Decarbonizing the 1,000 most CO2-intensive assets

Decarbonizing the 1,000 most CO2-intensive assets

January 17, 2024

How owners of the world’s largest carbon emitters can drastically improve climate protection

The likelihood of complying with the Paris Agreement and limiting global warming to 1.5°C currently stands at just 14%. Only a quantum leap forward in sustainability efforts can put the world on track for a more sustainable future. The Global Carbon Restructuring Plan, a new study by Roland Berger, shows that decarbonizing the 1,000 most CO2-intensive assets can drastically improve these odds – at an affordable cost for their owners.

"Renewables are currently the most suitable decarbonization solution for many assets in the power sector."
Portrait of Martin Hoyer
Senior Partner
Hamburg Office, Central Europe

Each of these 1,000 assets is a single-point emitter – one power plant, for instance, or one iron and steel factory. Our research shows the 1,000 assets collectively emit 8.2 gigatons (Gt) of CO2 – around 22% of fossil-fuel-based emissions worldwide (out of 38 Gt in 2021, according to EDGAR, Emissions Database for Global Atmospheric Research). To be on track to limit global warming to 1.5°C, the world must eliminate 24 Gt of CO2 emissions by 2030. In other words, a third of this goal could be achieved by decarbonizing a very small group of assets – an extremely powerful lever to combat climate change.

Coal-fired power plants dominate the group of assets, contributing 76% of the 8.2 Gt of CO2; iron and steel plants are the second-biggest contributor (18%). More than half the 1,000 assets are in China, with India home to 13%, the United States 10%, and Europe 3%.

Crucially, ownership of the 1,000 assets is concentrated among 406 companies. Indeed, just 40 firms own assets that produce half the 8.2 Gt of CO2 emissions. Decisive action from a small number of businesses could drastically improve climate protection.

The cost of decarbonizing 1,000 assets

But what action should they take? Our Global Carbon Restructuring Plan (GCRP) outlines four potential solutions for decarbonization: renewable energy, gas, nuclear, and carbon capture and storage (CCS). While renewables and nuclear can cut CO2 emissions by 100%, CCS can reduce them by an average of 90%. Gas is best used as an interim solution as it can only reduce carbon emissions by 50%.

There’s no escaping the importance of the bottom line in sustainability. In the GCRP, we calculate that each approach will cost between USD 7.5 trillion (renewables) and 10.5 trillion (nuclear and CCS) over the course of 26 years (2025-2050). A significant sum, but still less than 20% of the world’s annual military or R&D spending.

Cost isn’t the only factor to consider: asset owners need decarbonization solutions to deliver a sufficient and secure supply of energy and be profitable. Renewables, nuclear, and gas all fit the bill. However, CCS requires a more widely implemented CO2 pricing scheme with sufficient price levels before it can be profitable.

Our study also analyzes the financeability of decarbonization solutions. On a global level, the owners of the top 1,000 assets have enough headroom to fund gas and CCS investment costs, but not renewables or nuclear. Some regions are more strongly positioned than others, with China and India facing serious financial challenges across all four solutions.

Deployment of renewables must be accelerated

There is no one-size-fits-all approach to decarbonization. Nevertheless, our findings clearly show that renewable energy sources are currently the most suitable solution for many assets in the power sector. They can fully eliminate CO2 emissions at the lowest total cost and are readily financeable by existing headroom across most regions.

Each of the alternatives faces multiple hurdles. Gas is only an interim solution, while nuclear would require additional financing in most regions. CCS still faces major profitability hurdles in every region due to insufficient CO2 pricing.

This paints a distinct picture: Deployment of renewable energy must be accelerated across all assets in all regions. It should be complemented by a regional emphasis on the next best local solution.

Collective action can bring change

The GCRP clearly shows that decarbonizing a select number of the largest CO2 emitters would make a substantial contribution to addressing climate change.

This won’t be easy. Overcoming the numerous technological and financial challenges requires a new form of collaboration between regions, governments, companies, and financiers. We believe collectively embracing the steps outlined in this Global Carbon Restructuring Plan represents a significant move in the right direction.

The journey to decarbonization is long and daunting. But by focusing on actions that create the biggest impact, we can generate the momentum needed to change our energy system and create a cleaner, financially sound future.

To access the full version of the Global Carbon Restructuring Plan, please click here…

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Decarbonizing the 1,000 most CO2-intensive assets


Roland Berger’s Global Carbon Restructuring Plan shows how owners of the world’s largest carbon emitters can drastically improve climate protection.

Published January 2024. Available in
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