In December 2020, European Council Conclusions called on the European Commission to “propose measures that enable energy intensive industries to develop and deploy new climate neutral technologies while maintaining their industrial competitiveness”. Three key parts of the industrial value chain need to be unlocked to kickstart the transition to climate neutral industry: clean energy infrastructure, ultra-low-carbon process technologies, and creating demand for climate-neutral and resource-efficient basic materials.
This project seeks to address the third pillar of this trio: how to develop scalable market demand for final products made from climate-neutral – including circular and efficiently-used – basic materials. Indeed, production of carbon-intensive basic materials such as steel, aluminum, cement and basic chemicals accounted for approximately 16 percent of annual net CO2 emissions in the EU. The development of market demand for climate-neutral basic materials is therefore an essential condition for the transition to a decarbonised industrial sector, but it remains highly underdeveloped in the relevant EU product markets.
This project, undertaken in partnership with the Cambridge Institute for Sustainable Leadership (CISL), aims to explore how European policies could be designed to accelerate development of this missing demand and rapidly shift production processes onto a pathway to climate neutrality by 2050. Based on extensive interviews with leading European industrial companies, it will identify the barriers that still hold back demand for climate-friendly and circular products and identify a role for well-targeted, non-discriminatory EU policies to address them.
The next question is, how can these policy priorities be quickly and efficiently turned into policy proposals under the EU Industrial Strategy and the European Green Deal? This project will pinpoint several important opportunities for EU policy makers to craft a focused package of policies to accelerate and foster lead market demand for climate neutral and circular materials.