A financial alliance has been launched at Cop28 to bring online critical projects that deliver decarbonisation for heavy industries at a scale that helps near the 1.5°C global warming target.
Cutting the amount of carbon released into the atmosphere is key to the Paris Agreement, which saw world leaders agree to “pursue efforts” to limit global temperature rises to 1.5°C above pre-industrial levels at Cop 21.
Hundreds of plants that make sustainable aviation fuel or convert to zero emissions steel production must get off the ground in the 2030s to meet net zero by 2050 targets.
Backed by a joint contribution of $30 million from the Cop28 presidency and Bloomberg Philanthropies, the Industrial Transition Accelerator (ITA) is designed to catalyse decarbonisation opportunities across heavy-emitting sectors, including energy, industry, and transportation.
Building on promises made at the Glasgow Cop26, the new initiative accelerates the delivery of Paris-aligned targets for emissions reduction in some areas of industry.
Research from the Mission Possible Partnership, which will manage the ITA, suggests that financing should be put in place over the next two years that would deliver some or all of a projected 300 sustainable aviation fuel (SAF) plants, 200 ships using zero-emissions fuel, 70 zero-emissions steel plants, 40 new low-carbon smelting and refinery plants and over 40 commercial-scale carbon capture, usage and storage (CCUS) plants.
First step to transformation
“Today’s historic announcement, across the entire energy ecosystem, is something to be welcomed and celebrated, but we must recognise this is a first step towards a transformation that we all require,” said Cop28 President Dr Sultan Al Jaber.
Michael Bloomberg, UN special Climate envoy and head of Bloomberg Philanthropies, said the announcement would bring some balance in the race to decarbonisation when the industrial sector is not matching gains in electricity and transportation.
“Concrete and roads are essential,” he said. “Shipping and aviation make global trade possible. We want to expand these industries, especially in the Global South, while at the same time reducing their emissions.
“It’s a complex challenge but one we can meet new partnerships across government, finance and private business.”
Mr Bloomberg said the importance of driving more capital to decarbonise heavy industry had been a priority for the Cop28 presidency and Dr Al Jaber “deserved credit” for focusing on the issues, including the potential of promising new energy sources such as green hydrogen.
Taken all together the project could target two fifths of global emissions, especially across the developing countries that often lack the access to capital that boosts the climate transition.
Another UN envoy, Mark Carney, the former central banker turned climate tsar, applauded the summit goal of a tripling of renewable energy capacity by 2030, noting that solar plants attracted more capital than new oil and gas production this year. He pointed out that emissions from the chemical and heavy transportation industries were on track to rise by almost a third by 2050.
“As a result, many of these heavy emitting companies are caught in transition traps,” he said. “Without a clear path forward investors are demanding returns from cash flows today rather than encouraging companies to invest for a low cost tomorrow.”
The search for the right technologies to cut emissions at scale, includes green hydrogen, long-duration energy storage, and carbon capture and storage. Electricity is crucial to progress with two thirds of industrial emissions while almost all transport emissions relate to their energy use.
The Initiative will not only seek to increase demand for green solutions but also lobby on policy, encourage new financial products and highlight “tipping point” opportunities for transforming the emissions record of entire sectors. “Our aim is to bend the emissions curve and get these industries to a place in which technology and public policy make decarbonisation investable,” Mr Carney said. “Financial institutions are often criticised for investing too much in polluting industry.
“The reality is that they’ve not being doing enough, industries such as shipping and cement receive far too little capital to cut their emissions in-line with world climate needs. Incentives we’re now [unveiling] at Cop28 can help break this cycle.”