Responsible for nearly one-third of carbon emissions, the heavy industry sectors have a vital role to play in keeping global warming to well below 2˚C - and we know how to do it. Depending on your disposition, this is either a huge challenge or an incredible opportunity – but either way, it is possible.
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Certain sectors – including aluminium, cement, chemicals, steel, aviation, trucking and shipping - are referred to as ‘hard to abate’ because the solutions for reducing their greenhouse gas emissions are tricky. In some cases, the sheer amount of power they need makes switching to renewables a slow process, especially in countries that don’t have resources in place. For cement, the chemistry involved in the process is the culprit and so far, no scalable alternative has been found. For aviation and shipping, meanwhile, fossil fuels are still the only answer, although that is changing.
It is no surprise that up until now governments and businesses have focused on tackling the easier wins when it comes to climate action; primarily that has meant switching to low-carbon sources of power and implementing energy-efficiency measures. We are also seeing the results of multi-stakeholder action; analysis by data specialist firm Point380 indicates that companies reporting to CDP between 2014 and 2017 have seen their emissions drop by 7% – largely as a result of increasing energy efficiency and switching to renewables. The corresponding evidence of this is seen in the dramatic drop in emissions from many of the electricity utility companies who are supplying this low-carbon power. Emissions from the S&P500 companies in the studies fell by 16% from 2014 to 2017.
Although switching to renewable power and investing in energy efficiency remain the most obvious and immediate options for most companies looking to reduce their carbon footprint, it is not so straightforward for some of the heavy industry and transport sectors who are set to account for 15.7 Gt of carbon emissions by 2050 if left unabated. This would be more than the entire carbon budget the world can emit in 2050 if we want to limit global warming to below 2°C.
It’s an alarming number. But thankfully, the Energy Transitions Commission (ETC) has the answers.
The World Economic Forum has teamed up with the ETC to build a new ‘Mission Possible Platform’ in order to create a range of partnerships with governments, within sectors and across value chains to deliver on what is possible. It is starting with the aluminium, cement, chemicals, steel, aviation, trucking and shipping sectors, which together currently emit an estimated 11.2Gt of greenhouse gases a year, representing about 20% of total global emissions.
We know the solutions
The good news is that the vast majority of technologies needed to bring about a clean industry transition have already been developed.
Based on analysis by the ETC, implementing the solutions needed for the hard-to-abate sectors would barely change the cost for consumers – in most cases the price rise would be limited to 1% for things like a car, a house or a plastic bottle. Aviation sets the exception; prices for economy class flights are expected to increase by 10-20%.
For intermediate products that are sold by primary producers to manufacturers, construction companies and transport providers, the cost is tremendous: the price of a tonne of cement or a litre of jet fuel could increase by up to 100%. That’s why collaboration is key; these abatement options are only feasible if a significant proportion of the industry adopts them.
For short-haul distances in shipping, aviation and trucking, electric vehicles are the most promising solution. For longer distances, the industry will need to invest in sustainable fuels. In marine transport, ammonia and hydrogen will be the energy sources of choice, while aviation is likely to be powered by bio and synthetic fuels.
The cement sector has the option to switch their kilns and invest in alternative materials for concrete production to move towards net-zero emissions. The steel sector is set to improve the efficiency of the coking process while switching to hydrogen or gas as a transition fuel. Similarly, the focus for aluminium lies on new smelting and refining processes and using renewable energy.
The chemicals sector can improve its carbon intensity by relying on bio and synthetic feedstock, utilizing waste for heat generation, electrifying furnaces and improving electrochemical processes.
Across all sectors improving energy efficiency and reducing demand through increased recycling rates and sustainable product design will be key levers.
From hard-to-abate to Mission Possible
There are climate champions within the heavy industry and transport sectors. Companies like Heathrow, Maersk, Dalmia, SSAB and Schipol have already set themselves net-zero targets.
A further 24 companies from heavy industry and mobility sectors have set themselves science-based emission-reduction targets - and of these, 17 are from the chemicals sector.
Meanwhile, new alliances for heavy industry and transport sectors are sprouting up under the Mission Possible Platform.
In the aviation sector, airports like Heathrow and Schipol plan to become carbon-neutral by 2050. There is ongoing work with fuel providers like Shell and airlines including Spice Jet and KLM to move the aviation industry towards carbon-neutral flying, through an accelerated transition to sustainable aviation fuels.
In the world of trucking, Scania and Volvo are leading the charge to collaborate with end customers and fuel producers to bring down emissions from heavy-duty road transport.
The shipping industry has banded together to get zero-emission vessels running along deep-sea trade routes by 2030. This initiative is spear-headed by Citi, Lloyd’s Register, Cargill, Maersk and Shell under the umbrella of the Global Maritime Forum and the Friends of Ocean Action.
Chemicals companies have gathered to accelerate the development of clean production technologies through collaborative innovation led by the Chemistry and Advanced Materials Governors Community at the World Economic Forum. BASF is aiming for carbon-neutral growth from 2019 until 2030.
Pioneer projects like Hybrit are showing the way forward in the steel industry. This is a joint project between SSAB, LKAB and Vattenfall to create zero-carbon steel by replacing coal as a fuel with hydrogen in coking process.
Similarly, businesses in the aluminium sector are working towards developing low-carbon smelting and refining processes, increase renewable energy sourcing and recycling rates. EN+ is leading the charge in a new initiative called Aluminium for Climate.
There is no doubt that these heavy industry sectors have a long way to go – and they will only get there with strong government and NGO support. It is critical that whether this is seen as a huge challenge or an incredible opportunity, we are all working towards realising what is possible.