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Industry & Innovation

Carbon-intensive material sectors such as steel, cement, aluminium, and various chemical products are all around us in our daily lives: in infrastructure, buildings and cars. These sectors make up 16% of the European Union’s emissions, which continue to rise due to growing demand. The ECF supports policy to enable zero-carbon production processes and incentivise innovative and circular business models for industry.

Ricardo Gomez Angel Dprxf9 4tqc Unsplash

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 industry from passing overall modest price increases in the final products on to the final consumer.
  • 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 industrial scale yet and are significantly more expensive than current, established production routes.

Mission

The ECF’s Industry & Innovation programme aims to create an environment where a competitive, innovative net-zero emissions industry becomes possible in Europe by 2050. Innovation to reach carbon neutrality means the right framework is in place to support the financial risks and cover for the failure that is an inevitable part of an innovator’s journey. This includes sufficient public financial support to leverage enough private investments, and also a legal framework that is sufficiently agile and adaptative for the EU to remain a leader in climate competitiveness.

There is an increasing demand by society and customers for a change towards net-zero emissions in heavy industry. Even industrial players are increasingly giving themselves ambitious, science-based targets to align with the Paris Agreement. The industrial value chains have had decades to specialise in established, efficient technologies and business models. While the value-chain approach and more circular business models are just emerging, they are increasingly enabled by awareness, cooperation, innovation and digitalisation.

How we work

Our approach reflects the overall importance of heavy industry to both the achievement of the Paris Agreement and the economic welfare of the European Union. We work together with think tanks, civil society organisations, the financial sector, EU officials and industry itself to jointly identify, develop and implement strategies that enable a competitive, net-zero emissions industry by 2050. Our work is based on rigorous, evidence-based analysis and innovative thinking. We aim to form successful coalitions and align with the ECF’s strategy on energy, finance and the buildings sector.