The International Energy Agency (IEA) has released a new report suggesting ways that G7 countries can accelerate the development of technology and overcome high costs associated with the reduction of emissions from hard-to-abate sectors of industry such as steel and cement production.
Requested by Germany under its 2022 Presidency of the G7 to inform policy makers, industrial leaders, and other decision makers ahead of this month’s G7 summit, the report builds upon a report released by IEA last year, ‘Net Zero by 2050: A Roadmap for the Global Energy Sector’.
Its new release, ‘Achieving Net Zero Heavy Industry Sectors in G7 Members’, focuses on advancing decarbonisation among G7 member states – Canada, France, Germany, Italy, Japan, the UK, the US plus the EU – which together accounts for around 40% of the global economy, 30% of energy demand, and 25% of energy system carbon dioxide (CO2) emissions.
The notoriously hard-to-abate steel and cement sectors account for 8% and 7% of global CO2 emissions, respectively, while – in G7 countries – heavy industry is responsible for more than 15% of coal use and around 10% of oil and gas use.
Commenting on the report, Fatih Birol, Executive, IEA, said, “There is no way to reach net zero without dramatic reductions in emissions from heavy industry, and G7 economies have both a responsibility and an opportunity to take a leadership role in driving that forward.”
“Emissions from heavy industry are among the most stubborn, making it essential that countries with significant financial and technological resources use them to scale up practical solutions in a coordinated way.”
This scaling up - hindered by lack of investment - is seen as key to unlocking the next stage of meeting energy transition targets.
In addition to encouraging targeted finance and further private investment, the report recommends the use of carbon contracts for difference, public procurement rules, mandates, quotas and other measures to create differentiated steel and cement production markets with near zero emissions.
G7 countries were also advised to adopt specific thresholds for near-net zero emission material production.