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Multiple pathways can take EU industries to a clean and prosperous future


Achieving net-zero greenhouse gas emissions by 2050 for European energy-intensive industries is within reach and multiple pathways can get them there. If supported by the right policy framework, these industries can contribute their share to the EU’s net-zero by 2050 vision, currently under discussion by member states, while remaining competitive and at the forefront of new economic opportunities at the global level.

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These are some of the conclusions of a new report – Industrial Transformation 2050 – Pathways to Net-Zero Emissions from EU Heavy Industry – carried out by the consultancy Material Economics with the support of the Wuppertal Institute and the Institute for European Studies, and commissioned by the European Climate Foundation*. Following the publication of the report, the ECF launched an initiative aiming to co-develop a credible and feasible industry roadmap that is in line with the Paris Agreement, as well as the policy frameworks needed to achieve a thriving, competitive and climate-friendly European industry in 2050.

The report, Industrial Transformation 2050 – Towards an Industrial Strategy for a Climate Neutral Europe by the Institute for European Studies at the Vrije Universiteit Brussel, spells out a vision of an integrated climate and industrial strategy to support this transition.

*co-funded by Climate-KIC, Energy Transitions Commission, Cambridge Institute for Sustainability Leadership, Sitra, RE:source.

Heavy industry is one of the sectors of the EU economy with stagnating CO2 emissions abatement and significant fossil fuel use. Previously perceived as the “hard to abate” industrial sectors,  steel, chemicals, and cement account for about 14% of Europe’s annual emissions. While other sectors are accelerating their emissions reductions, the share of emissions from heavy industry will increase dramatically under business as usual. As such, the industry has a key role to play in the decarbonisation of the European economy to fulfil the EU’s commitments under the Paris agreement.

In previously conservative sectors, we now see front-runners that are really envisioning different production models and technologies – including zero-carbon aluminium, steel, gas, and automobiles. The phase when abatement of emissions from industry was considered impossible is over. Industry leaders are looking at totally disruptive technologies and visions.
Laurence Tubiana, CEO of the European Climate Foundation

Climate neutrality for heavy industry: From Whether To How

According to the report, there are multiple possible pathways the EU could pursue to achieve the full decarbonisation of its heavy industries by 2050.

  • A more circular economy is a large part of the answer. Increased materials efficiency throughout value chains could cut 58–171  Mt CO2 per year by 2050. 800 kg of steel, cement and chemicals are used per person, per year in the EU. However, it is possible to achieve the same benefits and functionality with less material. Examples include new manufacturing and construction techniques to reduce waste, coordination along value chains for circular product design and end-of-life practices, new circular business models based on sharing and service provision, substitution with high-strength and low-CO2 materials, and less over-use of materials in many large product categories.
  • Reusing materials that have already been produced can also result in large emission reductions. By 2050, 70% of steel and plastics could be produced using recycled feedstock. In the case of plastics, using end-of-life plastics as feedstock for new production could significantly reduce the need for fossil fuels to produce new plastics.
  • Innovations in new, clean production processes and significant increases in renewable energy production will help enable deeper emission reductions over time. Between 143–241 Mt CO2 per year could be cut by 2050 by deploying new industrial processes. Innovations that would allow the use of electricity to produce high-temperature heat, switching for example from fossil fuels to green hydrogen, are emerging. However, these solutions need to be rapidly developed and deployed if they are to make a significant contribution by 2050.
  • Carbon capture and storage/use (CCS/CCU): All pathways developed in the study show that there are cases where not all the emissions can be abated through circular economy and electrification. CCS and CCU will be required to cut between 45 and 235 MtCO2 emissions per year by 2050. However, as the study highlights, these measures are not a ‘plug and play’ solution and would require access to suitable transport and storage infrastructure.

The benefits of decarbonisation

  • Reaching the full decarbonisation of its heavy industry will create an opportunity for Europe to become one of the key global hotspots for deep decarbonisation. Ten years ago Europe was an undisputed leader in a wide variety of renewable energy and low-carbon products and services. It now has the chance to boost the competitiveness of its industry by developing sustainable solutions that will be needed globally.
  • Switching from the import of large quantities of fossil fuels and feedstocks to home-grown resources would significantly reduce the European industry’s dependence on energy imports and will foster Europe’s energy trade balance. Steel, cement, and chemicals production together use 8.4 Exajoules (EJ) of mostly imported oil, coal, and natural gas. A major benefit of a more circular economy would be to reduce this need by up to 3.1 EJ per year in 2050.

The costs of the transition

  • Thanks to a more circular economy and affordable electricity, consumer prices of cars, houses and packaged goods would increase by less than 1%. Overall, the additional costs of achieving zero emissions are around 0.2% of projected EU GDP by 2050.
  • However, the business-to-business impact can be challenging and must be managed carefully. Therefore, strong policy support will be needed in the near term to ensure companies remain profitable in the transition.

Time is key

EU companies will need to make important investment decisions in the next few years. Changes in value chains and business models will take decades to establish and any delay will hugely complicate the transition. Therefore, national and European policymakers should urgently develop a comprehensive and integrated industrial climate policy strategy that ensures companies remain profitable in the transition to a net-zero and circular industrial future.

Towards an Industrial Strategy for a Climate Neutral Europe puts forward specific policy solutions to be taken into account by EU policymakers as part of their industrial strategy. The suggested policy options range from accelerating research and development, creating lead markets for and safeguarding the competitiveness of low-CO2 solutions, to incentivising and scaling up investments, enabling a fully circular economy as well as facilitating sector coupling and supporting infrastructure. It suggests that a dedicated governance mechanism for the industrial transition at the EU level must be put in place to guarantee a successful transition.


Adair Turner, Chair, the Energy Transitions Commission:

“This report confirms the finding of the Energy Transitions Commission’s Mission Possible report – that it is technically possible to achieve zero carbon emissions from heavy industry by 2050, at a very low cost to consumers and no cost to jobs. Europe should now grasp the economic opportunity which  rapid  progress towards full decarbonization will create”

Eliot Whittington, Director of Policy, the University of Cambridge Institute for Sustainability Leadership:

“This report clearly sets out that a zero greenhouse gas emissions future is not only possible for key industries in Europe, it is also achievable and affordable. It presents more clear evidence that the European Commission’s “A clean planet for all” strategy is the right vision for the EU, and that member states should commit to it and start exploring the required actions to deliver on it. For example, to realise the potential futures set out in the report will require resolve and innovative action on all sides. Business and policymakers will need to work together to answer critical questions such as how new circular economy business models can be created, how the cost of innovations in the industry will be shared and how much should Europe invest in CCS development.”

Mari Pantsar, Director of Carbon-neutral Circular Economy, Sitra:

“Transitioning to climate-neutrality in heavy industry can only be achieved by co-operation between all stakeholders of society. Finland launched its globally first-of-a-kind road map to a circular economy already in 2016. We are now offering our lessons and experiences as an example to explore the needed transition pathways”

Per Klevnäs, Partner, Material Economics:

“EU industrial companies have a major journey ahead. Net-zero emissions by 2050 are possible, as this report shows, but only with unstinting effort to put low-CO2 transformation at the heart of the corporate strategy. Few EU companies now believe that the status quo is a good place to be, and leading companies are already making significant progress to be the first with a low-CO2 offering to their customers. Policymakers now need to catch up, ensuring that investment and commitment to low-CO2 production and innovation become the profitable choice.”

Sira Saccani, Director, Sustainable Production Systems, EIT Climate-KIC:

“As the reports published today outline, there are multiple industrial pathways and strategies which the EU could pursue to achieve Net-Zero Emissions from EU Heavy Industry by 2050. Time is short and we think that a more circular economy with greater material efficiency, reducing the need for new material production, shall be accelerated through further innovation and financial investments. This will be a large part of the answer to reduce emissions from industry to net-zero by 2050.”

Tomas Wyns, Doctoral Researcher, Institute for European Studies:

“An Industrial Strategy for Climate Neutrality will entail a consistent and coordinated set of actions and instruments from different policy areas and different levels of EU governance. Its goal is to nurture new processes, products, value chains and business models, some of which either don’t exist yet or are far from mature but will be essential to achieve net-zero emissions.”

  • About the Net-Zero 2050 initiative

    The Net-Zero 2050 is a new initiative of the European Climate Foundation with contributions from a consortium of experts and organisations funded by the ECF.

    The objective of Net-Zero 2050 is to start building a vision and evidence base for the transition to net-zero emission societies in Europe and beyond, by midcentury at the latest. The Paris Agreement commits us to make this transition, and long-term strategic planning shows that many of the decisions and actions needed to get us on track must be taken without delay. Reports in the series seek to enhance understanding of the implications and opportunities of moving to climate neutrality across the power, industry, buildings, transport, agriculture, land use, Land-Use Change and Forestry (LULUCF) sectors; to shed light on some of the near-term choices and actions needed to reach this goal, and to provide a basis for discussion and engagement with stakeholders and policy-makers.

    With acknowledgement of the source, reproduction of all or part of the publication is authorised, except for commercial purposes.

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