Natural gas is set to remain an “important component” of Europe’s energy mix for decades to come if the EU commissioner for climate action and energy, Miguel Arias Cañete, has anything to say about it. Gas “offers the flexibility that can complement variable electricity generation coming from renewables,” he told delegates at the fourth EU-Norway energy conference earlier this month. “As such it will act as a bridge to decarbonise the economy.”
However, it’s clear that natural gas cannot be the long-term answer, as countries begin to undertake earnest efforts to wean themselves off fossil fuel use, symptomatic of a changing world. Germany’s coal phase-out is one such sign that the region’s policymakers are keen to ensure strong leadership in the right direction, although such a radical transition is naturally not without its critics.
While the idea of a Green New Deal for Europe – a “national, industrial, economic-mobilisation plan” – is nothing new, the emerging groundswell of public support for a large-scale transition to renewable energy is. For Brussels to achieve its ambitious climate goals of net-zero emissions by 2050, Europe’s energy infrastructure will need to be radically decarbonised, and the pieces for such a move are finally starting to fall into place.
Detractors have been quick to claim that decarbonisation is synonymous with de-industrialisation, as means of production with low carbon intensity would ruin the edge German companies have on their competitors. But as Europe’s energy transition gains momentum, such assumptions simply do not stand up to scrutiny anymore. It is a fact that investors and consumers alike are looking to pay a premium for “green” products that are produced with as small a carbon footprint as possible. And increasingly, they are finding themselves pushing against an open door.
Earlier this year for example, MEPs announced they were looking to ease capital charges on banks’ green investments in a bid to drive investment into forward looking initiatives, such as electric vehicles and energy-efficient housing. Such global efforts to scale-up decarbonisation technology have led to innovations in the housing, energy and transportation sectors, but more investment is needed to ensure widespread adoption. Despite a persistent financing gap in low-carbon research and development initiatives, one thing remains clear: industrial decarbonisation is the next frontier for European development. Both a challenge and opportunity at the same time, failing to drive progress will have disastrous consequences may prove disastrous for the bloc’s industrial base.
This is particularly true for Europe’s energy-intensive industries that need to combine ambitions for low carbon emissions and global competitiveness in their value chains. The use of innovative technologies, then, can achieve this double imperative in the chemical, cement, and non-ferrous metal sectors.
Particularly in primary aluminium production a number of technologies are being developed to reduce emissions and the energy used in the electrochemical processes. Inert, non-carbon anodes to reduce direct emissions are one such example, while wetted cathodes to improve electrical contact stand to reduce energy use in the production process by approximately one-fifth. Alternative materials are being developed in cement production as well to reduce the industry’s carbon footprint, with advanced grinding technologies and carbon-efficient concrete laying the foundation for a new era of manufacturing and construction.
Yet the road to an industrial sector with zero carbon emissions is a winding one for a number of reasons. The sector’s heterogeneity means the number of crosscutting solutions is limited compared to other industries. Furthermore, industrial processes often inevitably produce carbon dioxide as by-product of chemical reactions, and these “process emissions” cannot simply be resolved with the same energy efficiency measures employed elsewhere. Finally, major retrofits in manufacturing plants are cyclical in nature, leaving a narrow window for reform.
But even then, offsetting solutions can be found to satisfy increasingly critical and demanding consumers. These lie in leveraging the EU’s trade connections, allowing EU downstream producers to benefit from other countries’ competitive advantages in raw material production. The aluminium sector displays this condition especially clearly. As a result of Europe’s production deficit, the EU needs to import the vast majority of its domestic aluminium – a figure that is slated to expand in years to come. But the downstream sector in need of primary aluminium can take advantage of closer trade within the European neighbourhood, where more low-carbon aluminium can be produced more easily.
The Norwegian, Icelandic and Russian aluminium industries are reliant on clean energy sources such as hydropower, which reduce emissions by up to 90% compared to coal. Rusal, for instance, exports some 1.6 million tonnes of the metal to the EU every year, and is using Siberia’s vast hydropower reserves to produce low-carbon aluminium. Some 90% of its output is produced this way, with plans to phase out the remaining 10% by 2020. Norway’s Norsk Hydro is another big aluminium exporter to Europe bent on greening its metal, which signed last year the longest corporate wind power contract to date. The 29-year long deal will provide clean energy from a wind plant in Sweden to its smelters in Norway.
The aluminium sector is just one of many areas where greening of the value chain is in full swing. Because Brussels has renewed its push toward implementing the circular economy, more focus is not only placed on aluminium and its recycling, but other metals as well. The result, of course, is the mitigation of energy requirements and inevitable reduction of carbon emissions.
All naysayers notwithstanding, the data is rather clear: Europe’s industries must reduce their carbon footprint as a matter of urgency, and the window of opportunity for greener industries has never been more widely opened.