Christiana Figueres, the UN’s chief negotiator at COP21 in Paris, has repeatedly warned that the 2020s are the critical decade for dealing with the climate crisis. The planet’s carbon trajectory is being locked in by the policies governments set and the decisions businesses make today.
This is why America’s new Inflation Reduction Act (IRA) is a source of some relief. It rewires the world’s largest economy towards a more sustainable future. In a similar effort, Canada has introduced investment tax credits to spur the private sector into environmental action.
But where Canada and the U.S. both fall dramatically short is addressing the industries that are some of the most notorious polluters: steel, cement, plastics and industrial chemicals, known collectively as ‘heavy industry.’ Heavy industry has also been where innovation has been slowest to yield results.
Demonstration projects are no longer enough. The planet urgently needs the wholesale transformation of heavy industry.
According to the Environmental Protection Agency’s most recent greenhouse gas inventory, the production of chemicals, metals (e.g., iron and steel), fertilizers and minerals (e.g., cement) accounted for 24 percent of emissions in the U.S. in 2022. Globally, this percentage rises close to 30 percent. In Canada, it’s 11 percent but this doesn’t take into account the future emissions resulting from processing the massive volumes of raw materials which Canada exports.
The industrial sector is the largest end-use sector, both in terms of energy demand and emissions, and yet the International Energy Agency (IEA) released a report in 2021 which projects that none of the heavy industrial subsectors are on track to achieve net-zero carbon emissions by 2050 — a benchmark that the United Nations recognizes is necessary “to avert the worst impacts of climate change and preserve a livable planet.”
So, what needs to happen if we’re to make greening heavy industry the next climate goal and set our minds in Canada to tackle some of the world’s toughest decarbonization problems?
First, we need to focus on the biggest sources of industrial emissions like blast furnaces, chemical plants and cement kilns. American and Canadian investment tax credits should be enhanced with special incentives that reward projects that green these and other high-emissions facilities.
Second, we need to put carbon reduction efforts, enabled by novel technologies that improve process or material efficiencies on the same footing as carbon removal.
When it comes to carbon emissions, it turns out that an ounce of prevention really is worth a pound of cure. As a study in Nature has demonstrated, it’s much more efficient to avoid emissions than to chase and capture them later.
Yet neither the IRA nor the Canadian investment tax credits recognize this. They offer no incentive to avoid emissions through process or material improvements or by swapping in low emissions materials. In heavy industry, abatement not removal is likely our fastest and most effective lever for reducing short-term emissions.
Third, we need to speed things up. Almost by definition, governments and heavy industry move slowly but time isn’t on our side. Policy decisions and business decisions need to be accelerated so that we can employ new technologies and build the infrastructure that carries us furthest fastest towards net zero. This requires confidence, and even a degree of fearlessness, and visionary leadership.
We need to bring to heavy industry the Silicon Valley mindset and race from concept to pilot to scale. The good news is that there are some exciting innovations. We need to bet big, bet often and create a strong, diversified publicly-supported rapid investment framework for promising early-stage concepts.
In this most critical race, we need as many shots on goal as possible, even if many, or even most, don’t ultimately score.
We are on the cusp of a major revolution in the production of the literal building blocks of modern civilization: more durable cement that absorbs rather than emits carbon. Then there’s bioneutral plastics that are infinitely recyclable. And zero carbon steel that can be forged with a fraction of the energy of conventional alloys.
If you chase any supply chain, you will ultimately find these component materials – cement, plastics, steel — that make up the infrastructure of the modern world around us.
We need to get the economics and decision-making processes aligned to transform heavy industry and reach our most urgent climate goals. Government policies and investments can help get us there.
By Apoorv Sinha – CEO of Carbon Upcycling