Environmental challenges
High-energy-intensive industries and the challenge of carbon neutrality
With the United States, Europe and Japan are all targeting carbon neutrality for 2050, and China for 2060, all economic sectors are gathering their forces to decarbonate. Many of them, particularly in the services sector, can meet this target by making increased, or even exclusive, use of renewable energies, while implementing energy-savings plans. This is not the case in high-energy-intensive industries, such as steelmaking, chemicals and cement, which emit heavy amounts of greenhouse gases. This is a review of decarbonation options to allow such industries to take part in the global shift towards carbon neutrality.
It’s hard to imagine the steel industry without blast furnaces or the cement industry without the clinker obtained by heating a mixture of various raw materials. High-energy-intensive industries rank very high among the main greenhouse gas emitters, accounting for about 25% of total global CO2 emissions1. These industries are both big energy users and big greenhouse gas emitters. To cite just one example: steelmaking requires temperatures ranging from 1100°C to 1600°C, which are achieved using fossil fuels. Moreover, CO2 emissions are mostly the “side” effects of processing that is essential to making materials such as cement or steel.
It happens that these industries are essential to global growth, even if just to keep up with population growth, economic development, and the growing need for infrastructures, housing, transports, and so on. Global steel demand, for example, is expected to rise by 30% by 20502 and aluminium demand by 50%3.
No wonder these industries are at the heart of decarbonation strategies. In June, US President Biden announced an investment of 135 million dollars in 40 projects to help US manufacturers accelerate their shift towards carbon neutrality4. Europe’s new industrial strategy, unveiled in March 2020, makes decarbonation of industry, high-energy-intensive industry in particular, a key challenge to achieving the carbon neutrality target by 20505.
Developing alternatives to fossil fuels
Several avenues are being explored to reduce energy consumption and greenhouse gas emissions. The first of these is integrating other, lower-emitting sources of energies into manufacturing processes. As the International Energy Agency has noted, processes requiring relatively low temperatures (such as agro-food) lend themselves well to electrification6.
The use of biomass – waste from the wood, agriculture or livestock sectors – is another path being explored by industry, via industrial combustion but mostly through gasification or liquefaction. This makes it possible, for example, to use wood derivatives to produce biogas or biofuels that, in one way or another, can be used as alternatives to fossil fuels. However, the use of biomass faces many challenges, such as installing supply chains, processing that can produce on an industrial scale, and the cost of these alternatives7. Industrial competitiveness is indeed a key issue here. Hence, the need for innovation to provide alternatives whose prices are as close to possible to fossil fuel prices.
What about hydrogen?
The use of hydrogen in industry faces the same challenges, not to mention the issue of where the hydrogen itself comes from. Traditional methods of producing hydrogen are heavy emitters of CO2 and hydrogen’s decarbonation value hinges entirely on the ability to produce “clean” hydrogen from renewable energies or nuclear power.
On paper, however, hydrogen does have lots to offer industry. First of all, it can be used to store and, hence, to stabilise renewable energy output, which, in turn, promotes its use by many sectors. Second, it can be used to decarbonate certain manufacturing processes, including those used in steelmaking, for example, as a reducing agent in the process of direct reduction of iron ore, an essential step in steelmaking. In this process, hydrogen reacts with the oxygen from iron ore to produce steam instead of CO2, as happens with coking coal, the traditional reduction agent8 . Likewise, when used as a raw material in chemical processes, hydrogen is a promising avenue to decarbonating the chemicals industry.
Rethinking the approach to energy consumption
Industry’s other major approach to carbon neutrality targets energy consumption. This includes investing in renovation of industrial facilities, implementing energy-savings plans based on monitoring of consumption, and renovating buildings.
Here’s another way to approach energy consumption and industrial production: the development of the circular economy. From steelmaking to plastics to textiles and chemicals, all industrial sectors can develop production processes that facilitate reuse, refabrication or recycling9.
The circular economy also involves the carbon capture and use. Once it has been concentrated, captured CO2 can also be used to produce synthetic fuels via a process called CO2 electrolysis, which is used by the agro-food industry (to produce carbonated beverages) and by the chemicals and aquaculture sectors. Here again, developing these solutions requires rolling out well-organised supply chains and massive investments. For example, the Oil and Gas Climate Initiative, which brings together 12 of the world’s largest oil & gas companies, has targeted CO2 capture and reuse in its decarbonisation policy, backed by an investment plan of more than 1 billion dollars10 .
Clusters for achieving carbon neutrality
In addition to the aforementioned possibilities, the most promising carbon neutrality projects are based on clusters, which combine several solutions and various actors (in particular, manufacturers, decarbonisation specialists and public authorities). The Transitioning Industrial Clusters towards Net Zero initiative, which has been rolled out in Europe, the US and Asia, aims to created 100 industrial clusters worldwide, to reduce CO2 emissions by 1.6 billion tonnes, to maintain and create 18 million jobs, and to contribute 2,500 billion dollars to global GDP11 .
The Humberside, England industrial cluster, which is targeting carbon neutrality by 2040, is a good example of what these clusters can do. It brings together steel, chemicals, cement and refinery industries. Within this cluster, the Zero Carbon Humber programme includes the development of a pooled carbon capture infrastructure with offshore storage. The cluster also provides hydrogen production facilities with a pooled distribution infrastructure. In the longer term, the project will include the production of green hydrogen using offshore wind power and electrolysers. And, lastly, project partners are counting on energy efficiency and circularity to reduce their CO212 emissions.
The development of these clusters illustrates perfectly how high-energy-intensive industries can manage their path towards carbon neutrality – by working together, leveraging public-private partnerships, pooling infrastructures, and promoting innovation to get solutions to achieve industrial scale. The goal: to build the future of sustainable industry, environmentally, socially and economically.
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1 https://www.iea.org/energy-system/industry
2 https://www.weforum.org/reports/the-net-zero-industry-tracker/in-full/steel-industry/
3 https://european-aluminium.eu/blog/vision2050/
4 https://www.energy.gov/articles/biden-harris-administration-announces-135-million-reduce-emissions-across-americas
5 https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/european-industrial-strategy_en
6 https://www.iea.org/energy-system/electricity/electrification
7 https://www.ieabioenergy.com/wp-content/uploads/2022/02/Role-of-biomass-in-industrial-heat.pdf
8 https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/641552/EPRS_BRI(2020)641552_EN.pdf
9 https://worldsteel.org/circular-economy/
10 https://www.ogci.com
11 https://www.weforum.org/press/2023/01/decarbonization-of-industrial-clusters-initiative-gains-global-momentum/