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In recent years, energy transition has become one of the most important investment themes across asset classes. Under the broad spectrum of energy transition investments, technologies such as wind turbines, solar panels and energy storage tend to attract the most attention, yet those are only a small piece of the decarbonization puzzle.

Even if the whole electricity grid were renewable energy, GHG emissions would remain
According to the World Resources Institute¹, the electricity and heat sectors only account for 32% of global greenhouse gas (GHG) emissions. This means even if the world’s electricity grid were to use 100% renewable energy, there are still significant GHG emissions that remain unaddressed.

Carbon capture may be solution in some CO2 emission Industries like cement production
One potential solution to tackle the emissions of carbon intensive industries is carbon capture, utilization and storage (CCUS). CCUS extracts the CO2 emissions that are produced from these industrial processes and stores it in underground caverns or sells it to other industrial customers for extra revenues. For example, BHP is piloting CCUS technology with China’s HBIS Group, one of the world’s largest steelmakers². HeidelbergCement is also commissioning the world’s first carbon-capture at a cement production facility in 2024³.

In the transport industry, the land transport subsector is the most decarbonized
In 2022, 14 percent⁴ of new cars sold were electric, and charging infrastructure increased by 55 percent to 2.7 million units. This has been driven, amongst other factors, by falling battery costs of 90 percent during the past decade⁵. The electric take-up is lower for commercial applications, with vans and trucks representing less than 3% of electric sales. Given freight makes up 30 % of transport CO2 emissions, this represents a significant opportunity for investors looking at accelerating the transition to zero-emission transportation.

1 World Greenhouse Gas Emissions,
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4 BNEF, Electric Vehicle Outlook 2023
5 Lazard, Levelized Cost of Energy Analysis