TY - GEN

T1 - A European industrial development policy for prosperity and zero emissions

AU - Nilsson, Lars J.

AU - Åhman, Max

AU - Bauer, Fredric

AU - Ericsson, Karin

AU - Johansson, Bengt

AU - van Sluisveld, Mariësse

AU - Vogl, Valentin

AU - Andersson, Fredrik N.G.

AU - Hansen, Teis

AU - Bataille, Chris

AU - Lechtenböhmer, Stefan

AU - de la Rue du Can, Stephane

AU - Schiro, Danielle

N1 - Funding Information: We thank the European Commission for support under contract No. 730053 for the H2020 REINVENT project and the Swedish Energy Agency for project Nr. 38271-1, Green transition and co-evolution of industry and the energy system (GIST). Publisher Copyright: © 2020 European Council for an Energy Efficient Economy. All rights reserved.

PY - 2020

Y1 - 2020

N2 - The objective of this paper is to outline and discuss the key elements of an EU industrial development policy consistent with the Paris Agreement. We also assess the current EU Industrial Strategy proposal against these elements. The “well below 2 °C” target sets a clear limit for future global greenhouse gas emissions and thus strict boundaries for the development of future material demand, industrial processes and the sourcing of feedstock; industry must evolve to zero emissions or pay for expensive negative emissions elsewhere. An industrial policy for transformation to net-zero emissions must include attention to directed technological and economic structural change, the demand for emissions intensive products and services, energy and material efficiency, circular economy, electrification and other net-zero fuel switching, and carbon capture and use or storage (CCUS). It may also entail geographical relocation of key basic materials industries to regions endowed with renewable energy. In this paper we review recent trends in green industrial policy. We find that it has generally focused on promoting new green technologies (e.g., PVs, batteries, fuel cells and biorefineries) rather than on decarbonizing the emissions intensive basic materials industries, or strategies for handling the phase-out or repurposing of sunset industries (e.g., replacing fossil fuel feedstocks for chemicals). Based on knowledge about industry and potential mitigation options, and insights from economics, governance and innovation studies, we propose a framework for the purpose of developing and evaluating industrial policy for net-zero emissions. This framework recognizes the need for: directionality; innovation; creating lead markets for green materials and reshaping existing markets; building capacity for governance and change; coherence with the international climate policy regime; and finally the need for a just transition. We find the announced EU Industrial Strategy to be strong on most elements, but weak on transition governance approaches, the need for capacity building, and creating lead markets.

AB - The objective of this paper is to outline and discuss the key elements of an EU industrial development policy consistent with the Paris Agreement. We also assess the current EU Industrial Strategy proposal against these elements. The “well below 2 °C” target sets a clear limit for future global greenhouse gas emissions and thus strict boundaries for the development of future material demand, industrial processes and the sourcing of feedstock; industry must evolve to zero emissions or pay for expensive negative emissions elsewhere. An industrial policy for transformation to net-zero emissions must include attention to directed technological and economic structural change, the demand for emissions intensive products and services, energy and material efficiency, circular economy, electrification and other net-zero fuel switching, and carbon capture and use or storage (CCUS). It may also entail geographical relocation of key basic materials industries to regions endowed with renewable energy. In this paper we review recent trends in green industrial policy. We find that it has generally focused on promoting new green technologies (e.g., PVs, batteries, fuel cells and biorefineries) rather than on decarbonizing the emissions intensive basic materials industries, or strategies for handling the phase-out or repurposing of sunset industries (e.g., replacing fossil fuel feedstocks for chemicals). Based on knowledge about industry and potential mitigation options, and insights from economics, governance and innovation studies, we propose a framework for the purpose of developing and evaluating industrial policy for net-zero emissions. This framework recognizes the need for: directionality; innovation; creating lead markets for green materials and reshaping existing markets; building capacity for governance and change; coherence with the international climate policy regime; and finally the need for a just transition. We find the announced EU Industrial Strategy to be strong on most elements, but weak on transition governance approaches, the need for capacity building, and creating lead markets.

KW - decarbonisation

KW - energy intensive industry

KW - governance

KW - industrial policy

UR - http://www.scopus.com/inward/record.url?scp=85102856520&partnerID=8YFLogxK

M3 - Article in proceedings

AN - SCOPUS:85102856520

T3 - Eceee Industrial Summer Study Proceedings

SP - 457

EP - 466

BT - eceee Industrial Summer Study

PB - European Council for an Energy Efficient Economy

T2 - 2020 eceee Industrial Summer Study on Industrial Efficiency: Decarbonise Industry!

Y2 - 14 September 2020 through 17 September 2020

ER -