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Renewables
…in power system flexibility to integrate high shares of variable renewables in a reliable and cost-effective manner. As the share of variable renewable energy increases, policies ensuring investment in all forms of flexibility become crucial. Solutions include enhancing power plant flexibility, unlocking demand-side management, supporting energy storage and improving grid infrastructure.
Address technology-specific challenges
Some renewable technologies are still relatively expensive and/or face specific technology and market challenges, so they require more targeted policies. Better remuneration of the market value of storage is necessary to accelerate deployment of CSP, pumped-hydro storage and reservoir hydropower technologies…
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Electricity
…Zero Scenario. Consistent targets and adequate policy support for renewables, for example through auctions, are necessary to achieving this ambition. Rising shares of variable renewables increase the flexibility requirements of the electricity system, and market designs should be adjusted to better reward the provision of flexibility, improving the business case for flexible generation, grid-scale storage and demand-side response.
Support CCUS deployment in the power sector
As CCUS in the power sector is still at an early stage of commercialisation, complementary and targeted policy measures such as tax credits and grant funding are needed to secure investment. Furthermore, new…
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Energy Efficiency and Demand
Energy Efficiency and Demand
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Carbon Capture Utilisation and Storage
…for CCUS projects, such as through the establishment of a carbon pricing system; capital grants to reduce up-front costs; loans and loan guarantees to provide access to debt capital; and tax credits to address capital and operating costs. Importantly for higher-cost CCUS applications, such as in the power, cement and steel sectors, governments have a range of different policies to spur initial deployment: R&D funding to reduce costs; carbon contracts-for-difference to provide a predictable revenue stream to operators, and public procurement programmes for low-emission products/fuels to spark demand.
Develop business models to s...
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Transport
…require a co-ordinated policy approach that facilitates decarbonisation across all transport modes and expands supporting infrastructure. Measures at various levels of jurisdiction – national, subnational, within cities and in multi-country regional blocs – must support progress in: Defining clear R&D priorities for all transport technologies. Improving the efficiency of all transport modes. Stimulating the uptake of zero-emission vehicles. Increasing the availability and use of sustainable low-emission fuels across the entire sector. Managing travel demand, distances travelled and car dependency; sustaining active modes of travel; and supporting the recovery of public transport.
Use fiscal instruments to stem transport…
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Industry
…industrial products to incentivise uptake of innovative production processes, and develop supporting infrastructure
Creating demand for near zero-emission materials allows firms to be confident that if they invest in near zero-emission production technologies, there will be a buyer for their products. In the near term, time-limited demand creation for low-emission materials – which achieve substantial emission reductions but are not yet at near zero-emissions – can be an important step to catalyse the transition.Initial policies should guarantee long-term support for early market entrants – examples include carbon contracts for difference, public procurement and advance market commitments…
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Buildings
…for decarbonising buildings and improving building performance, comfort, and resilience. Regulations can also require that new buildings be “demand-response ready” to enable future flexibility.
Introduce supporting information instruments and incentives to drive implementation of the regulations
Building energy performance certificate schemes or disclosure programmes can enhance compliance with building codes by publicising important data about buildings’ energy efficiency and informing consumer choices. Award and recognition programmes can further encourage low-carbon constructions. Expedited administrative permitting procedures privileging high-performing new builds or retrofit projects can incentivise the implementation of efficiency measures. Enforcement, monitoring and compliance practices should be streamlined…
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Low-Emissions Fuels
Develop certification and standards to ensure that low-emissions fuels are sustainable
The development of standards and certification schemes ensuring a sustainable supply chain will be critical for scaling up the production of both biofuels and hydrogen, while avoiding potentially harmful environmental, economic and social impacts. The development of international markets and trade in these fuels will also depend on internationally agreed methods and certification processes to guarantee the sustainability of traded fuels.
Create support programmes for the use of low-emissions fuels
With the use of low-emissions fuels still in most cases being more expensive than unabated fossil…
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Fossil Fuels
Adopt policies and regulations to reduce emissions from oil and gas supply
Policies should encourage operators to maximise abatement opportunities at the early stages of project planning and development, in addition to incentivising better management of existing facilities. Regulatory measures to prevent methane emissions from oil and gas operations include requiring leak detection and repair programmes, the installation of emission control devices, and the replacement of components and devices that emit methane in their normal operations. Major oil- and gas-producing countries can add commitments to reduce methane emissions to their nationally determined contributions. Government and industry should not delay…