Empowering a clean energy economy through collaboration

In 2023, the world passed the halfway mark between the signing of the Paris Agreement and its first major deadline – cutting emissions by roughly 50% by 2030 to stay below 1.5°C of global warming.

While net-zero commitments from companies across industries are commendable, the time has come to move beyond promises to concrete action. Stakeholders throughout the value chain must urgently tackle the monumental task of industrial decarbonisation specifically, which remains a challenge in translating climate commitments into tangible results.

Barriers in decarbonisation journeys

Accenture’s Powered for Change Report¹ identified many of the barriers hard-to-abate industries face in their decarbonisation journeys. Yet, the reinvention of heavy industries, including steel, metals and mining, cement, chemicals, freight and logistics, is critical to achieving global net-zero targets. In addition to being the world’s biggest emitters – their operations generate 40% of global CO₂ emissions – these industries are highly interdependent with manufacturing or ‘light’ industry.

Only by reinventing decarbonisation strategies that enable growth for the energy-intensive, hard-to-abate heavy industries can we hope to break the economic stalemate: about a fifth of all companies globally are on track to net zero, and over a third (38%) say they cannot make further investments in decarbonisation in the current economic environment.

Industrial decarbonisation at scale, however, calls for collective, cross-industry action across the value chain. For example, oil, gas and power companies must scale low-carbon power and hydrogen more quickly to guarantee affordable, secure supply for heavy industry, which is central to reducing the costs of green industrial products.

Technology also has a crucial role to play in this kind of collective action. Digital technologies and AI democratize complex value chains that previously would have needed years of experience and know-how to acquire. This can facilitate cross-industry collaborations that simply didn’t exist before; from finding new ways to reuse waste, to coordinating clean energy procurement, to optimizing a diverse portfolio of energy assets and capitalizing on energy markets.

Collaboration is key to unlocking net zero

The writing is on the wall. Achieving net-zero ambitions isn't a solitary undertaking and requires unprecedented collaboration across industries, governments, and societies. For example, industries can only accelerate the development of breakthrough technologies through shared innovation and pooling of resources.

Although meaningful collaboration has been hard to achieve for logistical, geopolitical and other reasons, the emerging cluster model is set to accelerate the creation of an equitable, affordable and sustainable transition. Examples like the Houston Hydrogen Hub and the Net-Zero Basque Industrial Supercluster demonstrate that creating a shared low-carbon infrastructure significantly reduces costs and accelerates scale. As heavy industry decarbonises, such industrial clusters will become more common, increasing the depth and breadth of collaboration across the supply chain. Working closely together for the long term, industrial clusters will increasingly need a common technology platform.

Affordable approaches to industrial decarbonisation

While the challenge is immense, there are increasingly affordable pathways to decarbonisation. The International Energy Agency (IEA) estimates that energy efficiency improvements could deliver over 40% of the emissions reductions needed by 2040², with many initiatives offering rapid payback periods. Furthermore, the costs of solar and wind power have plummeted by 89% and 70% over the last decade, making clean energy economically competitive with fossil fuels in many regions. The global power sector saved fuel costs of $520 billion in 2022 due to newly commissioned renewable energy capacity³.

Implementing circular economy principles can also reduce emissions while often lowering costs. For instance, circular economy practices, such as smart crushed aggregates (where crushed old concrete is used as filler for new concrete), could abate 96% of embodied CO₂ emissions from cement and create a $122 billion net profit gain by 2050⁴. In addition, AI and IoT solutions can optimize processes, reducing energy consumption and emissions.

Energy industry is central to industrial decarbonisation

Renewables alone cannot drive industrial decarbonisation as several industrial processes cannot decarbonise through electrification and require alternative solutions. Low-carbon energy and clean fuels — including biofuels, blue or green hydrogen, and ammonia — help support industrial decarbonisation. Carbon management will be critical in industrial decarbonisation. Fossil fuels will, realistically, be used by industry for years to come, providing low-emission natural gas for power generation or blue hydrogen until green hydrogen reaches scale.

Indeed, scaling these solutions is a key phase in enabling industrial decarbonisation. As our Powered for Change Report points out, urgently compressed transformation is required in three phases within a crucial three-year timeframe to help eliminate economic growth trade-offs and make existing net-zero targets achievable for all companies:

• Light industry must take the lead in developing green premiums to finance the first phase of efficiency gains in low-carbon power, hydrogen and green industrial infrastructure.  
• Second, oil, gas and power companies must scale low-carbon power and green hydrogen more quickly to guarantee affordable and secure supply for heavy industry, as this is central to reducing the costs of green industrial products.  
• Last, it is essential to reduce the capital and operating expenses related to low-carbon infrastructure, costs that heavy industry controls to drive their decarbonisation. For example, using AI can augment decision-making during infrastructure construction. Together with virtual reality and augmented reality technologies, AI will also help improve labor efficiency in both core and back-office operations.

Ensuring that low-carbon options achieve price parity with high-carbon alternatives is the collective responsibility of all stakeholders, including the energy industry, power utilities, heavy industry, and light industrial customers. Each industry must focus on where it can add the most value. For oil and gas, the task is straightforward: accelerate the scaling of low-carbon hydrogen to guarantee an affordable and secure supply.

Beyond government subsidies

While government support plays a crucial role, subsidies alone are insufficient to drive the massive transformation required. IEA estimates that annual clean energy investment needs to triple by 2030 to around $4 trillion to reach Net Zero by 2050. This far exceeds what governments can provide through subsidies. Industry-led initiatives often result in more sustainable, market-driven solutions. In addition, the private sector's drive for competitive advantage spurs innovation far beyond what government funding alone can achieve.

The path forward

Looking ahead, companies must establish clear, science-based emission reduction targets that align with the Paris Agreement and increase investment in low-carbon technologies and processes. According to the Mission Possible Partnership, $1 trillion of investment is needed annually to decarbonise heavy industry⁶.

The transition to a low-carbon economy presents an enormous challenge and an unprecedented opportunity. By moving from commitment to action and embracing collaboration, industries can better meet their net-zero ambitions while unlocking new avenues for innovation, efficiency, and growth. This is the time for action – our planet's future depends on it.

Source references:

1. Powered for Change
2. The Role of Energy Efficiency in Achieving Net-Zero Emissions: Strategies and Challenges
3. Renewables Competitiveness Accelerates, Despite Cost Inflation
4. Why Japan's circular built environment makes economic sense
5. Using digital and AI to achieve net zero
6. New MPP tracker reveals heavy industry transition has started but needs to accelerate sevenfold to meet 2030 climate targets