Abstract
This paper explores which climate-friendly projects could be part of the COVID-19 recovery while jump-starting the transition of the European basic materials industry. Findings from a literature review on technology options in advanced development stages for climate-friendly production and enhanced sorting and recycling of steel, cement, aluminium and plastics are combined with insights from interviews with 31 European industry stakeholders about the practical and economic feasibility of these technology options. Results indicate that with an estimated investment of 28.9 billion Euro, about 20% of EU’s basic materials could be produced through low-emission processes or additional recycling by 2025 with technologies that are commercially available or at pilot scale today. However, our stakeholder consultation also shows that in order to make these short-term investments viable in the long term, six main barriers need to be addressed, namely i) the lack of effective and predictable carbon pricing, ii) the limited availability of affordable green electricity, iii) the lack of a regulatory framework for circularity, iv) low technology readiness and funding, v) the lack of infrastructure for hydrogen, CO2 and power, and vi) the lack of demand for climate-friendly and recycled materials. Based on these insights, the paper proposes elements of a policy package that can create a long-term framework favourable for investments in these technologies and should ideally accompany the recovery package to give credibility to investors that the business case will last beyond the recovery timeframe.
Highlights
In response to the economic crisis caused by the COVID-19 pandemic, the European Union and its member states are launching a wide range of economic stimulus measures
Using a standardized questionnaire (Annex 1.1), we asked our interviewees about the most promising technology options for the transition of their sector, how their accelerated deployment could contribute to an economic recovery and what barriers they see for their implementation
In the following we present a techno-economic overview of the best available technologies (BAT) and compare them with climate-friendly process and recycling alternatives with high technological readiness level (TRL)
Summary
In response to the economic crisis caused by the COVID-19 pandemic, the European Union and its member states are launching a wide range of economic stimulus measures. Supporting climate-friendly investments in the basic material sector, namely steel, cement, chemicals, and aluminium (IEA, 2020), can be key for a green economic recovery This would require public funding to fulfil three conditions (Kröger et al, 2020): first, to target novel production processes, sorting, and recycling technologies, to trigger investments with high economic return. Options identified in the literature are compared to stakeholder feedback about practical and economic feasibility, and the potential scale of investment costs is quantified For this purpose, we conducted 31 interviews with industrial experts about climate-friendly production process alternatives, enhanced sorting and recycling and the barriers hindering their deployment in the steel, cement, aluminium, and plastics industry.
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