Last month, the UN held its 26th annual Climate Change Conference (COP26), resulting in a formal agreement acknowledging that a 45 percent reduction in greenhouse gas emissions by 2030 provides the best chance to decarbonize the global economy by 2050. During the conference, leading nations and the private sector made substantial commitments to drive decarbonization this decade, including important commitments for industry.
When emissions from electricity and heat are included, industry accounts for 40 percent of emissions globally. Solutions to decarbonize the industrial sector are critical if the world is to take serious action to reduce emissions this decade. Among the pledges and plans made at COP26, three key takeaways have emerged for industry:
- Countries and companies are coming together around market-driven approaches for low-carbon technologies and products.
- There is increasing collaboration among countries to accelerate the deployment of low-carbon innovation technologies for industry.
- Roadmaps for industry are paving the way for decarbonization in hard-to-abate sectors.
In November, the Industrial Innovation Initiative (I3) released its first consensus policy blueprint. In line with many of the initiatives launched during COP26, the blueprint outlines key recommendations to accelerate innovation across low-carbon technologies, processes, products, and markets. As the international community moves forward on its commitments, I3 is paying attention to those that are well-positioned to make an impact.
Key announcements at COP26
US-led coalition will drive market demand for low-carbon technologies and approaches
The First Movers Coalition, led by the World Economic Forum and US Special Presidential Envoy for Climate John Kerry, brings together more than 30 companies committed to creating demand for low-carbon technologies and approaches to decarbonize industry. Based on leading analysis from the Mission Possible Partnership, the coalition will address the gap in commercially available decarbonization technologies by stepping up their purchasing commitments in hard-to-abate sectors. The first phase of purchase orders announced at COP26 includes a 2030 target for the procurement of green steel.
Five countries commit to buying low-carbon steel and cement
The United Kingdom, India, Germany, Canada, and the United Arab Emirates have committed to using their public purchasing power to create demand for low-carbon industrial products starting with steel and cement. The five countries will work together under the Industrial Deep Decarbonization Initiative to support the decarbonization of heavy industry and develop 2030 interim targets ahead of the next Clean Energy Ministerial meeting in 2022.
Steel and hydrogen get a breakthrough agenda
Leading nations have endorsed the Glasgow Breakthroughs, an ambitious set of goals to drive innovation and deployment of clean technologies in five key sectors of the economy, notably including steel and hydrogen. The steel breakthrough aims to make near-zero-emissions steel the preferred market choice by 2030. The hydrogen breakthrough will assess global costs, production capacity, and technology investments needed to make low-carbon hydrogen available and affordable by 2030. A global checkpoint process will be implemented in 2022 to monitor progress on the breakthroughs.
Companies align to advance the global hydrogen economy
The World Business Council for Sustainable Development and the Sustainable Markets Initiative have convened 28 companies under the H2Zero initiative to accelerate the development of low-carbon hydrogen projects. Participating companies have tailored their commitments in three areas: demand, supply, and financial and technical targets. Shell, for instance, has pledged to expand both its demand and supply for reduced carbon hydrogen by 2030.
Mission Innovation launches three new missions with industry impact
The 22 governments and EU Commission that make up the Mission Innovation platform have announced three new initiatives that will impact industry:
- Led by Austria and Australia, the Net-Zero Industries Mission will help unlock emissions reductions for steel, cement, and chemicals.
- Under the Carbon Dioxide Removal Mission, the US, Saudi Arabia, Canada, and Norway have committed to achieving a net reduction of 100 millionmetric tons of carbon dioxide annually by 2030. Each country will invest in fund research, development, and deployment over the next five years to support this goal.
- The simultaneously launched Integrated Biorefineries Mission will encourage cost-competitive fuel switching to biobased alternatives in the transportation and chemicals sectors.
New initiative to accelerate the transition to clean industrial clusters
COP26 was the launching point for the new initiative, Transitioning Industrial Clusters towards Net Zero, a collaboration between the World Economic Forum, Accenture, and the Electric Power Research Institute. Recognizing the benefits of co-locating industrial facilities, the initiative aims to advance the deployment of net-zero industrial clusters. The work builds on their initial report, Industrial Clusters – Working Together to Achieve Net Zero. Currently, four clusters in Spain, Australia, and the United Kingdom have signed on. The initiative’s goal is to have 100 clusters signed on by 2024.
Global Cement and Concrete Association releases roadmap for net zero by 2050
While governments collaborate to reach emissions reductions across industry, sectors are also leading their own commitments. Last month, the Global Cement and Concrete Association (GCCA) released a foundational Roadmap for Net Zero Concrete. GCCA’s 40 cement and concrete manufacturers have aligned in one the most significant net-zero ambitions from industry to date, with added ambition from members’ own 2050 commitments like the Portland Cement Association’s roadmap for carbon-neutral concrete.
Securing global action for industrial decarbonization
Last month’s climate summit signaled a global movement of support for industrial decarbonization. Both the public and private sectors are generating demand for low-carbon products and technologies by creating markets for industries with the ambition to decarbonize. Governments and companies are collaborating to develop critical pathways needed for emissions reductions both within and across industrial sectors. The world is ready for industrial decarbonization, but more must be done to ensure that ambition is implemented before COP27.
The coming year will require robust collaboration across government, industry, and other stakeholders to see these commitments upheld. The Industrial Innovation Initiative’s diverse stakeholder group is working to meet the moment by advancing low-carbon innovation through policy and consensus.
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