloomberg.com/graphics/2021-us-housing-construction-costs/.294.WorldEconomicForumFirstMoversCoalition,SurfacingSupplyofNear-ZeroEmissionFuelsandMaterialsinIndia,July2923,https://www3.weforum.org/docs/WEF_Surfacing_Supply_of_Near_Zero_Emissions_Fuels_and_Materials_in_India_2023.pdf.295.BusinessWire,HoffmannGreenCementSignsaSupplyContractWiththeAlkernGroup,15March2023,https://www.businesswire.com/news/home/20230315005759/en/Hoffmann-Green-Cement-Signs-a-Supply-Contract-With-the-Alkern-Group.296.ISO,Standard:70747,March2023,https://www.iso.org/standard/70747.html.297.WorldEconomicForum,LowCarbonDesignCanReduceCementEmissionsby40%-Here’sHowtoDeployitatScale,March2023,https://www.weforum.org/agenda/2023/03/low-carbon-design-can-almost-halve-cement-emissions-here-s-how-to-deploy-it-at-scale/.298.Monteiro,Helena,Moura,BrunaandNelsonSoares,“AdvancementsinNano-enabledCementandConcrete:InnovativePropertiesandEnvironmentalImplications”,JournalofBuildingEngineering,September2022,https://www.sciencedirect.com/science/article/abs/pii/S2352710222007495.299.Srubar,Wil,“TinyAlgaeCouldHelpFixConcrete’sDirtylittleClimateSecret”,AmericanSocietyForBiochemistryAndMolecularBiology,MemberMagazinefortheAmericanSocietyforBiochemistryandMolecularBiology,November2022,https://www.asbmb.org/asbmb-today/science/111222/tiny-algae-could-help-fix-concrete-s-dirty-little.300.WorldEconomicForum,ThisInnovationUses3DPrintingtoCutConcreteUse,January2022,https://www.weforum.org/agenda/2022/01/eth-zurich-3d-printer-concrete-carbon-emissions.301.U.S.GeologicalSurvey,Cement,January2023,https://pubs.usgs.gov/periodicals/mcs2023/mcs2023-cement.pdf.302.EuropeanCommission,InnovationFund,https://cinea.ec.europa.eu/programmes/innovation-fund_en.303.EuropeanCommission,TheNet-ZeroIndustryAct,https://single-market-economy.ec.europa.eu/industry/sustainability/net-zero-industry-act_en.304.EuropeanCommission,EUEmissionsTradingSystem(EUETS),https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets_en.305.ICAP,USA–CaliforniaCap-and-TradeProgram,https://icapcarbonaction.com/en/ets/usa-california-cap-and-trade-program.306.ICAP,ChinaNationalETS,https://icapcarbonaction.com/en/ets/china-national-ets.307.EuropeanCommission,CarbonBorderAdjustmentMechanism,https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism_en.308.CSIS,OnCarbon-LinkedTrade,StartwiththeBasics,10August2023,https://www.csis.org/analysis/carbon-linked-trade-start-basics.309.IEA,CCUSInCleanEnergyTransition:RegionalOpportunities,https://www.iea.org/reports/ccus-in-clean-energy-transitions/regional-opportunities.310.U.S.DepartmentofEnergy,TheInfrastructureInvestmentandJobsAct,https://www.energy.gov/sites/default/files/2021-12/FECM%20Infrastructure%20Factsheet.pdf.311.WorldResourcesInstitute,WhatDoes“Green”ProcurementMean?InitiativesandStandardsforCementandSteel,April252023,https://www.wri.org/insights/green-procurement-initiatives.312.CouncilonEnvironmentalQuality,FederalBuyCleanInitiative,https://www.sustainability.gov/buyclean/.313.CleanEnergyMinisterial,IndustrialDeepDecarbonisationInitiative,https://www.cleanenergyministerial.org/initiatives-campaigns/industrial-deep-decarbonisation-initiative/.314.BuildingsPerformanceInstituteEurope,ImplementingtheParisAgreementandReducingGreenhouseGasEmissionsthroughouttheLifeCycleofBuildings:EuropeanPublicPolicies,ToolsandMarketInitiatives,https://www.bpie.eu/wp-content/uploads/2022/01/SPIPA-LCA-2022FINAL.pdf.Net-ZeroIndustryTracker2023Edition125315.U.S.GSA,GSAAdministratorHighlightsProgressonLow-CarbonConstructionMaterialProcurementinOhio,15September2022,https://www.gsa.gov/about-us/newsroom/news-releases/gsa-administrator-highlights-progress-on-lowcarbon-construction-material-procurement-in-ohio-09152022.316.S&PGlobal,IRA“Turbocharged”CarbonCaptureTaxCredit,26July2023,https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/energy-transition/072523-ira-turbocharged-carbon-capture-tax-credit-but-challenges-persist-experts.317.AccentureanalysisbasedonECRA.318.AccentureanalysisbasedonS&PCapitalIQdata.319.AccentureanalysisbasedonS&PCapitalIQdata.320.SternNYU,WACCData:CostofEquityandCapital,January2023,https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.html.321.AccentureanalysisbasedonS&PCapitalIQdata.322.ClimateBonds,CementCriteria,https://www.climatebonds.net/standard/cement.323.ClimateBonds,ConcretePoliciestoUnderpintheCementTransition,March2023,https://www.climatebonds.net/files/reports/cbi-cement-policy.pdf.324.TransitionPathwayInitiatives,Cement,https://www.transitionpathwayinitiative.org/sectors/cement.325.MPP,Aluminium,https://missionpossiblepartnership.org/action-sectors/aluminium/.326.IAI,Statistics,20October2023,https://international-aluminium.org/statistics.327.AluminiumStewardshipInitiative(ASI),AnalysisofImplementationofGreenhouseGas(GHG)EmissionsReportingfromASICertifiedEntities:March2020–March2021Update,12October2021,https://aluminium-stewardship.org/wp-content/uploads/2021/10/20211012-ASI-GHG-Validation-Report_v2.0_GENERIC.pdf.328.IAI,GreenhouseGasEmissions,25January2023,https://international-aluminium.org/statistics/greenhouse-gas-emissions-aluminium-sector/.329.IAI,MetallurgicalAluminaRefiningFuelConsumption,26September2023,https://international-aluminium.org/statistics/metallurgical-alumina-refining-fuel-consumption/.330.IAI,GlobalAluminiumCycle2021,https://alucycle.international-aluminium.org/public-access/.331.Accentureanalysis.332.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,April2023,https://missionpossiblepartnership.org/wp-content/uploads/2023/04/Making-1.5-Aligned-Aluminium-possible.pdf.333.Accentureanalysis.334.Accentureanalysis.335.S&PGlobal,PlattsLow-CarbonandZero-CarbonAluminum,https://www.spglobal.com/commodityinsights/en/our-methodology/price-assessments/metals/low-carbon-and-zero-carbon-aluminum.336.IAI,AluminiumSectorGreenhouseGasPathwaysto2050,September2021,https://international-aluminium.org/resource/aluminium-sector-greenhouse-gas-pathways-to-2050-2021/.337.TransitionPathwayInitiative,Aluminium,https://www.transitionpathwayinitiative.org/sectors/aluminium.338.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,April2023,https://missionpossiblepartnership.org/wp-content/uploads/2023/03/MPP-Aluminium-Technical-Appendix.pdf.339.AccentureanalysisbasedonS&PCapitalIQdataandSternNYUWACCdata.340.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,April2023,https://missionpossiblepartnership.org/wp-content/uploads/2023/04/Making-1.5-Aligned-Aluminium-possible.pdf.341.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,April2023,https://missionpossiblepartnership.org/wp-content/uploads/2023/04/Making-1.5-Aligned-Aluminium-possible.pdf.342.Accentureanalysisbasedon:IAI,PrimaryAluminiumSmeltingPowerConsumption,29September2023,https://international-aluminium.org/statistics/primary-aluminium-smelting-power-consumption/.343.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,April2023,https://missionpossiblepartnership.org/wp-content/uploads/2023/04/Making-1.5-Aligned-Aluminium-possible.pdf.344.Accentureanalysisbasedon:IAI,MetallurgicalAluminaRefiningEnergyIntensity,27September2023,https://international-aluminium.org/statistics/metallurgical-alumina-refining-energy-intensity/.345.Net-zerotrajectoryisbasedon:IAI’s1.5-degreepathway.346.IAI,AluminiumSectorGreenhouseGasPathwaysto2050,September2021,https://international-aluminium.org/resource/aluminium-sector-greenhouse-gas-pathways-to-2050-2021/.347.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,April2023,https://missionpossibl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upplyforaluminium,21April2022,https://www.weforum.org/agenda/2022/04/how-china-is-decarbonizing-the-electricity-supply-for-aluminium/.379.ASI,ASIPerformanceStandardVersion3recognisedintheGreenBuildingCouncilAustralia’sResponsibleProductsFramework,10February2023,https://aluminium-stewardship.org/asi-performance-standard-version-3-recognised-in-the-green-building-council-australias-responsible-products-framework.380.ShanghaiMetalsMarket,GuangxiEncouragesAluminiumSmelterstoResumetheProductionthroughFinancialSubsidy,21November2022,https://news.metal.com/newscontent/102008369/guangxi-encourages-aluminium-smelters-to-resume-the-production-through-financial-subsidy.381.MPP,TechnicalAppendix:MakingNet-ZeroAluminiumPossible,https://missionpossiblepartnership.org/wp-content/uploads/2023/03/MPP-Aluminium-Technical-Appendix.pdf.382.AccentureanalysisbasedonS&PCapitalIQdata.383.Ibid.384.Ibid.385.SternNYU,WACCData:CostofEquityandCapital,January2023,https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/wacc.html.386.ASI,3TopBanksPartnerwithRMItoCreatetheAluminumClimate-AlignedFinanceWorkingGroup,27June2022,https://aluminium-stewardship.org/3-top-banks-partner-with-rmi-to-create-the-aluminum-climate-aligned-finance-working-group.387.TransitionPathwayInitiative,Aluminium,https://www.transitionpathwayinitiative.org/sectors/aluminium.388.RoyalSociety,Ammonia:Zero-CarbonFertiliser,FuelandEnergyStory,February2020,https://royalsociety.org/-/media/policy/projects/green-ammonia/green-ammonia-policy-briefing.pdf.389.FromdataprovidedbyBloombergNEF.390.Accentureanalysis.391.IEA,AmmoniaTechnologyRoadmap,https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.392.AccentureanalysisbasedonIEA.393.MPP,MakingNetZeroAmmoniaPossible,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-1.5-Aligned-Ammonia-possible.pdf.394.IEA,AmmoniaTechnologyRoadmap,https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.395.MPP,MakingNetZeroAmmoniaPossible,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-1.5-Aligned-Ammonia-possible.pdf.396.TransitionPathwayInitiative,Chemicals,https://www.transitionpathwayinitiative.org/sectors/chemicals.397.AccentureanalysisbasedonS&PCapitalIQdataandSternNYUWACCdata.398.MPP,MakingNetZeroAmmoniaPossible,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-1.5-Aligned-Ammonia-possible.pdf.399.IEA,Chemicals,https://www.iea.org/energy-system/industry/chemicals.400.IEA,TheFutureofHydrogenAssumptions,December2020,https://www.iea.org/reports/the-future-of-hydrogen/data-and-assumptionshttps://iea.blob.core.windows.net/assets/29b027e5-fefc-47df-aed0-456b1bb38844/IEA-The-Future-of-Hydrogen-Assumptions-Annex_CORR.pdf.401.IEA,NetZeroRoadmap:AGlobalPathwaytoKeepthe1.5°CGoalinReach–2023Update,September2023,https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach.402.IEA,AmmoniaTechnologyRoadmap,https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.403.Ibid.404.MPP,MakingNetZeroAmmoniaPossible,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-1.5-Aligned-Ammonia-possible.pdf.405.FromdataprovidedbyBloombergNEF.406.Ibid.407.ThyssenkrupIndustrialSolutions,GreenAmmonia–SaveCostsandCO2byUsingRenewableEnergy,https://www.thyssenkrupp-uhde.com/power-to-x/en/green-ammonia.408.FromdataprovidedbyBloombergNEF.409.MPP,MakingNetZeroAmmoniaPossible,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-1.5-Aligned-Ammonia-possible.pdf.410.AccentureanalysisbasedonIEA.Net-ZeroIndustryTracker2023Edition128411.MPP,MakingNetZeroAmmoniaPossible,https://missionpossiblepartnership.org/wp-content/uploads/2022/09/Making-1.5-Aligned-Ammonia-possible.pdf.412.AmericanPublicPowerAssociation,America’sElectricityGenerationCapacity:2023Update,May2023,https://www.publicpower.org/system/files/documents/Americas_Electricity_Generating_Capacity_2023_Update.pdf.413.Ibid.414.ENGIE,YuriRenewableHydrogentoAmmoniaProject,https://engie.com.au/yuri.415.Accentureanalysis416.Gnutzmann,HinnerkandPiotrSpiewanowski,FertilizerFuelsFoodPrices:IdentificationThroughtheOil-GasSpread,29September2016,https://ssrn.com/abstract=2808381.417.OurWorldinData,ShareofExpenditureSpentonFoodvs.TotalConsumerExpenditure,2021,https://ourworldindata.org/grapher/food-expenditure-share-gdp.418.Aramco,FirstAccreditedLow-CarbonAmmoniaShipmentforPowerGenerationDispatchedfromSaudiArabiatoJapan,20April2023,https://www.aramco.com/en/news-media/news/2023/low-carbon-ammonia-shipment.419.S&PGlobal,PlattsAmmoniaForwardCurveAssessments,26April2022,https://www.spglobal.com/commodityinsights/en/about-commodityinsights/media-center/press-releases/2022/042622-sp-global-commodity-insights-launches-platts-ammonia-forward-curve-assessments.420.EuropeanCouncil,InnovationFund,https://cinea.ec.europa.eu/programmes/innovation-fund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