- Client: WWF, TNFD, GFANZ
- Implementation period: December, 2022 - June, 2023 (Completed)
- Geographic coverage: European Union
- Theme: Climate Change, Environment
- Topic: Air Quality
- Experts: Hans Bolscher, Perla C. Torres Vega, Andrea Finesso, Liliana Guevara Opinska, Aurora Miari
Europe’s climate goals are both very necessary as well as very ambitious. In this study we analyse the possible contribution of ‘demand side measures’ to achieve these goals. Demand side measures can develop low-carbon markets as an enabler of industrial decarbonisation in Europe. The primary objective of this project was to investigate the options for demand-side driven instruments and policies for industrial decarbonisation, focused on the steel and cement industries in the EU, while also considering their interaction with international trade.
As part of this study, we conducted a comprehensive analysis of current and new demand-side driven instruments and policies for industrial decarbonisation and their possible impact on deep decarbonisation technologies in hard-to-abate industry. The study included desktop research and the mapping of existing studies, followed up of semi-structured interviews with steel and cement industries industry organisations, academia and think tanks. The final report of this study includes:
• An analysis of the existing technology options to decarbonise the steel and cement sectors, highlighting strengths and challenges carried with each one of them, with a deeper focus on their investment cycles and the consequential capacity constraints.
• As a central instrument of EU climate policy, this study looks first at the role of the EU ETS in the decarbonisation process of steel and cement industries, focusing on its historic development and (changing) design elements.
• Different demand-side options that could stimulate and drive the demand for low carbon steel and cement have been analysed and reviewed. Both from existing sectoral EU initiatives, as well as other options from inside and outside the EU. The initiatives have also been discussed according to different categories of actors primarily involved (namely government and industry) and their potential role within the targeted option.
The study concludes by presenting a set of recommendations on the most promising routes for establishing low-carbon markets as an enabler for deep decarbonisation investments.
