Promote use of clean energy in industrial processes

Today, too many industrial processes still rely on unabated coal and gas. In the near future, these processes will need to quickly pivot to using mature cleaner energy sources such as clean power or bioenergy, or to emerging solutions like green hydrogen or synthetic fuels, as promoting the use of clean energy in industrial processes is one of the most effective ways to reduce industrial emissions.

The switch to clean energy and electrification are easiest where only low-temperature heat is required. Heat pumps that are tailored for industry, thermal batteries, and the greening of existing power demand for industry are the easiest to implement. In BNEF’s Net Zero Scenario, global industrial energy consumption relies on electrification for a third of total emissions reductions by 2050. Policymakers and utilities could make it easier for industrial electricity consumers to procure clean power through new tariffs and lower-cost grid access.

However, over half the heat demand in industry is high temperature (above 500C), which is more challenging to electrify. Some heavy industrial processes such as aluminum smelting and steel recycling are already electrified processes, and we expect recycling to play a large role in the future of metals decarbonization. Some kinds of electric kilns, furnaces and boilers are also mature technologies that can be deployed in industrial processes that need temperatures above 400-500C. Not every industrial process will electrify, however. We expect there to be a significant role for clean hydrogen, bioenergy and perhaps synthetic fuels where high temperatures and/or reducing agents are required. Almost half of all industrial abatement by 2050 in BNEF’s Net Zero Scenario relies on bioenergy, low-carbon hydrogen and carbon capture and storage (for more, see Pillar 2: Industry and materials). Governments can promote the use of these solutions in industry through incentives such as capex-based subsidies and regulations like carbon pricing