RESEARCH REPORT

In brief

In brief

  • As Europe’s low-carbon economy evolves, industries have the opportunity to make smart investments to accelerate decarbonization and unlock growth.
  • Industries must develop a balanced portfolio of emissions reduction investments, including short-term and next-horizon solutions.
  • Our analysis of six European industries shows that the right investments can unlock up to €26 billion in business value by 2025.


Decarbonization investments can fuel growth

New Accenture research shows that with smart investments, European industries can achieve their emissions goals and unlock future business value.

Europe’s low-carbon economy is rapidly evolving

Europe is targeting bigger and bolder climate goals as it focuses its attention on accelerating its clean energy transition. This, coupled with the increased viability of low-carbon solutions, will see the region’s industries looking to make smarter moves towards a greener future.

But can they overcome long-held fears of tradeoffs between costly clean energy technologies and competitiveness?

Our research indicates that investment in emissions reductions doesn’t need to be a zero-sum game. Rethinking how companies invest is pivotal to unlocking business value and future growth.

The challenge here is balance and timing. Low carbon technologies are maturing at uneven speeds, making it difficult to time investments. Investing too early could mean higher emissions reductions but lower returns, while waiting could lead to missed opportunities in lucrative markets.

We examine how both established industries—chemicals, cement, and iron & steel—and emerging industries—battery, pharma and data centers—can use a set of short- and long-term tactics to unlock billions of euros in business growth while remaining on track to achieve their emissions goals.

How smart green investment can be a growth investment

Businesses must develop a balanced portfolio of emissions reduction investments built on the back of short-term, no-regret solutions and medium-term, next-horizon solutions.

Companies can support short-term business goals by identifying and accelerating investments in emissions reductions that pay off today. However, medium-term opportunities will require companies to anticipate emerging low-carbon solutions while building expertise and partnerships to gain access to these future markets.

No-regret solutions and next-horizon opportunities

Our analysis of Europe’s six industry sectors—three established and three emerging—suggests that the right investments in emissions reductions can unlock up to €26 billion in business value across these sectors by 2025. The resulting carbon emissions reductions would total 130 Mt, more than the total greenhouse gas (GHG) emissions of the Czech Republic in 20181. The majority of this value resides in fuel and technology switches—from coal to natural gas, as well as renewable energy.

Established industries: Chemicals, cement and iron & steel

Today’s no-regret investments
The potential benefits of investing in short-term, no-regret solutions are especially important for Europe’s established industries since these can offset their share of the continent’s emissions.

The right investments in emissions reductions in Europe’s chemicals, cement, and iron & steel industries can deliver up to €26 billion in business value and 130 Mt in emissions reduction by 2025.

The European Union (EU) has tied pandemic-related stimulus funding to its long-term goal of making the region climate-neutral by 2050. In light of this, an additional €5 billion in business value could be unlocked if stimulus funding is leveraged for near-commercial low-carbon technology investments.

Next-horizon solutions

Next-horizon solutions in Europe’s established industries can help secure growing market share in markets expected to be worth €100s of billions from 2030 onwards.

Deeper decarbonization by industrial clusters across the continent using a combination of solutions, including carbon capture and utilization/storage (CCUS) and hydrogen production for industrial feedstock, could set the stage for future decades. Research by the World Economic Forum estimates that this can potentially eliminate industrial emissions by 2050 while creating 387,000 to 912,000 jobs and significant business value.2

Emerging industries: Battery, pharma and data centers

The size of the investment opportunity for emissions reductions that also deliver business value in Europe’s emerging industries is relatively smaller.

Our research indicates that Europe’s strategic, future-oriented emerging industries must make smart investment decisions if they are to free up capital to invest in securing their long-term competitive position.

Smart investment in emissions reductions in Europe’s battery manufacturing, biopharmaceuticals and data centers industries can deliver up to €2 billion in business value and 7 Mt in emissions reductions by 2025.

Next-horizon solutions

Next-horizon solutions in emerging industries are critical to helping position the European industry as the leader in the energy transition.

Capturing share in the markets of the future is not always easy for European businesses, especially as they are facing cost pressures from peers in established industries. Pioneering and differentiating through investment in low-carbon/net-zero value chains, however, can—and in some cases do—enable European companies to build a unique competitive edge in these markets.

How European industries can get it right when aiming for net-zero

Europe’s energy transition is highly dynamic. Technologies mature, policies change, and consumer expectations shift. The ability to anticipate change and act is imperative to remaining competitive.

Our analysis identifies four practical investment steps that can help companies achieve the dual goals of accelerated emissions reductions and business growth while positioning them for future opportunities. Measuring carbon footprint, keeping tabs on maturing decarbonization technologies, building cross-industry consortia and clusters, and engaging with customers are all key to achieving climate goals and business growth.

Why going green “smartly” is good business

Europe stands on the precipice of great change as the low-carbon economy undergoes radical shifts. As the EU tightens its emissions goals and ties pandemic-related stimulus to its clean energy transition, businesses must respond by accelerating their emissions reductions.

In the past, while businesses have invested significantly in decarbonization, fears of tradeoffs between costly clean energy technologies and competitiveness have held them back from more decisive action. However, our research shows that making smart moves now can unlock massive business value later.

Net-zero solutions supported by digital technologies can provide cost-effective ways of achieving emission reductions. By pursuing strategic short-term no-regret investments and next-horizon opportunities, European companies can not only position themselves to achieve the ambitious target of 55% emissions reduction by 2030 but also unlock around €28 billion in business value across six sectors—chemicals, cement, and iron & steel, battery, pharma, and data centers—by 2025.

Change is the only certainty in the pursuit of net-zero. The ability to act on emerging opportunities will be the difference between those who position themselves for growth and those who lag behind.

1 European Environment Agency. Air emissions inventories. 2020.

2 World Economic Forum & Accenture (2020): aping the Future of Energy and Materials System Value Framework – Europe Market Analysis.

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