Deloitte details roadmap to achieving net-zero emissions by 2050

Posted on 22 May 2024 by The Manufacturer

A new report from Deloitte has emphasised the urgency of scaling, innovation, and sequencing change across five strategic verticals for energy transition, to help with achieving net-zero emissions by 2050.

Why this matters

The journey to net zero is on a relatively short timeline, especially when considering the scale of the transformation, and analysis shows that acting now to capture emissions would be more effective than postponing the process. Deloitte’s new report, “Energy Transition: The Road to Scale,” explores a potential roadmap for the future, outlining strategic initiatives and cross-sector collaborations to help make net-zero emissions by 2050 a reality.

Coordination among industries and across economies could be key to driving global impact

Five strategic verticals are at the forefront of this change, each requiring urgent scaling, innovation, and sequencing change. Progress across verticals is expected to help expedite the journey toward achieving broader net-zero goals. In addition, progress in one area is often contingent upon advancements in another, and this can help to sequence the introduction of new policies and technologies.

  • Decarbonising infrastructure: Due to longevity and the high time value of carbon, there is a need for immediate decarbonisation of existing infrastructure.
    • Industries (40%), buildings (39%), and transportation (20%) are the three principal (direct and indirect) emitters of global energy and process-related carbon emissions, which makes them each an important component of scaling decarbonisation.
    • According to Deloitte analysis, capturing 1 mmtpa of carbon by 2050 is equivalent to capturing only 0.35 mmtpa today.
  • Expanding and modernising grid infrastructure: As the demand for renewable energy grows, the report indicates that grid infrastructure should evolve to handle increased capacity while maintaining customer affordability.
    • Over 70% of the US electricity grid is over 25 years old, signifying an urgent need for broad upgrades and modernisation initiatives.
    • Currently, there exists a 5X to 7X gap between the development cycle of the grid and that of renewable energy sources.
    • Building a new grid typically takes between five to 15 years, whereas the roll-out of renewable energy solutions usually spans one to five years.
  • Boosting and securing clean energy manufacturing capacity: Manufacturers are helping drive energy efficiency and process efficiency through smart factory solutions, and play a key role in building capacity to produce the components needed for a transition to lower emissions economies.
    • Over the past five years, clean energy manufacturing investment has grown fourfold to reach approximately US$80 billion in 2022.
    • Global solar photovoltaic manufacturing capacity is set to hit nearly 1,000 GW by 2024, surpassing the 2030 target of 650 GW for a net-zero trajectory.
  • Responsibly extracting minerals and producing metals: The energy transition is expected to result in reduced reliance on fossil fuels and increased dependence on metals and minerals, altering supply chains, cost structures, and business models.
    • A switch to wind and solar energy is expected to increase the demand for metals, minerals, and materials by nearly 10X, compared to traditional energy sources.
    • The strong demand for renewable energy has resulted in a 200% surge in lithium demand, a 70% jump in cobalt demand, an 8% increase in copper demand, and a 40% growth in nickel demand from 2017 to 2022.
  • Advancing land, water and waste stewardship: Curbing the pace of climate change should involve smart management of resources including land, water, and waste. Land serves as important carbon sinks; water is essential for industrial processes, energy generation, and human life; and waste can be transformed into valuable industrial feedstock. Integrated environmental stewardship necessitates the collaboration of these three elements (land, water, and waste) to help achieve sustainable progress.

A phased approach to building capacity for the future

To help the progression of the energy transition, the report outlines three considerations that can catalyse action across five strategic vertical markets.

  • First, tri-phasing scaling emphasises the incremental and sequential progress of decarbonisation, starting from individual assets (like a machine or facility), then scaling to a system level (sets of processes or multiple facilities), and eventually integrating various systems into a unified low-carbon ecosystem.
  • Second, acceleration is supported by tools such as technology, talent, finance, and innovative business models, which can act as both enablers and barriers in the transition.
  • Lastly, transition architects, including policymakers, companies, and consumers, play important roles in shaping the transition’s trajectory and determining its outcomes.

Stanley Porter, vice chair, Deloitte LLP and US energy, resources & industrials leader, said: “The transition to net-zero emissions is not just an environmental imperative, but also an opportunity to drive economic growth and societal progress. Achieving net-zero goals by 2050 does not offer much flexibility. We must act with urgency, and collaborate across industries, to help ensure a successful energy transition – one where neither the financial nor environmental costs are too high for us to bear on a global scale.”

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