- The industrial sector accounts 30% of global carbon emissions and 37% for global energy consumption.
- Although it will be difficult to decarbonize industrial operations such as the production of iron, steel, cement, and petrochemicals this is not impossible.
- We must concentrate on industrial clusters where manufacturing industries co-located to make the greatest impact.
There are good reasons to believe that there will be progress on the climate crisis. Transportation and electricity generation are decarbonizing at an increasing rate. Companies and governments are prioritizing net zero carbon goals. Industry is the only sector that is not following this trend.
Global emissions account for 30% of global emissions, and the industrial sector accounts to 37% of global energy use. This enormous share of climate-changing emission from one sector presents a huge opportunity for global emissions reduction. If companies and governments don’t start bringing today’s breakthrough carbon-slashing technologies to industry quickly and efficiently, we risk undermining the progress we’ve made in other parts of the economy.
Although it will be difficult to decarbonize industries like mining, iron, steel and iron production, it is possible. This is how we approach the task. WhereJust as important is the How. Industrial clusters can be a great place to start the industrial carbonization movement. These are geographical areas in which a number of manufacturing industries are clustered together. This creates opportunities for scale, sharing of risk and resources, and allows for aggregation of demand. Europe’s approximately 3,000 industrial clusters account for 20% of the continent’s emissions.
Why not start with industrial groups?
The efficiency of sharing resources and services – most notably, energy – is the key benefit of industrial clusters. A 2014 studyAn industrial park that included a steel plant, cement plant, fertilizer and recycled paper facility was able to achieve 21% energy savings by heat integration and sharing other products. Using industrial-scale renewable resources – green hydrogen, solar thermal, solar plus storage, and other technologies –makes further savings.
Heliogen pioneered AI-enabled concentrated sun technologyFor industrial facilities, with scalability. Our AI-enabled, solar technology that provides heat, electricity, and clean hydrogen fuels for one industrial facility can dramatically reduce carbon emissions. The same technology can be scaled up so that clean energy can be provided to multiple facilities.
The demand ecosystems found in industrial clusters make them a great environment for a collaborative approach toward decarbonizing industry. These sites should be a meeting place for government, financial institutions, technology providers, and industrial corporations to plan, finance, and execute decarbonization efforts. These efforts would be a huge success for governments as they will see large, sustainable carbon cuts that lead to carbon neutrality.
The key to combating climate changes is to move to clean energy, but the energy transition has stagnated over the past five years.
Global emissions are two-thirds caused by energy production and consumption. Eighty-one percent of the global energy system still uses fossil fuels. This is the same percentage that was 30 years ago. The global economy’s energy intensity, which is the amount of energy used per unit economic activity, is slowing down. In 2018, energy intensity increased by 1.2%, which is the slowest rate since 2010.
To create a more inclusive, sustainable and affordable global energy system, effective policies, private sector action, and public-private collaboration are essential.
A successful transition requires benchmarking. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. Only 2.6% of global annual emissions come from the 10 countries with the highest readiness scores.
To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials PlatformCurrently, he is working on several initiatives, including Systemic Efficiency, Innovation and Clean EnergyThe Global Battery AllianceTo encourage and support innovative energy investments, technologies and solution development.
Additionally, Mission Possible PlatformThe MPP is a consortium of public and private partners that works to promote the industry transition and set heavy industry and mobility sectors on a path towards net-zero emission. MPP was created by the World Economic Forum as well as the Energy Transitions Commission.
Are you interested in collaborating with the World Economic Forum? Learn more.
Benefits of industrial clusters that are decarbonized
Industrial corporations would be able to make sustainable cost savings, in addition to reducing their carbon footprints, which is an important step for ESG-oriented investors around the world. Banks and other financial institutions would have new opportunities to finance capital projects that provide reliable returns on investments. Companies developing cutting-edge technologies in energy will have the opportunity to fulfill their promise of reducing industrial carbon emissions. They will also be paid.
Decarbonizing industrial clusters will accelerate global decarbonization efforts and generate trillions in value for both public- and private stakeholders. In order to reduce greenhouse gas emissions from industrial areas, the biggest companies and governments around the globe must collaborate with innovative energy providers, including low- and zero-carbon heat, electricity and hydrogen fuel. The climate crisis is too serious and the stakes too high to ignore. While more visible, easier sectors decarbonize, this effort must be done now. It’s time to get the teams together and get to work.
Learn more at on transitioning industrial clusters towards net zero.
These views are solely those of the author and not the World Economic Forum.