New WEF Report Suggests Carbon Prices For Six Industries

New WEF Report Shares Key Findings In Six Industries - Carbon Herald
POZNAN, POL – APR 15, 2021: Laptop computer displaying logo of The World Economic Forum, an international NGO based in Cologny, Geneva Canton, Switzerland and founded on 1971. Image: monticello/Shutterstock

The first Net-Zero Industry Tracker WEF report, which aims to set the foundations of a “robust tracking platform that supports the emergence of low-carbon industries” by the end of the decade, was released on July 28. The report, published by the World Economic Forum (WEF) in collaboration with Accenture, features the expertise of over 40 organizations. 

Relevant: How Can We Get To Net Zero?

The Net-Zero Industry Tracker establishes a new framework for the monitoring of six key heavy industries on their net-zero progress: steel, cement, aluminium, ammonia, oil and natural gas. The report also suggests CO2 equivalent prices for each of those sectors. As industry sectors contribute to nearly 40% of the global energy consumption and over 30% of greenhouse gas emissions, their transformation would play a crucial role in achieving net zero by 2050. 

Steel

The largest emitting manufacturing industry, steel generates 7% of all human-made emissions. Over 85% of its consumption of energy is generated from fossil fuels. The report emphasized five priorities for the sector on its net-zero journey:

  • Introduce efficiency levers to maximize bringing down emissions in current processes;
  • Increase the number of low-emission projects to bring down costs and boost clean steel tech development;
  • Expand the capacity for renewable power, the production of green hydrogen, carbon transportation and storage infrastructure;
  • Give incentives to producers and investors by multiplying the demand signals for clean steel;
  • Advance policies to support the above four priorities. 

The Net-Zero Industry Tracker set a CO2 equivalent price of $180 – $360 / tCO2e for steel to level the competitive landscape. 

Cement 

Cement accounts for 6% of all human-made emissions and is the second biggest emitter after steel. 

The report emphasized five priorities for the sector on its net-zero journey:

  • Introduce efficiency levers to maximize bringing down emissions in current processes and support concrete recycling;
  • Increase the number of CO2 capture projects to decrease the costs and improve commercial readiness;
  • Develop the infrastructure for carbon transport and storage;
  • Give incentives to producers and investors by multiplying the demand signals;
  • Advance policies to support the above four priorities. 

The Net-Zero Industry Tracker set a CO2 equivalent price of $60 – $110 / tCO2e for cement to level the competitive landscape. 

Aluminium

Aluminium generates 2% of all human-made emissions and over 7% of its consumption of energy comes from fossil fuels. 

The report emphasized five priorities for the sector on its net-zero journey:

  • Advance aluminium recycling networks;
  • Increase the number of low-emission projects;
  • Boost the low-emission power capacity, green hydrogen production and carbon transportation and storage infrastructure;
  • Give incentives to producers and investors by multiplying the demand signals;
  • Advance policies to support the above four priorities. 

The Net-Zero Industry Tracker set a CO2 equivalent price of $210 / tCO2  for aluminium to level the competitive landscape. 

Ammonia 

Ammonia accounts for 1.3% of all human-made emissions and is the biggest emitter in the chemical industry. 

The report emphasized five priorities for the sector on its net-zero journey:

  • Increase the number of green and blue ammonia projects;
  • Develop low-emission power capacity, carbon transport and storage infrastructure to avoid bottlenecks;
  • Give incentives to producers and investors by multiplying the demand signals for low-emission ammonia and fertilizers;
  • Advance policies to support the above four priorities. 
  • Warrant that ammonia and fertilizer production decarbonization “does not impact food security for poorer households.”

The Net-Zero Industry Tracker set a CO2 equivalent price of $36 – $360 / tCO2e for ammonia to level the competitive landscape. 

Oil

Oil accounts for 6% of all human-made emissions, with 35% coming from methane emissions. 

The report emphasized five priorities for the sector on its net-zero journey:

  • Deploy existing technology fast to decrease methane and flaring emissions; 
  • Increase the number of low-emission projects in refining;
  • Advance renewable power, clean hydrogen production and carbon transportation and storage infrastructure;
  • Give incentives to producers and investors by multiplying the demand signals;
  • Advance policies to support the above four priorities. 

The Net-Zero Industry Tracker set a CO2 equivalent price of  $247 / tCO2e for oil to level the competitive landscape. 

Natural Gas

Natural gas accounts for 4% of all human-made emissions, with 65% coming from methane emissions. 

The report emphasized five priorities for the sector on its net-zero journey:

  • Deploy existing technology at scale to decrease methane and flaring emissions;
  • Increase the number of low-emission projects;
  • Advance renewable power and carbon transportation and storage infrastructure;
  • Give incentives to producers and investors by multiplying the demand signals;
  • Advance policies to support the above four priorities. 

The Net-Zero Industry Tracker set a CO2 equivalent price of $20 – $30 / tCO2e for natural gas to level the competitive landscape.

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