Editing IPCC:AR6/WGIII/Chapter-11 (section)

== 11.1 Introduction and New Developments ==

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=== 11.1.1 About This Chapter ===

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The AR5 was published in 2014. The Paris Agreement and the 17 Sustainable Development Goals (SDGs) were adopted in 2015. An increasing number of countries have since announced ambitions to be carbon neutral by 2045–2060. The COVID-19 pandemic shocked the global economy in 2020 and motivated economic stimulus with demands for green recovery and concerns for economic security. All this has created a new context and a growing recognition that all industry, including the energy and emissions intensive industries, need to reach net zero GHG emissions. There is an ongoing mind shift around the opportunities to do so, with electrification and hydrogen emerging among key mitigation options as a result of renewable electricity costs falling rapidly. On the demand side there has been renewed attention to end-use demand, material efficiency, and more and better-quality recycling measures. This chapter takes its starting point in this new context and emphasises the need for deploying innovative processes and practices in order to limit the global warming to 1.5°C or 2°C ( [[#IPCC--2018a|IPCC 2018a]] ).

The industrial sector includes ores and minerals mining, manufacturing, construction and waste management. It is the largest source of global GHG and CO 2 emissions, which include direct and indirect fuel-combustion-related emissions, emissions from industrial processes and products use, as well as from waste. This chapter is focused on heavy industry – the high temperature heat and process emissions intensive basic materials industries that account for 65% of industrial GHG and over 70% of industrial CO 2 emissions (waste excluded), where deployment of near‐zero emissions technologies can be more challenging due to capital intensity and equipment lifetimes compared with other manufacturing industries. The transition of heavy industries to zero emissions requires supplementing the traditional toolkit of energy and process efficiency, fuel switching, electrification, and decarbonisation of power with material end-use demand management and efficiency, circular economy, fossil-free feedstocks, carbon capture and utilisation (CCU), and carbon capture and storage (CCS). Energy efficiency was extensively treated in AR5 and remains a key mitigation option. This chapter is focused mainly on new options and developments since AR5, highlighting measures along the whole value chains that are required to approach zero emissions in primary materials production.

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=== 11.1.2 Approach to Understanding Industrial Emissions ===

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The Kaya identity offers a useful tool of decomposing emission sources and their drivers, as well as of weighing the mitigation options. The one presented below (Equation 11.1) builds on the previous assessments ( [[#IPCC--2014|IPCC 2014]] , 2018b; [[#Hoegh-Guldberg--2018|Hoegh-Guldberg et al. 2018]] ), and reflect a material stock-driven services-oriented vision to better highlight the growing importance of industrial processes (dominated in emissions increments in 2010–2019), product use and waste in driving emissions. Services delivery (nutrition, shelter, mobility, education, etc.; see [[IPCC:Wg3:Chapter:Chapter-5|Chapter 5]] for more detail) not only requires energy and material flows (fuels, food, feed, fertilisers, packaging, etc.), but also material stocks (buildings, roads, vehicles, machinery, etc.), the mass of which has already exceeded 1000 Gt ( [[#Krausmann--2018|Krausmann et al. 2018]] ). As material efficiency appears to be an important mitigation option, material intensity or productivity (material extraction or consumption versus GDP ( [[#Oberle--2019|Oberle et al. 2019]] ; [[#Hertwich--2020|Hertwich et al. 2020]] )) is reflected in the identity with two dimensions: as material stock intensity of GDP (tonnes per dollar) and material intensity of building and operating accumulated in-use stock. [[#footnote-026|1]] For sub-global analysis the ratio of domestically used materials to total material production becomes important to reflect outsourced materials production and distinguish between territorial and consumption-based emissions. The identity for industry differs significantly from that for sectors with where combustion emissions dominate ( [[#Lamb--2021|Lamb et al. 2021]] ).

Recent progress in data availability that allows the integration of major emission sources along with socio-economic metabolism, material flows and stock analysis enriches the identity for industry from a perspective of possible policy interventions ( [[#Bashmakov--2021|Bashmakov 2021]] ):

[[File:a7ffcffc02e5f9a814d6a3306c7ab162 IPCC_AR6_WGIII_Equation_11_1.png]]

'''Equation 11.1 Table 1 | Variables, Factors, Polic''' '''ies and Drivers'''

{| class="wikitable"
|-
! Variables

! Factors

! Policies and drivers

!
|-
| POP

| Population

| Demographic policies

| rowspan="4"| Demand decarbonisation

|-
| ''GDP/POP''

| Services (expressed via ''GDP'' – final consumption and investments needed to maintain and expand stock) per capita

| Sufficiency and demand management (reduction)

|-
| ''MStock/GDP''

| Material stock ( ''MStock –'' accumulated in-use stocks of materials embodied in manufactured fixed capital) intensity of ''GDP''

| Material stock efficiency improvement

|-
| ''(MPR+MSE)/MStock''

| Material inputs (both virgin (primary materials extraction, ''MPR'' ) and recycled (secondary materials use, ''MSE'' )) per unit of in-use material stock

| Material efficiency, substitution and circular economy

|-
| ''Dm''

| Share of allocated emissions – consumption vs production emissions accounting (valid only for sub-global levels)*

| Trade policies including carbon leakage issues (localisation versus globalisation)

| CBAM

|-
| ''E/(MPR+MSE)''

| Sum of energy use for basic material production ( ''Em'' ), processing and other operational industrial energy use ( ''Eoind'' ) per unit of material inputs

| Energy efficiency of basic materials production and other industrial processes

| rowspan="3"| Production decarbonisation

|-
| ''(GHGed+GHGeind)/E''

| Direct ( ''GHGed'' ) and indirect ( ''GHGeind'' ) combustion-related industrial emissions per unit of energy

| Electrification, fuel switching, and energy decarbonisation (hydrogen, CCUS-fuels)

|-
| ''GHGoth/(MPR+MSE)''

| Emissions from industrial processes and product use, waste, F-gases, indirect nitrogen emissions per unit of produced materials

| Feedstock decarbonisation (hydrogen), CCUS-industrial processes, waste and F-gases management

|}

\* Dm =1, when territorial emission is considered, and Dm equals the ratio of domestically used materials to total material production for the consumption-based emission accounting). CBAM – carbon border adjustment mechanism.

Factors in Equation 11.1 are interconnected by either positive or negative feedbacks: scrap-based production or light-weighing improves operational energy efficiency, while growing application of carbon capture, use and storage (CCUS) brings it down and increases material demands ( [[#Hertwich--2019|Hertwich et al. 2019]] ; [[#IEA--2020a|IEA 2020a]] , 2021a). There are different ways to disaggregate Equation 11.1: by industrial subsectors ( [[#Bashmakov--2021|Bashmakov 2021]] ); by reservoirs of material stock (buildings, infrastructure, vehicles, machinery and appliances, packaging, etc.); by regions and countries (where carbon leakage becomes relevant); by products and production chains (material extraction, production of basic materials, basic materials processing, production of final industrial products); by traditional and low carbon technologies used; and by stages of products’ lives including recycling.

An industrial transition to net zero emissions is possible when the three last multipliers in Equation 11.1 (in square parentheses) are approaching zero. Contributions from different drivers (energy efficiency, low carbon electricity and heat, material efficiency, switching to low carbon feedstock and CCUS) to this evolution vary with time. Energy efficiency dominates in the short- and medium term and potentially long term (in the range of 10–40% by 2050) ( [[#IPCC--2018a|IPCC 2018a]] ; [[#Crijns-Graus--2020|Crijns-Graus et al. 2020]] ; [[#IEA--2020a|IEA 2020a]] ), but for deep decarbonisation trajectories, contributions from the other drivers steadily grow, as the share of non-energy sources in industrial emissions rises and new technologies to address mitigation from these sources mature ( [[#Material%20Economics--2019|Material Economics 2019]] ; [[#CEMBUREAU--2020|CEMBUREAU 2020]] ; [[#BP--2020|BP 2020]] ; [[#Hertwich--2020|Hertwich et al. 2020]] , 2019; [[#IEA--2021a|IEA 2021a]] , 2020a; [[#Saygin--2021|Saygin and Gielen 2021]] ) ( ).

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[[File:c53b14cd565f265e4c7303d6fcd80718 IPCC_AR6_WGIII_Figure_11_1.png]]

'''Figure 11.1 | Stylised composition and contributions from different drivers to the transition of industry to net''' '''zero emissions.'''

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