Can Process Industries Truly Reach Net Zero? A Practical Roadmap

In recent years, two powerful shifts have reshaped the business landscape: the global consensus on climate risks and the financial sector’s pivot to sustainability. The UN Intergovernmental Panel on Climate Change’s Sixth Assessment Report (AR6) underscored that rapid, substantial cuts in greenhouse‑gas emissions are the only way to cap temperature rise, yet the precise level of warming remains a choice for all of us.

Key Takeaways from AR6

• Climate impacts are widespread, accelerating, and intensifying.
• Human‑caused warming is unequivocally linked to extreme weather events.
• Limiting global temperature rise hinges on immediate, deep emissions cuts.
• We still control how much warming will occur this century.

The outcome depends on the actions of investors, leaders, and employees across every organization. We must translate climate science into concrete investment plans now, rather than wait for a 2050 deadline that no one will see.

More than 20% of the world’s largest 2,000 public companies, with sales of nearly $14 trillion, have set net‑zero targets.

Setting a 2050 net‑zero goal is easy, but without intermediate milestones—such as a 2030 target—the ambition becomes meaningless. A stretch target can spark innovation, but a clear, actionable roadmap is essential.

Leading firms are raising the bar: Microsoft has committed to carbon negativity, aiming to erase all emissions since 1975. We expect similar “moon‑shot” ambitions to rise across sectors.

The second major shift is the financial sector’s mainstream adoption of ESG investing. ESG funds surged to $55 billion in 2020—double the 2019 level—and outperform the broader market. By 2025, ESG assets are projected to reach $53 trillion, one‑third of global assets under management.

Regulations such as the EU Sustainable Finance Taxonomy, risk mitigation, and growing societal expectations are accelerating this trend. Investors are increasingly unwilling to fund fossil‑fuel‑heavy projects, as reflected in Lombard Odier’s stance:

‘We must look beyond a company’s footprint today, and understand its trajectory and alignment to the transition.’

Investor Segmentation of Companies

• Burning Logs – high exposure, urgent decarbonisation needed, but lagging.
• Ice Cubes – high exposure but actively transitioning.
• Solutions Providers – offer products that enable the transition.
• Isolated – low climate risk.

Burning Logs will face tougher capital access and customer pushback. The process industry, responsible for ~30% of global final energy demand and 80% of industrial energy use, sits squarely in this category.

Globally, coal powers 41% of process heat; coal, oil and gas together account for 75%. Process‑heat emissions comprise roughly 15% of total GHGs—comparable to transport.

Is Net Zero Feasible for Process Industries?

It is a journey, not a destination. While some companies may lag, investors and regulators are demanding credible roadmaps now.

Offsets can play a role in the short term, but their quality varies, and many view them as green‑washing. Renewable power purchases offer benefits, yet grid variability and “green” labels can dilute true impact. Direct procurement from local renewable facilities via private wire—ensuring 100% renewable electricity—offers higher certainty and cost savings.

Energy efficiency remains the foundation. ISO 50001 embeds robust energy management, unlocking significant savings. Process‑industry projects often yield high returns when all benefits—energy, material, waste, health, safety, and strategic alignment—are accounted for.

Decarbonising heat, which fuels 80% of process emissions, has been historically under‑prioritised. Over half of industrial heat demand is low (<150 °C) or medium (150–400 °C), primarily in chemicals, food & beverage, and paper sectors.

Technologies for Low‑ and Medium‑Temperature Heat

BloombergNEF and WBCSD list options such as heat pumps, mechanical vapor recompression, resistance and electromagnetic heating, biomass combustion, biogas/biomethane, geothermal, and solar thermal. Re‑engineering heat exchangers with indirect thermosyphon technology can cut energy use by 50%, while automated controls amplify savings.

Waste‑heat-to‑power technologies—including Organic Rankine Cycle engines and thermoelectric generators—offer additional revenue streams and resilience. When projects are evaluated with a full multi‑benefit assessment, the financial upside often multiplies, turning decarbonisation from a cost into a profit centre.

Ultimately, process industries can—and must—reach net zero. Boards need to commit, set bold interim targets, and drive change. Managers, engineers, and accountants must broaden their perspective beyond energy costs to capture the full value of decarbonisation. The challenges are real, but the environmental and financial risks of inaction are far greater.