Heavy industries not on track for Paris Agreement goals
May 2nd, 2024
Aluminium, cement and steel industries are not aligned with a 1.5-degree trajectory, as set out in the Paris Agreement.
The World Benchmarking Alliance’s (WBA’s) first 2024 Climate and Energy Benchmark found companies need to triple their efforts to reduce emissions intensity in the next 5 years to align with a 1.5 trajectory.
The benchmark assessed the performance of 91 companies in the aluminium (12), cement (34) and steel (45) industries, including Cemex, ArcelorMittal, Holcim, Chalco and Rio Tinto.
It found emission intensities in the company sample decreased on average by 0.8% annually between 2017 and 2022. To meet the 1.5-degree target companies would need to achieve 2.4% in annual reductions over the next five years.
It said that there is not yet enough investment in market-ready technologies for the industry to reduce emissions enough to meet the target.
Only 24% of the companies evaluated reported R&D investments in low-carbon technologies and 10% do so for non-mature technologies.
While the benchmark also noted that some companies showed examples of good practices in transition planning, the majority have struggled to do the same.
Half of the companies assessed scored 0 on the WBA’s just transition indicators, which it said put their workers and the communities around these companies at risk.
However, the report also found 28% have transition plans for all business units, with 13% extending those plans to their entire value chain.
Additionally, 23% of companies factor carbon pricing into their cost calculations as a financial indicator and 12% have committed to reporting progress annually on their transition plans and defined their stakeholder feedback process.
Vicky Sins, WBA’s decarbonisation and energy transformation lead, said: “We need strong accountability, leadership and urgent action from aluminium, cement, and steel producers to ensure a just, low-carbon future.”
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