Cutting greenhouse gas emissions is at the heart of efforts to reduce the impacts of climate change and ensure our planet remains habitable for future generations. However, there is no one-size-fits-all approach to making the cuts needed: there has to be a concerted effort across countries and different economic sectors.
Industry, particularly heavy industry, is one of these sectors, not least because global energy consumption from industry has the potential to be reduced by 25 per cent if the best available technologies are adopted to improve efficiency. It is also notoriously one of the most difficult sectors in which to identify areas to reduce emissions. This is why it has become a key focus for Climate Group, which works with extensive networks in business and government to take fast, effective action on climate change.
Although technologies exist to decarbonise production processes, concrete and steel making, for example, are still some of the biggest global emitters of CO2, with each accounting for seven per cent of global emissions. In 2021, together with Mighty Earth, we therefore set out six publicly available global guidelines for how heavy industries like steel, cement and chemicals can stimulate economic growth while also playing a part in keeping global temperature rises to 1.5°C climate trajectory.
Developing a more circular economy can reduce CO2 emissions from four major industry sectors (plastics, steel, aluminium and cement) by 40 per cent worldwide and by 56 per cent in developed economies like Europe by 2050. Such a substantial drop would boost efforts being made elsewhere to reach net zero emissions.
Focusing on steel
We are specifically driving low carbon industry innovation in response to corporate demand for low emission and net zero steel, as businesses step up their climate commitments across all sectors.
The SteelZero initiative, run by Climate Group in partnership with ResponsibleSteel, brings together leading organisations from across the construction and property, renewable energy and automotive and shipping sectors to create a more sustainable supply chain faster. Members make a public commitment to buy and use 100 per cent net zero steel by 2050, with an interim commitment of using 50 per cent responsibly sourced steel by 2030. This roadmap helps guide members towards the ultimate 2050 target date: keeping momentum up and showcasing success to others in real-time, which in turn drives further demand.
We are already seeing steel producers accelerate their decarbonisation strategies due to a rise in demand. Last year British Steel announced that it will be adopting Science Based Targets and specifically referenced Climate Group’s SteelZero initiative as a critical factor in the decision to take this step.
To support businesses further, in May we published our Global Policy Principles as part of SteelZero. This lays out six policy principles that governments must adopt to support the global decarbonisation of the steel industry. The principles call on government decision makers to:
- Promote a global standard and definition on what low emission and net zero steel is.
- Support the public sector in using low emission and net zero steel in current and future projects.
- Get businesses to measure and report on the carbon emissions associated with the steel they use.
- Encourage better use of steel in the first place while ensuring that steel can be easily recycled.
- Set expectations on what’s needed from steelmakers to drastically cut carbon emissions.
- Create a level playing field for net zero steel in global markets.
We know that the steel industry needs enhanced government support to help meet its net zero targets. Our principles will be used as a tool for our membersto advocate for action across supply chains, partnerships and policy networks. If widely implemented, they can mobilise system change to decarbonise the whole steel sector.
Bringing in governments
However, businesses are only one part of the answer to tackling industry emissions. Meaningful change will only ever be possible if governments at all levels help to create the conditions needed for businesses to act while remaining competitive. Through the Under2 Coalition, for which Climate Group acts as Secretariat, we have been helping to drive these conditions. The Coalition represents state and regional governments worldwide, with a membership representing half of global GDP. Collectively its members have a wide breadth of understanding of potential solutions to climate issues – and how to enact them.
State and regional governments have the power and ability to experiment and stimulate industry innovation in a way that would not be an option for national governments. Planning for low carbon industry also provides states and regions with the opportunity to secure a long term clean and healthy future: guaranteeing jobs in green sectors, as well as growth and prosperity for local people.
The Under2 Coalition’s Industry Transition Platform (ITP), run with the German state government of North Rhine-Westphalia and funded by Stiftung Mercator, began in April 2019 and finished in 2022. It brought together representatives of industry, system change experts and researchers to offer tailored technical support to eleven state and regional governments from Europe and North America. The ultimate aim was to help these governments, all from highly-industrialised geographies, develop meaningful and ambitious industry emission reduction strategies.
The governments taking part were:
- North Rhine-Westphalia
Getting started with industry emissions
The ITP launched with a three-day workshop in Milan, where government representatives shared the challenges they faced in their particular geographies. This led to identifying a number of priorities for the project to address, including improving industrial energy efficiency, developing innovative finance and investment models and creating meaningful engagement with industry.
This workshop also included a site visit to ORI Martin, an international steel production company, at their plant in Brescia, Italy. Here project participants learnt about the various technologies and approaches that ORI Martin has introduced to reduce its impact on the environment. The plant produces steel with an electric arc furnace instead of the traditional blast furnace. Electric arc furnaces consume less energy than blast furnaces, can time their activity to use low-cost electricity and emit significantly less carbon dioxide.
Ori Martin, together with Tenova (technological engineers), Turboden (turbogenerator manufacturers) and A2A (utilities and energy suppliers for Brescia city), also created the innovative iRecovery project to harness waste heat from the steelworks to produce electricity and heat for the city. iRecovery provides heat via a district heating system to 2000 families in the winter and produces enough electricity for 700 families during the summer.
Making progress through collaboration
The project continued to bring governments together over 2020 and 2021, although most meetings moved online due to the restrictions brought about by Covid-19. One workshop looked in detail at the idea of ‘co-benefits’ that can come from reducing industrial emissions. This meant mapping out links between developing a low carbon industry strategy and other government priorities. As well as economic benefits and the creation or retention of vital local jobs, this workshop uncovered less obvious areas that such a strategy could affect, including air quality, public health, equity, diversity and inclusion and a green recovery from the pandemic.
Drawing out co-benefits also helped governments to identify a broader range of partners that could support in lowering industry emissions. For example, youth movements represent an opportunity to work with departments of education. This could provide an opening to boost skills development: helping a future workforce understand the opportunities available and giving them optimism about paths they might follow.
Working online also provided new and unexpected ways of sharing knowledge. In January 2021, more than 50 representatives from European and North American state and regional governments took part in a virtual site visit to the LEILAC1 (Low Emissions Intensity Lime and Cement) project in Lixhe, Belgium.
LEILAC1 – a European Union Horizon 2020 research and innovation pilot project – is developing a breakthrough carbon capture technology that will enable both the cement and lime industries to dramatically reduce their CO2 emissions without significant energy or cost. The pilot plant is hosted by HeidelbergCement and the project is designed to carry out fundamental research on the process’ demands and performance to demonstrate that the technology works sufficiently and robustly enough to scale it up.
After water, cement is the most widely used substance on the planet: creating over 10 billion tonnes of concrete each year in the construction industry. The production of cement currently accounts for eight per cent of global CO2 emissions.
By investing in innovative technologies such as carbon capture, which will enable sustainable infrastructure development to continue while lowering CO2 emissions previously thought to be unavoidable, the UN’s Industries, Innovation and Infrastructure Sustainable Development Goal can be met. This demonstrates innovation in action and supports the mindset that ITP was designed to build: one of progress through experimentation.
Two points of focus
Through the platform, governments highlighted two particular areas of focus for reducing emissions across their industrial sectors: sustainable hydrogen and the idea of ‘fostering disruptive innovation’.
In terms of hydrogen, this meant looking at opportunities to produce and use hydrogen in industrial processes, as well as potential mechanisms to develop hydrogen transport routes. This was all part of seeing how the gas could fuel a broader ‘hydrogen economy’. Alberta and North Rhine-Westphalia have been particularly enthusiastic about this idea and have shared many key learnings over the course of the project.
Beyond hydrogen, one working group researched innovative technologies such as fuel switching and carbon capture utilisation and storage (CCUS) alongside advancements in public policy in terms of procurements and tangible moves towards circular economies. They pointed out the need to factor finance into all of these areas as well, including the rollout of ‘green bonds’.
Progress beyond the ITP
The Industry Transition Platform helped 11 regions to design their own separate industrial decarbonisation strategies. Taken together, these strategies are reducing emissions from industry in some of the world’s biggest industrial regions and providing blueprints for other similar governments to follow. Since the project finished, Scotland and Wales have begun to work more closely together on industry emissions and trusted working relationships have been built between government and industry representatives – meaning that even more progress is possible.
The Industry Transition Platform’s findings were also published on the Climate Group’s website through our Knowledge Hub. This forms a ‘one-stop shop’ for governments that want information about particular sectors or ways of working, and we will continue to add material here over the coming years. For the ITP, we have published two reports on Fostering Disruptive Innovation and Sustainable Hydrogen, as well as in-depth proposals for understanding systems change and improving stakeholder engagement. Together with participating governments, we have also produced a range of case studies, including on carbon capture and the roll-out of sustainable hydrogen in the Netherlands.
We hope and expect that this work will encourage other state and regional governments to take similar action and seek out collaborative working relationships with other like-minded partners.
After the success of the Industry Transition Platform, we are looking at other tailored projects to run with state and regional governments focused on this key sector. In March last year, for example, we published a review of the heavy industry sector in India: a sector that has been important in enabling India to become one of the fastest-growing economies in the world. However, this rapid development has also led to rapid urbanisation and a rise in energy demand. As the country continues to transform, demand for iron and steel is expected to rise significantly: making the need to disassociate economic prosperity from greenhouse gas (GHG) emissions necessary now more than ever.
Alongside these deep dives into industry, the Under2 Coalition has also been building new partnerships to innovate and advance the tracking of GHG emissions because we know that understanding emissions sources is a crucial foundation to targeted and effective climate action. So, in February, we launched a new pilot project with Climate TRACE to provide six state and regional governments – Abruzzo, Basque Country, Jalisco, Pernambuco, Querétaro and Western Cape – with more up-to-date greenhouse gas emissions data.
Climate TRACE will supply sectoral emissions estimates for all six regions for the past five years, which will be gathered using satellite data and AI technology. The data will give each region a better opportunity to deliver effective and tailored mitigation action. For the industry sector, emissions estimates will be provided for the manufacturing of cement, aluminium and steel within this first year of the pilot, while the chemical and pulp paper industries should be included in subsequent years.
It has become increasingly clear that states and regions, particularly in the Global South, lack access to comprehensive, high-quality, and up-to-date GHG emissions data. Even for those with the resources and capacity to regularly update their GHG emissions inventories, data is often at least one year old and so quickly becomes outdated. With a sector as energy-intensive as industry, it is vital that we have the information to hand to make informed decisions. Governments rely on this to develop policies, enact laws and – crucially – support industry in making the changes necessary to cut their emissions at source.
Mitigating emissions in states and regions
The Under2 Coalition exists to unite and speak for state and regional governments on all issues around climate change. This has traditionally been focused on mitigation strategies in terms of greenhouse gas emissions, although we also support a number of adaptation measures through our Future Fund. This finances small-scale projects for our Global South members and is supported by a range of donor governments from within the Coalition.
Measuring emissions is central to our work. Not only does it help identify sectors where change is needed, but it plays a key role in the transparency and accountability of subnational governments. Against a varying national and international picture of climate action, it matters that we demonstrate where progress is – or is not – taking place.
One of the largest projects we have run on measuring emissions to date is our Climate Footprint Project, which has just entered its second phase. This initially supported seven states and regions in Brazil, India, Mexico and South Africa in creating emissions inventories that mapped out emission sources and trends across each location. A further eight states in Brazil, Colombia, India, Mexico and South Africa are now taking part.
In the first phase, we organised ten ‘Tracking to Action’ peer forums led by the participating states and regions themselves and supported by subject matter experts. These covered the process for setting up greenhouse gas inventories and the steps involved in reducing emissions. They aimed to inspire participants to act by offering them approaches that they could take away and use in a practical way. There was also an e-learning course created with the Greenhouse Gas Management Institute (GHGMI) that governments could work through to give them a thorough introduction to creating their own inventories. Pernambuco in Brazil became the first state to develop its inventory through the project in late 2019.
Why states and regions?
Many of the solutions to achieve a world of no more than 1.5°C of global warming already exist and are being developed and deployed by state and regional governments. In fact, this level of government has been identified as having the most significant mitigation potential of any subnational or non-state actor group (NewClimate Institute et al., 2021).
In countries where climate leadership is lacking, it is easy to think that it doesn’t exist – but that is not necessarily the case. State and regional governments have significant power and influence when it comes to making a difference on the ground. They can pass new laws, create favourable business conditions, improve public transport systems and influence behaviour change in their local areas.
State and regional governments are also important to the international climate process and play an increasingly high-level role in negotiations such as COPs. Not only do they have unique powers to develop and implement climate laws – with effects on air quality, transport, energy and buildings – but they are able to influence governments across the world and encourage them to be more ambitious. This is enabled partly because of their deep regional knowledge and their ability to be agile: implementing solutions faster than national governments are able.
“many of the solutions to achieve a world of no more than 1.5°C of global warming already exist”
They also have greater scope to experiment and innovate, creating conditions for meaningful progress on climate issues. We have seen this in the Industry Transition Platform and we continue to see it in the projects that states and regions either create or take an active role in developing. As the world looks for ways to reach net zero emissions and to protect populations from the worst impacts of climate change, it needs to look to all levels of government for possible solutions. Progress is only going to accelerate at the pace we need if we work together.