Industrial Transformation 2050 - Pathways to Net-Zero Emissions from EU Heavy Industry

There is intense debate about how to close the gap between current climate policy and the aim of the Paris Agreement to achieve close to net-zero emissions by mid-century. Heavy industry holds a central place in these discussions. The materials and chemicals it produces are essential inputs to major value chains: transportation, infrastructure, construction, consumer goods, agriculture, and more. Yet their pro­duction also releases large amounts of CO2 emissions: more than 500 Mt per year, or 14% of the EU total. 

Policymakers and companies thus have a major task ahead. There is an urgent need to clarify what it would take to reconcile a pro­sperous industrial base with net zero emissions, and how to get there in the 30 remaining years to 2050. 

This study seeks to support these discussions. It characterises how net zero emissions can be achieved by 2050 from the largest sources of ‘hard to abate’ emissions: steel, plastics, ammonia, and cement. The approach starts from a broad mapping of options to eliminate fossil CO2-emissions from production, including many emerging inno­vations in production processes. Equally important, it integrates these with the potential for a more circular economy: making better use of the materials already produced, and so reducing the need for new production. Given the uncertainties, the study explores several dif­ferent 2050 end points as well as the pathways there, in each case quantifying the cost to consumers and companies, and the require­ments in terms of innovation, investment, inputs, and infrastructure. The ambition is to explore how the myriad of new technologies and business models be­ing discussed can fit together into consistent European industrial strategies to combine a prosperous industrial base with Paris compatibility, and what big choices and ‘no regrets’ Europe faces when developing such industrial strategies. 

This report thus explores the technical and economic aspects of the transition but stops short of concrete po­licy recommendations. In a separate report, An Industrial Strategy for a Climate Neutral Europe, a group of policy experts explore what European policy is best suited to achieve a balanced transition. 

About Industrial Transformation 2050

This report is part of the Industrial Transformation 2050 project, an initiative convened by the European Climate Foundation in collaboration with the Cambridge Institute for Sustainability Leadership, the Children's Investment Fund Foundation, Climate-KIC, the Energy Transitions Commission, RE:Source, and SITRA. It is published as part of the Net-Zero 2050 series, an initia­tive of the European Climate Foundation. 

Industrial Transformation 2050 seeks to work with industry and other stakeholders to set out pathways and policy options for net-zero heavy industry in Europe by 2050, achieving the objectives of the Paris Agreement while strengthening industrial competitiveness and the EU’s overall economic development and performance. 

The objective of Net-Zero 2050 is to build a vision and evidence base for the transition to net zero emission societies in Europe and beyond, by mid-century at the latest. 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 and forestry sectors; to shed light on near-term choices and actions needed to reach this goal; and to provide a basis for discussion and engage­ment with stakeholders and policymakers.