Press releases

The 2030 decarbonization challenge

The path to the future of energy

Deloitte releases The 2030 Decarbonization Challenge Report, exploring how companies in certain energy and resources (E&R) industry sectors — chemicals, oil and gas, mining and metals, and power, utilities and renewables — can accelerate decarbonization over the next decade and achieve meaningful interim targets by 2030.

According to the report, the top four drivers of decarbonization are customer, employee and community demand; investor pressure; policy and government targets; and technology and operational cost reductions. As these drivers intensify and converge, many leading E&R companies are announcing goals to reduce emissions, utilize renewable energy, and address climate-related risks.

In a recent Deloitte global survey, 89% of E&R executives said they either already had a plan in place or were developing a strategy to reduce reliance on fossil fuels, with 30% of those executives already having a fully developed plan in place. Some E&R companies are mainly responding to government mandates, but others see the energy transition as an opportunity to transform themselves via long-term scenario planning over the next 10 to 30 years.

Kevin Guo, Deloitte China Energy, Resources & Industrials Industry Leader, says "Energy transition is anchored in long-term trends, which is likely to make it able to withstand current economic headwinds. As this energy transformation or 'Green Deal' gains momentum, new ecosystems are forming and new technologies are emerging. These developments are helping to grow renewables, develop new energy carriers, improve energy efficiency, reduce emissions and create new markets for carbon and other by-products as part of a more circular economy."

The path towards decarbonization is not without challenges. Many of the common steps to decarbonization, such as increased electrification, wide-scale use of renewable energy, and intensifying energy efficiency measures pose unique challenges. E&R companies can struggle to understand the material impacts that their goals will have on their valuations, operations, employees and markets over the next few years.

Allan Xie, Deloitte China Climate Change and Sustainability Service Leader, says, "Decarbonization is an opportunity to transform. For companies pursuing these goals, it requires shifts in how they source, use, consume and think about energy and feedstock, and how they engage with multiple stakeholders. It also requires a substantial financial support from investors and governments. The energy transition also has sector-wide implications for how E&R companies interact with one other, and for how sectors themselves can combine and converge."

The report highlights potential decarbonization pathways companies across four E&R sectors can take to move towards their goals.

  • Chemicals: Focus on improving resource and energy efficiency to produce chemicals and materials using sustainable waste or bio-based feedstock, and avoiding production of virgin materials.
  • Oil and gas: To satisfy investors and remain viable, transform business models by diversifying into other forms of energy and enabling technologies and turning Scope 3 emissions into a business opportunity.
  • Power, utilities, and renewables: Decarbonization will require a robust ability to manage and derive insights from data. Companies can look at applying advanced analytics and scenario modeling across the three main segments of the value chain: retail power, grid transmission and distribution, and generation.
  • Mining and metals: The thorny issue of decarbonization in mining, which involves tackling value chain emissions, requires partnerships and an ecosystem mindset. Companies need to set goals for their partnerships, trials they are conducting and solutions they are developing. 

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