Using Targeted Innovation to Enable the Transition of Hard-to-Abate Sectors to Renewable Energy
The industrial sector is becoming the primary source of greenhouse gas (GHG) emissions. Seventy percent of direct global emissions come from three major industries: iron and steel, non-metallic minerals (cement, glass, and lime), and chemicals. In addition, 74 percent of the energy consumed in the industrial sector is for heat production, which is hard to decarbonize, especially in the production of cement, steel, and petrochemicals.
This is a particularly pressing issue for developing countries, as rapid industrialization and improving the competitiveness of industries make creating a low-carbon future more difficult. Yet, decarbonizing the industrial sector is a crucial step in limiting the global temperature increase and fighting climate change.
In recognizing the urgency, the World Bank’s ESMAP launched the Industrial Decarbonization Program (IDP) to support governments in developing countries in decarbonizing their industrial sectors. The program works to helping them adopt innovative solutions and advance beyond old technologies that could lock them into carbon emissions for decades.
The program is structured around three broad strategies which should be pursued in coordination:
- Reduce the demand for carbon-intensive products. According to recent estimates, the circular economy can reduce CO2 emissions from major industrial sectors by 40 percent globally. This can be achieved by increasing reuse through improved utilization of existing material stocks, remanufacturing, and recycling rates. There is also an opportunity to reduce materials requirements through improved product design and longer product lifetime.
- Improve energy efficiency. Existing technologies can facilitate energy efficiency and reduce CO2 emissions of industrial processes. This can be accomplished when an entire system or production is transformed by replacing a single piece of equipment. It also includes better management and more efficient operation of the equipment.
- Deploy decarbonization technologies: The following decarbonization technologies can be considered, depending on the industrial sector:
- Use hydrogen as a heat source or reduction agent, with zero-carbon or near-zero-carbon hydrogen.
- Direct electrification of industrial processes, including the generation of high-temperature heat.
- Use biomass as an energy source for heat production.
- Deliver low and medium-temperature heat through solar, thermal, and geothermal technologies.
- Carbon capture, combined with either use or storage.
IDP supports governments in developing countries through activities such as:
Global knowledge management. The team produces knowledge pieces and guidance material, including technical references, presentations, operational documents, and reports on innovative technologies with high abatement and replicability potential and applicability to industrial sectors. These knowledge products, disseminated through learning events and training sessions, facilitate partnerships and inform technical assistance and lending operations.
Technical Assistance. The program develops strategies, roadmaps, and recommendations on enabling policies, regulations, and legal frameworks for decarbonization. The program team engages with sector stakeholders to design incentives and funding schemes for projects.
Market Development. IDP supports investments by analyzing and advising on decarbonization opportunities. The program team conducts technical and economic assessments for technological innovation, supports pilot projects, and mobilizes project financing, including lending and concessional finance.
Capacity building. The program team organizes workshops that highlight the significance of industrial decarbonization, facilitating practical knowledge and learning. Workshop attendees include government officials, international development practitioners, and decarbonization experts.
In 2021, IDP approved ten grants with a total requested amount of US$ 7,660,000 to support work related to the decarbonization of the industrial sector using innovative technologies. The countries covered by those grants are Bangladesh, China, India, Kazakhstan, Morocco, Turkey, Uzbekistan, and Vietnam. There was also an additional regional project in the Middle East and North Africa. The approved projects covered assessments of the potential for innovative decarbonization technologies, scoping studies, pre-feasibility and feasibility studies, capacity building for pilot project implementation, and the development of roadmaps and enabling policies.
In 2022, IDP’s primary knowledge deliverable will be a report entitled, Technology Innovations in Industrial Decarbonization in Developing Countries: Scoping Study. The report will analyze innovative technical solutions with high GHG abatement potential identifying five innovative decarbonization technologies for each industrial sector: iron and steel, cement, construction, chemicals, food and beverages, and textiles. This information will guide government officials and decarbonization practitioners in developing innovative industrial decarbonization projects, by providing an overview of the most promising technologies from the GHG abatement potential in the most energy and resource-intensive industries.