Report of October 30, 2019
The science is clear: global warming must be limited to 1.5 degrees Celsius to avoid catastrophic impacts. The Paris Agreement recognises the 1.5C-limit as well. The production of basic materials –cement, iron and steel, paper, aluminium, as well as chemicals and petrochemicals – is one of the main contributors to climate change, accounting for approximately 25% of global CO2 emissions, and around 16% of EU GHG emissions.
The evolution of European industry toward climate neutrality is at the centre of current EU-level policy discussions. It is part of the European Green Deal proposed by incoming European Commission President Ursula von der Leyen, and appears in similar industrial strategy discussions in Member States such as Sweden, Netherlands, Spain, UK, Germany and France. Scenarios from climate scientists, governments and industry consistently show that it is possible: the clean production, efficient use and recycling of basic materials can together contribute to climate neutrality. Meanwhile, companies in the European materials sector are increasingly committed to carbon neutrality by 2050.
However, science, political commitment and even the eagerness of the industry to modernise are not enough to realise European commitments under the Paris Agreement. Nor are innovation funds or a carbon price alone able to transform the materials market with the scale and speed necessary to make a credible business case for climate-friendly options. Today, new, climate friendly production technologies are significantly more expensive than the existing processes. Incentives for efficient material choices and use are lacking. Therefore, industry and investors require and demand an integrated, coherent and comprehensive policy framework to support the creation of markets for climate-friendly materials and discourage greenhouse gas-intensive materials.
The Climate Friendly Materials Platform suggests to consider the following package to strengthen existing policy and integrate new options:
Together these policies will:
The climate-neutral production and use of basic materials will create opportunities for innovation and investment in an industry currently haunted by uncertainties relating to global economic development and trade wars. A smart transition to climate neutrality needs to ensure the long-term competitiveness of the sector, a long-term business case for each industrial sub-sector, and the creation of local jobs, contributing to a social, clean and competitive European economy.
The Climate Friendly Materials (CFM) Platform, which brings together leading researchers and policy advisors in Spain, France, Netherlands, Belgium, Sweden, Germany, Poland and Hungary convened by the research network Climate Strategies, presents a concrete package of policy instruments that creates economic incentives for private actors to pursue transformative investments aligned with Europe’s climate-neutral objectives for 2050 while keeping them in business. The underlying report offers explanation as to why such a package allows heavy industry to shift to climate-friendly materials while European industrial competitiveness in a global market is supported, through stimulation of global emission reductions and prevention of relocation of carbon-intensive production to less stringent regions.
Authors: Karsten Neuhoff, Olga Chiappinelli, Timo Gerres, Manuel Haussner, Roland Ismer, Nils May, Alice Pirlot, Jörn Richstein