IEA, IRENA & UN Climate Change High-Level Champions (2023), Breakthrough Agenda Report 2023, IEA, Paris https://www.iea.org/reports/breakthrough-agenda-report-2023, Licence: CC BY 4.0
Strengthening international collaboration to accelerate transitions
The transition to clean energy and sustainable solutions is accelerating across many sectors, with unprecedented expansion in clean technologies such as solar PV and electric cars. Renewable electricity is now more affordable than fossil fuel—based electricity in a growing number of countries and contributes to more than 50% of electricity generation in around 30% of countries. Sales of electric passenger cars are growing exponentially and – if this rate continues – could by 2030 be comfortably in line with what is required under a scenario compatible with reaching net zero CO2 emissions by 2050.
Yet, global emissions are still increasing, and the Nationally Determined Contributions that countries have put forward in UN climate change negotiations are not consistent with curbing temperature rise in line with international climate goals. The past year has also been notable for record temperatures, and extreme weather events are continuing to increase in frequency and intensity in many parts of the world.
Action this decade will be crucial to head off the worst effects of climate change. Some of the solutions required to decarbonise certain sectors are not yet deployed at scale, and can take several years to develop, meaning first steps towards deployment are needed now. What’s more, investment in clean energy technologies and low-emission products and materials tends to be concentrated in advanced economies, and not in the countries undergoing the most rapid development and economic growth.
Well-targeted international collaboration is a critical enabler at each stage of the transition. Even in the current context of geopolitical and geoeconomic complexities, well-targeted collaboration can deliver important benefits. It can decrease the difficulty and amplify the effect of actions being taken individually by countries and businesses, helping to ensure a faster transition and making clean technologies and sustainable solutions more accessible and affordable to all. Its forms can include: collaborating on the development and testing of new technologies and solutions, resulting in faster innovation; coordinating deployment, delivering larger economies of scale; sending joint demand signals to create new markets, providing stronger incentives for investment; collectively improving the offer of technical and financial assistance, to enable a wider deployment of solutions; and coordinating on standards, to help create level playing fields where needed.
The Breakthrough Agenda is designed to strengthen international collaboration across the major greenhouse gas emitting sectors of the global economy. The five sectors for which Breakthrough Agenda goals have already been agreed – power, hydrogen, road transport, steel and agriculture – is this year set to expand to cover the buildings and cement sectors. As a result, the Agenda will cover more than 60% of current global GHG emissions.
Only modest progress has been made in strengthening international collaboration on low carbon transitions in the past year
In the past year, there has been only modest progress in strengthening international collaboration in the sectors covered in this report. Progress has been made in expanding financial and technical assistance to developing countries in some sectors (including power, road transport, and steel) and in converging on standards for measuring emissions and defining low carbon products (in steel, cement, and hydrogen). There has also been progress in collaborative research and development initiatives across most sectors, although there remains a need to share learning more deeply with a wider set of countries.
Much more progress is needed in aligning policies to create demand for clean technologies. In road transport, steel, cement, hydrogen, and electricity-consuming appliances, opportunities to create stronger demand signals for industry investment, and to accelerate cost reduction through economies of scale, are still being missed. Sending strong demand signals should be a high priority for international collaboration this year. There is also a need for more determined efforts to initiate dialogues on trade in sectors where this is likely to be critical to the transition, notably steel and agriculture.
Overall, current efforts remain far from exploiting the full potential of international collaboration to accelerate transitions. While participation in many initiatives has increased, in most sectors the leading international initiatives still fall short of membership that covers a majority of the global market. Greater political commitment is needed to progress from softer forms of collaboration, such as sharing best practice, to harder forms such as alignment of standards and policies, which are more difficult but can yield greater gains in mobilising investment and accelerating deployment.
|Standards and certification
|Demand creation and management
|Finance and investment
|Research and innovation
Knowledge and skills
Knowledge and skills
Coordination in each sector
The deployment of renewables in the power sector has increased to 83% of new electricity generating capacity – although the rate of annual deployment still needs to treble by 2030. There have been high profile announcements of technical and financial assistance for developing countries, but there remains a need for this to be expanded, particularly to reduce the cost of capital in developing countries, and to support the transition in the most coal-dependent regions. Collaboration on research and innovation projects should be strengthened by sharing learning with a wider set of countries. An important opportunity that remains unexploited is for countries to agree higher minimum energy performance standards for electrical appliances, to shift global markets towards more efficient products that reduce costs and cut emissions.
- The power sector accounts for around 13 GtCO2e, or 23% of total emissions. This has risen by around 10% since 2010. These need to fall by over 50% by 2030.
- The average levelised cost of electricity has fallen by 86% for solar PV and 60% for wind since 2010.
- By 2030, 11 TW of renewable generating capacity is required, up from less than 4 TW today.
Renewable and low-carbon hydrogen remains below 1% of global hydrogen production, compared to the 50% that is needed by 2030. There has been some progress towards convergence on standards and certification for emissions and safety, and in increasing financial and technical assistance for developing countries. A pressing need is to strengthen the collective demand signal for renewable and low carbon hydrogen, from both public and private buyers, moving from commitments and pledges to contracts and policies. The opportunity to create large-scale demand quickly is greatest in sectors where hydrogen is already used, such as fertilisers and refining. In joint research and innovation activities there is a need for greater prioritisation of those sectors where hydrogen can provide the most value, such as industry and shipping, as well as for wider geographical distribution of projects and improving knowledge-sharing.
- Emissions intensity of hydrogen production needs to fall by nearly 50% by 2030, resulting in a 10% reduction in total emissions from hydrogen production.
- Low-carbon and renewable hydrogen production reached 0.7 Mt in 2022, compared with 70-125 Mt/yr required by 2030.
Progress in the road transport sector is accelerating, with electric passenger cars now totalling 14% of total car sales, a rate that is doubling every 1.2 years. There has been progress towards taking the most polluting used vehicles out of international trade, with agreements by groups of African countries on minimum standards for imported vehicles. There has also been an expansion of technical assistance programmes in the sector. There remains a need for countries with the largest markets to agree on the pace of the transition towards all new vehicles being zero emission, and to implement this through effective policies in all vehicle segments. More progress is also needed to agree international standards for battery sustainability.
- Emissions from road transport need to fall by nearly one-third by 2030 to get on track for net zero.
- The total cost of ownership of electric buses and trucks is likely to be lower than diesel counterparts across nearly all medium- and heavy-duty segments by 2030 in Europe, the United States and China.
In the steel sector, nearly 90 Mt of new high emission blast furnaces are anticipated before 2025. Announcements for new near-zero emission steel plants have increased to 13 Mt, more than doubling versus last year, but still far short of the more than 100 Mt needed by 2030. There has been good progress in aligning emissions accounting methodologies and definitions for near-zero emission steel, and modest progress in the delivery of financial and technical assistance for developing countries, with the launch of new funds. There is an urgent need for stronger collective efforts to create demand for near-zero emission steel: while participation in public sector initiatives for this purpose has risen (from 9 to 20% of the global market), purchase commitments of the kind that could mobilise industry investment at scale have not yet been made. Other priorities are to increase the sharing of learning from early demonstration projects with developing countries, and to expand initial discussions on trade and the steel transition to include the largest steel producers in emerging economies.
- Total CO2 emissions from the steel sector have risen since 2015, before stabilising since 2019.
- The project pipeline for primary near-zero emission plants has increased to 13 Mt, from 5 Mt last year. Over 100 Mt is required by 2030 to get on track for net zero.
In agriculture, emissions remain on a long-term upward trend, crop yields are not improving at the rate needed, and agricultural expansion continues to drive deforestation. While there have been some new international commitments to investment in research and development, there remains a need for increased development assistance, sustained and substantial policy exchanges, and cooperation on standards and trade. This need is most pressing in relation to sustainable agriculture solutions with proven effectiveness, which could be more rapidly deployed, including agroecology and other sustainable approaches, low emission fertilisers, alternative proteins, crop and livestock breeding, measures to reduce livestock methane emissions, reductions in food loss and waste, and digital agriculture and climate services for farmers
- Agriculture emissions continue to increase to 7.3 GtCO2 in 2022. They need to fall to 5.7 GtCO2 to get on track for net zero.
- Gains and losses in global cropland are roughly equal, although agricultural expansion continues to drive deforestation. Expansion will have to stop completely if 2030 targets are to be met.
Emissions in the buildings sector have grown at an average of 1% per year since 2015, with the global growth in floor area more than offsetting the increased efficiency and decarbonisation efforts. Mandatory building energy efficiency codes are a key national policy, requiring a scale-up in technical assistance to ensure all countries have them in place. International agreements on definitions and standards that support the comparability and interoperability of these codes can help facilitate private investment. Aligned public procurement commitments for zero emission buildings can help grow markets for new construction methods, materials and building appliances, even though some of the coordination gains may be limited by the highly localised nature of the sector. More accessible technical assistance for developing countries is needed to support policy design and implementation, and to facilitate investment.
- Buildings sector emissions represent around a third of total energy system emissions. Operational emissions need to fall by about 50% from their 2022 level by 2030, to get on track with net zero.
- 80% of the growth in buildings floor area through 2030 is set to take place in emerging and developing economies.
Total emissions in the cement sector have been rising since 2015, although there has been a wave of recent announcements of large projects for near-zero emission cement production. Most of the key technologies required have not yet been deployed commercially at scale. Private sector collaboration on research, development and demonstration has been notably substantial. As in the steel sector, the urgent need is to complement this with strong collective action to create demand for the near-zero emission product, and while countries and companies have recently joined initiatives with this intent, they have yet to convert the intention into effective action. It will also be important to ensure that knowledge from early demonstration and commercial-scale projects is shared quickly with a wide range of countries, to accelerate wider build-out.
- Emissions intensity of cement production has risen by nearly 10% since 2015, largely due to an increase in the clinker-to-cement ratio in China.
- By 2030, around 10% of global cement production capacity needs to be consistent with near-zero emissions.
In terms of cross cutting collaboration that will have an impact in several sectors, progress has been most notable in research and innovation, where countries have committed USD 94 billion to clean energy demonstration projects by 2026. On finance, the Bridgetown Initiative has prompted discussions at heads of government level on proposals to reduce the cost of capital for developing countries’ investments in clean technologies, and there has been some progress in the development of platforms to match developing countries’ needs with international investment and technical assistance. On trade, the Climate Club has taken initial steps towards coordinated international action on industrial decarbonisation but has so far only involved two of the ten largest emerging economies; expanding participation will be important to the effectiveness of these efforts. There has been some progress in clarifying the structure for international collaboration within each sector, with the Breakthrough Agenda process contributing to the coordination of activities and providing clearer direction where participation or resources need to be increased.
Other sectors: opportunities to improve international collaboration and make low carbon transitions less difficult are likely to exist in sectors not yet covered by the Breakthrough Agenda. These include shipping, aviation, and industrial sectors other than steel and cement (such as chemicals and plastics).
In many sectors there will be synergies between actions to reduce emissions and actions to build resilience. The agreement at COP27 of the Sharm El Sheikh Adaptation Agenda, to be advanced in parallel with the Breakthrough Agenda, creates an opportunity for these synergies to be enlarged and accessed more widely through well targeted international collaboration.
The summaries of progress in each sector outlined below demonstrate the contribution that international collaboration is already making to accelerate the transition. Often, action in one sector contributes to progress in another, such as by speeding up the deployment of key technologies. The priorities for action and recommendations in each sector provide a clear pathway to continue accelerating the transition.