Published by Todd Bush on November 30, 2022
The Accelerator is part of Deloitte's US$1 billion sustainability, climate and equity investment
NEW YORK, Nov. 30, 2022 /PRNewswire/ -- Key takeaways
According to the International Energy Agency, hydrogen is one of the biggest innovation opportunities to reduce global carbon dioxide emissions to net zero by 2050, a widely accepted global target to avert the worst effects of climate change.
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Although the push for decarbonization is gaining momentum, traditional strategies and methodologies are largely unable to address the majority of emissions for some sectors. Abatement solutions like clean hydrogen and CCUS remain cost-prohibitive for most companies to pursue on their own. Establishing low-carbon hubs in strategic geographical areas across the U.S. aims to further long-term decarbonization and help mitigate the effects of climate change.
Low-carbon hubs accelerate decarbonization for hard-to-abate sectors
"Hard-to-abate" sectors account for more than 30% of total global greenhouse gas emissions, and this number is only expected to grow as other industries make progress on their sustainability goals, according to Deloitte's May 2021 report, "Leading in a Low Carbon Future."
These sectors — heavy industry, such as chemicals, metals and mining; building materials and heavy road transport; as well as shipping and aviation — have some of the most challenging pathways toward emissions reduction, creating increased urgency to find new strategies to offset emissions.
According to the Deloitte study, "Low-Carbon Industrial Hubs: Driving Deep Decarbonization for Industry," low-carbon hubs can provide a cost-effective way for companies in hard-to-abate industries to accelerate their decarbonization efforts; demonstrate action on climate change to customers, investors and other stakeholders; and spur tipping points in low-carbon technology innovation. Deloitte found that surveyed companies that collaborate in hubs tend to have a more effective pathway for deep emission reductions.
Deloitte research identified hub models that can help maximize cost synergies, economies of scale and emissions reductions. Deloitte found that CCUS hubs with hydrogen, or "Industrial Hubs," are often the most comprehensive, combining CCUS infrastructure with hydrogen from fossil sources to create an ecosystem of multiple reinforcing solutions for downstream utilization or export.
The benefits of participating in hydrogen hubs are fairly clear: compared to individual companies that deploy CCUS by themselves, lower emission industrial hubs can help companies and industries reduce emissions by approximately 50%, at a cost that is 20% to 95% cheaper than when pursued alone.
Lower emissions industrial hubs can serve a variety of geographies across the U.S., each with their own unique industry configurations and addressable emissions profile. Deloitte also found that emissions reduction benefits driven by hubs extend to downstream customers who benefit from the lower emissions footprint of products supplied by the hub. Locally produced hydrogen can also help with energy security, while creating new business models and jobs.
Significant action at the federal level is accelerating the development of a viable hydrogen economy in the U.S. and positioning the country as a global low carbon hydrogen leader.
The Low-Carbon Hub Accelerator projects are part of Deloitte sustainability, climate, and equity a practice serving clients as they define a path to a more sustainable future. Building upon years of sustainability and climate client service, Deloitte is assembling one of the largest global networks of sustainability experience including an investment of US$1 billion in client-related services, data-driven research, and assets and capabilities. Globally, Deloitte is involved in multiple hubs, working with consortium leaders on feasibility studies, business cases, connecting supply and demand centers, and supporting acceleration.
Through Deloitte's Low-Carbon Hub Accelerator, companies can benefit from a unique approach to supporting hydrogen growth no matter where they are in the journey. Comprehensive, end-to-end services generally focus on strategic development, as well as the construction of hubs, technology implementations, and insight into the current policy and regulatory environment driving the hydrogen economy.
Key quote
"Over the past five years, we've seen a steady acceleration by companies in all sectors in their efforts to decarbonize the value chains in which they operate. Combined with new government funding and policies for developing low-carbon hubs, this momentum provides a rare catalyst to attract private investment and scale up quickly, particularly within hard-to-abate industries. While low-carbon hydrogen is quickly – and finally – showing itself to be one of the key, viable lynchpins to achieve bold societal climate goals, we might only get there if companies embrace a collaborative, cross-industry approach to accelerate the energy transition."
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 7,000 private companies. Our people come together for the greater good and work across the industry sectors that drive and shape today's marketplace — delivering measurable and lasting results that help reinforce public trust in our capital markets, inspire clients to see challenges as opportunities to transform and thrive, and help lead the way toward a stronger economy and a healthier society. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Building on more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's approximately 415,000 people worldwide connect for impact at www.deloitte.com.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.
SOURCE Deloitte
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