- Energy efficiency serves as the cornerstone for achieving industry decarbonisation, as it leads to minimising waste, promoting cleaner technologies, and optimising resource consumption.
- Achieving industrial energy efficiency involves trade-offs, such as managing costs vs. environmental impact, reliability vs. renewability, and pacing technological advances with infrastructure readiness.
- Challenges in the journey towards energy efficiency and decarbonisation include interconnected industries, energy transition complexities, policy and regulation issues, and the need for continuous technological innovation.
- Emerging technologies, including smart grids, energy-efficient machinery, and electric vehicles, are reshaping global energy use.
- Industry decarbonisation demands a collaborative effort among governments, industries, and individuals to strike a balance between energy efficiency, alternative sources, and policy frameworks.
With mounting concerns about climate change on the rise, industry decarbonisation has become an imperative for governments and businesses, given how industrial energy consumption is still predominantly based on fossil fuels. In relation to this, energy combustion and industrial processes account for a significant amount of greenhouse gas emissions year after year (a staggering 89% in 2022).
At the heart of industry decarbonisation efforts lies the quest for energy efficiency, as industry consumes more energy than any other sector. This article explores key factors surrounding industry decarbonisation, including the trade-offs involved in balancing these factors and the challenges associated with current strategies being applied in various industries.
Energy Efficiency: The Driving Force Towards Decarbonisation
Energy efficiency refers to the ability to achieve a certain task with the least amount of energy input. And when it comes to industry decarbonisation, energy efficiency is largely considered a key enabler, as it helps minimise energy waste, promote cleaner technologies, and optimise resource utilisation. Hence, it is essential for industries to evaluate energy efficiency measures alongside alternative energy sources, especially for sectors that are currently leading the charge to net zero, and even more so for those that are considered hard to decarbonise.
However, the journey towards energy efficiency and industry decarbonisation is not without its challenges. It involves key factors that need to be balanced, such as:
• Cost vs. Impact – Sustainable and low-carbon technologies often come with higher initial costs. On the other hand, sustainable options offer more operational savings over time, leading to reduced energy costs and lower environmental impacts in the long run. To bridge the gap between these two factors, governments and subsidies can incentivise energy efficiency initiatives — an example of which, albeit non-industrial, is the United Kingdom’s ECO+ scheme, which was set to help up to 300,000 of the country’s least energy-efficient homes upgrade their wall insulation and, in the process, tackle fuel poverty.
• Renewability vs. Reliability – Renewable energy sources like solar and wind are weather-dependent, which can pose challenges to their long-term and consistent reliability. To maintain a reliable energy supply from renewable sources, effective energy storage solutions, such as advanced batteries and flexible, smart energy grids, are essential, especially during periods of low renewable energy production.
• Technological Advances vs. Infrastructure – As reported by the International Energy Agency (IEA), a global-scale transition to a more sustainable energy system requires “more sophisticated approaches” to meet the expanded electrification demands, especially during peak periods. This same IEA report states that insufficient investment in electrical infrastructure has rendered electricity grids ill-equipped to handle the challenge of long-term reliability.
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Current Developments in Industrial Decarbonisation
Energy efficiency is becoming a global priority, and along with it is the emergence of technologies that are transforming the way people utilise energy. Examples of this are smart grid systems, energy-efficient machinery, renewable energy integration, and electric vehicles.
A recent report by the IEA, entitled "Energy Efficiency 2022," presents a compelling narrative of a potential turning point in global energy efficiency efforts. 2022 also marked a 16% upswing in global investments in energy efficiency, amounting to USD $560 billion (around GBP £460 billion).
The IEA highlighted encouraging developments emerging from various sectors, noting that one in every eight cars sold globally is now electric. They also underscored improvements in building codes, energy-saving awareness campaigns, and policies for efficient cooling in Southeast Asia (read the full report here).
The Crucial Role of Policy Support
To ensure the success of ambitious endeavours towards energy efficiency worldwide, there is a need for policymakers to establish frameworks that encourage businesses, as well as the general public, to adopt energy-efficient practices.
• The US Department of Energy (DOE) launched the Clean Fuels & Products Shot™ in May 2023, which is an initiative aimed at reducing carbon emissions from the transportation and chemical industries.
• Canada has committed over CAD 8 billion to decarbonise the country’s largest industrial emitters, aiming to reduce greenhouse gas emissions by 40% compared to 2005 levels by 2030.
• The Japanese government has unveiled the Green Transformation (GX) Basic Policy, focusing on regulatory, financing, and technology development for industrial sectors.
• In mid-2023, the UK government launched the Local Industrial Decarbonisation Plans (LIDP) competition, in which GBP 5 million worth of grant funding is to be provided for dispersed industrial clusters in support of the development of their decarbonisation plans.
• The European Commission has granted state aid approval for the German Federal Ministry for Economic Affairs and Climate Protection to support the decarbonisation of steel production at thyssenKrupp Steel Europe. Dubbed Germany’s “largest decarbonisation project to date,” this programme is designed to save up to 3.5 million tonnes of CO2 emissions per year.
In the pursuit of a sustainable and resilient energy future, collaboration between governments, industries, and individuals is paramount. Striking the right balance between energy efficiency, alternative sources, and policy frameworks is essential for navigating the complexities of industry decarbonisation. As the world grapples with increasing climate concerns, informed decisions and collective action will pave the way to a greener and net-zero future.