Industry in a net-zero emissions world: New mitigation pathways, new supply chains, modelling needs and policy implications

Abstract

The 2015 Paris Climate Agreement’s objective of net-zero CO2 emissions shortly after mid-century has completely transformed the climate policy debate for heavy industry. Prior to Paris, the iron & steel, cement & concrete, chemicals and other materials sectors were expected to be the last sectors emitting in a -80% reduction world. After Paris, they face either transforming rapidly or paying for offsetting negative emissions from land use, biomass and carbon capture and storage (CCS) or direct air capture (DAC). This has set off an intense debate on demand and supply technological options, induced innovation, capital investment needs, competitiveness issues, policy packages, and the need for better modeling. Old supply chains could be potentially uprooted to move the most intensive emitting parts of production to where there is geology for CCS or very inexpensive renewable electricity for electrification. A tentative research agenda for climate mitigation modeling, analysis and policy is suggested.