Innovation for the decarbonisation of heavy industries

Lars J. Nilsson, Igor Bashmakov and Chris Bataille

Chapter 25 in Handbook of Energy Innovation, 2026, pp 493-510 from Edward Elgar Publishing

Abstract: Industry accounts for 26.3 percent of global carbon dioxide emissions and 34 percent if we include the indirect emissions from purchased electricity and heat. Reaching net-zero emissions in a few decades means that industry must also take unprecedent mitigation actions. Given the 15–25-year lifespan of major process equipment, all new industrial investments will need to be near net-zero emissions by the early 2030s. Unlike in other sectors, industrial decarbonization requires eliminating emissions not only from fossil fuel combustion, but also from feedstock and chemical processes. This requires innovation in technologies, processes, value chains, business models, etc. Demand management, materials efficiency, and high-quality recycling are important options to reduce the need for emissions-intensive primary materials. Mastering low GHG materials production involves both supporting clean cross-cutting technologies (e.g., direct electric heating, heat batteries, and heat pumps) to decarbonize common industrial heat needs as well as the decarbonization of key specific processes in the largest emitters (e.g., iron ore reduction, clinker production, and chemical processing), using electrification and hydrogen as well as carbon management to provide feedstocks or do carbon capture and storage. It involves climate and industrial policy approaches that include all mitigation options, effective governance and ambitious industrial targets, infrastructures for green electricity and hydrogen, improved waste management, mission-driven innovation, financing and de-risking of investments, as well as international collaboration around developing and spreading solutions, while preventing carbon leakage. It requires, e.g., strategic reorientations towards net-zero commitments by consumers, corporations, changes in operations, and reskilling of labor, supported in turn by stable political commitments and institutions suitably mandated to institute, monitor, and adjust policies along different sectoral pathways towards a net-zero industry.

Keywords: Industrial Policy; Electrification; Decarbonization; Materials Efficiency; Carbon Management (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035310401
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