Energy Transition

Why public-private collaboration is critical for industrial net-zero transformation

Decarbonization of the entire industrial value chain is essential for a sustainable energy transition

Decarbonization of the entire industrial value chain is essential for a sustainable energy transition Image: Unsplash/Veeterzy

Jan Jenisch
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Energy Transition

This article is part of: World Economic Forum Annual Meeting

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  • The scale and speed of industrial decarbonization needed to meet climate goals are huge.
  • Cross-sector collaboration is key to strengthening market demand for low-carbon and circular solutions across the industrial value chain.
  • Next-generation technologies such as carbon capture, use and storage can help decarbonize industry.

Given the scale of today’s net-zero challenges, no single organization or industrial sector can tackle decarbonization alone. We need close collaboration: between government and industry as well as along our entire value chain.

Government and industry must work as partners to make sure the business case of short and long-term investments in industrial decarbonization is sound.

Industrial decarbonization for energy transition

At Holcim, we are seeing this collaboration take shape in the deployment of next-generation technologies such as carbon capture, use and storage (CCUS). We are exploring the potential use of CCUS technologies across over 30 pilot projects worldwide, repurposing CO2 from our plants for use in vertical farming all the way to alternative fuel for aviation.

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    We are exploring such a broad range of CCUS projects so that we have maximum flexibility to apply these technologies across our global footprint. We’re seeking the best solutions (in terms of technology and cost-efficiency) that can be replicated in other plants in selected regions, advancing our CO2 reduction journey and adding value in the form of CO2-related materials, thereby creating new growth opportunities for the company.

    Governments recognize that these technologies must be deployed at scale to reach net-zero in cement manufacturing. The European Commission considers CCUS as one of the seven strategic pillars in their “A clean planet for all” strategy, and the IEA Roadmap for the cement sector projects CCUS to begin at scale from 2030 onwards. For that reason, a number of our CCUS projects are receiving public support today, from entities such as the US Department of Energy to Germany’s Federal Ministry of Economic Affairs and Energy.

    The net-zero transition will require large-scale and sustained investments across the industrial value chain.

    Jan Jenisch, CEO of Holcim

    This is just the beginning. The net-zero transition will require large-scale and sustained investments across the industrial value chain. Some of the needed technologies go beyond any single industrial sector and form societal endeavors that require public support and acceptance. Public policy tools such as carbon pricing mechanisms will play a central role in the carbon neutral economy and must be designed in a way that embeds carbon costs across whole value chains and gives low-carbon solutions a competitive edge.

    CCUS will significantly increase the energy needs of industry. In turn, this will require an adapted energy policy framework that enables the following:

    • Improved access to abundant and competitively priced low-carbon energy.
    • The recognition of technologies such as co-processing which allows substituting fossil fuels and primary raw materials with non-recyclable residual and biomass waste.
    • The enforcement of waste legislation and its management hierarchies (including landfill bans for waste that can be recovered and/or recycled in industry).
    Fostering Effective Energy Transition 2022 industrial decarbonization
    Fostering Effective Energy Transition 2022: Collaboration model types between customers and suppliers for industrial decarbonization Image: Fostering Effective Energy Transition 2022

    Decarbonization collaborations across the value chain

    Actors from all sectors must collaborate to strengthen market demand for low-carbon and circular solutions across the industrial value chain. One important factor is to integrate low-carbon and circularity performance alongside traditional criteria such as safety, cost, resilience and durability. This must be done in a way that respects the principles of technology neutrality and lifecycle performance.

    Industry actors can also show leadership to decarbonize their sectors. As a global leader in innovative and sustainable building solutions, Holcim is taking such a leadership role. The CO2 emissions from transporting our materials (to customers, between factories and distribution terminals) account for 27% of our total indirect (Scope 3) emissions. We drive roughly two billion road-kilometres per year to transport our products, with approximately 95% of trucks owned and operated by third parties.

    To reduce emissions from downstream transportation we are optimizing routes and loads, moving volumes from road to waterways or rail, training and monitoring drivers' behaviours to increase road safety and reduce fuel consumption and gradually replacing diesel with eco-friendly fuels in fleets.

    As a founding member of the First Movers Coalition, we are ambitious to drive more green demand and low-carbon technologies to advance our world’s climate goals. On the green procurement side, we commit to FMC’s trucking ambition of reaching 30% of zero-emission heavy-duty truck purchases or contracts by 2030.

    On the supply side, we will continue to scale up our green building solutions and next-generation technologies for net-zero construction, building on Holcim’s industry-first 2050 net-zero goals, validated by the Science Based Targets initiative. Leading by example, we hope to inspire the virtuous cycle of collaboration and partnership that is necessary to reach net-zero in our industry. There is no other way forward.

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