Energy-intensive industries play a significant role in the energy transition, driving change from the demand side of the energy system. As the world needs to shift towards global climate change, these industrials - especially those reliant on high-temperature heating processes - face the challenge of growing energy demands whilst reducing carbon emissions, as part of their ESG strategy.
Decarbonization has thus become imperative for decision-makers in manufacturing and process industries, demanding the development of safe, sustainable pathways to future-proof their companies. Navigating this complex landscape requires strategic insight amidst societal, economical, regulatory and technological hurdles, where innovative solutions and decisive action are crucial for competitiveness and long-term sustainability.
Challenges and imperatives
Decarbonization initiatives in energy-intensive industries encounter multifaceted challenges, as highlighted in DNV's Energy Industry Insights report1. While senior executives emphasize cost control as a key driver of optimism, achieving decarbonization targets remains daunting due to rising costs. Only 43% of energy-intensive industrials express confidence in reaching these targets, underscoring the urgency for effective solutions.
More specific, industries classified as high, medium, or low in their heat requirements rely heavily on fossil fuels for heat generation, with 75% of industrial heat consumed by energy-intensive sectors in Europe, like iron and steel, chemicals, and cement2. The higher the process temperature, the more limited the reduction options are. However, the emergence of green hydrogen, produced through renewable energy electrolysis, presents a promising alternative.
Opportunities on the horizon
Amidst challenges, opportunities abound for energy-intensive industries. DNV’s Energy Industry Inisghts1 indicates a growing inclination towards energy efficiency investments, with 77% of industrials aiming to increase their focus in this area. Moreover, a shift towards green hydrogen, ammonia, and carbon capture and storage (CCS) signals a strategic pivot towards sustainable practices. Over half of energy-intensive businesses plan to invest in green hydrogen or ammonia, while a similar number anticipate rapid scaling up of CCS in the next five years. These trends underscore a paradigm shift towards cleaner energy sources and innovative technologies. Effective collaboration across sectors, coupled with strategic investments in research and development, is pivotal for accelerating this transition.
Supporting your decarbonization journey and ESG processes
As the independent expert in risk management and quality assurance, DNV acknowledges the significant challenges faced by energy-intensive industries in achieving net-zero emissions, especially in sectors with high-temperature processes. Offering a suite of services to facilitate emission reductions and support techno-economic decision-making, DNV is your trusted partner in navigating the complexities of this transition.
Our comprehensive services, structured into four primary modules, streamline critical decision-making and action on decarbonization. These services range from establishing decarbonization frameworks to implementing business strategies and monitoring performance through our Net Zero Dashboard. Drawing on DNV's extensive expertise, these modules provide insights, benchmarking, technical solutions, and regulatory compliance tailored to the specific net-zero phase of each company.
Testing and piloting are the keys to a safe transition
DNV's Technology Centres, part of our global network of laboratories and testing facilities, play a crucial role in providing credibility, implementation support, and qualification of decarbonization technologies. With state-of-the-art facilities in the Netherlands and Norway, we combine deep industrial expertise with test capabilities by qualifying and applying innovative technologies against stringent safety and performance standards, providing industrials with the confidence they need to invest in sustainable solutions. Engaged in joint industry projects (JIPs), our Technology Centres actively enhance standards and practices for decarbonization technologies.
Fast forward
While the industry maintains a positive outlook, there is a complex landscape of shifting dynamics in specific sectors. The journey towards deep decarbonization presents challenges yet is achievable. By embracing innovation, collaboration, and strategic investment, energy-intensive industries can not only reduce emissions but also enhance competitiveness in a rapidly evolving landscape. DNV remains committed to empowering these industries with the tools, expertise, and support needed to navigate the complexities of decarbonization with confidence and trust.
References:
1. DNV Energy Industry Insights 2023: Transforming Through Uncertainty: Latest insights for 2024 (dnv.com)
2. DNV Energy Transition Outlook 2023: Energy Transition Outlook 2023 (dnv.com)
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