To reach Net Zero emissions by 2050, investments in clean energy need to triple from the current level of $1.2trn to $4.4trn annually by 2030.

“By accelerating their capital deployments in low-carbon energy sources and technologies, energy companies can help bridge the investment gap,” the report states. “Additionally, these measures will lower the carbon intensity of energy companies’ asset portfolios, thereby strengthening their capability to attract capital from investors looking to lower the emissions exposure of their portfolios.”

The report calls for the acceleration of solutions such as wind, solar, hydrogen, biofuels and CCUS, as well as solutions that improve energy efficiency and circularity.

Hydrogen, sustainable fuels and carbon capture offer potential to reduce dependence on solar and wind alone, while supplying clean power for energy uses that cannot be electrified, the report adds.

Speaking on an accompanying podcast, Roberto Bocca, Head of Energy, Materials and Infrastructure at WEF, said, “This crisis is unprecedented because, while we had the crisis in the 1970s, that was about oil and gas, whereas this one is having a knock-on effect on the supply chain and many other elements. When you think about what an energy system has to deliver – sustainability, affordability and security – this crisis is affecting all those dimensions.”

As of April 2022, every advanced economy and 87% of emerging and developing economies were experiencing above-target inflation, and the prospects for global GDP growth have shrunk from over 5.5% in 2021 to just 1.5% in 2023.

Fossil fuels will continue to be a part of the energy mix in the medium term, but new approaches can be used to mitigate their impact on the transition. For example, additional gas capacity can be used to produce blue hydrogen and ammonia, while new infrastructure can be equipped early-on with carbon capture, utilisation and storage (CCUS) technologies. Countries such as Norway, New Zealand, Finland and Denmark score well in terms of their energy mixes.

David Rabley, who leads the energy transition practice for oil and gas at Accenture, highlighted the need to reconcile short-term needs with long-term policies. Short-term responses to the crisis have pushed global carbon dioxide (CO2) emissions to record highs as several countries have reverted to coal for power generation in a bid to save their natural gas for other uses, while LNG investment has soared following Russia’s invasion of Ukraine and sanctions.

“We need to be careful about solutions that appear very attractive in the near term but perhaps are not moving in parallel, or in the direction we need to move in the longer run,” he said.

“If you think of the evolution of the shipping industry, it will require ammonia as a fuel into the future, and LNG infrastructure is a great stepping point. The same for cement and steel plants, which will require an element of hydrogen – the same infrastructure can have value if it’s planned and thought through.”