Globally, industry is the largest fossil fuel consumer among all end-use sectors—and hence, the largest emitter. What’s more, industrial facilities are built to last decades. Many production plants built today probably will be able to operate through 2050 and beyond. Fortunately, there are solutions: new technologies are already feasible, and in applications where breakthroughs are still on the horizon, production plants can at least be made ready today for a future retrofit compatible with climate neutrality. And it’s not just about energy: industry uses fossil fuel as a feedstock for everything from plastics to ammonia production.
Power and heat are often reported as separate sectors. But when power and heat are attributed to each end sector (transport, buildings, and industry), industry turns out to be the biggest carbon-emitting sector because it consumes so much electricity and process heat. Decarbonizing industry thus involves making power and heat zero-carbon. But a fully zero-emissions industry sector will also require policies and solutions for specific processes, including fossil-free feedstock materials.
Nearly half of the current production capacity in the EU needs to be revamped or replaced in the 2020s. The technologies already exist to make these new facilities zero-carbon—or at least ready for zero emissions. What is often lacking is a policy framework to incentivize such investments.
Industrial plants are built to run for decades. Any new facilities built in the 2020s therefore must be designed to achieve targets for 2050 and beyond. Industry readiness for zero emissions by mid-century begins now.
If the EU does not start addressing emissions from industry, other sectors will have to move even faster—but the power sector, for instance, must already cut its emissions by more than half by 2030 relative to 2015. If clean technologies are consistently implemented, industrial emissions could be cut by more than a quarter below 2019 levels by 2030.
Key technologies can make industry emissions-free—but they require specific policy support tailored to each major industry subsector. Instead of relying on a robust carbon price to make this wide range of technologies market-ready, a bouquet of support mechanisms is needed—from carbon contracts for difference to hydrogen sustainability criteria.
The perfect fit: Shaping the Fit for 55 package to drive a climate-compatible heat pump market, by RAP, Agora Energiewende, CLASP and GBPN.