I have been looking at those Hard-to-Abate sectors for reaching Net-Zero Co2 Emissions like the cement, steel, plastics, aviation, shipping, and heavy road transport within our need for a global energy transition. These are the really big carbon emitters and it is argued that they could achieve, using known technologies already under development a pathway to complete carbonization over the next decades. It is going to require significant public policy will and private investment to drive both the present incremental solutions and push for the breakthrough ones. Innovation is really needed here.
There are six innovation areas of electrification, hydrogen, biochemistry and synthetic chemistry, material efficiency and circularity, alongside new materials and the ability to carbon capture and carbon use that need to have innovative solutions. Working on the innovations within these six critical areas does have a real chance of fully decarbonizing these harder-to abate sctors of the world’s economy.
Yet, let’s step back just a little and get some clarifications out of the way. They help frame this story.
In understanding the energy transition that is well underway, there are many companies and countries all proudly claiming dates for achieving their carbon neutral targets. Most of these centers around 2030, but where I keep coming back to is the discussions around Net-Zero carbon emissions. Is this a mission impossible? For me, all I hear about are the cities and companies all proudly announcing their target goals for achieving carbon-neutral, yet is this good enough in this rapidly warming world? I think not.
So let us define the two: Carbon Neutral is a term used to describe the state of an entity (such as a company, service, product or event), where the carbon emissions caused by them have been balanced out by funding an equivalent amount of carbon savings elsewhere in the world. These savings are generated through helping to support renewable energy projects and energy efficiency projects, many of which bring additional social and community benefits in developing countries as well as reducing greenhouse gases.
There is an increasing number of businesses claiming to be carbon neutral. They recognize that being carbon neutral can play a crucial part in their sustainability and Corporate and Social Responsibility (CSR) strategy while enabling them to do their bit for global climate change. They also realize that individuals and corporate customers prefer to buy products and services from environmentally conscious suppliers. Source Carbon Footprint. It seems this aim, although transformational to parts of a business or a city, is not addressing the essential one of achieving a net-zero emission state.
The other is Net-zero carbon emissions The IPCC demonstrates in its most recent report of 2018 that net emissions must be reduced to zero to stabilize global temperatures. The report also states that any scenario that does not involve a reduction to zero will not stop climate change.
Since the Earth already reacts strongly to small changes in the amount of CO₂, methane, and other greenhouse gases in the atmosphere, emissions of these gases must be reduced until the whole system is back in balance again. Net zero-emission means that all man-made greenhouse gas emissions must be removed from the atmosphere through reduction measures, thus reducing the Earth’s net climate balance, after removal via natural and artificial sink, to zero. This way, humankind would be carbon neutral, and global temperature would stabilize. (Source: My Climate Org.)
Then what is hard-to-abate mean when it comes to difficult sectors of the economy?
There is a myth In the sectors that are termed hard-to-abate industries such as petrochemicals, cement, steel, trucking, airlines, and shipping it is not possible to find non-fossil alternatives, and demand keeps rising. Therefore, there will be no energy transition. Actually, this is well-argued as not valid. It is merely just really hard!
I think this summary below nicely sums up the hard-to-abate issues coming from Carbon Tracker under their myths, written by their New Energy Strategist, Kingsmill Bond.
Carbon Tracker offers these Mythbusters
Hard-to-solve sectors are an endgame problem. All transitions take place in stages, and the hardest segments can be solved last. Long before we get to the last 21% of primary energy supply required directly by the hard-to-solve sectors, the market will have reacted, and incumbents will have changed strategy.
There is plenty of room for progress in other areas. We have already started on the path to decarbonize electricity and to electrify light industry, buildings, and light transport. With today’s technology, we can already increase the share of cost-competitive non-fossils from 20% of the primary energy supply to 30%.
Technology keeps raising the ceiling of the possible. The continued fall in the cost of solar, wind, batteries, and electrolyzers means that there will be cost-competitive renewable solutions for half of the primary energy by the mid-2030s.
Hard-to-solve sectors already have solutions. Electricity, heat, and biomass already make up more than a quarter of the total final energy consumption of heavy industry. Technology is chipping away at the easier parts of the hard-to-solve sectors such as light trucking in transport or low-temperature heat in industry.
Hard-to-solve sectors are smaller than ones where we have solutions. Cars use four times as much oil as planes. Electricity uses ten times as much primary energy as iron and steel. And meanwhile, the world is electrifying so that electricity will make up most of the growth in energy demand. It is not credible to argue that growth in these small sectors can outweigh the decline in the large ones.
Reality
The hard-to-solve sectors are islands of enduring fossil fuel demand, but no impediment to a transition. And as renewable energy sources become increasingly prevalent, so each of the islands will be overwhelmed by the rising renewable tide. Meanwhile, financial markets react during the peaking phase of the energy transition, long before the last sources of fossil fuel demand need to be replaced.
Turning mission impossible into mission possible for Net-Zero and the Hard-to-Abate debate
The most comprehensive report I have read through on this net-zero carbon emission set of problems, tackling those hard-to-abate sectors has been written by the Energy Transmission Commission and released in November 2018.
The report Mission Possible: Reaching net-zero carbon emissions from harder-to-abate sectors by mid-century outlines the possible routes to fully decarbonize cement, steel, plastics, trucking, shipping, and aviation – which together represent 30% of energy emissions today and could increase to 60% by mid-century as other sectors lower their emissions.
The “Mission Possible” report was developed with contributions from over 200 industry experts over a 6-month consultation process. Its findings show that full decarbonization is technically feasible with technologies that already exist, although several still need further investment to reach commercial readiness
The “Mission Possible” report concludes that the most challenging sectors to decarbonize are plastics, due to end-of-life emissions, cement, due to process emissions, and shipping because of the high cost of decarbonization and the fragmented structure of the industry.
For me, the sector in the report (Chapter 8) that discusses the innovation agenda was the place I automatically went. The two crucial slides from the Mission Impossible Report for innovation were highlighted in the chapter, discussing bring critical technologies to commercial-scale deployment, addressing engineering complexities, and driving down costs.
Exhibit 8.1 presents a summary of critical domains where incremental performance and cost improvement of existing technologies is essential to facilitate commercial-scale deployment. It provides a roadmap to explore identified innovation solutions.
Exhibit 8.2 presents a summary of key areas where innovations are further away from the market, and require significant development, demonstration, and piloting over the next 15 years to bring them to market readiness by the 2030s or 2040s. Again, the innovation concepts are known, it is the validation and scaling-up that needs time.
The Energy Transmission Commission rightly points out we will be discovering other innovation alternatives in the years ahead. The state:”Unforeseeable technological breakthroughs will significantly change the optimal pathway to decarbonization over the next fifty years.” The driver of the real change must come from a very forceful public policy set of decisions that makes reaching net-zero carbon emissions from the harder-to-abate sectors non-negotiable.
The point is unless we push for these hard-to-abate heavy industries, such as cement, steel, and plastics, along with solutions to overcome the heavy-duty transport ones of heavy road transport, shipping, and aviation, we will improbably not achieve the global warming goals of well below 2c.
To achieve this, the leading four decarbonization technologies of electricity, biomass, carbon capture, and hydrogen all need to have innovative and scalable solutions. Along with these are a consistent improvement of energy efficiency and a constant determination to reduce existing demand for carbon-intensive products and services.
Winning the climate war
If we want to win the climate war, these demanding hard-to-abate (decarbonize) sectors must have viable solutions emerging in the next ten to twenty years, otherwise achieving carbon neutral will be the end game, and that is not enough.