International cooperation for decarbonizing energy intensive industries – Towards a Green Materials Club : A working paper on sectoral cooperative approaches

The energy intensive industry, producing basic materials, is responsible for 25 to 30% of today's global greenhouse gas emissions. The future supply of GHG neutral basic materials (e.g. steel, cement, aluminium, plastics, etc.) is a necessity for building a sustainable modern society. Deep decarbonisation of the energy intensive industries is technically possible but will require a major systemic shift in production processes and energy carriers used, which will require large public support in the form of subsidies and high carbon prices. A key barrier for implementing ambitious climate policies targeting energy intensive industries is the inherent conflict between the global nature of energy intensive industries and the existing climate policy framework that is based on nation states taking action according to the principle of “common but differentiated responsibilities”. This approach could lead to carbon leakage and the introduction of carbon trade measures has been the default proposition from academics to ameliorate these concerns. However, another way is to define the task of decarbonizing EIIs as a global task and not as a purely national matter and to cooperate internationally. In this paper we analyse what it takes to decarbonize energy intensive industry and what implications this transition can have for trade. From here we explore the opportunities for enhanced cooperation for deep decarbonisation for EIIs within the Paris Agreement. We argue for international cooperation by establishing a green materials club that would focus on long-term technology development. This could be a viable way to ease the current shortterm conflicts and mitigate the need for carbon tariffs. However, a green materials club should still be a part of a wider discussion around what is considered fair trade practices under the climate convention and how this relates to national interest and industrial policy for the decarbonisation of basic materials production

International cooperation for decarbonizing energy intensive industries: the case for a Green Materials Club

Basic materials are traded globally and responsible for roughly 22 % of global carbon emissions. It is technically possible for the energy intensive industries (EIIs) that produce these materials to reach zero emission, but at a cost. So far, the fear of carbon leakage has been a barrier for implementing ambitious domestic climate policies that targets theses globally traded commodities. The introduction of border carbon adjustments (BCAs) for levelling the global playing field has been suggested to ameliorate these concerns. However, another way is to focus more on innovation, adopting green industrial policies and to cooperate internationally for developing technologies for net zero EIIs. In this chapter we explore the opportunities for enhanced cooperation for enabling deep decarbonisation for EIIs and how that links to BCAs. We argue for establishing a green materials club focussing on long-term technology development and discusses limitation and opportunities for this approach. A green materials club could ease the conflicts between trade and ambitious climate policy and complement BCAs

Can we find a market for green steel?

The race is on to find an alternative and greener way to make steel away from the fire and brimstone associated with traditional methods. Higher prices for ‘green steel’,however, will mean that new markets must be found

Utilization of industrial and agricultural by-products in blended cement mortars – creating an effort of circular economy in Indian cement industry

India stands in second place as a manufacturer of cement in the world, accounting for over 8 % of the worldwide mounted capacity until the end of the year 2018. It is estimated that the production of the cement will touch 550 Mt by the year 2020 and will reach more than 600 Mt by 2025. Up to the year 2015, the total emissions of CO2 from cement sector in India have touched the level of around 150 Mt in comparison to an amount of 52 Mt emitted in the year 2013. This amount of generation has been projected to increase by 9 %–10 % annually up to the year 2025. The boosting demand for construction activities results in incessant growth of the sector along with alarming environmental consequences and non-sustainability in the cement industry. Utilization of the various industrial and agricultural by-products as an alternative form of binder in the cement can reduce the perilous environmental impacts and their practice will further offer an auxiliary solution in fetching the concept of circular economy in the surging cement industry. Blended types of cement made up of industrial and agricultural by-products can successfully replace the limestone-based clinkers. The adoption of such practice could offer a significant reduction in CO2 emissions approximately by 20 %. On the other hand, the abundant generation and the efficient utilization of industrial and agricultural wastes primarily having binder qualities similar to that of cement has set up a new challenge in the construction industry. Next to a review of industrial and agricultural clinker substitutes, this contribution estimates the impact of these clinker substitutes on CO2 reduction in the Indian cement industry up to 2050

Can we find a market for green steel?

The race is on to find an alternative and greener way to make steel away from the fire and brimstone associated with traditional methods. Higher prices for ‘green steel’,however, will mean that new markets must be found

Which countries are prepared to green their coal-based steel industry with electricity? - Reviewing climate and energy policy as well as the implementation of renewable electricity

Global steel production is currently dependent on coal and capital-intensive production facilities with long economic lifetimes. While the Paris Agreement means carbon neutrality must be reached globally by 2050–2070, with negative emissions thereafter, coal-based steel production today accounts for around 8% of global energy-related CO2 emissions. Its production may stabilize or even decline in industrialized countries, but it will increase significantly in the emerging economies. In the past, the focus of CO2 reduction for steel has been on moderate emissions reductions through energy efficiency measures and on exploring carbon capture and storage. However, as (1) the cost of renewable electricity is declining rapidly, (2) carbon capture and storage has not materialized yet, and (3) and more and more countries set deep emission reduction targets, electricity- and hydrogen-based steelmaking has gathered substantial momentum over the past half-decade. Given the short time frame and the sector's deep carbon lock-in, there is an urgent need to understand the national climate and energy policy as well as the current implementation of low-CO2 and renewable electricity that would enable a shift from coal-based to electricity-based steelmaking. In this paper, we first identify the countries that are likely to be major steel producers in the future and thus major CO2-emitters. Then we map medium- and long-term CO2 reduction and renewable targets as well as the current share of low-CO2 and renewable electricity by country. Based on these data, we develop a set of indicators that map the readiness of steel-producing countries for a sustainable transition. Our findings show that although binding long-term CO2 reduction targets are being implemented, medium-term CO2 reduction do not yet affect coal based steel production. Overall, the global steel industry seems not be on track yet, though differences between steel producing countries are large. Common shortcomings across countries are a lack of access to renewable electricity and a lack of demanding medium-term CO2 reduction targets. The paper ends with recommendations on how to enable a low-carbon transition of the global steel industry in line with the Paris Agreement

Drivers and barriers to the diffusion of energy-efficient technologies - a plant-level analysis of the German steel industry

The paper aims at explaining why large-scale energy-intensive industries - here the German iron and steel industry - had a period of slow uptake of major energy-efficient technologies from the mid 1990s to mid 2000s (Arens and Worrell, 2014) and why from the mid 2000s onwards these technologies are increasingly implemented again. We analyze the underlying factors and investment/innovation behavior of individual firms in the German iron and steel industry to better understand barriers and drivers for technological change. The paper gives insights on the decision-making process on energy efficiency in firms and helps to understand how policy affects decision-making. We use a mixed method approach. First, we analyze the diffusion of three energy-efficient technologies (EET) for primary steelmaking from their introduction until today (top-pressure recovery turbine (TRT), basic oxygen furnace gas recovery (BOFGR), and pulverized coal injection(PCI)). We derive the uptake of these technologies both at the national level and at the level of the individual firm. Second, we analyze the impact of drivers and barriers on the decision-making process of individual firms whether or not they want to implement these technologies. Economics and access to capital are the foremost barriers to the uptake of an EET. If the expected payback period exceeds a certain value or if the company lacks capital, investments in EET seem not to happen. But even if an EET is economically viable and the company has access to capital, investments in EET might not be realized. Policy-induced prices might have strengthened the recent diffusion of TRT. We found indications that in a limited number of cases, policy intervention was a driving factor. Technical risks and imperfect information are only marginal factors in our cases. Site-specific factors seem to be important, as site-specific factors shape the economicsof the selected EET