The report also finds that the cost of decarbonisation will be less than 1 percent of global GDP and that the impact on the cost of end consumer products will be marginal. For example, ‘green steel’ would add no more than $100 on the price of a car, while ‘green shipping’ would add around 2 percent on the price of imported manufactured goods. Low-carbon plastics would add $1 cent on the price of a bottle of soda.
The most challenging sectors to decarbonise are cement – due to process emissions – and shipping – given high cost of de-carbonisation options and fragmented industry structure slowing down technology take-up.
In industry, there are three main routes to de-carbonisation: electrification (direct or indirect via hydrogen), biomass use, and carbon capture (combined with storage or use). Their deployment will vary from region to region depending on local resource availability and related prices.
In road transport, electric trucks and buses (either battery or hydrogen fuel cells) are likely to become cost-competitive by 2030.
In shipping and aviation, liquid fuels are likely to remain the preferred option for long distances – with the balance between biofuels, synfuels or (for shipping) LNG and ammonia, dependent on their relative cost-competitiveness.
Switching from coal to natural gas could deliver significant short-term emissions reductions, particularly in the Chinese industry, provided methane leakages are reduced to minimal levels (
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