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Reports by Chris Bataille, Seton Stiebert, Jonas Algers + 2 more • August 01, 2024
This report represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision. Contributions to SIPA for the benefit of CGEP are general use gifts, which gives the Center discretion in how it allocates these funds. Rare cases of sponsored projects are clearly indicated.
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Among the most significant challenges to achieving the Paris Agreement goal of global net-zero CO2 emissions by 2055–2075 is addressing the so-called “hard-to-abate” heavy industrial sectors such as iron and steel, cement and concrete, ammonia, methanol, and high value feedstock chemicals like olefins. These sectors accounted for 7.5 Gt CO2 or 20.4 percent of global emissions in 2021, and global demand for their products will only rise until broad development goals are met everywhere. Moreover, nearly all heavy industrial plants being planned or in construction today are fossil based, with the exception being a handful of small-scale pilot facilities. Given that plants tend to operate for at least 20 years before their first deep renovation, and 40–80+ years overall, these new ones will likely still be in operation by the time global CO2 emissions must be net-zero (~2050–2060), after which heavy industry players that are still emitting will likely need to pay for CO2 removal (CDR) from the atmosphere. The cumulative CO2 emissions between now and then and the likely very high cost of CDR are driving society, governments, and firms to make near-zero emissions the default minimum standard for all new and retrofit facilities by the end of the 2020s.
However, fulfilling that standard is no easy task. The main bottleneck is less technological in nature than financial and market based. At the current state of the art, near-zero emissions plants simply cost more than fossil-based plants, and meanwhile, no demand pull or market exists for lower-emission industrial products. Given the urgency of the task at hand amid the global climate crisis and the current lack of a business case to undertake it, strong policy signals can be used to incentivize early investment in near-zero-carbon heavy industry.
This report, part of the Carbon Management Research Initiative at the Center on Global Energy Policy at Columbia University SIPA, explores financial policy instruments that can make first-of-a-kind (FOAK) near-zero emission industrial facilities viable. The report finds that such FOAKs can then be used as low-risk, replicable models for rapidly transforming the “hard-to-abate” sectors and ultimately facilitating a transition to full net-zero emissions for industry as a whole.
The takeaways of the report are as follows:
The authors recommend the following measures for getting near-zero-emitting projects to full deployment both in the US and in other developed countries:
Amid plans to nearly double its steel production capacity by 2030 to serve its growing infrastructure needs, the world’s No. 2 steel producer India[1] has released plans to...
The following document includes the responses submitted to the Department of Energy following the request for information on proposed national definition of a zero emissions building.
The power sector and transportation tend to dominate conversations about climate change, but there’s an under-the-radar source of climate pollution that must be addressed: industry.
Full report
Reports by Chris Bataille, Seton Stiebert, Jonas Algers + 2 more • August 01, 2024