Decarbonisation Pathways for Services

Abstract

The decarbonisation pathways for the service sector are derived. Brief outlines of the agriculture—food and forestry—wood product sectors, fishing industry, and water utilities are presented. The projected development of product quantities or GDP and the assumed development of energy intensities are given. The industry-specific energy consumptions and CO₂ emission intensities are provided in tables. The non-energy-related CO₂ emissions for all sectors analysed in this chapter are discussed and quantified.

The service sector contributes 65% of the global gross domestic product (GDP in 2019, US$ 56.9 trillion (World Bank, 2021). In this analysis, we use the IEA World Energy Balances as the basis for the energy statistics which defines three main subsectors: ‘industry’, ‘transport’, and ‘other sectors’.

While ‘industry’ and ‘transport’ overlap with their respective GICS classification used for the 1.5 °C OECM sectoral pathways to a large extent, the service sector is scattered across several GICS sectors and the IEA ‘other sectors’ and ‘industry’ group (see Chap. 4). In this section, we describe four service sectors that supply essential goods:

• 1. Agriculture and food processing

• 2. Forestry and wood products

• 3. Fisheries

• 4. Water utilities

The combined share of global energy demand of these sectors at about 7.5% is relatively minor. Even though the energy demand is low and current energy-related CO₂ emissions contribute only 6% to global CO₂ emissions, the non-energy GHG emissions are significant. Agriculture and forestry are among the main emitter of non-energy CO₂, methane (CH₄), and nitrous oxide (N₂O)—emissions referred to as AFOLU (agriculture, forestry, and other land uses) in climate science.

1 Overview of the Global Agriculture and Food Sector

The agriculture and food sector is an essential economic sector contributing to food security, livelihoods, and well-being. Valued at 3.5 trillion USD, agriculture, forestry, and fisheries (AFF)¹ accounted for 4% of the global GDP in 2019, with the largest contributions from China and India. The value added² in agriculture³ alone was 0.2 trillion USD (FAO, 2021b; The World Bank, 2019). Value is also added in some of the manufacturing sectors supported by AFF. In 2018, the manufacture of food and beverages contributed 1.5 trillion USD, and the manufacture of tobacco products contributed 167 billion USD (UNIDO, 2020). The corresponding GICS sectors addressed in this section are listed in Table 6.1 (ISIC, 2008).

Table 6.1 Relevant Global Industry Classification Standard (GICS) sectors

The most widely produced commodities in the world are cereals, sugar crops, vegetables, and oil crops. The area under agricultural use has been increasing since the 1960s, until it started to plateau at the beginning of this century, with almost 5 billion hectares under cultivation by 2018. China, the United States, and Australia have the largest areas of agricultural land (FAO, 2021b). Besides land and energy (discussed in the next section), other major inputs to agriculture are fertilisers and pesticides, which have been increasing progressively over time.

The impacts of agriculture, forestry, and other land uses (AFOLU) can be both positive and negative. The IPCC describes AFOLU emissions as follows: ‘Plants take up carbon dioxide (CO₂) from the atmosphere and nitrogen (N) from the soil when they grow, re-distributing it among different pools, including above and below-ground living biomass, dead residues, and soil organic matter. The CO₂ and other non-CO₂ greenhouse gases (GHG), largely methane (CH₄) and nitrous oxide (N₂O), are in turn released to the atmosphere by plant respiration, by decomposition of dead plant biomass and soil organic matter, and by combustion’ (Smith et al., 2014).

1.1 Energy Demand Projection for the Global Agriculture and Food Sector

Although energy is an important input to agriculture, the sector accounts for only 2.2% of the total final energy consumption globally, with oil and oil products meeting most of this demand (IEA, 2020). Generally, as agriculture is industrialised, this energy consumption increases. In regions where most agricultural systems are industrialised, efficiency gains may have plateaued (in the United States, after a peak in 2006 [FAO, 2021a)]), and the sectoral final energy consumption may even have decreased (in EU, 10.8% decrease since 1998 [Eurostat, 2020]).

However, the global food system is estimated to account for almost one third of the world’s total final energy demand. In high-GDP countries, approximately 25% of the total sectoral energy is consumed behind the farm gate (agriculture including in fisheries): 45% in food processing and distribution and 30% in retail, preparation, and cooking (Sims et al., 2015). In low-GDP countries, a smaller share is spent on the farm and a greater share on cooking (FAO, 2011).

In this study, projections of the future energy demand for the agriculture and food processing sector are based on GDP development projections. The assumed global GDP projections until 2050 are based on the World Bank and IEA projections (IEA, 2019). It is anticipated that both agriculture and food and processing industries will grow in proportion to the global economy and that their share of the global GDP will remain between 3.5% and 4%. The production volumes for cereals, pulses, and other agricultural products for 2019, shown in Table 6.2, are taken from the Food and Agriculture Organization (FAO) database (FAO, 2021b).

Table 6.2 Economic development—agriculture and food processing: 2019 and projections towards 2050

The estimated global population growth is based on UN population projections (UN DESA, 2019) and will decrease evenly from about 1% per year in 2020 to 0.5% per year in 2050. The food production volumes for each product shown will develop accordingly. No dietary or lifestyle changes are assumed in estimating the future energy demand of the agriculture and food processing sector. In addition to food for human consumption, agricultural products are also needed for animal feed. However, the impacts of diets on agricultural product demand and emissions are discussed in the next section.

According to the IEA’s Advanced Energy Balances database structure, the food processing industry is part of the industry sector, whereas agriculture is part of other sectors group. Furthermore, the statistical data for the relevant energy demand are provided as ‘food and tobacco’, and separate data for the food processing industry are not available. Similarly, the IEA database provides the energy demand for agriculture and forestry, but no further separation of the two industries is available.

To calculate the energy demand for each sub-sector, the economic values in $GDP energy for agriculture, forestry, food processing, and tobacco industry are divided by the average energy intensities (in MJ per $GDP) for each of those sectors. Table 6.3 shows a selection of energy intensities taken from the IEA database for different agricultural products. To calibrate the model and to understand the development in the past, statistical data for the years 2005–2019 are used. To project the future energy demand for each of the sub-sectors, the calculation method then changes, and the projected GDP development (Table 6.2) is multiplied by the average sector-specific energy intensities, incorporating an assumed efficiency factor, giving the projected energy demand. For more details of the OECM methodology, see chap. 3.

Table 6.3 Energy intensities for selected food processing industries

The average energy intensity of the food processing industry for 2019 has been calculated to be around 3.5 MJ/GDP, and it is assumed that the annual efficiency gain is 0.25% on average (Table 6.3). The main energy demand for food processing is for heating processes in the range of 100–500 °C. Based on the study of Ladha-Sabur et al. (2019), the share of thermal energy is estimated to be 75% of the final energy demand on average for food processing and the remaining 25% for electricity. Transport energy is not included in this approach because the transport sector is analysed separately (see the Methodologies for Scopes 1, 2, and 3 section).

Based on the methodology described above, the energy demand for the agriculture and farming sector is calculated with an energy intensity of 1.74 MJ per $GDP for the base year 2019. The majority of the energy demand is estimated to be for fuel for agricultural machinery, such as tractors and harvesters, whereas 30% of the energy is electricity. Efficiency gains for the agriculture sector are assumed to be higher—0.8–1% per year—than for the food processing industry.

Table 6.4 shows the calculated energy demand broken down according to the electricity, heat, and fuel requirements for the agriculture and food processing sector. The energy-related CO₂ emissions for the calculated demand are based on the 1.5 °C OECM supply scenario (see Chap. 12) (Table 6.5).

Table 6.4 Energy demand projection for agriculture and food processing

Table 6.5 Energy-related CO₂ emissions for agriculture and food processing

1.2 Food Demand and Implications

Food Equity

The FAO estimates that sufficient global aggregate food is produced for nearly everyone to be well fed. However, income inequalities and resource constraints in different parts of the world mean that everyone is not well fed. Progress towards eliminating hunger and malnutrition is still lagging, with 821 million people undernourished in 2017 (FAO, 2018). However, while we recognise the need for the redistribution of available food calories and a discussion of nutrition, in this research, we take a global aggregate view of food production, rather than a nuanced view of food security and nutritional equity in the local context.

Demand for Agricultural Products

The key drivers of food (and consequently feed) demand are population growth and changes in consumption patterns, which are driving a shift to a more meat-based diet. The demand for commodities, such as food grains, is primarily driven by increases in population because the per capita food demand is stagnant or even decreasing in several high-income countries (although the demand for coarse grains for use as feed will increase as meat and dairy consumption increases). Income, individual preferences, and changes in lifestyle and consumption patterns will play a greater role in the demand for vegetable oils, sugar, meat, and dairy products (OECD-FAO, 2020). The use of cereals for feed is projected to grow at 1.2% per year over the coming decade as livestock production expands and intensifies in low- and middle-income countries, compared with the projected growth of 1% per year for food use (OECD-FAO, 2021).

The average dietary energy supply per person per day in low- and middle-income countries is around 2750 kilocalories, whereas in high-income countries, it is around 3350 kilocalories. Both these figures exceed the minimum requirement of around 1950 kilocalories per person per day (FAO, IFAD, & WFP, 2015). It is expected that overall per capita consumption will increase globally, including in developed countries, even as concerns around obesity increase (Alexandratos & Bruinsma, 2012).

The global demand for food for human consumption is the main component of the overall demand for agricultural products. However, non-food uses of several commodities, mainly animal feed and fuel, are important and have experienced faster growth than food for human consumption over the last decade(s). It is anticipated that in the coming decade, the relative importance of food, feed, and biofuel use will remain constant, because no major structural shifts in the demand for agricultural commodities are expected (OECD-FAO, 2020). The global demand for agricultural commodities (including for non-food uses) is projected to grow at 1.2% per year over the coming decade, which is well below the 2.2% per year growth experienced over the last decade. This projected slowdown is due to a lower global demand for biofuels, especially as many high-income and emerging countries achieve saturation levels (OECD-FAO, 2021).

1.3 Meeting Global Food Demand While Reducing the Environmental Impact of Food Production

As noted above, a major source of emissions from the agricultural sector is associated with land use. Key complementary strategies for increasing food production while reducing the impact on land use are discussed below, followed by a discussion of the environmental impacts and emissions specifically related to animal protein production, including enteric emissions. These impacts are fundamentally driven by the overall demand for agricultural products.

Crop Yield

The substantial additional amounts of food required in the coming decades will mainly be produced through yield increases, rather than any major expansion of cultivated areas (FAO, 2017). The FAO expects 77% of this increased production to come from increased yields, compared with 9% from the expansion of cultivated land and 14% from increased cropping intensities (Alexandratos & Bruinsma, 2012). A review of the scientific literature showed that most of the focus on how to feed the world is on increasing food production through technological advances, whereas attention on reducing the food demand through dietary changes to less-intensive patterns has remained constant and low (Tamburino et al., 2020).

In either case, crop yields must increase to meet the needs of the growing population without increasing croplands. Agricultural yields have increased without a significant increase in agricultural land use in the past. For example, between 1961 and 2000, the global population more than doubled, and the per capita cereal consumption increased by 20%. However, the area of harvested cereals increased by only 7%, largely because cropping intensities increased (Piesse, 2020). Mueller et al. (2012) found that by maximising crop yields (i.e. closing yield gaps), the global crop production could increase by 45–70% with the same land use.

Food Waste

Another important consideration to improve the efficiency of food systems is the reduction of food waste. The energy embedded in global food losses is 38% of the total final energy consumed by the whole food supply chain. This means that more than 10% of the world’s total energy consumption is food that is lost and wasted. By one estimate, the food losses and waste that occur every year generate more than 3.3 gigatonnes of CO₂ equivalents (FAO, 2013), equal to the combined annual CO₂ emissions of Japan and the Russian Federation (FAO, 2017).

Kummu et al. (2012) determined that an additional one billion people could be fed if food waste was halved, from 24% to 12%. The World Resources Institute reported that a 25% reduction in food waste would push food production 12% closer to the level necessary to feed the world in 2050 and would reduce the amount of increased agricultural land needed by 27%, inching closer to fully closing the land gap (Ranganathan et al., 2018).

Dietary Changes

Most developed countries have largely completed the transition to livestock-based diets, although it is unlikely that all developing countries—including India—will shift to levels of meat consumption typical of western diets in the foreseeable future (Alexandratos & Bruinsma, 2012).

The FAO 2030 Agriculture Outlook suggests that near-saturation levels of meat consumption, as well as health and sustainability concerns, might limit the growth of animal protein consumption in high-income countries, particularly reducing the demand for beef. However, the demand for poultry is expected to increase in high-income countries in the move to a more sustainable and healthy diet and in middle- and lower-income countries because it is the most economic animal protein (this will also circumvent religious reasons for the non-consumption of meat, such as the consumption of beef and pork in India and Muslim countries, respectively). However, it is estimated that over the next decade, any gains (emission-wise) made from the reduced demand for animal products in developed countries due to increases in vegetarianism or veganism will be offset by the increased consumption of meat in middle-income countries due to lifestyle changes and increasing per capita caloric consumption.

The projected improvements in production efficiency will be insufficient to meet the future food demand without increasing the total environmental burden posed by food production. By contrast, transitioning to less impactful diets would, in many cases, allow production efficiency to keep pace with the growth in human demand while minimising the environmental burden of the food system (Davis et al., 2016). Changing diets to a globally adequate diet of 3000 kcal per capita per day, with 20% animal kcal would allow an additional 2.1–3.1 billion people to be fed in 2050 if yield gaps are closed (Davis et al., 2014). Another study showed that a transition towards more sustainable production and consumption patterns could support 10.2 billion people within the planetary boundaries given if cropland is spatially redistributed, water and nutrient management improved, food waste reduced, and dietary changes imposed (Gerten et al., 2020).

Environmental Impacts

Increased meat production impacts land use in terms of increased pastureland and increased cropland. To accommodate the increasing ruminant production (especially sheep and goats) in sub-Saharan Africa, pastureland is expected to expand by 1.2 Mha. The projected expansion in livestock production in North America will require additional pastureland (+3.22 Mha), with the conversion of marginal croplands (OECD-FAO, 2021).

The other main contributor to agricultural emissions is methane emissions from the enteric fermentation in livestock. Diets rich in meat, particularly that from ruminants such as cattle, are associated with higher environmental costs and higher emissions of GHGs: methane, from enteric fermentation; CO₂, which is released from the clearing of forests for pasture; and nitrous oxide (N₂O), which is generated in feed production (FAO, 2017) . Diets with a smaller meat component have significantly lower emission intensities. The FAO 2030 Agriculture Outlook projects predict that agricultural GHG emissions will grow by 4% between 2018–2020 and 2030, with livestock accounting for more than 80% of this global increase (OECD-FAO, 2021).

Non-energy-related carbon emissions are calculated with the Generalized Equal Quantile Walk (GQW) method, the land-based sequestration design method, and the carbon cycle and climate model (Model for the Assessment of Greenhouse Gas Induced Climate Change, MAGICC) (Meinshausen & Dooley, 2019). The model also accounts for other GHG gas emissions arising from the enteric fermentation of livestock (CH₄), crop residues and fertilisers, and manure management (N₂O).

An industry sub-sector share has been assigned for each GHG, as explained in the attached supplementary material. Only a small part (20%) of the CO₂ emissions attributable to changes in land use are assigned to the agriculture sub-sector, with 80% assigned to forestry. Table 6.6 shows the breakdown of the different emission sources in agriculture. These emissions are multiplied by the global warming potential of other GHG gases to obtain the total CO₂ equivalents (CO₂e) for the sector.

Table 6.6 Non-energy emissions from the agriculture sector

2 Overview of Global Forestry and Wood Sector

Forestry contributes to food security, livelihoods, and well-being; supports terrestrial ecosystems and biodiversity; provides (human) life-sustaining ecosystem services; and acts as a carbon sink. Value is also added by some of the manufacturing sectors supported by forestry. In 2018, wood and wood products contributed 183 billion USD, and paper and paper products contributed 324 billion USD to the global economy. Together with agricultural manufacturing, this is about 18% of the value added in total manufacturing globally (UNIDO, 2020). The corresponding GICS sectors addressed are listed in Table 6.7.

Table 6.7 Relevant Global Industry Classification Standard (GICS) sectors

Globally, 30% of all forests are used for production. Of this 30%, about 1.15 billion ha of forest are primarily used for the production of wood and non-wood forest products, and another 749 million ha are designated for multiple uses. In contrast, only 10% is allocated for biodiversity conversation, although more than half of total forests have management plans (FAO, 2020a).

2.1 Energy Demand Projection for the Global Forestry, Wood, and Wood Product Sector

The sectoral final energy consumption of forestry has remained stable over the last three decades, and half of this demand is met by oil products.

The energy demand of the forestry and wood sector was calculated with the same methodology as for the agricultural and food processing sector (Table 6.8). The IEA Advanced Energy Balances show the wood and wood products separately but combine the energy demand for forestry with that for agriculture. The energy demand for forestry was calculated both as the energy intensity (Table 6.10) multiplied by the global GDP for this sector, as shown in Table 6.9, and by subtracting the calculated energy for agriculture (see previous section) from the combined energy demand for agriculture and forestry provided by the IEA. With this repeated calculation, the energy intensity for forestry, taken from the literature, was evaluated again. The economic values for forestry were taken from FAO 2015 (Lebedys, 2015).

Table 6.8 Global economic development of the forestry, wood, and wood products industry

Table 6.9 Assumed energy intensities for the forestry, wood, and wood product industry

Selected energy intensities of the wood products and paper industry, as well as the average energy intensities, were used to calculate the energy demand for the forestry industry and the wood and wood product industry. For forestry, it is assumed that the improvement in energy efficiency per year will be relatively small, at only 0.25% per year, because this industry is already highly automated (Ringdahl, 2011).

The wood and wood product industry, as defined in the IEA statistic, includes the manufacture of wood and of products made of wood and cork, except furniture, and the manufacture of articles of straw and plaiting materials, as classified under the United Nations International Standard Industrial Classification of All Economic Activities (ISIC, 2008).

The calculated total final energy demand, further broken down to the electricity and heat/fuel demand for the forestry and wood product industry, is shown in Table 6.10. The processing of wood to wood products requires considerably more energy than forestry activities. For this reason, in developing the 1.5 °C energy pathway, the energy efficiency in this area is given greater importance than that for timber harvesting.

Table 6.10 Energy demand for the forestry and wood product industry

Based on the 1.5 °C OECM supply scenario documented in Chap. 12, the energy-related CO₂ emissions for the analysed forestry and wood product sector are provide in Table 6.11. To decarbonise the energy supply of the forestry requires to switch machinery such as chainsaws and other heavy-duty tools from combustion engines to electric motors, and all-terrain vehicles need to be electrified.

Table 6.11 Energy-related CO₂ emissions of the analysed sectors under the 1.5 °C energy pathway

2.2 Land-Use Demand for Forestry

There is potential for ‘nature-based solutions’ to remove CO₂ from the atmosphere at the gigatonne scale, with potentially significant co-benefits (Meinshausen & Dooley, 2019) (see also Chap. 14). Simulations of nature-based approaches, such as forest restoration, reforestation, reduced harvest, agroforestry, and silvopasture, were combined and found to sequester an additional 93 Gt carbon by 2100. This would require an additional 344 million ha of land for reforestation (Littleton et al., 2021). The key pathway for managing land-use change is reforestation, which is limited to biomes that will naturally support forests, by identifying previously forested land in close proximity to intact or degraded natural forests. This comprises of 274 Mha of land in proximity to intact forests in subtropical and tropical forest biomes and another 70 Mha identified in temperate biomes.

Decarbonisation pathways are being developed at the global level. At this level, there is little conflict between the competing uses of cropland, pastureland, and forests for carbon removal. Adopting nature-based approaches, such as agroforestry or silvopasture, where trees are integrated into cropland or grazing lands, will help to increase the carbon stock while meeting the increasing demand for forestry and agricultural products. It should be noted that a lot of deforestation and the capacity and demand for increased agricultural and livestock products will occur in tropical and subtropical regions, often in developing countries. At the local level, there must be a more nuanced approach to addressing the balance between environmental, economic, and well-being outcomes.

The OECM model also calculates the non-energy GHG emissions from the forestry sector, as shown in Table 6.12. The OECM 1.5 °C net-zero pathway is based on efficient energy use and renewable energy supply only—leading to full-energy decarbonisation by 2050. No negative emission technologies are used and the OECM leads to zero energy-related carbon emissions. The model assumes no net deforestation from 2030 onwards and the adoption of nature-based approaches to land-use management. Therefore, from 2030 onwards, there will be carbon removal or negative emissions.

Table 6.12 Non-energy GHG emissions in the forestry industry

3 Overview of the Global Fisheries Sector

About 7% of the total protein intake globally comes from seafood (FAO, 2020b). Over 200 million tonnes of fish and seafood are produced annually (Ritchie & Roser, 2021). According to the OECD, the fisheries industry employs over 10% of the world’s population (OECD, 2020b). While the overall food fish consumption expanded by 122% between 1990 and 2018, the global capture fisheries—fish that has been caught from natural environments by various fishing methods—only grew by 14%. The main rise of fish ‘production’ came from aquaculture, which increased output by factor five. However, the percentage of fish stocks caught in the open ocean within biologically sustainable levels decreased from 90% in 1909 to only 65.8% in 2018 (FAO, 2020b).

The economic (first sale) value of the global fishing industry in 2018 was estimated at USD 401 billion, of which USD 250 billion came from aquaculture production (FAO, 2020b).

The Fishing Industry and Their Relevance Within the Energy Sector

While the fishing industry plays a significant role in food supply and economic income for a large part of the global coastal population, its share on global energy demand is minor with less than 0.1% of the global energy demand (IEA, 2020). The IEA World Energy Statistics lumps the energy demand of agriculture, forestry, and fisheries in one category. And even within this category, the energy demand of fisheries only makes up 3% within that group. The energy demand of the agricultural/forestry sector is with 8900 PJ per year—compared to around 300 PJ annually for fisheries—about 25 times higher (IEA, 2020).

However, the OECM decided to develop a specific scenario for fisheries due to its importance for small island states. Subsistence fishing is a key economic pillar for island nations in the Pacific, the Indian Ocean, and the Caribbean. Over the past decades, large fishing vessels have been in dispute with the traditional fish grounds of local indigenous people.

Marine and aquatic ecosystems are under stress—from climate change, overfishing and unsustainable fishing, and aquaculture practices in some areas, as well as pollution from various other human activities, which lead to ocean acidification and declining biodiversity. Furthermore, illegal, unreported, and unregulated (IUU) fishing continues in many parts of the world, adding excessive pressure on fish stocks, harming law-abiding fishers through unfair competition, and thereby reducing their profitability, in addition to limiting employment opportunities throughout the value chain (OECD, 2020b).

Among the most unsustainable fishing methods is bottom trawling with large vessels which accounts for about one quarter of fish catch globally. Traditional artisanal fishing boats which are either entirely unpowered or with small outboard engines cannot compete with industrial fishing vessels. Increasing fuel costs make it increasingly uneconomic for the fisherman as fuel costs can often outweigh income from fish. Besides, most island states still rely on expensive diesel generators to provide electricity for households and cooling equipment for food preservation.

3.1 Fisheries: Projection of Economic Development and Energy Intensities

The economic value of the fishery industry is assumed to maintain its current global GDP share of 0.2% and to increase from US$ 272 billion in 2019 according to growth projection for global GDP to over US$700 billion in 2050. However, the shares between marine fishing, aquaculture, and inland fishing change significantly in favour of aquaculture. Table 6.13 shows all key assumptions used of the 1.5 °C pathway for fisheries.

Table 6.13 Key assumption for the energy demand projection of the global fisheries industry

The projected development of produced fish in million tonnes per year is certainly arguable, and forecasts of fish production volumes over the next 30 years are not available—thus the assumption that the volume of wild fish catch and fish from aquaculture plateaus on 2020 level, while the market value steadily increases. The rationale behind this is that marine fishing will not be able to increase fishing volumes, while costs and economic values per tonne of fish continue to increase. The catch per unit effort (CPUE)—the amount of energy per tonne—is assumed to remain stable. In this case, longer distances and sailing time to catch 1 tonne of fish can be compensated by increased energy efficiency of fishing vessels.

The 1.5 °C OECM pathway for the fishing industry suggests moving away from large-scale fish trawlers towards a more decentralised fleet of fishing boats.

In regard to the fishing vessel fleet, 2.07 million vessels were registered in 2019, 1.16 unpowered, 1.63 million powered artisanal vessels, and 0.43 million industrial vessels (Rousseau et al., 2019). The overall motor power of the global fishing fleet is estimated with a capacity of 144 GW, 87 GW of which are from industrial vessels. The 1.5 °C pathways assume that the power artisanal fishing vessels steadily increase in numbers on the expense of industrial vessels which lose market shares in a stable fish market by volume.

The average motor power of artisanal vessel is estimated with 35 kW that operate with around 500 full load hours per year. The electricity share for fishing vessels increases from 0% in 2020 to 2% in 2025, to 4% in 2030, to 16% in 2040, to 64% in 2050.

Table 6.14 shows the resulting energy demand under those documented assumptions and Table 6.15 the expected energy-related CO₂ emissions. However, the available data about energy demand of fishing vessels is scarce and the results are indicative. More research is required in order to develop more detailed scenarios for and around the fishing industry, their vessels, and electrification concepts for artisanal fishing boats.

Table 6.14 Projected energy demand for global fisheries industry

Table 6.15 Energy-related CO₂ emissions of the fisheries industry under the 1.5 °C energy pathway

Decarbonising the energy and electricity supply of island nations away from diesel generators for electricity generation and gasoline-fuelled outboard engines to renewable-powered—mainly battery solar systems—mini- and micro-electricity grids will afford the island energy independence from expensive fuel supply via boat and planes. While the electrification of road vehicles for passenger and freight transport is already progressing worldwide, the electrification of ships and fishing vessels is still in its very first developments. Electric outboard engines, supplied with batteries charged with renewable electricity, can support subsistence fishing and help moving away from destructive fishing practices. However, electric outboard engines are still significantly more expensive than two-stroke or four-stroke outboarder, and the market is small. Economies of scale are required to make electric outboard engines—preferably in the range of 30–50 kW—cost-competitive.

4 Overview of the Global Water Utilities Sector

Water is important for basically every process that supports human life on Earth. Keeping potable drinking water of high quality is therefore a basic requirement for the health of humans, for the environment, and for an intact economy. Thus, the economic value of water utilities is far beyond the monetary values of this industry. While the projection of future energy demand for various sectors in the analysis is based on economic values, the energy demand projection for water utilities must be based on production volumes.

The 1.5 °C OECM pathways are developed according to sectors as defined in the Global Industry Classification Standard (GICS). Water utilities (5510 40) are a subsector of the GICS sector 55 utilities together with electric utilities (5510 10), gas utilities (5510 20), multi-utilities (5510 30), and independent power and renewable electricity producers (5510 50). According to the GICS definition, water utilities are companies that purchase and redistribute water to the end consumer, including large-scale water treatment systems.

Only a fraction of water utilities globally has been privatised. The global market value of privatised water utility companies in 2020 was USD 158.79 billion (Statistica, 2021). Globally, the largest privatised water utilities are located in China and in the United States and are worth between USD22 and USD33 billion (Fig. 6.1).

Fig. 6.1

Market value of leading water utilities companies worldwide in 2020, by country, in billion USD. (Source: Statistica (2021))

However, the majority of member countries of the European Community decided against a privatisation of the water sector. The European Economic and Social Committee called for a stop of water utility privatisation (EESC, 2018), and the controversial debate kept the sector predominately in public ownership. Therefore, US American, Chinese, and companies from the United Kingdom dominate the overview due to their high share of privatisation.

To ensure that drinking water is of high quality, stricter water regulations have been implemented, and treatment practises have been intensified. As a consequence, energy consumption of wastewater treatment plants increased (Rothausen & Conway, 2011). The energy intensity for wastewater treatment depends on the process and/or technology and the scale of the treatment plant (Paul et al., 2019). As electricity consumption in the water sector grows, the carbon footprint of the sector becomes larger and more significant if fossil fuel-based electricity is used. If this electricity is purchased from power utilities, energy costs might be significant. In developed countries, water utilities, on average, spend 15–30% of their budget on energy—this is for large wastewater plants—costs for small wastewater treatment plants are higher and make up 30–40% of their budget (Paul et al., 2019). For drinking water plants, the largest energy use (80%) is used to operate motors for pumping (Copeland & Carter, 2017).

4.1 Water Utilities: Commodity Demand Projections and Usage

There are a several international organisations that oversee water governance and also offer comprehensive databases; the most relevant organisations are:

• Food and Agriculture Organization (FAO)—a specialised agency of the United Nations that leads international efforts to defeat hunger

• Organisation for Economic Co-operation and Development (OECD)

• World Bank

• International Energy Agency (IEA)—data only for energy-related water usage

For this analysis, we use the FAO AQUASTAT database for all water-related data, which contains detailed data on water withdrawal, usage, and treatment (FAO, 2021a). The OECD database is most useful for OECD regions (North America and Europe) but not as comprehensive for global data. A comparison of the different data is shown in Table 6.13. IEA data on water extraction aligns best with the FAO data for global and for OECD regional. The OECD and World Bank data is particularly patchy; historical data is therefore displayed as averaged values for different timeframes. Considering the diversity of databases and approaches to compile data, the OECM project decided to use the FAO database for global analysis.

The FAO defines total water withdrawal as the ‘annual quantity of water withdrawn for agricultural, industrial and municipal purposes. It can include water from renewable freshwater resources, as well as water from over-abstraction of renewable groundwater or withdrawal from fossil groundwater, direct use of agricultural drainage water, direct use of (treated) wastewater, and desalinated water. It does not include in-stream uses, which are characterised by a very low net consumption rate, such as recreation, navigation, hydropower, inland capture fisheries, etc.’.

The FAO water extraction data is based on the following calculation:

$$ {\displaystyle \begin{array}{l}\left[\mathrm{Total}\ \mathrm{water}\ \mathrm{withdrawal}\right]=\left[\mathrm{Municipal}\ \mathrm{water}\ \mathrm{withdrawal}\right]\\ {}+\left[\mathrm{Industrial}\ \mathrm{water}\ \mathrm{withdrawal}\right]+\left[\mathrm{Agricultural}\ \mathrm{water}\ \mathrm{withdrawal}\right]\end{array}} $$

In addition to total extraction, the database allows to break down the data into water withdrawal by sector and by industry, which links the water sector with energy consumption in agriculture in form of irrigation.

According to the OECD, 70% of all water abstractions is used for agriculture (OECD, 2020a, p. 35). While freshwater extractions dominate total water extractions, desalinisation plants are an important parameter considering their high-energy consumption. However, water extraction through desalination plants only makes up 0.2% of the global water extraction (Table 6.16). Globally, about one third of all countries representing 80% of global population (OECD, 2020a) are connected to sewerage treatment plants. Table 6.17 shows the assumed global water withdrawal quantities—broken down by usage sector—which form the basis for the projection of the energy demand projection for water utilities.

Table 6.16 Total water withdrawal in billion cubic meters per year including extraction from desalination

Table 6.17 Assumed global water withdrawal quantities for the energy demand projection for water utilities

4.2 Energy Efficiency Standards and Energy Intensities of Water Utilities

The following processes require the use of energy for water utilities:

• Water sourcing

  • Surface water pumping or

  • Groundwater pumping

• Wastewater treatment—energy demand dependent on the level of pollution

• Water distribution—energy for pumping, dependent on required distances

In addition, the topography of a region and the climatic conditions—especially seasonal temperature differences and rainfall pattern—affect energy use in the water sector (Copeland & Carter, 2017). In dry regions such as California, 19% of the state’s electricity consumption is used for pumping, treating, collecting, and discharging water and wastewater (ibid). The following provides a brief overview of the technical processes and their energy intensities.

Water Extraction

To lift 1000 litre (1 m³) on metre requires 0.0027 kW/h—at 100% efficiency (Rothausen & Conway, 2011). But, in practice, the value is higher and dependents on the quality and efficiency of water pumps.

Wastewater Collection

Wastewater is collected from domestic, commercial, or industrial use and processes. In general, the composition of wastewater by weight consists of 99.9% wastewater and 0.1% contaminants, including organic or inorganic matter, or microorganisms that need to be removed (ERC, 2019). Wastewater must be collected and transported; this process requires water pumps.

Wastewater Treatment Plants (WWTP)

There are four types of wastewater treatment plants: (1) sewage treatment plants (STPs), (2) effluent treatment plants (ETPs), (3) activated sludge plants (ASPs), and (4) common and combined effluent treatment plants (CEPTs).

For water utilities, only sewage treatment plants (STPs) and activated sludge plants (ASPs), which are part of STPs, are important. Effluent treatment plants (ETPs) are typically used to clean industrial wastewater (ERC, 2019)—most of these are integrated into industrial parks for manufacturing and/or the chemical sector.

Sewage Treatment Plant (STP)

The STP receives wastewater from domestic and commercial use and industrial processes. It also collects rainwater, storm water, and associated debris. The main processes include a basic filtering procedure to remove debris, dirt, grit, and sand:

• Primary treatment—settling: In the primary treatment, heavier and lighter organic solids are separated in a clarification tank which promotes sinking of heavier and floating of lighter solids, so they can be removed. This primary sludge is then moved into aeration basins, where the secondary treatment takes place.

• Secondary treatment—Secondary treatment involves aerobic aeration, which consists of ceramic or rubber membranes which have holes for aeration. The inflow of oxygen (compressed air) initiates a biological process in which the bacteria in the sewage digest organic matter. Aerobic aeration can remove chemicals, with the exception of nitrates (there are additional processes which can remove NO₃). After this process, the sludge moves into the dewatering tank to remove any water from the activated sludge.

• Tertiary treatment—disinfection: The tertiary process combines mechanical and photochemical processes. This step of the wastewater treatment process is required for sanitary sewage with microorganisms which require disinfection.

The secondary treatment is the most energy-intensive process for wastewater treatment plants; aeration—the introduction of air into the biological tank—consumes about 60% of the plant’s total energy. There are ways to improve energy efficiency, e.g. by removing the aeration process through enhanced primary solid removal, based on advanced micro sieving and filtration processes (Oulebsir et al., 2020).

For the calculation and projection of energy demand for global water utilities, the energy intensities need to be simplified, and average values are used. Table 6.18 shows the values used for the 1.5 °C OECM pathway for water utilities. It is assumed the water withdrawal quantities (Table 6.17) will have to be pumped and distributed and—after usage—go back into wastewater treatment. The average energy intensity is provided. A small share of the water withdrawal—around 0.2%—will come from desalination plants which have a relatively high energy intensity per cubic metre.

Table 6.18 Assumed global energy intensities for process relevant for water utilities

Sewage plants often have onside electricity generation from biological material collected during wastewater treatment. The 1.5 °C pathway assumes that 5% of all sewage plants will utilise this potential in 2020 and that the share increase by 1% annually to 35% in 2050.

Furthermore, water utilities have significant non-energy GHG emissions from sewers, biological wastewater treatment, and sludge—mainly CH₄ and N₂O. Table 6.18 shows the assumed values in CO₂ equivalent per cubic metre with the conservative assumption that those specific values will remain on 2020 level until 2050.

4.3 Projection of the Energy Demand and CO₂ Emission for Water Utilities

The projected global energy demand for water utilities was calculated with the documented assumed global quantities of required water and energy intensities (Table 6.19). Based on the required energy and the 1.5 °C energy supply scenario, the global energy-related CO₂ emissions have been estimated (Table 6.20). However, the main GHG emissions from water utilities do not originate from energy-related CO₂, but from methane and N₂O (nitrous oxide or ‘laughing gas’) which have a significant greenhouse potential (see Chap. 11).

Table 6.19 Projected global energy demand for water utilities

Table 6.20 Global energy-related CO₂ emissions and non-energy GHG for water utilities under the 1.5 °C energy pathway

5 Energy Demand Projection for the Four Analysed Service Sectors

The combined energy demand for the analysed sectors represented 7.5% of the global demand in 2019. The results of the energy demand projection suggest that demand will continue to grow even with energy efficiency measures as the volume of their produced commodities—especially food and water—will have to increase to meet the demands of a growing population by 165% by 2050. The two main drivers for the increased energy demand are agriculture and food processing and forestry and wood products. Due to electrification of machinery and (process) heat, the overall electricity demand increases significantly by 162% in 2050 in comparison to 2019. Especially the electricity demand for fisheries with the projected electrification of marine fishing vessel increases by factor 7 between 2019 and 2050 (Table 6.21).

Table 6.21 Projected global energy demand for water utilities

6 The OECM 1.5 °C Pathways for Major Industries: Limitations and Further Research

We have shown that the four analysed sectors can phase out their energy-related CO₂ emissions (Table 6.22) with a combination of energy efficiency and a shift to a renewable energy supply. Key technologies for the decarbonisations are the following:

Table 6.22 Global energy-related CO₂ emissions and non-energy GHG for water utilities under the 1.5 °C energy pathway

Agriculture and Forestry

Heavy-duty machinery for harvesting food products, such as crops, or timber is currently almost entirely based on fossil fuel-driven combustion engines. However, biofuels and—after 2030—electric vehicles are assumed to be available to reduce energy-related CO₂ emissions to zero by 2050.

The management of forests, croplands, and pastures can lead to both emission and sequestration of CO₂ and other GHGs. The need to feed a population of nine billion in 2050 will exert significant demands on the global agriculture and food systems. Advances in technology, particularly the increasing role of renewable energy in the agri-food sector, will help to reduce the energy emissions of the sector. However, given the crop intensification and agricultural expansion required to meet these food demands, it is expected that the agriculture sector will be unable to achieve zero emissions of non-energy GHGs by 2050. Improving soil management, reducing the yield gap, and initiating substantial shifts in dietary and nutritional patterns will help to reduce emissions. However, an increase of agricultural land at the expense of forests and/or their expansion in order to achieve negative emissions is likely if crop yield efficiencies cannot be improved. Further research is required on the individual contributions of each of these pathways to the complete decarbonisation of the sector.

Nature-based approaches, particularly reforestation, also offer offset options. With an increasing focus on saving and regenerating forests, the forestry sector can become not only carbon-neutral but also carbon-negative, as early as 2030. The abolition of carbon emissions or the achievement of negative emissions between 2030 and 2050 will compensate for the unavoidable process emissions in other sectors, such as the cement and steel industries.

The authors found a lack of policy mechanisms to unlock the large potential for nature-based solutions to create carbon sinks, although the scientific literature confirms the significant role of land-use emissions in climate mitigation pathways (IPCC 2021). More research is required into the compensation mechanisms for process emissions and their potential roles in the implementation of nature-based solutions (see also Chap. 11).

Food Processing

Food processing, in particular, requires process heat, most of which was supplied by fossil fuel-based technologies in 2019. A significant increase in the electrification of process heat generation is assumed to occur. To achieve the overall CO₂ emission targets, the electricity generation under the OECM pathway will increase the average global renewable electricity share from 25% in 2019 to 74% in 2030. Although the transition to renewables under the OECM 1.5 °C pathways that phase out energy-related Scopes 1 and 2 emissions is ambitious, the implementation of the assumed Scope 3 emission pathways is significantly more challenging.

Wood and Paper Products

The wood processing and pulp and paper industry can use organic residuals and biomass as fuel for onside power and heat generation which is already a common practice especially in Scandinavia and Canada. An increase of those applications is assumed in the OECM.

Water Utilities

Similar to the wood and paper industry, water utilities can use organic residuals and especially methane from sludge to fuel onside power and heat generation to supply their own demand. Those technologies are assumed to become mainstream in the OECM to reduce ‘behind the meter’ demand and to capture methane emissions which have a high global warming potential (GWP)—see Chap. 11.

Fisheries

The transition to sustainable fisheries includes to move away from industrial fishing trawlers towards a more decentralised fishing fleet. The electrification of marine artisanal vessels via electric outboard engines seems a promising way to reduce emissions from inefficient diesel ship engines. However, the energy intensity for aquaculture farms is diverse, and a global average value in energy units per tonne of fish is not available. The literate suggests that it is entirely dependent on the region and the fish species. Thus, the calculated energy demand for the global fishery industry is fraught with very great uncertainties, and more research is needed.

We found that industry-specific data for energy intensities, although available (especially for the food sector), are often incomparable because they are based on different assumptions and/or methodologies. Therefore, we recommend the standardisation of the calculation and reporting methodologies for industry-specific energy intensities for the various technical processes. Furthermore, industry-specific energy statistics, including those for the sub-sectors of industries classified under the GICS system, would significantly enhance the level of detail available for setting net-zero targets in the future.