Heavy industry key to carbon reduction

Governments must unlock the technological knowledge assets of carbon-intensive industries if they are to meet their climate change objectives.

This is the view of Ilian Iliev, chief executive of Cambridge IP and co-author of the ‘Who Owns Our Low Carbon Future?’ report published by Chatham House earlier this month.

According to Iliev, greater collaboration with heavy industry is required to help accelerate the commercialisation of energy-efficient technologies and ensure the world achieves its target of an 80 per cent reduction in greenhouse gas emissions by 2050.

‘For many years we have seen oil and gas companies as the evil doers of the global capitalist system,’ said Iliev. ‘Whether or not you hold this view, the bottom line is that in a positive sense these companies own a lot of technology and knowledge that will be critical for the deployment of low-carbon technologies.’

The report documents the global research and development patterns of six technologies: biomass, wind, cleaner coal, carbon capture, concentrated solar thermal (CST) and solar photovoltaic (PV). It concludes that under current practices the technologies will not be ready in time to make a significant difference to the world’s climate-change agenda.

Speaking ahead of the UN summit on climate change, Iliev said: ‘It is the “dirty” carbon-intensive companies that have the capabilities that will allow us to move away from increasing emissions.

‘For instance, carbon capture is very likely to play a critical role in the technology mix going forward. Oil and gas companies have been using carbon capture in advanced oil recovery and other areas of traditional work and have huge expertise in this field.

‘The heavy-industry companies, based around metals and alloy manufacturing, also have the capabilities for advanced alloys that can be used to manufacture products such as cheap super-critical boilers, which at the moment are too expensive for countries such as India and China to afford.’

On Friday, the EU approved a draft list of 164 industrial sectors and sub-sectors deemed to be exposed to ‘carbon leakage’. This relates to the risk that companies under strong global competition may relocate from the EU to countries where greenhouse gas regulations are less stringent.

Under the revised EU Emissions Trading System (EU ETS), which will apply from 2013, the sectors named in the draft list will receive a higher share of greenhouse gas emission allowances free of charge.

However, the report warns that excluding heavy industry from climate-change regulations in this way will stifle innovation and produce a negative spillover effect on the rest of the economy. Instead it argues that governments need to include these industries in carbon-reduction initiatives by encouraging greater research and development (R&D).

‘In the developed world we have a good system for fundamental R&D, and we have no shortage of ideas about new energy technologies,' said Iliev. ‘However, over the last 20 years there has been a significant shortage in public support of private sector applied R&D to convert scientific breakthrough into commercial technologies. If this is to change, we must encourage heavy-industry carbon-reduction technologies and learn from their expertise.’

Click the following URL to access the ‘Who Owns Our Low Carbon Future?’ report: http://tinyurl.com/mluku4

Ellie Zolfagharifard