Industry is one of the sectors in which significant reductions in emissions take place earlier in all scenarios. Nevertheless, given the high costs of achieving substantial emission reductions from the industrial sector, and the competitivity of different options after 2040, efforts to decarbonize must take into account the specific challenges facing each industrial sector to lower costs, accelerate the transformation and minimize risks. However, these factors should not be overstated and lead to missing out on the significant potential benefits of cross-industry solutions that could come from a better integration of needs and supply. Moreover, given the frequent mismatch between energy efficiency improvements and changes resulting in emission abatement, modifying current energy efficiency subsidy programs is neither a sufficient nor an adequate strategy when targeting net-zero emissions; new programs designed with this goal in mind are required.
One result that stands out is that despite the importance of carbon capture in reducing emissions from the sector as a whole, its role is limited overall. In cement, where CCS provides the highest share of emission reductions among the sectors analyzed above, this contribution is at most barely over half of reductions. While the role of emission capture remains important in decarbonization efforts, this result underscores that other strategies for the industrial sector are also needed in net-zero pathways. Even if technological breakthroughs would allow for a larger share of facilities to be equipped with carbon capture technologies, not all emissions can be captured and there remains considerable uncertainty about the actual share of captured gases despite theoretical potential (see Chapter 12). Even beyond these uncertainties, the cost of carbon capture remains too prohibitive for the REF and CP30 scenarios, with the exception of petrochemicals in CP30.
A second result, discussed in Part 2 of this report, is that industrial process emissions are harder to avoid when carbon capture is not technologically feasible since strategies like fuel switching are inapplicable. Moreover, the capture of process emissions is also more difficult than for combustion emissions, which helps explain their important role in remaining emissions once net-zero is reached. Therefore, unless technological breakthroughs are achieved for industrial processes and all strategies are applied to reduce combustion emissions to their lowest possible levels, significant production reductions are difficult to avoid completely in net-zero scenarios.
Finally, other sectors not reviewed here may add insight into the building of a profile for the industrial sector that leads to effective mitigation policies. For instance, emissions from the construction sector are often less concentrated than in plants, making carbon capture impossible. The broad variety of activities in manufacturing outside of metals, iron, chemicals, cement and pulp and paper may complicate one-size-fits-all applications. Agricultural production in greenhouses, which requires a significantly larger quantity of energy in colder months compared with the rest of the year, also presents distinct challenges. Designing strategies and policies to address each of these sectors should focus not only on the different options available for reducing emissions, but also on the possibility of integrating sectors and facilities.