-
Given the new paradigm of achieving climate neutrality by 2050, current climate and industry policies will lead to investment l eakage or risk stranded industrial assets.
Industrial companies understand: The EU objective of climate neutrality by 2050 has clear implications for industrial reinvestment in the 2020s. Carbon-intensive technologies have lifetimes of up to 70 years. Reinvestments into long-lived assets will not be made unless there is an investment framework to deploy climate-neutral technologies.
-
With a new policy framework, the basic materials industries can support an increased EU
2030 climate target of at least -55 per cent. Key low-carbon technologies are available and
can be deployed well before 2030.
The CO2 abatement potential of key low-carbon technologies in the steel, chemicals, and cement sectors alone amounts to 145 Mt of CO2 by 2030, exceeding the required emission reductions from industry under the EU ETS. Their deployment will represent a breakthrough in Europe’s industrial sector and ensure it a leading global role.
-
By 2030, 30 to 50 per cent of existing assets in cement, steel, and chemicals will require major reinvestment. New policies are needed now to create a business case for breakthrough technologies.
Key low-carbon technologies are available, but their abatement costs are still in the range of 100 to 170 €/t of CO2. The EU should adopt policy instruments to cover the gap between these abatement costs and the EU ETS price as soon as possible.
-
Europe needs a Clean Industry Package in 2021 to kick-start breakthrough investments and protect existing assets.
By refining existing carbon leakage protection instruments it will be possible to protect existing plants until they can be replaced. At the same time, decisive support for investments in breakthrough technologies is needed. This should come in the form of carbon contracts-for-difference, planning and financing for clean-energy installations and infrastructure, and standards to create markets for climate-neutral and circular products.
-
Related