Industry & Innovation

Key challenges

• Even a 100% renewable energy supply would not reduce the emissions from heavy industry to levels compatible with the Paris Agreement, as emissions resulting from production processes and from the feedstock in cement, steel and chemicals would remain unchanged.
• There is no business case or incentive for businesses to manufacture clean materials under the status quo. Many carbon-intensive materials are globally traded commodities with thin profit margins, preventing early movers in the industry from passing overall modest price increases in the final products onto the final consumer.
• Many solutions, technologies or processes, are not yet on the market, whether they still need development or because they need support to be deployed. Decarbonising the economy, especially heavy-industry, requires the right framework for Research and Development and sufficient funding made available to cover for the risk inherent to innovation.
• Uncertainties concerning cost-competitive energy and feedstock, adequate infrastructure, and the evolution of the global trading environment for products inhibit investment by EU industry into climate-neutral processes. Assets are increasingly depreciated and not renewed.
• Heightened global and European demand will likely level out any incremental efficiency improvements.
• There is no adequate regulatory framework in place to enable a shift to clean production pathways. Alternative production technologies don’t exist at an industrial scale yet and are significantly more expensive than current, established production routes.