A new whitepaper released by consulting firm Accenture states that Europe’s heavy industrial companies can generate more than €200 billion ($238.5 billion) in net value through decarbonisation by 2030.
The report Energising Industry highlights the importance of collaboration between the public and private sectors to achieve decarbonisation.
While future prices for carbon dioxide (CO2) emissions and green electricity remain uncertain, the research predicts the annual net value of industrial decarbonisation will more than double between 2020 and 2030 – from around 100 to just over 200 billion euros per year.
Accenture says it expects new technological innovations to emerge, leading to growth in value continuing over time.
The majority of companies are focusing on energy efficiency since most transformative solutions, including electrification technologies and carbon capture, are not yet financially attractive.
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However, hydrogen is the most promising technology for significant decarbonisation progress in heavy industry, according to the report.
For heavy industry, the total net value of hydrogen adoption is forecast to increase from around 20 to 100 billion euros annually between 2020 and 2040.
At the same time, switching to natural gas would follow a decreasing trend, from generating 11 billion euros in total net value in 2020 to 6 billion euros in 2040.
Despite an evaluation of all global CO2 patent filings since 2013 revealing that the growth of new technologies or applications for the mitigation of or adaptation to climate change may be slowing, the report reveals that European industrial firms are still investing in some new areas.
Almost 40% of investments made during the past five years were linked to decarbonisation, including investments in renewables, hydrogen, intelligent cloud and energy distribution.
Chemical companies are spending heavily on 3D printing, biofuels, hydrogen and battery technology; energy companies are more focused on platform ecosystems, cloud technologies and renewable energy; and mining, metals and building materials companies are concentrating on larger investments in energy distribution and chemicals, such as hydrogen.
Recommendations to accelerate decarbonisation
The report recommends European companies to focus quickly on driving efficiency and identify new business models, for example, by benchmarking against industry peers and leaders.
Adopting new technologies, more expansive carbon-pricing efforts, joint investments and alliances across the value chain and improved supplier pre-qualification, based on carbon footprint will also help companies to accelerate their decarbonisation efforts.
European companies should also foster an innovative entrepreneurial culture, enabling them to pivot to new opportunities ahead of their industry peers.
Götz Erhardt, a senior managing director at Accenture, said: “Industrial companies across Europe are struggling with uncertainty around the fragmented regulatory environment, infrastructure challenges, the development of key technologies and their pricing.
“That’s why decarbonisation efforts are not progressing fast enough, despite the potential for innovation and value creation. However, public and financial support is at an all-time high, and, as key enablers of the energy transition, European industrial companies need to reimagine their operations at a faster pace.
“Industrial decarbonisation in Europe is a major opportunity for both energy producers and industrial energy customers.
“But while they are capable of driving transformational change and redefining business models, they need support from the public sector, given the investments required and the uncertainty of the pace and scope of technological innovation. Successful industrial decarbonisation requires a multi-faceted approach with the public and private sectors working in coordination to ensure Europe retains its competitive advantage.”
Accenture also conducted expert interviews with a study group of 30 companies.