Greening European industry will cost up to €210 billion

About a quarter of global CO2 emissions can be attributed to the industrial sector. With a combination of measures, industry can reduce these emissions to almost zero. What investments are needed for this? And what will be Europe's responsibility? This is what the 'Green Industrial Revolution' report recently published by our research department is about.

According to our calculations, the industrial sector is responsible for a quarter of global CO2 emissions. To decarbonize the industrial sector worldwide, a total of 2,700 billion euros of investments will be necessary by 2050. The European Union represents 8%, or 210 billion euros. Half of this amount is needed for the electrification of industry. The rest goes to the use of hydrogen, innovative production processes and new technologies. The money needed for carbon capture and storage (CCS) is not yet included. This would represent 330 billion euros of additional investment.

If we assume 28 EU countries, an average of 3 billion euros per country and per year will have to be invested between 2020 and 2030. And between 2030 and 2050 an average of 9 billion euros per year. Of course, harmful industrial emissions have already been significantly reduced over the past ten to twenty years. European industry has also become much more energy efficient. For example, industrial emissions in 2010 were already -29% lower than in 1990. Ten years later, this drop had risen to -39%. This is a great success that companies, which usually face fierce (international) competition, achieve climate and energy targets.

Nevertheless, there is still work to be done. In 2020, the sector was still responsible for 650 million tons of CO2 emissions. Our researchers have looked at the industrial sectors that emit the most CO2 and from which we can therefore make the most profit. The cement, steel and chemical industries together contribute the most to CO2 emissions. These three sectors accounted for three quarters of industrial emissions in the 28 EU countries in 2020.

One sector where there is still a lot of work to do in terms of CO2 is the pulp and paper industry (responsible for around 190 million tonnes of CO2 emissions in 2021). Paper production is expected to increase at least until 2030. This requires considerable efforts to reduce the emissions intensity of production. Much progress can be made by stopping fossil fuels. Clever techniques can also be used to reduce the amount of heat needed to dry pulp and paper.

To reach zero CO2 in the European Union, the pulp and paper industry will require an investment of almost 80 billion euros by 2050. For the steel industry, it is more than 55 billion euros and for the cement industry nearly 40 billion euros.

The chemical sector (more than 500 billion euros in turnover) plays a decisive role in the European economy. Many industries depend on it (such as pharmaceuticals, electronics, automotive and construction). Assuming 1990, production in the chemical sector increased by almost 50%. On the other hand, greenhouse gas emissions fell by -54%. Energy consumption decreased by -21%. Nevertheless, the chemicals sector is still responsible for almost a quarter of total CO2 emissions in the EU.