{"id":82231,"date":"2020-12-16T05:59:42","date_gmt":"2020-12-16T05:59:42","guid":{"rendered":"https:\/\/www.alj.com\/?post_type=perspective&#038;p=82231"},"modified":"2021-03-22T13:45:54","modified_gmt":"2021-03-22T13:45:54","slug":"not-just-hot-air-why-decarbonizing-industry-is-so-vital-to-a-sustainable-future","status":"publish","type":"perspective","link":"https:\/\/alj.com\/en\/perspective\/not-just-hot-air-why-decarbonizing-industry-is-so-vital-to-a-sustainable-future\/","title":{"rendered":"Not just hot air: why decarbonizing industry is so vital to a sustainable future"},"content":{"rendered":"<p>The last five years were the warmest on record.\u00a0 At the current rate, the world will be around three degrees warmer by the end of the century<a href=\"#_ftn1\" name=\"_ftnref1\"><sup>[1]<\/sup><\/a>.<\/p>\n<p>By then, it will be too late.<\/p>\n<p>What we do now will decide the fate of ecologies, economies, and populations.\u00a0 If we can limit warming to 1.5 degrees Celsius over the next 30 years, we might, just might, avert some the worst effects of climate change.\u00a0<\/p>\n<p>According to the Intergovernmental Panel of Climate Change (<a href=\"https:\/\/www.ipcc.ch\/\">IPCC<\/a>), the world must reduce carbon emissions by at least 49% of 2017, levels and become carbon neutral by 2050, to meet the targets set by the UN-led Paris agreement.<a href=\"#_ftn2\" name=\"_ftnref2\"><sup>[2]<\/sup><\/a><\/p>\n<p>As of 2019, over 75 countries had committed to net-zero carbon emissions by 2050<a href=\"#_ftn3\" name=\"_ftnref3\"><sup>[3]<\/sup><\/a>.\u00a0 The UK, France, Sweden, and Norway lead the way in legislation.\u00a0 Others are showing positive signs, such as America&#8217;s CLEAN Future Act, which sets out sector-specific and economy-wide solutions to achieve a 100% clean economy by 2050<a href=\"#_ftn4\" name=\"_ftnref4\"><sup>[4]<\/sup><\/a>.<\/p>\n<figure id=\"attachment_82274\" aria-describedby=\"caption-attachment-82274\" style=\"width: 414px\" class=\"wp-caption alignleft\"><img decoding=\"async\" loading=\"lazy\" class=\"wp-image-82274 \" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/Fady-Jameel-2-768x1024.jpg\" alt=\"Fady Jameel\" width=\"414\" height=\"552\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Fady-Jameel-2-768x1025.jpg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Fady-Jameel-2-225x300.jpg 225w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Fady-Jameel-2-112x150.jpg 112w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Fady-Jameel-2-1151x1536.jpg 1151w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Fady-Jameel-2.jpg 1224w\" sizes=\"(max-width: 414px) 100vw, 414px\" \/><figcaption id=\"caption-attachment-82274\" class=\"wp-caption-text\">Fady Jameel, Deputy President and Vice Chairman, Abdul Latif Jameel<\/figcaption><\/figure>\n<p>As discussed by <a href=\"https:\/\/alj.com\">Abdul Latif Jameel<\/a> Deputy Chairman and Vice President, <a href=\"https:\/\/www.alj.com\/en\/our-people\/fady-jameel\/\">Fady Jameel<\/a>, in his recent Spotlight article on <a href=\"https:\/\/www.alj.com\/en\/spotlight-by-fady-jameel\/delivering-decarbonization-how-achievable-is-net-zero\/\">achieving net-zero<\/a>, the power, buildings, and transport sectors are all making good progress in reducing emissions.\u00a0 Industry, however, is lagging.\u00a0 Industry emits about 28% of greenhouse gases (GHG) emissions, of which 90% are CO<sub>2<\/sub>. These emissions rose by 69% between 1990 and 2014, compared to 23% for buildings, power, and transport.<a href=\"#_ftn5\" name=\"_ftnref5\"><sup>[5]<\/sup><\/a><\/p>\n<p>The production of ammonia, cement, ethylene, and steel accounts for almost half of industrial emissions.\u00a0 Other high emitting sectors include food and tobacco; paper, pulp, and print; and non-ferrous metals.\u00a0 The construction industry is expected to become the largest source of \u2018consumption-based emissions\u2019 in the world&#8217;s largest cities, accounting for nearly a quarter of all consumption emissions from now until 2050.<\/p>\n<p>Global industry must decarbonize by reducing and removing GHG emissions, principally carbon dioxide (CO<sub>2<\/sub>) and methane (CH<sub>4<\/sub>), throughout the supply chain.\u00a0 The International Energy Agency (<a href=\"https:\/\/www.iea.org\/\">IEA<\/a>) stresses the importance of prompt action to avoid &#8216;locked-in&#8217; emissions due to the sector&#8217;s long investment cycles.<a href=\"#_ftn6\" name=\"_ftnref6\"><sup>[6]<\/sup><\/a>\u00a0 So industry, energy, and government must mobilize now to align innovation, incentives, and investment to support a carbon-free future for industry.<\/p>\n<blockquote>\n<p><em>\u201cTo successfully achieve so-called \u2018deep decarbonization\u2019 over the longer term, we have to be prepared to take fundamental action now, which is likely to be painful, expensive and disruptive to our existing economic and social models,\u201d<\/em> says Fady Jameel.<\/p>\n<\/blockquote>\n<p>It won\u2019t be easy. But it can be done.<\/p>\n<h2>Cheap fuel is complex and costly to replace<\/h2>\n<p>Heavy industry is highly dependent on fossil fuels for feedstock and combustion to generate very high temperatures, both of which emit CO<sub>2<\/sub>.\u00a0 This means both fuels and processes must change.\u00a0 Heavy industry will have to design furnaces that run between 700 and 1,600 degrees Celsius on zero-carbon electricity.\u00a0 And because industrial processes are highly integrated, one change to the system will impact other processes and even the finished product.<\/p>\n<p>For example, steel and cement made with reduced carbon may have different specifications that require building codes to be modified.<a href=\"#_ftn7\" name=\"_ftnref7\"><sup>[7]<\/sup><\/a> \u00a0\u00a0Rebuilds and retrofits are expensive, and production costs are even higher.\u00a0 McKinsey estimates the decarbonization of cement, steel, ammonia, and concrete will cost between US$ 11 trillion and US$ 21 trillion through 2050.<a href=\"#_ftn8\" name=\"_ftnref8\"><sup>[8]<\/sup><\/a>\u00a0 A tall order when selling commodities in a global market.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-82253\" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-scaled.jpg\" alt=\"Steel Production Process\" width=\"2560\" height=\"1638\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-scaled.jpg 2560w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-300x192.jpg 300w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-1024x655.jpg 1024w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-150x96.jpg 150w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-768x491.jpg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-1536x983.jpg 1536w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Steel-Production-Process-2048x1310.jpg 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<p>Meanwhile, demand for resources is increasing, driven by a global middle class which is expected to reach 5.3 billion people by 2030<a href=\"#_ftn9\" name=\"_ftnref9\"><sup>[9]<\/sup><\/a>.\u00a0 This means industry will have to dramatically increase production, while emitting far less CO<sub>2<\/sub> than it does now.\u00a0<\/p>\n<p>Global alignment will also prove tricky.<\/p>\n<p>Since 2011, China, the world\u2019s largest steel and cement producer, has consumed more coal than the rest of the world combined.<a href=\"#_ftn10\" name=\"_ftnref10\"><sup>[10]<\/sup><\/a>\u00a0 Furthermore, developing nations, which are disproportionately affected by climate change, may be reluctant to forgo cheaper fossil fuels as they try to bridge the gap with wealthier nations, especially since the developed world has caused the vast majority of global warming.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-82246\" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-scaled.jpg\" alt=\"Global GHG Emissions \" width=\"2560\" height=\"1810\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-scaled.jpg 2560w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-300x212.jpg 300w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-1024x724.jpg 1024w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-150x106.jpg 150w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-768x543.jpg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-1536x1086.jpg 1536w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Global-GHG-Emisions-2048x1448.jpg 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<h2>Strategies for reducing industrial emissions<\/h2>\n<p>Despite these challenges, decarbonization is technically achievable, even without technological breakthroughs.\u00a0 Specific decarbonization pathways will vary between regions and individual facilities, based on factors including access to renewable energy, feedstocks, infrastructure, carbon storage capability, demand for resources, and access to the right financial and regulatory incentives.<\/p>\n<h4>Electrification of heat<\/h4>\n<p>Industries that depend on low- and medium-temperature heat, such as construction, food, textiles, and manufacturing, could reduce 90% of their emissions by electrification with clean-energy sources.\u00a0 To achieve this, they would need to electrify at twice their current level by 2050.<a href=\"#_ftn11\" name=\"_ftnref11\"><sup>[11]<\/sup><\/a>\u00a0<\/p>\n<p>Electrification is harder for processes that require high heat, however.\u00a0 According to McKinsey, to decarbonize ammonia, cement, ethylene, and steel would require a &#8220;reliable, low-cost supply of approximately 25 to 55 exajoules of zero-carbon electricity per year\u2014about four to nine times the amount they would need in the absence of any special effort to reduce CO<sub>2<\/sub> emissions.&#8221;<a href=\"#_ftn12\" name=\"_ftnref12\"><sup>[12]<\/sup><\/a><\/p>\n<blockquote>\n<p style=\"font-size: 16px; font-weight: 400;\"><strong>Industry needs more renewable electricity<\/strong><\/p>\n<p style=\"font-size: 16px; font-weight: 400;\">Continued innovation and investment in the renewable energy sector are essential to decarbonize industry.\u00a0 Fotowatio Renewable Ventures (<a href=\"https:\/\/frv.com\/\">FRV<\/a>), part of\u00a0<a href=\"https:\/\/www.alj.com\/en\/energy-and-environmental-services\/energy-overview\/\">Abdul Latif Jameel Energy<\/a>, recently launched its first utility-scale battery project, as a part of the company\u2019s long-term plan to develop energy storage projects globally.\u00a0 The\u00a0<a href=\"https:\/\/www.alj.com\/en\/news\/abdul-latif-jameel-energys-frv-to-develop-energy-storage-projects-globally\/\">Holes Bay<\/a> scheme in the UK is one of the largest battery storage systems in the South of England. It will deploy a system of lithium-ion batteries, with a combined capacity of 15 MWh, providing the capability to store energy and affording flexibility to the grid.<\/p>\n<\/blockquote>\n<h4>Low carbon energy sources and feedstocks<\/h4>\n<p>Industry must replace fossil fuels with low carbon energy sources and feedstocks, specifically zero-carbon <a href=\"https:\/\/www.alj.com\/en\/perspective\/preparing-for-a-cleaner-greener-future\/\">renewable electricity<\/a>, sustainably produced biomass as a feedstock or fuel, and hydrogen as a feedstock or fuel.<\/p>\n<p>When zero-carbon renewable electricity is no more than US$ 50 per megawatt-hour at current commodities prices, using electricity to produce heat or hydrogen is more economical than Carbon Capture and Storage (CCS) in many situations.<\/p>\n<p>This has already been achieved in some places and will probably become widespread.<a href=\"#_ftn13\" name=\"_ftnref13\"><sup>[13]<\/sup><\/a><\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-82239\" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-scaled.jpg\" alt=\"Decarbonization\" width=\"2560\" height=\"2069\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-scaled.jpg 2560w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-300x242.jpg 300w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-1024x828.jpg 1024w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-150x121.jpg 150w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-768x621.jpg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-1536x1241.jpg 1536w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Decarbonization-2048x1655.jpg 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<p>About 30% of energy-related CO<sub>2<\/sub> emissions across industries are hard to abate with electricity alone, mostly due to the high temperatures involved.<a href=\"#_ftn14\" name=\"_ftnref14\"><sup>[14]<\/sup><\/a> \u00a0\u00a0That\u2019s where hydrogen and biomass come in.\u00a0 <a href=\"https:\/\/hydrogencouncil.com\/en\/\">The Hydrogen Council<\/a> estimates hydrogen could replace up to 18% of final energy consumption by 2050.\u00a0 Hydrogen will play a key role both as feedstock and energy source, particularly in the steelmaking and chemical industries.\u00a0 The <a href=\"http:\/\/www.hybritdevelopment.com\/\">Hybrit<\/a> initiative, backed by Sweden and Finland, is on track to produce low-carbon steel with hydrogen by 2035.\u00a0 Hydrogen will ideally be produced with zero-carbon electricity, although \u2018blue hydrogen\u2019, made using natural gases, will also help if combined with carbon capture.<\/p>\n<p>Sustainably produced biomass, such as wood, charcoal, and biodiesel, is also technically and financially viable for newly built cement and steel facilities and can replace fossil-fuel feedstocks for ethylene and ammonia production.\u00a0 In Brazil, for example, steel producers use charcoal as a fuel and feedstock instead of coal, and several European chemicals producers are experimenting with bio naphtha<a href=\"#_ftn15\" name=\"_ftnref15\"><sup>[15]<\/sup><\/a><sup>.<\/sup><\/p>\n<h4>Carbon capture and storage<\/h4>\n<p>Carbon can be captured from exhaust gases in industrial processes and stored underground (CCS) or used as a feedstock through carbon capture and usage (CCU).\u00a0 The captured CO<sub>2<\/sub> can be used to produce fertilizer, carbonated drinks, medicines, and treat water. \u00a0It can also be used in other industries, including power generation, as a feedstock or fuel.\u00a0 Other applications include conversions to polymers or carbonates, concrete curing, and mineral carbonation.\u00a0 Researchers are also investigating the possibility of turning CO<sub>2<\/sub> into transport fuels<a href=\"#_ftn16\" name=\"_ftnref16\"><sup>[16]<\/sup><\/a><sup>.<\/sup><\/p>\n<p>Where storage is available, CCS is the lowest-cost decarbonization option at current commodity prices, and the only technology that can fully abate emissions from cement production<a href=\"#_ftn17\" name=\"_ftnref17\"><sup>[17]<\/sup><\/a>.\u00a0 The technology remains expensive, though, and relies on public and regulatory support.\u00a0 Lower electricity prices would make electrification and hydrogen-based decarbonization more attractive.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-82232\" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-scaled.jpg\" alt=\"Carbon Capture\" width=\"2560\" height=\"1638\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-scaled.jpg 2560w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-300x192.jpg 300w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-1024x655.jpg 1024w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-150x96.jpg 150w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-768x491.jpg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-1536x983.jpg 1536w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Carbon-Capture-2048x1310.jpg 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<h4>Smarter, more sustainable materials and processes<\/h4>\n<p>Using more efficient materials and processes can support decarbonization while saving time and money.\u00a0 Steel (or even aluminum) in cars can be replaced with carbon fiber, and construction can use more wood instead of steel and concrete.\u00a0 Smart materials, such as alternative concretes, new chemical catalysts, and low-GHG steel<a href=\"#_ftn18\" name=\"_ftnref18\"><sup>[18]<\/sup><\/a> show promise; Massachusetts-based Boston Metal, for example, is already using a steel-making process that removes the need to use coal as a feedstock<a href=\"#_ftn19\" name=\"_ftnref19\"><sup>[19]<\/sup><\/a>.<\/p>\n<p>These products can be combined with more innovative processes that use less energy and fewer materials. \u00a0So-called \u2018lightweighting\u2019 drives efficiencies in everything from airplanes to smartphones.<\/p>\n<p>Additive manufacturing reduces lead time, cost, and waste.\u00a0 Automation and analytics improve productivity.\u00a0 Even simple design improvements can have a significant impact; for example, Interface slashed energy use in a Dutch carpet factory by making pipes fat, short and straight, to reduce friction and allow smaller pumps and motors.<a href=\"#_ftn20\" name=\"_ftnref20\"><sup>[20]<\/sup><\/a>\u00a0 It is estimated that the construction industry could cut emissions by between 29%\u201344% by using more sustainable procurement and methods,<a href=\"#_ftn21\" name=\"_ftnref21\"><sup>[21]<\/sup><\/a> such as curved fabric molds to reduce the amount of concrete used in buildings.<\/p>\n<p>Integrating different processes, especially the generation and use of heat, is a very effective way to reduce energy and emissions and can have a big payback.\u00a0 Researchers from the Rocky Mountain Institute in the United States calculated that in around US$ 40 billion of diverse industrial projects, whole-system redesign delivered up to 60% energy sayings in retrofits and up to 90% energy savings in newly built facilities<a href=\"#_ftn22\" name=\"_ftnref22\"><sup>[22]<\/sup><\/a>.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"alignleft  wp-image-82267\" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/Circular-Economy-e1607512413552-300x293.jpeg\" alt=\"Circular Economy\" width=\"223\" height=\"218\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Circular-Economy-e1607512413552-300x293.jpeg 300w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Circular-Economy-e1607512413552-1024x1000.jpeg 1024w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Circular-Economy-e1607512413552-150x147.jpeg 150w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Circular-Economy-e1607512413552-768x750.jpeg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Circular-Economy-e1607512413552.jpeg 1080w\" sizes=\"(max-width: 223px) 100vw, 223px\" \/>Circular economy principles can be applied to make longer-lasting products that are easier to reuse, refurbish, and recycle.\u00a0 For example, reusing steel requires just a quarter of the energy of brand new steel, and by 2050, nearly 60% of plastics could be replaced with recycled materials.<a href=\"#_ftn23\" name=\"_ftnref23\"><sup>[23]<\/sup><\/a>\u00a0 Canadian firm Carbon Cure is already mixing recycled CO<sub>2<\/sub> into cement to reduce its carbon footprint.<a href=\"#_ftn24\" name=\"_ftnref24\"><sup>[24]<\/sup><\/a><\/p>\n<p>Finally, changing consumption patterns, enabled by new technology, can reduce demand for materials; for example, <a href=\"https:\/\/www.alj.com\/en\/perspective\/breakthrough-for-mobility\/\">new models of mobility<\/a> could reduce the need for roads and, therefore cement, and precision agriculture could reduce ammonia usage for fertilizer.<\/p>\n<h2>Sharing the bill<\/h2>\n<p>Although the absolute numbers are daunting, decarbonizing industry would only cost around 0.5% to 1% of global GDP, according to the <a href=\"https:\/\/www.sei.org\/\">Stockholm Environment Institute<\/a> (SEI)<a href=\"#_ftn25\" name=\"_ftnref25\"><sup>[25]<\/sup><\/a>.\u00a0 The challenge is how to spread the risk between public and private investors.<\/p>\n<p>The rise in ESG investing, which evaluates investments on environmental, social, and governance performance, as well as financial factors, proves that sustainability can pay.\u00a0 Despite market turmoil, 2020 is expected to be a record year for ESG investing.\u00a0 Inflows in the first quarter of 2020 were more than half of the record US$ 21.4 billion pumped into sustainable funds in 2019<a href=\"#_ftn26\" name=\"_ftnref26\"><sup>[26]<\/sup><\/a>.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter size-full wp-image-82260\" src=\"https:\/\/www.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-scaled.jpg\" alt=\"Sustainable Funds\" width=\"2560\" height=\"1465\" srcset=\"https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-scaled.jpg 2560w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-300x172.jpg 300w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-1024x586.jpg 1024w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-150x86.jpg 150w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-768x440.jpg 768w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-1536x879.jpg 1536w, https:\/\/media.alj.com\/app\/uploads\/2020\/12\/ALJ-Sustainable-Funds-2048x1172.jpg 2048w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<p>The German Institute for Economic Research (<a href=\"https:\/\/www.diw.de\/en\">DIW Berlin<\/a>) notes that finance is &#8220;indispensable&#8221; where technologies are yet to achieve market competitiveness: &#8220;Green finance in the form of bonds, grants, loans, results-based finance or any other form is crucial for three aspects: R&amp;D, scalability, and affordability.&#8221;<a href=\"#_ftn27\" name=\"_ftnref27\"><sup>[27]<\/sup><\/a><\/p>\n<p>Private businesses \u2013 like Abdul Latif Jameel \u2013 can help to catalyze both business and government investment into solutions to decarbonize industry and combat climate change.\u00a0 Organizations like the Clean, Renewable and Environmental Opportunities Syndicate (<a href=\"https:\/\/creosyndicate.org\/\">CREO Syndicate<\/a>), are already helping to change attitudes and explore private investment opportunities across the global ESG marketplace.<\/p>\n<p>Private investors can\u2019t do it alone, however.\u00a0 Promising but unproven solutions are inherently riskier, and the absence of fossil fuel bans and higher carbon prices holds back further cash.\u00a0 Greater certainty and clear direction will allow deeper investment.\u00a0 Governments must provide support, regulation, and coordination for the decarbonizing industry, in the same way they supported the cost reduction and scaling of renewable energy.<\/p>\n<p>Government and public institutions can foster partnerships between industry, business, investors, and researchers to champion innovation and provide tax credits and grants for research.\u00a0 They will also need to play a more prominent role in the later stages of development, such as financing pilots and roll-out of carbon-neutral solutions, and setting procurement standards to alleviate risks for early movers<a href=\"#_ftn28\" name=\"_ftnref28\"><sup>[28]<\/sup><\/a>.<\/p>\n<p>In the UK, the <a href=\"https:\/\/www.lse.ac.uk\/granthaminstitute\/\">Grantham Research Institute on Climate Change and the Environment<\/a> at the LSE calls for a:<\/p>\n<blockquote>\n<p><em>&#8220;National Infrastructure Bank, to provide transparency and credibility around finance for sustainable infrastructure.\u00a0 This institution could align expectations on the future growth path and avoid a muddled path where the UK invests in both inefficient high-carbon technologies and sustainable infrastructure.&#8221;<a href=\"#_ftn29\" name=\"_ftnref29\"><sup><strong>[29]<\/strong><\/sup><\/a><\/em><\/p>\n<\/blockquote>\n<p>A report from the institute<a href=\"#_ftn30\" name=\"_ftnref30\">[30]<\/a> proposes that fiscal policy could be used to make markets more attractive for generating and distributing renewable energy, together with direct incentives to promote low-carbon products and decarbonize facilities.\u00a0 Policies could also encourage sustainable biomass usage and the reuse of steel and the recycling of plastics.\u00a0 Incentives could be combined with more stringent energy efficiency and emission standards, energy audits, and data collection and disclosure requirements. More robust measures are always an option. \u00a0Mandatory retirement has been used for the highest emitters, mainly coal-powered facilities, from the US to China.<\/p>\n<p>One of the key fiscal tools often mooted is carbon pricing, which aims to leverage the ingenuity \u2013 and economic imperative \u2013 of industrial companies to find their own way of reducing emissions.\u00a0 It also generates revenue, which can support more decarbonization or social policies.\u00a0 Carbon pricing is most effective when it includes border adjustments to minimize the &#8220;leakage&#8221; that occurs when carbon emissions are hidden overseas in the supply chain.\u00a0<\/p>\n<p>Carbon taxes have already shown some success in the energy and transport sectors.\u00a0 Sweden has the highest carbon tax in the world, primarily for heating and motor fuels.\u00a0 It proves it&#8217;s possible to decouple decarbonization from GDP while increasing the use of more sustainable fuels.\u00a0 After introducing the carbon tax, Sweden&#8217;s biomass usage increased from 25% in 1990 to nearly 70% in 2012<a href=\"#_ftn31\" name=\"_ftnref31\">[31]<\/a>.<\/p>\n<h2>Take a deep breath<\/h2>\n<p>Decarbonizing industry will require global commitment and a staggering amount of investment.\u00a0 But the alternative will cost far more.\u00a0 Industrial businesses need to play a central role by reviewing their facilities to determine the optimum mix of technologies and feedstocks, based on the local availability of low-cost electricity, hydrogen, biomass, and carbon storage capacity.\u00a0<\/p>\n<p>Businesses further down the supply chain, including construction and manufacturing, can redesign their processes to use fewer materials more efficiently while increasing reuse and recycling.\u00a0<\/p>\n<p>Investors \u2013 both public and private &#8211; can develop more mechanisms to support innovators and early movers.\u00a0 And crucially, governments must provide fiscal incentives for the development and implementation of promising decarbonization technologies, while expanding support for renewable energy.<\/p>\n<p>Says Fady Jameel:<\/p>\n<blockquote>\n<p><em>\u201cThere are many choices we can make today that will affect whether we can be close to a zero-emissions energy system in 2050.\u00a0 While some of them are not economically \u2013 or politically \u2013 viable at present, making the right choices will ultimately help to drive the economy, protect the environment and safeguard our societies in future.\u201d<\/em><\/p>\n<\/blockquote>\n<p>&nbsp;<\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref1\" name=\"_ftn1\"><sup>[1]<\/sup><\/a> <a href=\"https:\/\/news.un.org\/en\/story\/2019\/11\/1052171\">https:\/\/news.un.org\/en\/story\/2019\/11\/1052171<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref2\" name=\"_ftn2\"><sup>[2]<\/sup><\/a> <a href=\"https:\/\/www.nature.com\/articles\/d41586-018-06876-2\">https:\/\/www.nature.com\/articles\/d41586-018-06876-2<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref3\" name=\"_ftn3\"><sup>[3]<\/sup><\/a> <a href=\"https:\/\/www.un.org\/sg\/en\/content\/sg\/statement\/2019-09-23\/secretary-generals-remarks-closing-of-climate-action-summit-delivered\">https:\/\/www.un.org\/sg\/en\/content\/sg\/statement\/2019-09-23\/secretary-generals-remarks-closing-of-climate-action-summit-delivered<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref4\" name=\"_ftn4\"><sup>[4]<\/sup><\/a> <a href=\"\"><\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref5\" name=\"_ftn5\"><sup>[5]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Sustainability\/Our%20Insights\/How%20industry%20can%20move%20toward%20a%20low%20carbon%20future\/Decarbonization-of-industrial-sectors-The-next-frontier.pdf\">Decarbonization of industrial sectors: the next frontier<\/a>, McKinsey, June 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref6\" name=\"_ftn6\"><sup>[6]<\/sup><\/a> <a href=\"https:\/\/www.iea.org\/reports\/clean-energy-innovation\">https:\/\/www.iea.org\/reports\/clean-energy-innovation<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref7\" name=\"_ftn7\"><sup>[7]<\/sup><\/a> <a href=\"http:\/\/blogs.edf.org\/markets\/2020\/07\/10\/why-decarbonizing-heavy-industry-is-difficult-but-also-possible\/\">http:\/\/blogs.edf.org\/markets\/2020\/07\/10\/why-decarbonizing-heavy-industry-is-difficult-but-also-possible\/<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref8\" name=\"_ftn8\"><sup>[8]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Sustainability\/Our%20Insights\/How%20industry%20can%20move%20toward%20a%20low%20carbon%20future\/Decarbonization-of-industrial-sectors-The-next-frontier.pdf\">Decarbonization of industrial sectors: the next frontier<\/a>, McKinsey, June 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref9\" name=\"_ftn9\"><sup>[9]<\/sup><\/a> <a href=\"https:\/\/ec.europa.eu\/knowledge4policy\/growing-consumerism_en\">https:\/\/ec.europa.eu\/knowledge4policy\/growing-consumerism_en<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref10\" name=\"_ftn10\"><sup>[10]<\/sup><\/a> <a href=\"https:\/\/chinapower.csis.org\/energy-footprint\/#:~:text=From%201990%20to%202018%2C%20China,the%20largest%20consumer%20of%20coal\">https:\/\/chinapower.csis.org\/energy-footprint\/#:~:text=From%201990%20to%202018%2C%20China,the%20largest%20consumer%20of%20coal<\/a>.<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref11\" name=\"_ftn11\"><sup>[11]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/business-functions\/sustainability\/our-insights\/reimagining-industrial-operations#nga_section_header_main_0_universal_0\">Reimagining industrial operations<\/a>, McKinsey, May 2020<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref12\" name=\"_ftn12\"><sup>[12]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Sustainability\/Our%20Insights\/How%20industry%20can%20move%20toward%20a%20low%20carbon%20future\/How-industry-can-move-toward-a-low-carbon-future.pdf\">How industry can move toward a low-carbon future<\/a>, McKinsey, July 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref13\" name=\"_ftn13\"><sup>[13]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Sustainability\/Our%20Insights\/How%20industry%20can%20move%20toward%20a%20low%20carbon%20future\/How-industry-can-move-toward-a-low-carbon-future.pdf\">How industry can move toward a low-carbon future<\/a>, McKinsey, July 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref14\" name=\"_ftn14\"><sup>[14]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/business-functions\/sustainability\/our-insights\/climate-math-what-a-1-point-5-degree-pathway-would-take\">Climate mate: What a 1.5 degree pathway would take<\/a>, McKinsey, April 2020<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref15\" name=\"_ftn15\"><sup>[15]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Sustainability\/Our%20Insights\/How%20industry%20can%20move%20toward%20a%20low%20carbon%20future\/Decarbonization-of-industrial-sectors-The-next-frontier.pdf\">Decarbonization of industrial sectors: the next frontier<\/a>, McKinsey, June 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref16\" name=\"_ftn16\"><sup>[16]<\/sup><\/a> <a href=\"https:\/\/www.iea.org\/\">Five keys to unlock CCS investment<\/a>, International Energy Agency, 2017<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref17\" name=\"_ftn17\"><sup>[17]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/~\/media\/McKinsey\/Business%20Functions\/Sustainability\/Our%20Insights\/How%20industry%20can%20move%20toward%20a%20low%20carbon%20future\/How-industry-can-move-toward-a-low-carbon-future.pdf\">How industry can move toward a low-carbon future<\/a>, McKinsey, July 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref18\" name=\"_ftn18\"><sup>[18]<\/sup><\/a> <a href=\"https:\/\/www.responsiblesteel.org\/\">https:\/\/www.responsiblesteel.org\/<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref19\" name=\"_ftn19\"><sup>[19]<\/sup><\/a> <a href=\"https:\/\/www.bostonmetal.com\/\">https:\/\/www.bostonmetal.com\/<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref20\" name=\"_ftn20\"><sup>[20]<\/sup><\/a> <a href=\"https:\/\/www.greenbiz.com\/article\/heres-how-decarbonize-industry-and-fight-climate-change\">https:\/\/www.greenbiz.com\/article\/heres-how-decarbonize-industry-and-fight-climate-change<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref21\" name=\"_ftn21\"><sup>[21]<\/sup><\/a> <a href=\"https:\/\/www.c40.org\/networks\/clean-construction-forum\">https:\/\/www.c40.org\/networks\/clean-construction-forum<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref22\" name=\"_ftn22\"><sup>[22]<\/sup><\/a>. <a href=\"https:\/\/doi.org\/10.1088\/1748-9326\/aad965\">How big is the energy efficiency resource?<\/a>, A.B. Lovins, Environ Res Lett, 2018<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref23\" name=\"_ftn23\"><sup>[23]<\/sup><\/a> <a href=\"https:\/\/www.mckinsey.com\/business-functions\/sustainability\/our-insights\/climate-math-what-a-1-point-5-degree-pathway-would-take\">https:\/\/www.mckinsey.com\/business-functions\/sustainability\/our-insights\/climate-math-what-a-1-point-5-degree-pathway-would-take<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref24\" name=\"_ftn24\"><sup>[24]<\/sup><\/a> <a href=\"https:\/\/www.carboncure.com\/\">https:\/\/www.carboncure.com\/<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref25\" name=\"_ftn25\"><sup>[25]<\/sup><\/a> <a href=\"https:\/\/www.sei.org\/perspectives\/a-public-private-path-to-decarbonising-industry\/\">https:\/\/www.sei.org\/perspectives\/a-public-private-path-to-decarbonising-industry\/<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref26\" name=\"_ftn26\"><sup>[26]<\/sup><\/a> <a href=\"https:\/\/www.cnbc.com\/2020\/06\/07\/sustainable-investing-is-set-to-surge-in-the-wake-of-the-coronavirus-pandemic.html\">https:\/\/www.cnbc.com\/2020\/06\/07\/sustainable-investing-is-set-to-surge-in-the-wake-of-the-coronavirus-pandemic.html<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref27\" name=\"_ftn27\"><sup>[27]<\/sup><\/a> <a href=\"https:\/\/www.diw.de\/documents\/dokumentenarchiv\/17\/diw_01.c.794253.de\/agenda_workshop_snapfi_india_29012020.pdf\">Finance mechanisms for accelerating industry decarbonization<\/a>, DIW Berlin, January 2020<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref28\" name=\"_ftn28\"><sup>[28]<\/sup><\/a> <a href=\"http:\/\/blogs.edf.org\/markets\/2020\/07\/10\/why-decarbonizing-heavy-industry-is-difficult-but-also-possible\/\">http:\/\/blogs.edf.org\/markets\/2020\/07\/10\/why-decarbonizing-heavy-industry-is-difficult-but-also-possible\/<\/a><\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref29\" name=\"_ftn29\"><sup>[29]<\/sup><\/a> <a href=\"https:\/\/www.lse.ac.uk\/GranthamInstitute\/wp-content\/uploads\/2019\/09\/Grantham-Research-Institute-response-to-inquiry-on-decarbonisation-of-the-UK-economy-and-green-finance.pdf\">Decarbonization of the UK economy and green finance<\/a>, Grantham Research Institute on Climate Change and the Environment, September 2019<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref30\" name=\"_ftn30\">[30]<\/a> <a href=\"https:\/\/www.lse.ac.uk\/GranthamInstitute\/wp-content\/uploads\/2019\/09\/Grantham-Research-Institute-response-to-inquiry-on-decarbonisation-of-the-UK-economy-and-green-finance.pdf\">Decarbonization of the UK economy and green finance<\/a>, Grantham Research Institute on Climate Change and the Environment, September 2019<\/span><\/p>\n<p><span style=\"font-size: 14px;\"><a href=\"#_ftnref31\" name=\"_ftn31\">[31]<\/a> <a href=\"https:\/\/www.instituteforenergyresearch.org\/international-issues\/the-carbon-tax-in-sweden\/\">The Carbon Tax in Sweden &#8211; IER (instituteforenergyresearch.org)<\/a><\/span><\/p>\n","protected":false},"author":18,"featured_media":82281,"template":"","tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Decarbonizing industry vital to sustainable future | Abdul Latif Jameel\u00ae<\/title>\n<meta name=\"description\" content=\"The world must reduce carbon emissions by at least 49% of 2017, levels and become carbon neutral by 2050, to meet the targets set by the UN-led Paris agreement.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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Decarbonizing industry will require global commitment and a staggering amount of investment, but the alternative will cost far more.\u00a0<\/p>\n"],"perspective_location":["Dubai, UAE"],"wpcf-featured-news":["0"],"is_latest_news":["0"],"wpcf-show-news-at-homepage":["1"],"publish_mobile":["a:1:{i:0;s:3:\"yes\";}"],"_publish_mobile":["field_5bfa8eb2e65cf"],"mobile_featured_image":["https:\/\/media.alj.com\/app\/uploads\/2020\/12\/Factory-Smoke-Air-Pollution.jpg"],"_mobile_featured_image":["field_5c3b204983dea"],"_wpcf-card-image-sort-order":["a:1:{i:0;i:945577;}"],"_bsf_post_type":["0"],"_bsf_item_review_type":["none"],"_yoast_wpseo_title":["Decarbonizing industry vital to sustainable future | Abdul Latif Jameel\u00ae"],"_yoast_wpseo_metadesc":["The world must reduce carbon emissions by at least 49% of 2017, levels and become carbon neutral by 2050, to meet the targets set by the UN-led Paris agreement."],"_yoast_wpseo_content_score":["30"],"post_views_count_2020Dec":["51"],"post_views_count_2021Jan":["38"],"post_views_count_2021Feb":["38"],"post_views_count_2021Mar":["60"],"perspective_business_sector":["Energy and Environmental Services"],"wpcf-perspective-published-date":["1608076800"],"wpcf-card-image":[""],"post_views_count_2021Apr":["37"],"post_views_count_2021May":["30"],"post_views_count_2021Jun":["5"],"post_views_count_2021Jul":["59"],"post_views_total_count":["59"],"_edit_lock":["1774020518:22"]},"_links":{"self":[{"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/perspective\/82231"}],"collection":[{"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/perspective"}],"about":[{"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/types\/perspective"}],"author":[{"embeddable":true,"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/users\/18"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/media\/82281"}],"wp:attachment":[{"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/media?parent=82231"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alj.com\/en\/wp-json\/wp\/v2\/tags?post=82231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}