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Path to Decarbonisation

To achieve deep decarbonisation of the global
economy, it has become imperative to look for alternate
energy sources, transitioning to greener sources.

The transportation sector is a significant contributor
(16%) towards GHG emissions. These emissions are
primarily due to burning fossil fuel for cars, ships, trucks,
planes, trains, etc. Conventionally, over 90% of the
transportation fuel is derived from petroleum resources Fig. 4: Projected CO emissions
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– mainly Kerosene, Gasoline and Diesel. The energy
transition must prioritise decarbonising transportation Another large share of GHG emissions is attributed to
sector. Electric battery vehicles or Hydrogen fuel cell- the industry (24%). Industrial GHG emissions primarily
based vehicles are the hot alternatives being actively arise due to fossil fuels’ combustion used as an energy
considered by world economies. source and greenhouse gas emissions from specific
chemical reactions necessary to produce goods from
Electricity production is another large (28.2% per raw materials. The industry sector is mainly considered
cent of 2018 GHG emissions) contributor to the GHG ‘hard sector’ to decarbonise because several large
emissions. Approximately 63% of the electricity is GHG contributors in the industrial (Eg. Steel, Cement,
obtained by burning fossil fuels, mostly natural gas Petrochemicals, etc.) need a high temperature. Further,
or coal. Study shows that the electricity demand is specific process requirements must be satisfied, making
increasing seven times faster than demand growth of the switch to renewables difficult; moreover, a fifth of
other fuels and in 2050 the total demand is expected to the industrial sector’s carbon dioxide emissions are
be double that of all other fuels put together1. Figure 3 solely from the processes itself rather than the type of
depicts the rising electricity demand. energy used. Slow progress in research and innovation
on alternate approaches towards decarbonising the
industrial sector also hamper progress.

Technological innovations provide a rational approach
to achieving a low carbon economy. Technical solutions
are always leading part of the puzzle in energy
transition approaches. These could include use of zero-
carbon or renewable energy sources, Adopting to the
new alternate pathway, CO capture from significant
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industries such as power, steel, cement, etc. in addition
to efficiency improvements. However, technological
advancements must be supplemented by proper
policy support from the states, which can accelerate
deployment of the emerging technology. Strategically
Fig. 3: Rise in Electricity demand
designed policies incentivise faster adoption of
The growth of electricity demand will be driven by fuel emerging low carbon technologies and make more
mix changes in transport, industry and construction investments in such cleaner technologies more feasible
sectors, with renewables replacing oil and gas. or profitable.
Digitisation of industries would further increase electric
power demand for handling increased demand from The present policies for decarbonisation would only
data capture, storage and processing. With the current be able to keep emissions stable till 2050. Reductions
efficiency improvement of energy generation, it is in developed economies would be offset by industry
unlikely that the goal of 1.5°C temperature reduction growth in developing economies leading to increased
looks achievable; GHG emissions are likely to reduce use of coal, oil and gas-based power for transport and
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from current levels by 25% till 2050 reaching a 3.5°C power generation .
pathway, refer Figure 4.

6 The 1.5-degree challenge | McKinsey
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