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UNECE tests methodology to calculate the economic viability of industrial decarbonization measures

UNECE tests methodology to calculate the economic viability of industrial decarbonization measures

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Decarbonizing industry remains a key challenge for climate action: according to the International Energy Agency, industrial activity was directly responsible for emitting 9.4 Gt of CO2 in 2021, accounting for a quarter of global emissions (not including indirect emissions from electricity used for industrial processes). 

UNECE’s Task Force on Energy Efficiency in Industry has started testing an innovative methodology for assessing potential industrial decarbonization measures.   

The methodology, which is being refined with new data and assumptions, consists of a dynamic excel model that considers inputs such as energy costs, carbon prices and company priorities to calculate a constellation of measures to achieve energy savings and reduction of carbon footprint. The choices of measures that the model lists, include reducing energy consumption and process-related emissions, substitution of energy use with on-site renewables-based generation or its purchase, and compensation of emissions by means of carbon dioxide capture, use and storage, “green” projects financing, and purchase of certificates or carbon credits.   

For example, a metal production company could mitigate emissions by reducing energy consumption with the substitution of machinery and implementing advanced heating and cooling systems, including waste heat recovery. Self-generating renewable energy and purchasing carbon credits for production also form part of the new economic efficiency calculation. 

Stefan M. Buettner, Chair of the UNECE Group of Experts on Energy Efficiency and its Task Force on Energy Efficiency in Industry, said: “The new peer-reviewed methodology will be an essential building block towards achieving industrial decarbonization.” 

An online workshop, The Path to Climate Neutrality – Building Blocks of a New Methodology for Determining an Economic Mix of Measures, organized by UNECE, was attended by experts from 51 countries. This workshop was built on the findings of the document “A pathway to reducing the greenhouse gas footprint in manufacturing: determinants for an economic assessment of industrial decarbonization measures”, developed by the Task Force on Energy Efficiency in Industry hosted by the Group of Experts on Energy Efficiency, a subsidiary body of the Committee on Sustainable Energy. 

The workshop provided an opportunity for policymakers and practitioners to learn how to calculate the economic viability of different industrial decarbonization measures with real-world examples taking into consideration the costs of inaction. The discussions focused on the benefits of decarbonizing practices and potential transformations, as well as the large-scale expansion of low-carbon electricity and the phase-out of unabated fossil fuels. Additionally, the workshop explored the potential of batteries to enable required reductions in greenhouse gas emissions.  

For updates, discussion, and deeper engagement, save the date to join the tenth anniversary session of the Group of Experts on Energy Efficiency on 5-6 October 2023. 

This work expands on UNECE’s work on Energy Efficiency in Industry and the recently published pathways to carbon neutrality in “energy intensive” steel, chemical and cement industries.  

This week, the UNECE Sustainable Energy Task Force on Industry also has an open discussion forum on financing decarbonization in industry, with a focus on energy service companies (ESCOs) in industry. Join the UNECE Task Force on Energy Efficiency in Industry: bi-monthly open discussion.