Setting a roadmap to decarbonise energy-intensive industries

Today, net-zero targets are a corporate norm. Glance at any brand website or wander around any supermarket and you’ll see claims of ‘climate neutral’, ‘zero-carbon’ and ‘planet-friendly’ displayed across products and banners everywhere, writes Astrid Poupart-Lafarge of Schneider Electric.

In fact, the 2023 Net Zero Stocktake report found that the worldwide share of large publicly listed companies with net-zero targets has more than doubled in just over two years. By all appearances, net zero has finally moved from ambition to implementation.

Unfortunately, if we glance behind these targets, we often find few organisations have set credible plans to achieve them. By applying a basic checklist based on the UN Race to Zero campaign, researchers discovered that less than 5% of companies have set interim targets or made practical plans to decarbonize all the emissions they are responsible for, including those caused by their products. In other words, scopes 1, 2, and 3.

By nature, the energies and chemical sector is a high-impact endeavour. Businesses are often aware of their footprints and know that we’re facing a race against time. They may have defined their 2050 net-zero or decarbonisation goals, but what about the key milestones in their decarbonisation pathway?

Have organisations defined goals for the next year, five years, or even ten years? And are these goals even tangible, or realistically achievable? The convergence of the energy crisis and the climate crisis brings us to an inflection point. The time to act is now.  

GHG cuts for energy-intensive industries

Energy-intensive industries are under increasing scrutiny to achieve their greenhouse gas reduction goals. However, it is important to recognise that significant transformations cannot occur immediately.

The journey toward decarbonisation requires a well-defined long-term strategy. For example, many companies have committed to reducing their scope 1, 2, and 3 emissions in time for net-zero by 2050.

However, achieving these objectives also requires immediate incremental changes. Widespread slow progress towards meeting shorter-term targets has become evident, with recently released research finding that 31% of energy and natural resources companies missed the scope 1 and 2 targets they set for 2020.

This sector in particular faces significant decarbonisation challenges. While the industry is more aggressive than others, the long lifecycle of an investment, sometimes up to 50 years, poses a challenge in making an affordable decarbonisation roadmap a reality.  

Funding faster, greener transformations

The industry is also not currently taking all the opportunities to decarbonise its processes, with 78% of the industrial sector’s energy demand not electrified. This means that most of the industrial processes’ equipment, like boilers, heaters, furnaces, pumps, and motors are unnecessarily powered by fossil fuels. 

A wait-and-see approach is in danger of setting in. Even though existing technology has the potential to drive change, there is a gap in adoption. Small changes in refineries (energy efficiency or process optimisation for instance) can make a huge impact, with a 10 to 25% reduction in CO2 emissions, if implemented correctly.  

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Some nations’ industries are leading the way. For example, Germany’s current decarbonisation targets aim to reduce the country’s overall CO2 emissions by approximately 45% by 2030, with reduction targets for industry of 35% or 63 MT of CO2.

Several initiatives have been put in place by governments leading to a global push for the energy transition. In the United States, the 2022 Inflation Reduction Act (IRA) has become a catalyst for clean energy with a $370 billion investment. These initiatives have inspired economies in other geographies to make changes and pledges: 

• As part of the Spring 2023 budget, the UK announced a long-term support package to deliver up to £20billion in grants to develop its nascent CCUS industry 
• The EU has opened a subsidy race with the US to fight the exodus of green projects – Brussels will allow members to ‘match’ multi-billion-dollar incentives to move across the Atlantic 
• Canada’s Inflation Reduction Act response has been the creation of an $80bn clean energy plan 
• India has planned a $2 billion incentive for the green hydrogen industry 

Governments and the energy sector worldwide must continue to take a proactive and innovative approach to decarbonisation, despite the technical and managerial challenges they face. Inertia cannot be allowed to set in. Instead, processes must evolve faster than ever.

The power of process electrification

Process electrification is a far greener way to drive a wide range of industrial and manufacturing processes by using low-carbon electricity rather than fossil fuel combustion.

One main category for change includes motion and machine drive, which is related to powering equipment like compressors and pumps. For example, in the energies and chemicals industry, electrification can involve replacing systematically gas turbines and diesel engines with electric motors in compressors or pump packages.  

However, the impact of electrification on electricity load can have significant ramifications on a country’s electrical infrastructure. It is therefore imperative to also rethink the infrastructure evolution to maintain a reliable and resilient electrical grid.

In several countries, the grid may not be able to power a significant increase in process electrification – unless local generation and demand are associated more systematically in small or large microgrids. This is often referred to as developing Industrial Prosumers. 

The new energy world will be a key driver to decentralisation, self-powered plants, buildings, and homes, via microgrids using on-site renewables. Non-hydro renewables will account for over 98% of new power generation capacity globally, becoming the dominant source of power capacity.

According to research from S&P Global, over $700 billion will be invested worldwide in renewables annually to 2030, about 35% more than in 2022. It’s excellent progress, but will it be enough?  

Sparking sustainability across the sector

According to the IEA, the chemical sector is ‘the largest industrial energy consumer and the third largest industry subsector in terms of direct CO2 emissions’ in the world. It also asserts that the industry’s emissions ‘need to peak in the next few years and decline towards 2030 to get on track with the Net Zero Scenario’.

In other words, the sector has a lot of work ahead of it to ensure its own long-term sustainability and that of the wider world.

However, this evolution truly can be achieved. To do so, organisations must tackle carbon at its source, and digitally transform their plants to spot, track, and minimize areas of heavy emission.

Ultimately, they also need to partner with external experts, who can bring the knowledge, practical tools and skills, and ongoing support to ensure sustainability objectives are met within the net-zero deadline.

AUTHOR

Astrid Poupart-Lafarge, segment president energies and chemicals at Schneider Electric