This report from the Energy Transition Commission sets out comprehensive guidance on the technical side of enabling decarbonisation in key sectors where activities support future economic growth, but are also high energy users themselves. These so called ‘hard-to-abate’ sectors include heavy industries (such as cement, steel and chemicals) and heavy-duty transport (such as heavy road transport, shipping and aviation). The guiding consultation documents that cover these sectors are a critical resource to inform how the energy transition required to address climate change can be activated. Identifying what these sectors can do to address emissions is important for limiting temperature rises because together they account for around 30 per cent of total global CO2 emissions.
For the first time, the ETC report provides a roadmap showing how the decarbonisation of hard-to-abate sectors is both technically and financially feasible. The report finds that reaching net zero emissions by mid-century is technically possible at a cost to the economy of less than 0.5 per cent of global GDP with a minor impact on consumer living standards. The technologies to achieve this decarbonisation already exist: several still need to reach commercial viability; but we do not need to assume fundamental and currently unknown research breakthroughs to be confident that net zero can be reached.
The report points out that improving access to the latest available technologies and embracing of short term solutions (such as a shift from coal to natural gas), while striving for long term low-carbon solutions (such as future electrification) will progress low-carbon transition. In addition, greater energy efficiency would reduce the costs of decarbonisation.
“Fully decarbonising the economy means taking an active approach in these tough to address sectors” said Lord Adair Turner, co-chair of the Energy Transition Commission. “This work sets out a way forward. It is by no means straightforward and will take the joint will of policymakers, investors and businesses to take immediate and forceful action to transform economic systems, but it can be done”.
Scaling up clean power is also a key way to deliver climate goals and corporate activities can help drive the demand for renewable energy by committing to initiatives like RE 100. Corporates can source renewable electricity through existing providers, by buying Energy Attribute Certificates, by structuring power purchasing agreements capturing renewable supply or by building the capacity to generate electricity themselves. As demand grows, technological advancements should accelerate.
“Today, investors are already investing in renewable energy and low-carbon infrastructure. What the ETC report does is map out the next round of investment opportunities in the green economy”, said Zoё Knight, Head of the HSBC Centre of Sustainable Finance and ETC Commissioner.