Climate Action

To decarbonize heavy industry, we must focus on industrial clusters

The industrial sector accounts for 30% of global emissions and roughly 37% of global energy consumption. This makes industrial clusters a huge opportunity for emissions reduction

The industrial sector accounts for 30% of global emissions and roughly 37% of global energy consumption. This makes industrial clusters a huge opportunity for emissions reduction Image: Robin Sommer for Unsplash

Bill Gross
CEO and Founder, Heliogen
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Climate Action?
The Big Picture
Explore and monitor how Climate Crisis is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Climate Crisis

This article is part of: The Davos Agenda

Listen to the article

  • The industrial sector accounts for 30% of emissions and roughly 37% of global energy consumption.
  • It will be hard to decarbonize industrial operations like the production of cement, iron, steel, and petrochemicals, but the task is far from impossible.
  • To make the biggest difference we must focus on industrial clusters, where manufacturing industries are co-located.

There are reasons to hope for progress on the climate crisis. The transportation and electricity generation sectors are decarbonizing at an accelerating rate, and companies and governments are prioritizing net-zero-carbon goals. But one crucial sector is lagging behind in this trend: industry.

The industrial sector accounts for 30% of global emissions and roughly 37% of global energy consumption. This huge share of climate-changing emissions from one sector is an equally huge opportunity for emissions reduction on a global scale. If companies and governments don’t start bringing today’s breakthrough carbon-slashing technologies to industry quickly and efficiently, we risk undermining the progress we’ve made in other parts of the economy.

Have you read?

While it will be hard to decarbonize industrial operations like the production of cement, iron, steel, and petrochemicals, and mining, the task is far from impossible. And when we approach this task, the where is just as important as the how. Industrial clusters are the best places to start the industrial decarbonization movement. They are geographical areas where groups of manufacturing industries are co-located, providing opportunities for scale, sharing risk and resources, aggregation and optimization of demand. Europe’s approximately 3,000 industrial clusters account for 20% of the continent’s emissions.

Why start with industrial clusters?

The efficiency of sharing resources and services – most notably, energy – is the key benefit of industrial clusters. A 2014 study showed that an industrial park made up of a steel mill, cement plant, fertilizer plant, and recycled paper facility achieved 21% energy savings through heat integration and sharing other products. Using industrial-scale renewable resources – green hydrogen, solar thermal, solar plus storage, and other technologies –makes further savings.

Heliogen has pioneered AI-enabled concentrated solar technology for industrial facilities, with scalability in mind. Our AI-enabled solar technology providing heat, electricity or clean hydrogen fuels to one industrial facility can significantly reduce the carbon emissions from that facility; the same technology, scaled up to provide clean energy to multiple, co-located facilities can expand its carbon reduction impact by orders of magnitude.

The demand ecosystems that exist at industrial clusters are also an ideal environment for a collaborative approach to decarbonizing industry. Governments, industrial corporations, financiers and technology providers should come together to plan, fund and execute decarbonization efforts at these sites. For governments, these efforts would pay off in the form of large, sustainable carbon reductions that make big progress towards carbon neutrality commitments.

Discover

What's the World Economic Forum doing about the transition to clean energy?

Benefits of decarbonizing industrial clusters

In addition to shrinking their carbon footprints (an increasingly important step for the growing, global body of ESG-oriented investors), industrial corporations would make sustainable cost savings. Banks and other financial organizations would gain new opportunities to fund capital projects with reliable returns on investment. And the companies developing cutting-edge energy technologies will earn opportunities to deliver on the promise of abating hard-to-abate industrial carbon emissions, and get paid to do it.

Decarbonizing industrial clusters would turbocharge global decarbonization efforts, generating trillions of dollars in value for public and private stakeholders. The biggest governments and companies in the world need to work together with innovative providers of low- and no-carbon heat, electricity, hydrogen fuel and other energy resources to reduce emissions from industrial clusters. The climate crisis is already too dire and the stakes are too high to put this effort on the back burner while easier, more visible sectors go through their own decarbonization journeys. It’s time to get the teams together and get to work.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Climate ActionSustainable DevelopmentIndustries in DepthForum Institutional
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

'Every fraction of a degree matters': Why climate action needs a new narrative

Liang Lei

May 27, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum