Economic growth engines are also becoming net-zero accelerators
As more than 200 countries gathered at COP26 commit to greater greenhouse gas emissions reductions, there is an urgent need to deliver on these pledges. To help the global economy reach near net-zero emissions by mid-century, the World Economic Forum in collaboration with Accenture and the Electric Power Research Institute (EPRI), is launching a new initiative, “Transitioning Industrial Clusters Towards Net Zero.”
This initiative aims to create a global movement to accelerate the transformation of industrial clusters needed for net-zero emissions. Industrial clusters are geographic regions comprised of co-located energy supply and demand companies. Industrial clusters account for approximately 15% to 20% of global CO2 emissions, making them an attractive target for impactful emissions reductions.
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While there are many approaches to reducing industrial emissions, most focus on specific sectors, such as the decarbonization of steel, shipping and cement, or technological approaches such as electrification or hydrogen substitution. These efforts are critical. However, there is also a need and an opportunity to take an integrated approach to the decarbonization challenge. Industrial clusters are where sector-specific decarbonization efforts and clean energy technology deployment efforts converge to enable a systemic approach towards net-zero emissions.
The initiative aims to have more than 100 industrial clusters engaged by 2024. Four clusters from Australia, the UK and Spain have already joined with a collective CO2 emissions reduction profile of approximately 30 million tonnes – equivalent to that of Denmark:
- Kwinana, Australia [https://kic.org.au/]
- Hynet, UK [https://hynet.co.uk/]
- Zero Carbon Humber, UK [https://www.zerocarbonhumber.co.uk/]
- Basque, Spain [https://www.irekia.euskadi.eus/en/news/72753-industria-euskadi-compromete-alcanzar-cero-emisiones-netas-unira-cop26-glasgow-alianza-global-wef]
Public and private stakeholders in these four global clusters have already agreed to a vision for their clusters to achieve net zero. The path ahead will involve innovative financing solutions, an integrated approach to technology deployment, enabling policies and, most of all, strong partnerships.
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“Clusters are considered economic growth engines,” said Louise Anderson, electricity industry manager at World Economic Forum. “Historically, companies have co-located to take advantage of resource and logistic sharing, as well as access to infrastructure. This physical co-location can be leveraged to significantly reduce the emissions in industrial clusters, even enabling a transformation towards net-zero emissions.”
Melissa Stark, global renewables and energy transition lead at Accenture, said, “To reach a net-zero future while delivering business value and sustainable impact, industrial clusters are combining efforts to improve outcomes across the economy, the environment, society and the energy system. For example, the UK hopes to secure 1.5 million jobs through the development of four net-zero industrial clusters and can also see between £3 billion-4 billion pounds of potential savings per year by 2050 through avoided CO2 penalties.”
“Accelerating the development of industrial net-zero clusters today could play a significant role in reaching global net-zero emissions in the decades ahead,” said Arshad Mansoor president and CEO of EPRI. “Developing just 10 U.S. net-zero industrial clusters with similar CO2 -reduction profiles as the Humber project could reduce U.S. carbon emissions by approximately 10 percent. A rising tide lifts all boats, and these co-located energy sources will help one another—and our planet—towards a brighter, cleaner energy future.”
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