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CLIMATE & INDUSTRIAL POLICY FOR AN ENTREPRENEURIAL EUROPE
Tomas Wyns [email protected]
CECILIA 2050 CONFERENCE - 6 MARCH BRUSSELS
Outline
•EU 2050 low-carbon Roadmap!
•Industrial competitiveness revisited !
•Development of Industrial low-carbon roadmaps, conclusions!
•2050 de-carbonisation challenge for industrial sectors!
•Key elements of industrial low-carbon transition & examples!
•Suggestions for funding the transition
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Reference Scenario
Reduction Scenario
-40%
-80%
European Commission’ s 2050 low-carbon roadmap
-80 to -95% by 2050Reductions Investments Savings
!270 Bn p.a. !170-320 Bn p.a.Fuel cost
!88 Bn in 2050Air quality and health
-80% = domestic, ref. 1990 in EU economy: jobs
infrastructureR&D
EU Member States agree on targets but not on interim milestones
General challenges for the EU industry
Essential factors which determine the competitive strength and hence influence the location of the energy-intensive sectors:
Access to raw materials
Proximity to demand
Transport costs and infrastructure Cost
availability of (competitive priced) energy
Skilled labour-force (STEM)
Best practice industrial roadmaps should include•Thorough sectoral analysis (future growth, domestic demand, challenges, opportunities, move to higher value added, ...)
•Identification of current options to reduce emissions (BAT)
•Identification of future options to reduce emissions (future BAT and breakthrough tech.)
•Broader than only end-of-pipe/process solutions (downstream product design/use)
•Seek broader benefits beyond GHG reductions (e.g. lower capex, opex, higher value added products)
•Identify technical, financial and policy barriers for implementation
•Outline of low carbon roadmap implementation plan
•Policy recommendations to facilitate implementation
EU sectoral roadmaps state of play
EU paper sector was first to develop roadmap (2011)
Followed by EU Ceramics, Steel, Chemicals and Cement sector roadmaps
EU Industrial roadmaps: conclusions so far
• Roadmaps offer interesting insights into possible future sectoral developments, though in most cases quite narrow (e.g. GHG only)!
• Conservative estimates (low mitigation / high cost)• Need for breakthrough technologies• Need for policy support (but not very specific)• Implementation plan missing except for EU paper sector (CEPI two team project)!
Example: CEPI 2-team project
12 months: 5 breakthroughs
0%
25%
50%
75%
100%
1990 2005 2030 2050
100%100%
80%
66%
17%Low-end Industrial sectors scenario E.C. 2050 low-carbon roadmapHigh-end scenario0.8% pa e"ciency improvement as from 2005 (#xed production)
Deployment
of New
Technologies
56%60%
13%
2050 projections for Industry
0%
25%
50%
75%
100%
1990 2005 2030 2050
Deployment of N
ew
Technologies
60%
!!!!10-15 years 10-15 years
time lefttime left to develop & to develop & 60% to develop & 60%
make make breakthrough technologies market ready
2050 = 2030
Key elements of Industrial Low Carbon Transition
ExamplesProcess Innovation
Product Innovation
HISarna Blast Furnace (Tata Steel) Molten oxide electrolysis (MIT AMBRI)
US Nano-steel phase-change insulationmaterials (BASF)
Jeans from wood-fibre
Examples
TRIMET Aluminium Germanymodulated power use (linked to RE)
Business model innovation
Social Innovation
Innovation economics in Finland
Example: Business model change
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Requires: removal of (regulatory) barriers, incentives for on-site generation, support for R&D and investments
Source: CEPI
Example: Business model change
� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �
Requires: removal of (regulatory) barriers, incentives for on-site generation, support for R&D and investments
Source: CEPI
Spire
R&D into higher value added productsEU ETS
auctioning revenues
(e.g.18 Bn EUR2015-2020)
SILC II
Bio-based i ppp
Horizon 2020
Products contributing to EU low carbon roadmap
Diversification into new products, services and/or production/supply chains
Social transition, Education & Entrepreneurship
Process Innovation
Product & Business
model Innovation
ULCOS II
Social Innovation
Suggestions for industrial innovation policy/funding
Possible Funding sources:!
• EU ETS auctioning revenues NER
• Market Stability reserve • EU Coal and Steel Research
Fund • …
Bridge