In order to achieve the goal of climate neutrality by 2040 set by the Austrian federal government, it is necessary to take a closer look at various sectors - including the industrial sector. The main difficulty here is that large and long-term investments are the rule in this sector. Investments in climate-neutral technologies are therefore necessary as soon as possible in order to avoid sunk costs and lock-in effects. Stable framework conditions are required to enable these investments. In addition to the risk of "carbon leakage", "green leakage" is also increasingly becoming an economic risk. It describes the risk of companies moving away from their home countries because they find that the framework conditions for a transformation towards climate neutrality are inadequate. These framework conditions can only be created if the impact of innovative energy technologies for net-zero greenhouse gas emissions in industry has been quantified and understood.
The aim of the transform.industry project was to illustrate this effect by developing realistic, scenario-based transformation paths for climate neutrality in Austrian industry in 2040 and to derive recommendations for action based on this in terms of innovation policy. The transformation pathways developed will be used to show how climate protection, innovation and competitiveness of Austrian industry can be reconciled and which conflicting goals need to be resolved at a political level. The resulting trade-offs can be directly translated into additional emission avoidance costs and thus evaluated.
By taking a holistic view of the Austrian energy system with a focus on industry, a combined technical, business and economic optimization is achieved. Modeling energy use only in industry entails the risk that requirements in other sectors, such as transport and agriculture, are not correctly taken into account. To prevent this and to be able to identify interactions, other sectors are also taken into account at a high level.
The transform.industry project is intended to serve as the basis for comprehensive transformation management in Austrian industry. A strategic research and innovation agenda developed together with stakeholders shows the development steps that are necessary to achieve the climate targets. The results should leave an impression and be easy to apply for relevant stakeholders such as policy makers or funding bodies. The communication strategy should also raise awareness of the importance and urgency of this issue among the general public. A transformation of the industrial sector by 2040 will be difficult to implement without the support of the public. A wide range of communication channels will be used to address a wide variety of target groups and thus convey the importance of the transformation in a target group-oriented manner.
Contents and methodology
A consumption model for industry was developed based on nine technology families for process transformation and eight basic technologies for heat supply. Different forms of energy supply were also taken into account. In four scenarios, which achieve the climate policy targets set for 2040, the maximum characteristics of technology and energy source applications were modeled and compared. The results not only allow a technology-specific sensitivity assessment, but also provide information on the probability of application and penetration.
The four scenarios
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Renewable gases: In this scenario, the transformation of industry is implemented through the provision of renewable gases by energy supply companies.
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Circular economy: Here, the transformation is achieved through increased material efficiency and higher recycling rates, which can substantially reduce the energy-intensive production of basic materials. This requires integration of the value chains, including between companies.
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Innovation: In this example, best-available and breakthrough technologies are used to a large extent. The measures are based on a high level of integration of value chains, especially in the companies.
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Sector coupling: Here, an optimization approach is pursued in which domestic primary energy consumption is minimized on the basis of the energy services demanded and energy is used optimally in terms of exergy for this purpose.
The study also estimated the investment and energy costs and carried out an economic assessment of the various scenarios. The following recommendations for action were derived from this.
Results and key findings
Electricity and biomass must be used to create maximum value
The use of energy sources available in Austria must be prioritised according to technological requirements and temperature levels.
Clear framework conditions are needed to ensure the necessary planning security for technology transformation
- Energy price and availability security
- Rapid approval of grids and plants with predominant environmental benefits overall
- Clarity regarding greenhouse gas taxation (ETS and CBAM[1])
- Timely provision of appropriate infrastructure for the transportation of CO2-neutral gases, including mixtures and hydrogen derivatives
- Logistical solutions and legal basis for the transportation and use of CO2
Energy demand in industry will increase by approx. 10% to between 133 TWh and 143 TWh by 2040
In order to ensure price stability and predictability, maximum efforts are required to expand the renewable potential available in Austria.
1] Emissions Trading System, Carbon Border Adjustment Mechanism
Climate targets cannot be achieved without carbon capture, storage or utilization
Even with a successful transformation of the industry, relevant quantities of e.g. geogenic CO2 emissions remain. Possible solutions still need to be evaluated in further studies.
Different strategies required for energy-intensive and non-energy-intensive sectors
In the energy-intensive sector, specific production technologies must be rapidly developed, demonstrated and rolled out on a broad basis. The non-energy-intensive sector must accelerate the introduction of already well-developed cross-sector technologies (e.g. heat pumps). To this end, packages of industrial, location and innovation policy strategies and measures must be developed with the involvement of all social partners and the federal states and regions concerned.
Incentive systems through subsidies necessary
There is a need for R&D and corresponding public support, especially for the integration and implementation of technologies on an industrial scale. In addition to the existing regulatory instruments, positive incentives such as subsidies for investments and operating costs are also required in order to achieve the target within the desired timeframe.
