Editing IPCC:AR6/SR15/Chapter-4 (section)

=== 4.3.4 Industrial Systems Transitions ===

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Industry consumes about one-third of global final energy and contributes, directly and indirectly, about one-third of global GHG emissions (IPCC, 2014b) <sup>[[#fn:r412|412]]</sup> . If the increase in global mean temperature is to remain under 1.5°C, modelling indicates that industry cannot emit more than 2 GtCO <sub>2</sub> in 2050, corresponding to a reduction of between 67 and 91% (interquartile range) in GHG emissions compared to 2010 (see Chapter 2, Figures 2.20 and 2.21 and Table 4.1). Moreover, the consequences of warming of 1.5°C or more pose substantial challenges for industrial diversity. This section will first briefly discuss the limited literature on adaptation options for industry. Subsequently, new literature since AR5 on the feasibility of industrial mitigation options will be discussed.

Research assessing adaptation actions by industry indicates that only a small fraction of corporations has developed adaptation measures. Studies of adaptation in the private sector remain limited (Agrawala et al., 2011; Linnenluecke et al., 2015; Averchenkova et al., 2016; Bremer and Linnenluecke, 2016; Pauw et al., 2016a) <sup>[[#fn:r413|413]]</sup> and for 1.5°C are largely absent. This knowledge gap is particularly evident for medium-sized enterprises and in low- and middle-income nations (Surminski, 2013) <sup>[[#fn:r414|414]]</sup> .

Depending on the industrial sector, mitigation consistent with 1.5°C would mean, across industries, a reduction of final energy demand by one-third, an increase of the rate of recycling of materials and the development of a circular economy in industry (Lewandowski, 2016; Linder and Williander, 2017) <sup>[[#fn:r415|415]]</sup> , the substitution of materials in high-carbon products with those made up of renewable materials (e.g., wood instead of steel or cement in the construction sector, natural textile fibres instead of plastics), and a range of deep emission reduction options, including use of bio-based feedstocks, low-emission heat sources, electrification of production processes, and/or capture and storage of all CO <sub>2</sub> emissions by 2050 (Åhman et al., 2016) <sup>[[#fn:r416|416]]</sup> . Some of the choices for mitigation options and routes for GHG-intensive industry are discrete and potentially subject to path dependency: if an industry goes one way (e.g., in keeping existing processes), it will be harder to transition to process change (e.g., electrification) (Bataille et al., 2018) <sup>[[#fn:r417|417]]</sup> . In the context of rising demand for construction, an increasing share of industrial production may be based in developing countries (N. Li et al., 2017) <sup>[[#fn:r418|418]]</sup> , where current efficiencies may be lower than in developed countries, and technical and institutional feasibility may differ (Ma et al., 2015) <sup>[[#fn:r419|419]]</sup> .

Except for energy efficiency, costs of disruptive change associated with hydrogen- or electricity-based production, bio-based feedstocks and carbon dioxide capture, (utilization) and storage (CC(U)S) for trade-sensitive industrial sectors (in particular the iron and steel, petrochemical and refining industries) make policy action by individual countries challenging because of competitiveness concerns (Åhman et al., 2016; Nabernegg et al., 2017) <sup>[[#fn:r420|420]]</sup> .

Table 4.3 provides an overview of applicable mitigation options for key industrial sectors.

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'''Table 4.3'''

Overview of different mitigation options potentially consistent with limiting warming to 1.5°C and applicable to main industrial sectors, including examples of application (Napp et al., 2014; Boulamanti and Moya, 2017; Wesseling et al., 2017) <sup>[[#fn:r421|421]]</sup> .

<!-- TABLE -->
{| class="wikitable"
|-
| '''Industrial mitigation option'''
| '''Iron/Steel'''
| '''Cement'''
| '''Refineries and'''<br />
'''Petrochemicals'''
| '''Chemicals'''
|-
| Process and Energy Efficiency
| colspan="4"| Can make a difference of between 10% and 50%, depending on the plant. Relevant but not enough for 1.5°C
|-
| Bio-based
| Coke can be made from biomass<br />
instead of coal
| Partial (only energy-related<br />
emissions)
| colspan="2"| Biomass can replace fossil feedstocks
|-
| Circularity &amp; Substitution
| colspan="2"| More recycling and replacement by low-emission materials,
including alternative chemistries for cement

| colspan="2"| Limited potential
|-
| Electrification &amp; Hydrogen
| Direct reduction with hydrogen.<br />
Heat generation through electricity
| Partial (only electrified heat<br />
generation)
| colspan="2"| Electrified heat and hydrogen generation
|-
| Carbon dioxide capture, utilization and storage
| colspan="2"| Possible for process emissions and energy. Reduces emissions by 80–95%, and net emissions can become negative when combined with biofuel
| colspan="2"| Can be applied to energy emissions and different stacks but not on<br />
emissions of products in the use phase (e.g., gasoline)
|}
<!-- END TABLE -->

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==== 4.3.4.1 Energy efficiency ====

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Isolated efficiency implementation in energy-intensive industries is a necessary but insufficient condition for deep emission reductions (Napp et al., 2014; Aden, 2018) <sup>[[#fn:r422|422]]</sup> . Various options specific to different industries are available. In general, their feasibility depends on lowering capital costs and raising awareness and expertise (Wesseling et al., 2017) <sup>[[#fn:r423|423]]</sup> . General-purpose technologies, such as ICT, and energy management tools can improve the prospects of energy efficiency in industry (see Section 4.4.4).

Cross-sector technologies and practices, which play a role in all industrial sectors including small- and medium-sized enterprises (SMEs) and non-energy intensive industry, also offer potential for considerable energy efficiency improvements. They include: (i) motor systems (for example electric motors, variable speed drives, pumps, compressors and fans), responsible for about 10% of worldwide industrial energy consumption, with a global energy efficiency improvement potential of around 20–25% (Napp et al., 2014) <sup>[[#fn:r424|424]]</sup> ; and (ii) steam systems, responsible for about 30% of industrial energy consumption and energy saving potentials of about 10% (Hasanbeigi et al., 2014; Napp et al., 2014) <sup>[[#fn:r425|425]]</sup> . Waste heat recovery from industry has substantial potential for energy efficiency and emission reduction (Forman et al., 2016) <sup>[[#fn:r426|426]]</sup> . Low awareness and competition from other investments limit the feasibility of such options (Napp et al., 2014) <sup>[[#fn:r427|427]]</sup> .

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==== 4.3.4.2 Substitution and circularity ====

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Recycling materials and developing a circular economy can be institutionally challenging, as it requires advanced capabilities (Henry et al., 2006) <sup>[[#fn:r428|428]]</sup> and organizational changes (Cooper-Searle et al., 2018) <sup>[[#fn:r429|429]]</sup> , but has advantages in terms of cost, health, governance and environment (Ali et al., 2017) <sup>[[#fn:r430|430]]</sup> . An assessment of the impacts on energy use and environmental issues is not available, but substitution could play a large role in reducing emissions (Åhman et al., 2016) <sup>[[#fn:r431|431]]</sup> although its potential depends on the demand for material and the turnover rate of, for example, buildings (Haas et al., 2015) <sup>[[#fn:r432|432]]</sup> . Material substitution and CO <sub>2</sub> storage options are under development, for example, the use of algae and renewable energy for carbon fibre production, which could become a net sink of CO <sub>2</sub> (Arnold et al., 2018) <sup>[[#fn:r433|433]]</sup> .

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==== 4.3.4.3 Bio-based feedstocks ====

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Bio-based feedstock processes could be seen as part of the circular materials economy (see section above). In several sectors, bio-based feedstocks would leave the production process of materials relatively untouched, and a switch would not affect the product quality, making the option more attractive. However, energy requirements for processing bio-based feedstocks are often high, costs are also still higher, and the emissions over the full life cycle, both upstream and downstream, could be significant (Wesseling et al., 2017) <sup>[[#fn:r434|434]]</sup> . Bio-based feedstocks may put pressure on natural resources by increasing land demand by biodiversity impacts beyond bioenergy demand for electricity, transport and buildings (Slade et al., 2014) <sup>[[#fn:r435|435]]</sup> , and, partly as a result, face barriers in public acceptance (Sleenhoff et al., 2015) <sup>[[#fn:r436|436]]</sup> .

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==== 4.3.4.4 Electrification and hydrogen ====

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Electrification of manufacturing processes would constitute a significant technological challenge and would entail a more disruptive innovation in industry than bio-based or CCS options to get to very low or zero emissions, except potentially in steel-making (Philibert, 2017) <sup>[[#fn:r437|437]]</sup> . The disruptive characteristics could potentially lead to stranded assets, and could reduce political feasibility and industry support (Åhman et al., 2016) <sup>[[#fn:r438|438]]</sup> . Electrification of manufacturing would require further technological development in industry, as well as an ample supply of cost-effective low-emission electricity (Philibert, 2017) <sup>[[#fn:r439|439]]</sup> .

Low-emission hydrogen can be produced by natural gas with CCS, by electrolysis of water powered by zero-emission electricity, or potentially in the future by generation IV nuclear reactors. Feasibility of electrification and use of hydrogen in production processes or fuel cells is affected by technical development (in terms of efficient hydrogen production and electrification of processes), by geophysical factors related to the availability of low-emission electricity (MacKay, 2013) <sup>[[#fn:r440|440]]</sup> , by associated public perception and by economic feasibility, except in areas with ample solar and/or wind resources (Philibert, 2017; Wesseling et al., 2017) <sup>[[#fn:r441|441]]</sup> .

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==== 4.3.4.5 CO2 capture, utilization and storage in industry ====

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CO <sub>2</sub> capture in industry is generally considered more feasible than CCS in the power sector (Section 4.3.1) or from bioenergy sources (Section 4.3.7), although CCS in industry faces similar barriers. Almost all of the current full-scale (&gt;1MtCO <sub>2</sub> yr <sup>−1</sup> ) CCS projects capture CO <sub>2</sub> from industrial sources, including the Sleipner project in Norway, which has been injecting CO <sub>2</sub> from a gas facility in an offshore saline formation since 1996 (Global CCS Institute, 2017) <sup>[[#fn:r442|442]]</sup> . Compared to the power sector, retrofitting CCS on existing industrial plants would leave the production process of materials relatively untouched (Åhman et al., 2016) <sup>[[#fn:r443|443]]</sup> , though significant investments and modifications still have to be made. Some industries, in particular cement, emit CO <sub>2</sub> as inherent process emissions and can therefore not reduce emissions to zero without CC(U)S. CO <sub>2</sub> stacks in some industries have a high economic and technical feasibility for CO <sub>2</sub> capture as the CO <sub>2</sub> concentration in the exhaust gases is relatively high (IPCC, 2005b; Leeson et al., 2017) <sup>[[#fn:r444|444]]</sup> , but others require strong modifications in the production process, limiting technical and economic feasibility, though costs remain lower than other deep GHG reduction options (Rubin et al., 2015) <sup>[[#fn:r445|445]]</sup> . There are indications that the energy use in CO <sub>2</sub> capture through amine solvents (for solvent regeneration) can decrease by around 60%, from 5 GJ tCO <sub>2</sub> <sup>−</sup> <sup>1</sup> in 2005 to 2 GJ tCO <sub>2</sub> <sup>−</sup> <sup>1</sup> in the best-performing current pilot plants (Idem et al., 2015) <sup>[[#fn:r446|446]]</sup> , increasing both technical and economic potential for this option. The heterogeneity of industrial production processes might point to the need for specific institutional arrangements to incentivize industrial CCS (Mikunda et al., 2014) <sup>[[#fn:r447|447]]</sup> , and may decrease institutional feasibility.

Whether carbon dioxide utilization (CCU) can contribute to limiting warming to 1.5°C depends on the origin of the CO <sub>2</sub> (fossil, biogenic or atmospheric), the source of electricity for converting the CO <sub>2</sub> or regenerating catalysts, and the lifetime of the product. Review studies indicate that CO <sub>2</sub> utilization in industry has a small role to play in limiting warming to 1.5°C because of the limited potential of reusing CO <sub>2</sub> with currently available technologies and the re-emission of CO <sub>2</sub> when used as a fuel (IPCC, 2005b; Mac Dowell et al., 2017) <sup>[[#fn:r448|448]]</sup> . However, new developments could make CCU more feasible, in particular in CO <sub>2</sub> use as a feedstock for carbon-based materials that would isolate CO <sub>2</sub> from the atmosphere for a long time, and in low-cost, low-emission electricity that would make the energy use of CO <sub>2</sub> capture more sustainable. The conversion of CO <sub>2</sub> to fuels using zero-emission electricity has a lower technical, economic and environmental feasibility than direct CO <sub>2</sub> capture and storage from industry (Abanades et al., 2017) <sup>[[#fn:r449|449]]</sup> , although the economic prospects have improved recently (Philibert, 2017) <sup>[[#fn:r450|450]]</sup> .

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