A sustainable change in the industry is often considered a very expensive undertaking. According to estimates, it takes investments of a whopping 270 trillion dollars (we reported) to achieve the Paris climate goals in general worldwide. Industry is a big producer of CO2 emissions, suggesting that conversion will be expensive.
But now a new study by the insurance company Acredia and Allianz Trade has shown that Austrian industry “only” has to invest 10.2 billion euros in order to become almost climate-neutral by 2050, i.e. not to generate more greenhouse gases than it saves or offsets. For comparison: around one billion were incurred in 2020 for the structural maintenance of motorways and the construction of new roads.
Paris climate goals require investments of 270 trillion dollars
“Prospects for green industrial revolution good”
“If industry and politics see the energy crisis as an opportunity and initiate appropriate measures now, the prospects for a green industrial revolution are very good,” says Michael Kolb, CEO at Acredia. According to the study, global industry could save over 90 percent of emissions by 2050. Investments of 2.7 trillion euros, of which 210 billion euros in Europe, are required. For the analysis, Acredia and Allianz Trade examined the CO2 emissions caused by different industries worldwide and how much they would have to reduce and offset them in order to keep global warming at the benchmark of 1.5 degrees by 2050.
Industry is responsible for about a quarter of global greenhouse gas emissions. Almost three quarters of this is accounted for by the iron and steel industry, the chemical industry and the production of cement and other non-metallic minerals. “Instead of coal, oil and gas, hydrogen and biomass must be used as fuel and heat must be generated electrically, for example using industrial heat pumps,” says Kolb. In addition, technologies for CO2 capture and permanent storage are required.
Investments in carbon capture startups continued to boom in 2022
Investments should improve planning security
Such measures could reduce emissions in industry to almost zero. Investments in electrification are particularly important. Globally, half of the investments are necessary for this area. The rest is divided almost equally between the use of hydrogen, innovative production processes and new technologies.
“In Austria, domestic industry is an important factor for a successful energy transition and compliance with climate targets,” says Kolb. “Although decarbonization has its price, it could help domestic industry to achieve significantly better planning security and pave the way to a successful future.” In Austria, investments in the pulp and paper industry (EUR 4.5 billion ), in the iron and steel industry (EUR 3.7 billion) and in the cement industry (EUR 1 billion).
Financial groups: 740 billion US dollars investments in oil, coal and gas
Amortization within eight years
According to the study, these investments could definitely be worthwhile for industry. “The investments would reduce industrial CO2 emissions in the EU by 265 megatons, which corresponds to 92 percent of current emissions,” says Kolb. “To avoid one tonne of CO2 per year, investments of around EUR 790 are necessary.” At the current CO2 price, the investment sum would be amortized after eight years.