Heavy industry is one of the sectors of the EU economy with stagnating CO2 emissions abatement and significant fossil fuel use. Previously perceived as the 'hard to abate' industrial sectors, steel, chemicals, and cement account for about 14 percent of Europe’s annual emissions. While other sectors are accelerating their emissions reductions, the share of emissions from heavy industry is projected to increase dramatically under business as usual. As such, industry has a key role to play in the decarbonisation of the European economy to fulfill the EU’s commitments under the Paris agreement.
This report explores the technical and economic aspects of the transition. It suggests that the following methods should be employed to enable climate neutrality in heavy industry:
- A more circular economy is a large part of the answer. Increased materials efficiency throughout value chains could cut 58–171 Mt CO2 per year by 2050.
- Reusing materials that have already been produced can also result in large emission reductions. By 2050, 70 percent of steel and plastics could be produced using recycled feedstock.
- In the case of plastics, using end-of-life plastics as feedstock for new production could significantly reduce the need for fossil fuels to produce new plastics.
- Innovations in new, clean production processes could be cut 143–241 Mt CO2 per year by 2050.
- Carbon capture and storage/use will be required to cut 45-235 Mt CO2 per year by 2050. However, these measures are not a ‘plug and play’ solution and would require access to suitable transport and storage infrastructure.
Switching from the import of large quantities of fossil fuels and feedstocks to home-grown resources would also significantly reduce European industry’s dependence on energy imports and will foster Europe’s energy trade balance.