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INDUSTRY: Report Cites Electrification, Demand Reduction as Net-Zero Strategies

April 4, 2022
Reading time: 4 minutes
Primary Author: Bill Eggertson

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Greenhouse gas emissions from heavy industry have grown faster since 2000 than emissions from any other sector, and reducing them will be a challenge that requires coordinated action on all mitigation options, according to yesterday’s report from the Intergovernmental Panel on Climate Change.

In 2019, industry was the source of 24% of the world’s direct anthropogenic emissions, at 14.1 billion tonnes of carbon dioxide or equivalent, or 34% (20 gigatonnes) if indirect emissions from power and heat generation are included. The world’s current reliance on fossil feedstocks is more than 99%, and improvements in the GHG intensities of major basic materials have almost stagnated over the last 30 years. But the report says technology shifts and new technologies mean these intensities can be reduced to net-zero by mid-century.

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Carbon will remain important because it is a key building block in organic chemicals, fuels, and materials, the IPCC concludes. So in order to reach net-zero emissions for the carbon needed in society, it will be important to close the loops for carbon and CO2 through increased circularity with mechanical and chemical recycling, more efficient use of biomass feedstock with addition of low-GHG hydrogen to increase product yields, and potentially direct air capture of CO2 as a new carbon source.

Significant cuts in global emissions from GHG-intensive industries such as steel, plastics, ammonia, and cement can be achieved by 2050 by deploying multiple options which entail “coordinated action throughout value chains to promote all mitigation options, including demand management, energy and materials efficiency, circular material flows, as well as abatement technologies and transformational changes in production processes,” the report says. The shift to lower emissions will be enabled by the adoption of new production processes using low-GHG electricity, hydrogen, fuels, and carbon management. For most basic materials, many of these processes are close to commercialization, such as hydrogen direct reduction for primary steelmaking.

“The use of steel, cement, plastics, and other materials is increasing globally,” the IPCC states, and there are many sustainable options which can contribute to reductions, but “how these can be applied will vary across regions and different materials.” These options in industrial practice and policy are relatively new and are not considered in recent global scenarios, so their potential for mitigation is “underestimated compared to bottom-up, industry-specific models.”

There are technological options for steel to be made with no emissions, but increased efficiency could potentially reduce demand by 40% based on less use of steel and its longer life. Demand for plastic has been growing the strongest since 1970, and the current reliance on fossil feedstock and very low recycling present a challenge for reaching net-zero emissions from this material, at the same time that plastics are needed to reduce emissions elsewhere by lightweighting vehicles.

There are several options to reduce emissions from production of cement and concrete by as much as 50%, although the report says CCS will be required until some ancillary processes are commercialized. The report also examines several technological options for decarbonizing industrial feedstock chemicals and the pulp and paper industry.

The report points to electrification as a “key mitigation option for industry”, a versatile energy carrier that can be produced from abundant renewable energy sources, adding that using it directly (or indirectly via hydrogen from electrolysis) “offers many options to reduce emissions.” The focus until now for electrification and fuel switching has been mainly on innovation and developing technical supply-side solutions, rather than creating market demand.

The geographic distribution of renewable resources has implications for industry. The IPCC sees the potential for zero-emission electricity and low-cost hydrogen from electrolysis powered by solar and wind, or hydrogen from very low-emission sources, to reshape where energy- and emissions-intensive production is located, how value chains are organized, trade patterns, and what gets transported in international shipping. Actions to reduce carbon emissions may result in relocation of certain industries, with global distributional effects on employment and economic structure, while regions with abundant low-GHG energy and feedstocks could become exporters of hydrogen-based chemicals and materials derived from low-carbon electricity.

Introducing new sustainable production processes may increase production costs, but would result in only minimal cost increases for consumers, the report explains. Light industry, mining, and manufacturing have the potential to decarbonize through available abatement technologies, electrification, and low-GHG fuels.

The Paris climate agreement, the United Nations Sustainable Development Goals, and the COVID-19 pandemic all “provide a new context for the evolution of industry and mitigation of industry GHG emissions,” the report states. It emphasizes that energy efficiency will continue to be important, while the need for primary production can be reduced by switching to new processes that use low-GHG energy carriers. The remaining CO2, the IPCC says, can be handled by carbon capture and storage (CCS) technologies, although the anticipated need for CCS may be over-estimated due to the under-representation of many mitigation options in climate change scenarios and assessment models.

But reducing carbon emissions from industry will require a reorientation from the historic focus on incremental improvements in areas like energy efficiency, to transformational changes in energy and feedstock sourcing, materials efficiency, and more circular material flows, the report states. These measures aren’t well represented in climate modelling, either, although some progress has been made in recent years.

Industries exposed to international competition, global cooperation, and coordination may be important in enabling change through policies which include “transparent GHG accounting and standards; demand management ; materials and energy efficiency policies; R&D and niche markets for commercialization of low emission materials and products; economic and regulatory instruments to drive market uptake; high-quality recycling, low-emissions energy and other abatement infrastructure; and socially inclusive phaseout plans of emissions intensive facilities within the context of just transitions.”

Industry has been largely sheltered from the impacts of climate policy and carbon pricing due to concerns over competitiveness and carbon leakage. But the report notes that new approaches are emerging for a transition to net-zero that requires technology development, market demand for low-carbon materials, socially inclusive phaseout plans, and international coordination of climate and trade policies.

“Technologies exist to take all industry sectors to very low or zero emissions, but require five to 15 years of intensive innovation, commercialization, and policy to ensure uptake,” it states.



in Bioenergy, Carbon Levels & Measurement, CCS & Negative Emissions, Demand & Efficiency, Ending Emissions, Finance & Investment, Hydrogen, International Agencies & Studies, Petrochemicals & Plastics, Supply Chains & Consumption

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