Hefty cuts in CO2 emissions for energy-intensive sectors will cost approximately €20 billion
In an attempt to meet the European Union's ambitious climate goals, strategies are being developed to decarbonize hard-to-abate sectors such as ceramics, chemistry, cement, integrated steel, electric arc steel, paper, glass, and foundries. These sectors, known for their high energy intensity and challenging decarbonization, are crucial in the pursuit of a greener future.
The European Union aims to reduce emissions by 55% by 2030 and achieve climate neutrality by 2050. According to Boston Consulting Group (BCG), adhering to these objectives is necessary to create a new innovation paradigm, although the specifics of this change remain undefined.
A change is happening, and the EU is taking steps to ensure a smooth transition. The Clean Industrial Deal (2025) emphasizes boosting investments in energy-intensive sectors through state aid, tax incentives, and new financing tools. This investment is expected to accelerate decarbonization and innovation.
To reduce reliance on fossil fuels, the EU targets accelerating the transition to affordable clean and domestically produced energy. This transition will be facilitated by reforming the internal energy market, integrating renewable and decarbonized energy sources, and speeding up grid and energy storage deployment.
The Industrial Decarbonisation Accelerator Act, planned for the end of 2025, aims to streamline permitting processes for renewable energy projects and electricity infrastructure essential for energy-intensive industries. This move is expected to make the transition smoother and more cost-effective.
The EU also plans to incorporate high-quality domestic permanent carbon removals into the EU Emissions Trading System (ETS). This system integration will enable hard-to-abate sectors to offset residual emissions, facilitating compliance cost reduction and market liquidity, which is crucial for sectors like cement and steel that have process emissions difficult to eliminate.
While the specific costs of reducing emissions in these sectors are not provided, strategies typically include electrification of processes using renewable electricity, the use of alternative fuels such as green hydrogen for heat-intensive processes, the development of novel materials and recycling methods, and carbon capture, utilization, and storage (CCUS) to manage unavoidable emissions.
Policy and economic incentives will reinforce the adoption of these technologies, with a focus on competitiveness, security, and trade to ensure Europe remains a leader in cleaner industrial production.
In summary, Europe’s decarbonization of hard-to-abate sectors hinges on deploying clean energy infrastructure, innovative technologies such as green hydrogen and CCUS, market-based carbon pricing and removals, and regulatory streamlining, supported by public and private investments aligned with the EU Green Deal’s 55% emissions reduction by 2030 and net-zero by 2050 objectives. The new innovation paradigm is expected to make a difference in the market, although the specifics of this change remain to be seen.
[1] European Commission. (2021). Industrial Decarbonisation Strategy. Retrieved from https://ec.europa.eu/info/publications/industrial-decarbonisation-strategy_en [2] European Commission. (2021). Clean Industrial Revolution. Retrieved from https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-green-deal/clean-industrial-revolution_en [3] European Commission. (2021). Carbon Removal and Storage: State of Play in the EU. Retrieved from https://ec.europa.eu/info/publications/carbon-removal-and-storage-state-play-eu_en [4] European Commission. (2021). Green Hydrogen: State of Play in the EU. Retrieved from https://ec.europa.eu/info/publications/green-hydrogen-state-play-eu_en [5] European Commission. (2021). Industrial Decarbonisation Accelerator Act. Retrieved from https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-green-deal/clean-industrial-revolution/industrial-decarbonisation-accelerator-act_en
- The science of environmental-science plays a vital role in the EU's strategy to decarbonize hard-to-abate industries like climate-change sectors, as it offers insights into energy-efficient technologies and renewable energy sources.
- Finance and energy converge in the EU's clean industrial revolution, with investments in energy-intensive sectors expected to fuel innovation and accelerate decarbonization, as highlighted in the Clean Industrial Deal (2025).
- The climate-change industry within the environmental-science field will experience significant growth, as the EU plans to incorporate high-quality domestic carbon removals into the EU Emissions Trading System (ETS), creating new market opportunities for companies involved in carbon capture, utilization, and storage (CCUS) solutions.
