A new report published this week has urged the EU to pivot its investment focus in the steel, cement and chemical industries to climate-neutral technologies if it is to reach its climate goals.
HeidelbergCement, Ennigerloh, Germany
The HeidelbergCement AG factory in Ennigerloh, Germany. Photo: qwesy qwesy / Panoramio
The report, 'Breakthrough Strategies for Climate-Neutral Industry in Europe', was published earlier this week by Berlin-based energy think-tank Agora Energiewende and looked at ways in which the EU could move its material industries towards climate neutrality whilst maintaining its position in a competitive market.
In September, in her first State of the European Union address in the European Parliament, European Commission president Ursula von der Leyen called for an increase in the EU's emissions reduction target for 2030 to 55% from its current 40% compared with 1990 levels. It is also widely expected the bloc will enshrine its 2050 net-zero emissions targets into law.
However, the lack of discussion within the EU about the implementation of climate-neutral technologies for energy-intensive industries is "jeopardising its long-term climate goals", Agora said.
"The European Commission has so far almost completely ignored the use of climate-neutral technology in steel, cement and chemical factories," focusing instead on process efficiency at conventional plants, Agora said.
The report argued that if the bloc were to invest in such technologies for energy-intensive industries, it could reduce CO2 emissions by as much as 145 million tonnes by 2030 - more than the 140 million tonnes needed to reach its 55% emissions cuts target.
In the steel industry, Agora recommended replacing coal-fired blast furnaces at the end of their operational life with direct reduction plants which would initially run on natural gas, then later be switched to climate-neutral, or "green", hydrogen.
The chemical industry could switch its natural gas-fired boilers to electrical heat generation.
And in the cement sector, the report said that carbon capture and storage infrastructure was "crucial" to achieving climate-neutral production.
If the EU's climate goals are to be achieved, it is imperative that companies begin investing in such technologies now, or run the risk of opening new unsustainable factories with long life spans that use conventional tech, but that by the 2040s will have become stranded assets.
The think-tank also warned of carbon leakage - where emissions in one country increase as a result of an emissions reduction by a second country with a strict climate policy - if the EU did not put support in place for climate-neutral investment.
"Industrial companies are showing increasing interest in climate-neutral technology. What they lack is framework conditions for a climate-neutral business model. It is up to the EU to create such a framework for investment in climate-neutral innovation," Agora deputy director Frank Peter said.
"Under current conditions, there is a high probability that they will shift their investments to countries with lower environmental requirements. As a result, industrial emissions elsewhere will increase, and European industrial sites will close."
Last year, of the EU's total emissions, cement clinker production accounted for 7.6%, steel production for 6.4%, and chemicals 2.1%.
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