demand for fossil fuels. According to McKinsey’s 2022 Global Energy Perspective , the number of battery electric vehicles (BEVs) on EU roads, for example, would need to increase from 1 percent of the total today to about 20 percent in 2030. Stakeholders could then begin the lengthy process of scaling up infrastructure, supply chains, and the availability of talent. The public sector could be called upon to play a significant role—for example, by considering institutional reforms if needed. Private-sector efforts could prove equally important. Individual operators could catalyze a more orderly energy transition by focusing on cross-value-chain and cross-industry partnerships to improve the resilience of supply chains. The private sector could also take a leading role investing in automation, innovation, and new capabilities; attracting and reskilling the workforce; and launching initiatives to increase the social acceptance of the measures needed to achieve net zero. Without these—and other—key enablers, Europe will not be able to deploy energy transition technologies at the necessary speed and scale.
jobs through 2050, it could also create 11 million, for a net gain of five million. 5 As job losses and gains will occur disruptively across the labor spectrum, training and transition support will be required. 6 In addition to reducing CO 2 emissions, a successful transition would strengthen the region’s energy security by reducing dependence on fossil fuels and energy imports. The goal would be to raise the proportion of renewable energy in the final energy mix to 45 percent by 2030, compared with 22 percent today. By 2030, these changes could reduce the European Union’s total energy bill by 10 percent. 7 On the other hand, a less orderly transition— resulting, among other factors, from a lack of coordinated interventions among EU member states—could ultimately raise the cost of energy for households and businesses in coming decades. We estimate, for instance, that producing green hydrogen in Germany would cost 20 percent 8 more than importing it from Spain. A failure to act would have severe negative environmental and economic costs across sectors, infrastructure, human health, and disaster management. These would far exceed the costs of action and adaptation. 9 EU member states would need to take transformative collective action to meet their goals. Implementing the transition would mean profound change: substantial shifts in both energy supplies and large-scale electrification—two endeavors of tremendous magnitude. On the supply side, for example, our research shows that the rate of installation of renewable-energy sources (RES), such as wind and solar, would have to increase three to five times from the 2018–20 average. On the demand side, substantial and cross-sector electrification would be required to reduce direct
Accelerating a more orderly energy transition
In 2021, the EU market was the third-largest source of greenhouse-gas emissions, behind only China and the United States. Within the European Union, emissions were highest in Germany, with 23 percent of the total, followed by Italy and Poland, with 11 percent each. The majority of these emissions come from five sectors: transportation (about 28 percent), heavy industry (about 25 percent), power (about 22 percent), buildings (about 13 percent), and agriculture (about 12 percent). Fossil fuel combustion accounts for 80 percent of EU emissions. 10
5 Paolo d’Aprile, Hauke Engel, Godart van Gendt, Stefan Helmcke, Solveigh Hieronimus, Tomas Nauclér, Dickon Pinner, Daan Walter, and Maaike Witteveen, How the European Union could achieve net-zero emissions at net-zero cost , McKinsey, December 3, 2020. 6 Ibid. 7 We calculated the energy bill and compared the projected 2030 level with the level in pre-COVID-19 and prewar times, in 2019. 8 This includes the cost of transmission. 9 Climate Change 2022: Impacts, Adaptation and Vulnerability , the sixth assessment report of the Intergovernmental Panel on Climate Change (IPCC), February 2022. 10 How the European Union could achieve net-zero emissions at net-zero cost.
Accelerating the journey to net zero
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