To help with a successful journey to net zero, consider scaling five verticals in a phased manner, aided by various drivers and enablers, including finance, workforce, technology, and business models.
To achieve net-zero emissions, coordination across industries and economies can help to sequence the introduction of new policies and technologies. Regions will likely proceed at their own pace, with issues such as workforce readiness, supply chain visibility, cost advantages, water availability, and energy accessibility determining decision-making. The transition is getting underway amid market uncertainty, meaning that individual companies and entire sectors may be forging new supply chains, addressing technology risk, assessing price risk, and, in many cases, launching pilot projects. Governments are stepping in with policies to help mitigate areas of possible market concern, but innovative financing and cross-sectoral partnerships could be increasingly important. Through cross-sector collaboration, a system-of-systems approach can help sequence the implementation of new policies and technologies, while helping to respond to unforeseen consequences.
Five strategic verticals may require scaling, innovation, and adaptation to help catalyze impact globally.
Progress within and across these verticals could not only expedite the journey toward achieving net-zero goals but also demonstrate the interdependence of advancements in these areas. These five verticals are as follows:
- Prioritizing infrastructure decarbonization: Much of the current housing stock and built environment will be with us for years to come, and it’s important to start reducing their carbon footprint now. Similarly, many energy projects have an average lifespan of 20 years to 40 years, so planning for lower carbon and other greenhouse gas emissions is important over the long-term project horizon.1 Acting now to capture emissions holds greater significance than postponing the process to tomorrow. For instance, applying the standard time value principle shows that, capturing 1 million metric tons per annum of carbon in 2050 is equivalent to capturing only 0.35 million metric tons per annum today, underscoring its substantial time value.2
- Expanding and modernizing the power grid for a clean energy transition: Currently, there exists a 5x to 7x gap between the development cycle of the grid and that of renewable energy sources.3 Constructing a new grid typically requires five to 15 years, while the implementation of renewables spans only about one to five years.4 Further, more than 70% of the US electricity grid is over 25 years old, highlighting the need for comprehensive upgrades and modernization efforts, while maintaining consumer affordability.5
- Boosting industrial manufacturing capacity for the energy transition: Manufacturers, while reducing their emissions and enhancing efficiency, play a vital role in helping customers adopt an evolving product suite focused on energy efficiency and lower carbon emissions. Yet, achieving this dual objective is often challenging, due to concentrated supply chains, market uncertainty, nascent market demand for low-carbon products, and a workforce skills gap.
- Promoting metals and mining sustainability in critical supply chains: The energy transition is expected to reduce fossil-fuel reliance while increasing reliance on metals and minerals. The transition to wind and solar is expected to lead to a nearly 10x increase in metals, minerals, and materials demand, compared to conventional energy sources.6 Similarly, electric vehicles, on average, require 2.5x more copper than a typical internal combustion engine car.7 This growing dependency is expected to alter supply chains, cost structures, and business models.
- Advancing land, water, and waste stewardship: Slowing the pace of global temperature rise necessitates careful stewardship of our remaining resources. Key among these are land, which serves as vital carbon sinks; water, essential for industrial processes, energy generation, and human life; and waste, which can be transformed into valuable industrial feedstock. Achieving new levels of stewardship will likely require additional collaboration and innovation across industries and communities.
Read more about each of these five verticals, and the comprehensive strategies for sequencing and achieving sustainable progress, in our Road to scale series.
Endnotes
- United States Environmental Protection Agency, “Renewable energy fact sheet: Wind turbines,” August 2013; US Department of Energy, “End-of-life management for solar photovoltaics,” accessed April 15, 2024; International Atomic Energy Agency, Nuclear power plant ageing and life extension: Safety aspects, April 1987.
- Deloitte analysis: US EPA, Report on the social cost of greenhouse gases: Estimates incorporating recent scientific advances, accessed February 2024.
- International Energy Agency, Electricity grids and secure energy transitions, October 17, 2023.
- International Energy Agency, “Lack of ambition and attention risks making electricity grids the weak link in clean energy transitions,” October 17, 2023.
- The White House, “Fact sheet: The Biden-â Harris administration advances transmission buildout to deliver affordable, clean electricity,” press release, November 18, 2022.
- International Energy Agency, The role of critical minerals in clean energy transitions, May 2021.
Authored by
Geoff Tuff |Sustainability and Climate Leader for Energy, Resources & Industrials | U.S. Hydrogen Practice Leader | Deloitte Consulting LLP
Stanley Porter | Vice Chair | Global Energy, Resources, & Industrials Leader United States | Deloitte Consulting LLP
Kate Hardin | Managing Director | Deloitte Services LP
Anshu Mittal | Senior Manager | Research Leader, Oil & Gas India
Jaya Nagdeo | Manager | Research Manager, Power, Utilities & Renewables India