New research shows heavy industries key to decarbonisation

The World Benchmarking Alliance (WBA)’s first Heavy Industries Benchmark report reveals that emission intensity by heavy industry companies are currently not aligned with the 1.5°C carbon reduction strategy as there is currently a lack of investment in market-ready technologies. However, good practice provides hope that robust transition planning is possible throughout sectors.

The heavy industries of cement, aluminium and steel currently represent 18 per cent of total global CO2 emissions and the 91 assessed companies in the study, including 34 in the cement sector, accounted for seven per cent of global energy-related emissions in 2022. As a result, these sectors are key to the global decarbonisation journey.

“Heavy industries provide a massive opportunity to help us reach and ‘cement’ a rapid, just transition – but if the sector does not accelerate action, they will be a significant obstacle to global decarbonisation targets. We need strong accountability, leadership and urgent action from aluminium, cement, and steel producers to ensure a just, low-carbon future,” according to Vicky Sins, World Benchmarking Alliance’s decarbonisation and energy transformation lead.

WBA’s research found that emissions intensities from companies need to fall three times faster in the next five years to meet the requirements of the 1.5°C scenario. However, investment in R&D for market-ready technologies is insufficient. Of the companies assessed, 24 per cent disclose R&D expenditure in low-carbon technologies and just 10 per cent in non-mature technologies.

The report also recommends that companies should be collectively building the foundation for transition planning. Good practice was observed across the sector with 28 per cent of heavy industry players having transition plans that encompass all business units and operations, 13 per cent cover the entire companies’ value chain, 23 per cent incorporate a carbon price calculation and eight per cent align with low-carbon scenarios. This highlights that these sectors can elevate standards for key players and assist laggards to join the rest, according to the WBA.

In terms of the cement industry, companies are active in key low-carbon business models, but more progress is required. “While 60 per cent of companies have been found to be active in increasing the recycling rate of concrete and cement, only 30 per cent foresee growth in this activity over the next five years. Production of low-clinker cement is expected to grow in half of the cement companies evaluated, but this business model represents less than 25 per cent of the activity in 87 per cent of the companies,” said the WBA.

Three cement companies – Heidelberg Materials, CRH and Taiwan Cement – have established reduction targets that are fully 1.5°C aligned, both on the short as well as on the long term, added WBA.