Deloitte: Can industry achieve carbon-free targets by 2030?
One of the greatest challenges facing energy and resources (E&R) industry sectors is the drive towards decarbonisation. The latest report from Deloitte – The 2030 Decarbonization Challenge – suggests how chemical, oil and gas, mining and metals, and power, utilities and renewables sectors can react and achieve meaningful targets over the next decade.
The reports states that the top four drivers of decarbonisation are:
- customer, employee and community demand
- investor pressure
- policy and government targets
- technology and operational cost reductions
Many E&R companies are announcing goals to reduce emissions, utilise renewable energy, and address climate-related risks as pressure mounts to address these drivers.
In a Deloitte global survey, 89% of E&R executives said they either already had a plan in place or were developing a strategy to reduce reliance on fossil fuels, with 30% of those executives already having a fully developed plan in place.
Some companies are mainly responding to government targets, but others see the energy transition as an opportunity to transform themselves.
"Energy transition is anchored in long-term trends, which is likely to make it able to withstand current economic headwinds,” says Kevin Guo, Deloitte China Energy, Resources & Industrials Industry Leader.
“As this energy transformation or 'Green Deal' gains momentum, new ecosystems are forming and new technologies are emerging. These developments are helping to grow renewables, develop new energy carriers, improve energy efficiency, reduce emissions and create new markets for carbon and other by-products as part of a more circular economy."
The challenges of decarbonisation
Decarbonisation is not without challenges. Many steps, such as increased electrification, wide-scale use of renewables, and energy efficiency all have their issues.
"Decarbonisation is an opportunity to transform,” says Allan Xie, Deloitte China Climate Change and Sustainability Service Leader.
“For companies pursuing these goals, it requires shifts in how they source, use, consume and think about energy and feedstock, and how they engage with multiple stakeholders. It also requires a substantial financial support from investors and governments. The energy transition also has sector-wide implications for how E&R companies interact with one other, and for how sectors themselves can combine and converge."
The report highlights potential pathways companies from four sectors can take.
Chemicals Focus on improving resource and energy efficiency to produce chemicals and materials using sustainable waste or bio-based feedstock, and avoiding production of virgin materials.
Oil and gas To satisfy investors and remain viable, transform business models by diversifying into other forms of energy and enabling technologies and turning Scope 3 emissions into a business opportunity.
Power, utilities, and renewables Decarbonisation will require a robust ability to manage and derive insights from data. Companies can look at applying advanced analytics and scenario modelling across the three main segments of the value chain: retail power, grid transmission and distribution, and generation.
Mining and metals The issue of decarbonization in mining requires partnerships and an ecosystem mindset. Companies need to set goals for their partnerships, trials they are conducting and solutions they are developing.