- The industrial sector is responsible for roughly one quarter of global greenhouse-gas (GHG) emissions. A mix of measures, including energy-efficiency improvements, using hydrogen and biomass as feedstock or fuel, producing heat through electric means and adopting carbon-capture technologies, can reduce the sector’s carbon dioxide emissions to almost zero. To decarbonize the industry sector globally will require cumulative investments of EUR2.7trn until 2050. Of this, the EU needs 8% or EUR210bn, and half of this for electrification investments alone. The rest is almost equally split between hydrogen use, innovative production processes and new technologies. Additionally, at EUR330bn until 2050, the EU industry’s total investment needs for carbon capture and storage (CCS) are almost 60% higher than the investments in all other industry decarbonization measures combined. .
- To meet these needs, the EU28 countries need to invest EUR3bn per year between 2020 and 2030, and EUR9bn annually from 2030 to 2050, when technologies will be ready for full-scale deployment. The pulp & paper industry requires the largest overall investments – EUR 78.4bn until 2050 – followed by iron & steel (EUR55.4bn) and cement (EUR37.6bn). These investments would cut emissions by 265 MtCO2 (-92%), which yields an average abatement investment of EUR790 per tCO2.
- In this context, governments should use the instruments at their disposal (e.g. subsidies, carbon taxes) to effectively align sector pathways with overarching net-zero transition goals.
Industry sector
The green industrial revolution – Investment pathways to decarbonize the industrial sector in Europe
Contact
Markus Zimmer
Allianz SE
Allianz SE
Arne Holzhausen
Allianz SE
Allianz SE