Industrial competitiveness key to meeting EU emissions targets - chems trade groups

Source: ICIS News

2018/11/28

LONDON (ICIS)--A competitive European industry and a strategy for energy-intensive sectors are needed to drive the transformations necessary to fulfil EU 2050 emissions reductions targets, chemicals trade groups said on Wednesday.

Proposed EU emissions reductions targets to 2050 are likely to see chemicals producers in the region shift to new production processes, such as renewable hydrogen or sustainable biomass-based feedstocks, according to European Commission documents released on 28 November.

The Commission’s latest greenhouse gas emissions reduction roadmap includes a variety of scenarios for emissions-reduction in the region, with the most ambitious plans aiming for net-zero emissions by 2050.

"Energy intensive sectors such as steel, cement and chemicals as well as car manufacturers will see a shift to new production processes with new skills required," the Commission said.

The scenarios are part of a raft of measures set out by the EU and other world governments to keep global warming levels within 1.5 degrees Celsius through to 2050. The new documents map out eight different potential scenarios that EU capitals could adopt, with long-term plans to be finalised by early 2020.

The range of scenarios set out and the timeline for each member state to finalise its approach to reducing carbon dioxide (CO2) outputs risks losing focus on the ultimate goal, according to Utz Tillmann, director-general of Germany's chemicals trade group VCI.

“We should focus on a common EU goal and not on the subordinate goals of individual Member States. Europe should agree on a scenario that will make it possible for all stakeholders to make a transition to a greenhouse gas-neutral future,” he said.

Investment and innovation is needed to develop and commercialise the technologies that will drive the extent of the carbon reduction necessary for the 2050 goals, which requires a clear strategy for industry to go alongside the climate plans, according to the EU-wide chemicals trade group Cefic.

“The chemical industry is and will be at the heart of the solution, but we need these solutions to be produced by European industry,” said Cefic director general Marco Mensink.

“For that reason, we need a strong European strategy for energy intensive industries and electricity production, especially for the next ten years, which are crucial."

The EU is “broadly” on track to meet its 2020 greenhouse gas, energy efficiency and renewable energy targets, according to documents obtained by EU policy journal Euractiv, and is finalising plans for 2030, by which the Commission intends to reduce emissions by 40% compared to 1990 levels.

The new strategy does not represent the launch of new policies nor revise 2030 targets, the Commission added, but is intended to set out an introductory roadmap to the changes the EU is likely to see for the 2050 reductions agreed in the Paris Accord to be met.

“The status quo is not an option,” the Commission said in a communication to the European Parliament, Council, and Investment Bank (EIB).

“Delivering on the transformation towards a net-zero greenhouse gas emissions economy thus requires early long-term planning, improving knowledge of the opportunities for transforming our entire economy and building trust within our society,” it added.

The transition toward a net-zero greenhouse gas economy is likely to fall heaviest on the energy sector, which is responsible for 75% of emissions in the EU, with shifts likely to be driven by smart networks, digitialisation and innovations in buildings and transport.

Renewable energy has already driven a sharp drop in EU emissions, with more than half of electricity supply in the region free from greenhouse gases, estimated to shift up to 80% by 2050.

Energy-intensive sectors are also likely to see significant changes, despite the Commission acknowledging that European manufacturing is under pressure “from developed and emerging economies”.

Hydrogen is likely to become increasingly prominent as a feedstock for the chemicals sector, as well as the transformation of carbon-free electricity into synthetic gases such as hydrogen and methane, the Commission said.

Carbon-free electricity-derived hydrogen, combined with CO2 from sustainable biomass could create a carbon-neutral alternative of the same molecules as natural gas  or oil and be distributed by existing transmission systems, it added.

“Steel, cement and chemicals dominate industrial emissions. In the next 10 to 15 years, technologies that are already known will need to demonstrate that they can work at scale, and some of them are indeed already being tested at small scale,” the Commission said.

Cefic's Mensink concluded: “This also means the chemical sector needs access to significant amounts of affordable low carbon electricity, access to a modern infrastructure and financial mechanisms to support the required innovation.

“A package of policy, financial, innovation and regulatory support will be needed to overcome the higher costs of investments and new business models,” he said.

Cefic is expected to release its mid-century strategy roadmap in early 2019.

Picture source: Westend61/REX/Shutterstock

(Update re-leads, adds Cefic, VCI commentary throughout)