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Revealed: The Manufacturing Industry’s Massive Low-Carbon Opportunity

Photo: Vladimir Melnik / Shutterstock.com
Photo: Vladimir Melnik / Shutterstock.com

Did you know industries emit more than one-third of the world’s greenhouse gas emissions?

Certain sectors – including iron and steel, cement, chemical, and aluminium manufacturing – are actually the main contributors to climate change because of the large amounts of energy they need.

A new report is now putting a spotlight on how manufacturers can play a key role in tackling climate change and still produce the stuff we need, while making them more competitive as businesses

There is “significant economic potential” for future energy efficiency savings in the manufacturing industry, the report by the World Bank and non-profits CLASP and Carbon Trust says.

Aside from limiting climate change, the more efficient use of energy and materials is a major business opportunity that could lead to higher profits for companies, and more tax income for governments.

Also: Could Your Next Car Actually be Made From Recycled Tequila?

Massive Impact

The ‘A greener path to competitiveness’ report says the sector has already implemented 40 per cent of what’s currently achievable in terms of efficiency savings, but highlights that implementing the remaining 60 per cent would have a massive impact on global greenhouse gas levels.

The manufacturing industry should focus on practical, cost-effective energy efficiency options that can be deployed today, the reports says.

Four ingredients are listed as critical components of green solutions that can be implemented immediately and industry-wide:

  1. Quick returns on investment
  2. Minimal operational disruption
  3. Cost savings after implementation
  4. Easily accessible sources of financing

Governments can contribute to this by making haste with implementing supporting policies, the report stresses.

Enormous Opportunities

“Now is the time for companies and countries to act,” said Cecile Fruman, trade and competitiveness director at the World Bank, pointing to “enormous opportunities for industries.”

New technologies critical to emissions reduction aren’t always cost effective – not yet at least. This is where government policy can help by getting rid of “distorting production subsidies,” and by putting a price on carbon, the report says.

Governments should introduce new incentives to help kick-start solutions that currently have a weak business case, the report argues.

Also: Elon Musk Perfectly Explains How Carbon Pricing Could Spark an ‘Innovation Explosion’

Incredibly Strong Business Case

In the long term, there is an “incredibly strong business case for the transition to a low carbon economy,” says Michael Rea, CEO at the Carbon Trust.

“Many of the technologies we need to achieve this already exist today. But to capture this value, it is imperative that governments and energy intensive sectors work together,” Rea says.

Policy makers should also make “consumer demands visible” through new energy efficiency standards and labelling, the report recommends. “Appliance energy efficiency policies can simultaneously reduce energy use and improve competition,” CLASP CEO Christine Egan said.

Maintaining Momentum

Policy options like the one outlined in the report are set to be discussed among experts and diplomats in Morocco later this year at the COP22 climate summit. Alexios Pantelias, head of competitive sectors in Istanbul for the World Bank, says dialogue is a critical component of maintaining momentum following the Paris Agreement.

“Public-private partnerships, regional dialogues and long-term support for local energy and industrial entrepreneurs are all necessary to achieving successful outcomes [in Marrakesh],” Pantelias said.

At Climate-KIC, the European Union’s public-private climate innovation partnership, sustainable manufacturing is a key priority. The initiative’s enCO2re programme even wants to take efficiency to a new level by focusing on the large-scale recycling of CO2.

Also: Why The Marrakesh Climate Summit Will be Much More Important Than Paris

Do you have ideas on how to achieve more efficiency in manufacturing? Find out how Climate-KIC could help you launch your own company.

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