Energy is the cornerstone of our society and its availability, or lack thereof, touches every corner of our lives and impacts every business, regardless of sector. The availability of affordable energy on-demand is essential to the function of the global economy.

Likewise, this multi-generational effort we call “the energy transition” to reduce carbon emissions using cleaner, greener energy sources effects every industry - from manufacturing to logistics and construction, to financial services, and beyond. This is particularly important given that the U.S. Energy Information Agency projects that the global need for energy will only increase between now and 2050, increasing pressure to find clean, renewable energy sources.

As of 2023, the manufacturing/industrial sector consumed 37% of global energy use and, in 2022, was responsible for 25% of carbon dioxide emissions. Even as the sector seeks to decarbonize their operations, it relies on a steady, uninterrupted supply of power. It is imperative that industrial users seek ways to access adequate and cost-effective sources of energy. This could include onsite or near-site energy storage, corporate renewable energy procurement strategies, and specialized efficiency initiatives.

All of this will require significant capital outlays.

It is imperative that industrial users seek ways to access adequate and cost-effective sources of energy.

The construction sector also is directly impacted by the energy transition. For construction firms, embedding sustainability into their projects isn’t just a civic-minded aspiration or a potential regulatory requirement, but also a competitive advantage in their ability to meet the evolving preferences of clients and investors. Construction companies that can evolve are those that will thrive in the next few decades.

The transportation sector accounts for nearly 30% of the world’s energy consumption and so is particularly affected by a move to cleaner energy. Most of this energy comes from fossil fuels, but we are witnessing a sea change by which companies are transitioning from fossil fuel-powered vehicles to EVs, while airlines are looking to sustainable aviation fuel to decarbonize their operations.

We are witnessing a sea change by which companies are transitioning from fossil fuel-powered vehicles to EVs, while airlines are looking to sustainable aviation fuel to decarbonize their operations.

For example, two of the logistics industry’s titans—Amazon and FedEx—are investing heavily on clean energy. Amazon has agreed to put 100,000 EV delivery vehicles on the road by 2030; thousands already are in use. Likewise, FedEx has set a goal of converting its entire parcel pickup and delivery fleet to electric vehicles by 2040.

The electrification of fleets promises long-term savings and efficiencies for transportation companies. But in the near term, these changes require substantial investment in new technologies and retraining of the workforce.

In the financial services sector, the energy transition has encouraged the growth green bonds and the IRA introduced the concept of transferrable tax credits. These instruments accelerate development of—and increase the velocity of investment in—renewable energy projects.

Investors also are pumping massive amounts of capital into solar, wind, geothermal, and hydrogen energy projects. Of the $2.8 trillion invested in energy globally in 2023, more than $1.7 trillion were for clean energy projects.

Womble Bond Dickinson’s Energy Survey report takes a detailed and nuanced look down the road to net zero, identifying opportunities and complications as companies in a range of sectors grapple with the energy transition.

Some of the report’s key takeaways at a glance include:

• Cost and economic impact are key obstacles on the road to energy transition.
• Infrastructure and grid modernization pose significant challenges.
• Forward movement requires favorable regulatory and legislative policy and ongoing government support.
• Biofuels and biomass (waste-to-energy), efficiency improvements, carbon capture, energy storage, and EVs are among the most appealing growth and investment opportunities overall.
• Politics is viewed as the key obstacle to net zero goals the world over.

Click here to read the 2024 Womble Bond Dickinson Energy Transition Outlook Survey Report.