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SEE211 Energy, Climate Change and Sustainability

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Lecture 10

SEE211
Energy, Climate Change and Sustainability
Industrial Emissions and
Reductions for Decarbonization
Emissions (sector wise)
Ø Industrial sector is the biggest
emitter

• Iron & steel industry alone


contributes to > 7% of world
emission (higher for India)

• Chemical and Cement next biggest


emitters
GHG emissions (sector wise)

IEA: CO2 Emissions in 2022


Emissions: Categorization

• Scope 1 and 2
are often counted

• Scope 3 remains
unreported or is
not very
transparent
GHG emissions sector wise

※ Industrial sector > 30% of emission (scope 1 and 2)


※ Manufacturing based industries primarily emits through Scope 1 and 2
Net-Zero Industry Tracker 2022 Edition – World Economic Forum
India’s GHG emissions

Decarbonising India: Charting a pathway for sustainable growth, McKinsey 2022


Steel Industry
Steel Industry
§ Steel sector accounts for around 7% of global greenhouse gas (GHG) emissions and 11% of
global CO2 emissions .

§ In 2019:
§ The sector accounted for 2.6 gigatons (GT) of direct CO2 emissions globally,
representing about one-quarter of industrial CO2 emissions
§ 7% of total energy sector CO2 emissions
§ More than the CO2 emissions from all road freight that year.

§ Steel sector emissions are primarily due to its reliance on coal. Metallurgical coal meets 75%
of the sector’s energy needs .

§ In primary steel production route (70% of current world volume) – metallurgical coal, also
called coking coal or met coal, serves as a reducing agent, a source of energy and a source
of carbon.

§ For one tonne of steel produced through this route, between 1.5 and 3 tons of CO2 are
released into the atmosphere .
Iron and Steel Technology Roadmap (IEA, 2020)
Challenges for Industries
• Require complex multistakeholder collaboration:
o Diverse set of issues and supply chain in different industries
o NZE require collaboration in customers, suppliers, CO2
mitigation bodies, companies, government, financial institution
etc

• Common standards for “low-emission” production thresholds need


to be established for industrial companies to calibrate the
transformation of their key production processes.

• Technologies developed (or under development), however, pace of


demonstration projects need to be increased
Challenges for Industries
• End customer demand needs to be strengthened

• Heavily Capex dependent


o Favorable taxonomies and public funding in the form of grants,
low-interest and concessional loans, etc. needed to reduce
companies’ risk exposure
o Pace of investment needs to be increased drastically

• Policy frameworks are necessary to level the playing field for first
movers willing to invest in higher-cost, low-emission production.
Framework for net-zero industry performance

Tracking four drivers of industry net


greenhouse gas (GHG) emissions.

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Levers to reduce emissions

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Optimize demand and production
• Demand for industrial products expected
to grow significantly by 2050
o population, urbanization and
economic growth

• Significant demand-side efficiency gains


needed to optimize production volumes.

• Tasks :
o design regulations
o incentives to promote longer lifetimes
o circularity measures to improve
recycling
o demand management
o substitutes

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Optimize demand and production

• Wide range of end uses


• Large scale production
o Difficulty in substitution

• Net-zero transformation of
cities (buildings and structures)
critical
o Future demand for cement
and steel.

• Agriculture to NetZero à
Fertilizers and ammonia.
Net-Zero Industry Tracker 2022 Edition – World Economic Forum
Decarbonize industrial process

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Decarbonizing industry : primary vs secondary processes
Maximum potential emission intensity Maximum potential
§ At different technological maturity and
reduction: primary production
commercial readiness, new low-emission emission intensity
production routes have been identified reduction: secondary
production
§ Recycling steel and aluminium
(secondary production) generates
significantly fewer emissions than
primary production.

§ Secondary steel and aluminium


production could reach near-zero
emissions if fully powered by renewable
electricity.

§ Around 85% of steel and 75% of


aluminium are recycled at the end of
their useful lifecycle.

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Decarbonize: Lower energy consumption
Energy consumption by sector (exajoules § Currently, all sectors rely on fossil fuels as
(EJ)) energy sources, feedstock or reducing agents.

§ Further energy efficiency gains can be realized


o Nature of certain production processes
may eventually cap progress.

§ Fossil fuel emissions can be mitigated through


substitution with low-carbon energy sources
(e.g. switching from coal to biomass from
agricultural waste)

§ Electrification of plants and equipment


wherever possible and greening the grid can
also eliminate significant emissions from fossil
fuels.

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Decarbonize: Lower energy consumption
§ Secondary Al production (33% of total
production) and a high share of
hydropower in primary Al production (25%)
§ 65% of global Al production today is
already below IEA 2030 emission
intensity threshold.

§ Secondary steel production (22% of total


production)
§ 19% of global steel production today is
already below IEA 2030 emission
intensity threshold.

§ Development of blue and green ammonia,


and carbon capture, utilization and storage
(CCUS) in cement: Optimistic yet
challenging

Net-Zero Industry Tracker 2022 Edition – World Economic Forum


Framework for industry readiness

Five enabling
dimensions of
industry net-
zero
transformation

Net-Zero Industry Tracker 2022 Edition – World Economic Forum

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