Heavy industry could grow global output while using up to 45% less energy by 2050 if companies improve energy productivity.
According to a new report from the Energy Transitions Commission and Mission Possible Partnership, energy-intensive sectors including aluminium, aviation, cement, plastics and chemicals, shipping and steel could meet rising demand for housing, goods and mobility while cutting energy use by 25% to 45%, compared with a scenario with no productivity gains.
Energy use accounts for 30% to 50% of costs in heavy industry, the report says, meaning efficiency gains could play a major role in lowering costs and improving competitiveness.
It adds that combining energy productivity with decarbonisation could cut green premiums in aviation and shipping by around 40% to 60%.
The two organisations say demand is set to rise sharply by 2050, with steel, aluminium, cement and plastics and chemicals expected to grow by 25% to 100%, aviation by 150% and shipping by 45%.
Adair Turner, co-chair of the Energy Transitions Commission, said: “Clean electricity and low-carbon fuels are essential to decarbonise steel, cement, plastics and chemicals, aluminium, aviation and shipping and while they carry modest green premiums, these are manageable at consumer level.
“Improving energy productivity by using materials more efficiently and deploying better technologies enables us to meet rising demand for buildings, products and transport while reducing energy demand and related costs.”
The report highlights technical efficiency, service efficiency and material efficiency as the three main routes to lower demand. It points to aluminium recycling, which uses around 95% less energy than primary production, as one example of the potential savings.
Faustine Delasalle, chief executive of Mission Possible Partnership, said using energy, chemicals and materials more effectively would make the industrial transition “cheaper and faster” while reducing exposure to fossil fuel price shocks.
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