Moving Industrial Clusters Toward Net Zero

Climate Change

Jeff Bartel

Chairman and Managing Director

Executive Summary

Industrial clusters are one tool for companies to take the climate action consumers are demanding. An estimated 70% of the global economy appears committed to reaching Net-Zero by 2050. For the past decade, industry has accounted for more than 25% of the global economy. The industrial and energy sectors account for more than 50% of global greenhouse gas emissions.

By working together, businesses within industrial clusters can significantly impact emissions and help achieve net-zero goals on time.

Net Zero Solutions for Industrial Clusters

Industrial clusters have a lot of power and responsibility as essential drivers of wealth and growth in various global regions. That includes responsibility for social and environmental factors that may feel impacted by industrial businesses. With around 70% of the global economy, including economies in China, India, Africa, and Saudi Arabia, committing to net zero, industry clusters must find solutions to support net-zero emissions and other environmental goals while helping maintain economic stability within their regions.

Direct Electrification

Electricity is a crucial factor in moving toward net-zero energy for all types of industrial clusters. Relying more on electric power over fossil fuels and other energy sources can significantly affect pollution emissions. However, moving in that direction involves an energy transformation that has not been seen since the Industrial Revolution and, even then, likely outpaces that historic time of innovation. Therefore, energy companies and industrial clusters must embrace new solutions from digitization and low-carbon technologies. 

Carbon Capture

Despite the excitement over direct electrification, resource and functional limitations mean that not all efforts within industrial clusters can transition to these cleaner forms of energy — certainly not in the immediate future. Carbon-capturing technology has become increasingly critical in this environment, and current efforts are falling short. According to data from the International Energy Agency, at the current rate of progress, carbon capture projects will fail to capture the 1.7 tons of CO2 required by 2030 to keep up with global goals for a 2050 net-zero scenario. Industry cluster businesses must step up to push these efforts further and gain more ground in this area.

Hydrogen Technology

Hydrogen technology is a low-carbon, clean energy alternative that may help industries turn away from high-carbon gasses and fuels. While hydrogen technology is currently in use, it is a relative newcomer to sectors that have long relied on fossil fuels. Nevertheless, industry leaders are committing to hydrogen research and developing this technology. Others in the niche must follow suit by implementing these technologies as they become available.

Bioenergy

Bioenergy is the oldest form of energy used by humans, who began burning wood for warmth centuries before electricity, fossil fuels, and other energy sources were available. Researchers are delving into different biomass energy resources, including byproduct residues from industries such as forestry and agriculture and even fumes from landfills. Bioenergy is frequently focused on turning the byproducts of one process into energy sources for another.

 

Carbon Net Zero in industry can be attained through industrial clusters

Collaborations for Net Zero Industrial Clusters

Organizational and governmental actions must drive collaborations to help create net-zero industrial clusters. Since the world is already falling behind on total net-zero goals, U.S. government efforts, U.N. collaboration, and buy-in from large sectors, such as China’s industrial clusters, are critical to future success.

Industrial Cooperation

Profound transformation must occur by 2030 to support the final goals of net-zero emissions by 2050. It is a relatively short time frame, requiring intense cooperation and collaboration among industry clusters. The IEA notes that investments are already being made in technologies to support low-carbon and net-zero approaches. By 2040, the average expected investment in technologies for this purpose is $350 billion; by 2060, those investments are expected to rise to $3 trillion.

While alternative energy investments are significant, businesses and agencies within industrial clusters must also cooperate to:

  • Set and work toward short- and long-term goals together. Goal-setting is a requirement for companies adopting the Net-Zero Standard. Working together can help businesses within industrial clusters set realistic goals and work through the challenges of obtaining them.
  • Find ways to make rapid, deep emissions cuts in the short term. By working together to find the low-hanging fruit and enacting quick cuts to emissions where possible, businesses in industry clusters can significantly impact global emissions, even in the near future.
  • Moving beyond value chains. Most businesses prioritize cutting emissions within value chains, but industry cooperation lets organizations move beyond those goals to find further options for reducing emissions.

Government Initiatives for Industrial Clusters to Reach Net Zero

With approximately half the global population highly vulnerable to the impacts of negative climate change, governments across the globe have reasons to join in the cooperative effort to reduce emissions. Some ways government initiatives and collaborations can lessen the impacts of climate change by supporting industrial cluster moves to net-zero include:

  • Setting priority policies to support net-zero efforts. These can range from creating and enforcing regulations for driving net-zero approaches to funding and rewards for industrial clusters and businesses that meet goals.
  • Creating opportunities for investors. Public-private partnerships increase available capital for green-tech efforts and drive flexibility for rapid adoption and implementation of sustainable technologies.
  • Being aware of internal issues. Understanding government issues and how they might create blockers for success with net-zero is important, as it allows nations and agencies to address challenges and create smoother paths to success for industrial clusters and businesses.

Collaboration across business sectors, national borders, and industries is critical to reaching net-zero goals and objectives. Industrial clusters can lead the way by modeling collaboration and implementing rapid new developments.