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Transforming Industries Strategic Pathways to a Sustainable Future

Northwest Europe / 2024 / Energy Insights

The industrial sector faces mounting pressure to adapt to global decarbonization goals. Sproule embarked on a forward-thinking initiative to redefine the future of foundational industries like steel, refining, chemicals, and fertilizer. The program took stakeholders on a transformative journey, mapping the investment climate through 2040 to uncover how shifting dynamics could reshape system fundamentals.

With a vision to bridge the gap between ambition and reality, Sproule designed strategic steps to meet sustainability goals while balancing affordability, security, and country-specific risks.

By bringing together policymakers, network operators, industrial leaders, financial institutions, and societal representatives, Sproule crafted a collaborative framework that highlights potential impacts, navigates trade-offs, and phases investments strategically – transforming bold aspirations into achievable milestones.

Project Highlights

  • Explore: Societal Driving Forces through Scenario
  • Understand: Fundamentals Shaped by Critical Uncertainties and Inevitable Truths
  • Frame: Value Chains, Multi-Lens Ambitions, and Risks
  • Build: Future Steps with Key Decisions, Trade-Offs, and Signals

Challenge

Shifting Investment Climate: Europe spearheads ambitious transformations across its energy, resources, and agriculture systems. These shifts are multifaceted and accelerating rapidly, triggering inevitable societal feedback loops.

Changing Market Dynamics: These transitions will reshape energy system fundamentals, creating new disconnects and unexpected feedback loops. The coming decades will be volatile, and inaction will be unsustainable.

Making Decisions for an Uncertain Future: Future decisions must account for the broader systemic context, balancing value creation with trade-offs. Understanding how individual choices interact is key to shaping a sustainable path forward.

Solution

Develop Scenarios: Advancements in energy and climate mitigation technologies resulting investments must navigate a volatile and multipolar geopolitical economic landscape.

Create Future Models: The scenarios integrate socio-political, techno-economic, and physical factors that enable or inhibit change, laying the foundation for quantifying future pathways.

Balance Ambitions and Risks: Objectives and risks are defined through key lenses by examining critical uncertainties, inevitable truths, and potential societal feedback loops, clarifying what success looks like and identifying value chains to address.

Monitor Evolving Value Chains: The strategic decision framework aligns multiple portfolio scenarios, quantifying outcomes and highlighting pivotal decisions. It underscores key external signals to monitor in an ever-changing environment.

Value

Portfolio Insights: The framework highlights how the push for rapid decarbonization in the 2020s and projected intensification through the 2030s brings investment phasing and placement risks, and how interdependencies between investments, ensuring energy system stability, and adapting to new import dynamics affect future investments.

Inform Decisions: Energy transition investments will be made into an energy system that is in flux and increasing in complexity, shaping its competitiveness, stability, and sustainability. The framework helps decision makers account for demands on physical space, broader environmental considerations, and goals tied to the circular economy and local job creation.

Unlock Investments: Decarbonization efforts by individual industrial players remain stalled without clarity on infrastructure and cluster-level decisions, delaying energy and materials transitions. Sproule’s framework facilitates a better understanding of the sector, pinpointing possible investment opportunities to drive meaningful change.




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Tijs Beek, M.Sc.
Principal, Energy Insights

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