KPMG warns more work needed to reach industry net zero targets

The consulting corporation published its Net Zero Readiness Report for 2023 and called on governments and businesses to do more for impactful change.

Noah Bovenizer November 09 2023

Consulting corporation KPMG has warned that the aviation and shipping industries may not reach net zero targets due to the slow-moving nature of the businesses and the sectors’ planned transitions to new technology.

The company’s 2023 Net Zero Readiness Report called for greater transformative change from governments and industry leaders in nearly all sectors but laid out a particular warning for transport companies, which have yet to find quick solutions to emissions problems. 

KPMG International’s global head of climate change and decarbonisation, Mike Hayes, said: “Governments, businesses and society should continue to pursue action to address climate change. Further divisions are to be expected, but if we are to truly make meaningful strides towards net zero at the necessary pace while ensuring a stable energy supply, much greater focus is required.”

In particular, the report singles out the availability of sustainable fuels as an area of concern for the transition to a more sustainable transport and logistics industry.

KPMG described the International Civil Aviation Organisation’s (ICAO) goal of having sustainable aviation fuels (SAF) account for 65% of decarbonisation by 2050 as “already at risk” based on an analysis of the energy sector’s SAF production plans.

Though the report said that moving the industry to entirely using SAF was technically feasible, Malcolm Ramsay, global head of aviation at KPMG in Singapore, said that “it looks like a task that would be exceptionally difficult to deliver on”, due to the needed increases in production.

While the report noted the use of battery-powered vehicles can play a role in the transition to net zero, it said that the vehicles would only be appropriate for short-haul travel in both the maritime and aviation industries, meaning alternative fuels must be developed quickly.

Looking at the maritime sector, the report highlighted further difficulties in making this change, saying: “It will take several decades for shipping to move to low-carbon fuels as vessels are typically in service for 20 to 30 years and often cannot be refitted to use alternative fuels. Increasing efficiency through better collaboration and greater transparency offers quicker benefits.”

A similar concern was also highlighted regarding the transition to new aircraft in the aviation industry, with planes being built now still likely to be in use for the next two decades.

However, despite these concerns, KPMG did also highlight some of the positive actions already taken by the industries, including technology that advises aircraft pilots on the best route and altitude to fly at to avoid the formation of contrails and the International Maritime Organisation’s work to cut coastal air pollution from sulphur in fuel oil, which it said could provide a model for the reduction of other types of emissions at a global scale.

The report also came soon after an EU proposal to improve sustainability in intermodal freight transport by prioritising operations that lower negative environmental impacts by 40% compared to road transportation routes.

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