Alliance for Industry Decarbonization

On June 14, 2024, the Alliance for Industry Decarbonization (AFID) participated in the session "Industry-Driven Partnerships for Accelerated Energy Transition” within IRENA 27^th Council meeting.

The session facilitated exchange among the IRENA Members and private sector on how the net zero and decarbonization goals set at the national level could be practically supported by the industry for an accelerated energy transition.

The IRENA Director-General introduced the topic, underlining the pivotal role of industrial sectors in achieving net-zero emissions, as they account for a significant portion of global energy consumption and CO2 emissions. The Director-General also stressed out the need for the power sector to undergo significant decarbonization, which would involve an increase in renewable energy share to 91% by 2050 and highlighted the importance of industry collaboration and the role of technological innovation in meeting global energy demands sustainably.

Key points from the session included:

• The necessity for extensive decarbonization across various sectors to combat climate change effectively.
• The role of multi-stakeholder partnerships in fostering innovation and sharing best practices.
• The urgent need for proactive regulations and market adaptations to support the transition to renewable energy sources.
• The importance of technological innovation.

Mr. Khalid Bin Hadi, Managing Director from Siemens Energy, AFID Co-Chair, emphasized the significant progress and unity within the alliance. Since its inception, over 70 key players have joined forces to tackle industrial emissions, which represent a substantial portion of global greenhouse gas outputs. He highlighted the crucial role of emerging technologies, which are expected to contribute around 45% of emission reductions, in achieving ambitious decarbonization goals. Mr. Bin Hardi shared that governments are crucial in fostering a supportive environment for decarbonization, which includes implementing clear regulations, streamlining permits, and providing financial support. Mr. Bin Hadi urged private sector leaders and government decision-makers to actively support the industrial sector's decarbonization initiatives.

Spain shared their national strategy focusing on ambitious renewable energy goals and the development of electrolyzers to support industrial decarbonization by 2030. Spain highlighted the alignment with European directives and significant financial incentives to foster renewable hydrogen production.

India shared that the country is firmly committed to the energy transition agenda, which prioritizes energy affordability, accessibility, and security within its development plan. India employs an inclusive approach involving civil society, industry, and governments at local, state, and federal levels in its energy transition. Indian industry is actively involved in global energy transition initiatives like AFID, and the country is also exploring innovative solutions for energy storage, transport, and making global renewable energy supply chains competitive. The private sector is capitalizing on government-provided policy incentives to accelerate the energy transition at the ground level, enhancing decentralized renewable energy solutions.

The Republic of Korea (South Korea) expressed appreciation for IRENA's efforts to prioritize industry-driven decarbonization globally, particularly AFID. The country highlighted its significant commitment to supporting the industry's transition to low-carbon operations with a comprehensive investment plan. This plan includes about $300 billion in public financing by 2030, the establishment of a Future Energy Fund to expand clean power, and a Climate Technology Fund to advance climate technologies. South Korea emphasized that these initiatives are designed to catalyze investment and mitigate risks in expanding renewable energy infrastructure, also supporting SMEs in carbon-intensive sectors through the Korean Neutral Leadership Plan project.

Japan emphasized the critical role of technology innovation in the industry sector to promote clean energy investment and facilitate emerging clean energy technologies. To support private sector activities, Japan highlighted their domestic approach, which involves a synergy of publishing upcoming regulations and providing financial support to the private sector before these regulations take effect. Japan detailed its experience with issuing climate transition bonds and implementing financial support for R&D in innovative technologies, planning to launch an emission trading system by 2026 and a green transformation surcharging scheme by 2028.

Facilitated by IRENA, AFID unites private and public entities in energy-intensive sectors to accelerate net-zero transitions in line with the Paris Agreement. During the session, Rahul Oberoi, Executive Vice President at EDB, explained the bank's scoring system for renewable energy projects, which prioritizes those that contribute to reducing carbon footprints, work towards net zero initiatives, and align with the Sustainable Development Goals (SDGs).

Elie Adiamy, Group Director at Gulf Cryo emphasized the need to develop robust business opportunities between emitter companies that want to decarbonize their processes and the decarbonization solution developers, such as CCUS developers. He also stressed the need for a streamlined regulatory framework, advocating for a "one-stop-shop" approach that would significantly reduce bureaucratic hurdles and ensure timely project implementation.

Sobh Benmaamar, Head of Strategy from Siemens Energy reinforced the need for industry agility in both technological and financial innovation to accelerate renewable adoption. She emphasized Siemens global innovation centers, which work to develop efficient, end-to-end solutions addressing aging infrastructure, optimizing supply chains, and improving energy efficiency. Siemens collaborative approach, including partnerships with governments and other stakeholders, is key to identifying new opportunities for technological and financial innovation.

In summary, the session highlighted the critical importance of robust financing mechanisms, enhanced financial policy integration, and strong industrial networks to streamline and expedite the effective financial adoption of energy technologies.

This event provided an in-depth look at the global effort to decarbonize industrial value chains and accelerate net-zero ambitions. Speakers from Topsoe, Subsea 7, Net Zero Think and IRENA shared insights on how international organizations and the private sector collaborate, showcasing successful stories and recommending policies to enhance global decarbonization efforts.

Despite the global efforts for decarbonization shared during this event, today’s business leaders are under pressure to decarbonize their business models, assets, and infrastructure to ensure a sustainable and prosperous future. But leaders are struggling with economic uncertainty, higher interest rates, inadequate supply chains, global competition, and political conflict. The discussions underscored a robust commitment from industrial partners and stakeholders in energy-intensive sectors to collaborate towards a common vision of a green future. The session provided insights into how these collective efforts support the decarbonization of industrial value chains and accelerate net-zero ambitions in line with the Paris Agreement, showcasing The Alliance for Industrial Decarbonization as a key example in this regard. It also facilitated an open dialogue, sharing valuable lessons learned and addressing the common challenges that obstruct a fully decarbonized world.

Facilitated by IRENA, AFID unites private and public entities in energy-intensive sectors to expedite net-zero transitions in line with the Paris Agreement. The event aims to present a set of actions and joint initiatives for short and long-term plans. Opening the session, Gauri Singh, Deputy Director General of IRENA, said that decarbonising the industrial sector is crucial since industry is responsible for over 30% of global greenhouse gas emissions and nearly 40% of global energy consumption. “As demand for energy and industrial products rises, we must ensure emission reduction targets keep pace with limiting global temperature rise. Decarbonising industry represents a transformative opportunity, offering sustainable revenue streams and job creation for young people seeking to integrate sustainability into their careers. Realising this potential requires fundamental changes in markets and businesses, driven by leadership and commitment," she concluded.

Kumar Singh, CEO, Net Zero Think says that investors would readily engage in new energy transition ventures if the returns were well-defined. “Everyone is trying to look for returns but unfortunately, it's all speculative. There is lack of clarity, which is hindering investments, because investors want to invest where returns are clear. We need to fasttrack regulations and policies as the first step in laying the ground for enhancing investments in new transition technologies.”

In his closing remarks, David Frans, Senior Partner, Roland Berger, says that while the technology is in place and while ambition is steadily growing, “Governments need to be consistent in their policies for the transition to happen at the desired scale and speed.”

In summary, the key topics of this session included the necessity for robust financing mechanisms to support the tripling of renewable energy deployments, and the development of concrete business cases to secure essential funding. Further discussions also underscored the importance of regulatory clarity and global consistency in defining and maintaining the 'green' labelling of renewable projects as geographic discrepancies persist. Finally, the participants emphasized the critical role of collaborative platforms and policy frameworks, integrating advanced technologies, circular economy principles, and CO2 trading systems to drive forward industrial decarbonization effectively, and noted that the cost of inaction today could lead to significant economic and environmental challenges in the future, underscoring the urgent need to advance decarbonization efforts globally.

CEO Roundtable: Accelerating implementation of Industrial Decarbonization

Over 60 top executives and knowledge partners of the AFID held a roundtable at COP28 and committed to raise decarbonization ambitions through tangible achievements by 2030. Members of AFID have individual reduction plans that combined aim to reduce 51% of direct and indirect greenhouse gas (GHG) emissions and grow the installed renewable capacity from 84 gigawatts (GW) today to 187 GW in 2030. Moreover, Alliance members also commit to almost double installed green hydrogen, significantly increase bioenergy with CCUS solutions, increase workforce re-skilling from currently 15% to 91% and significantly boost investments in energy transition projects to more than USD 50 billion by the end of this decade.

Renewables

AFID held “How to implement renewable capacity in emerging and mature markets” event. Panelists underlined the importance of raw materials and supply chain bottlenecks, advantages of renewables corporate sourcing, challenges of system integration, permitting, and the role of youth in decarbonization.

Green Hydrogen

AFID held the “Green Hydrogen Unveiled: A Cross-Industry Dialogue for Sustainability”. The member companies showcased green hydrogen production and transportation projects. Within the interactive session “Hydrogen Horizons: Navigating Sustainable Transformation Across Industries”, panelists emphasised the need for supportive policies, importance of standards, and demand drives to stimulate market growth and decarbonization across industries.

Bioenergy with CCUS

AFID advanced discussions on “Accelerating Decarbonisation Through Bioenergy with CCUS”. The event showcased novel technology solutions, addressing barriers and providing an outlook on the way forward to use bioenergy in combination with Carbon Capture, Use and Storage (CCUS). The group also highlighted the important role of policies to stimulate bioenergy with CCUS for the decarbonization of industrial sectors.

Heat Process Optimization and Integration

AFID addressed “Importance of Decarbonizing Heat in Industrial processes”. The members of the Alliance and partners have discussed operational efficiency within their specific industrial processes. They focused on strategies that foster technology innovation and create a supportive ecosystem that incentivizes the widescale integration of low-carbon heat technologies across diverse industrial sectors.

Human Capital

AFID launched the digital platform MyChange at the event “Human Capital: Empowering the energy transition: unleashing human capital through collaborative private sector engagement”. The event showcased ‘My Change for AFID’, aiming to raise awareness of the challenges connected to the SDGs, the Agenda 2030, and to help AFID Members to deepen their knowledge in the fields of energy transition and decarbonization, sustainable development, and digital transformation.

Finance

AFID held the event “Empowering the energy transition: providing enough investment through collaborative private sector engagement”. Discussion centered on the key challenges and opportunities to unlock investments in the context of the urgent need to invest in renewable energies to enable the achievement of the UN 2030 Agenda.

The event fostered partnerships through initiating dialogue and taking tangible actions that are crucial for industrial stakeholders to best address the challenges and navigate opportunities of clean energy transition. The meeting also advanced exchanges and collaboration to accelerate global climate action. The participants voiced the industry’s views on the importance of coherent, comprehensive, coordinated, and thoughtful policies to ensure a safe transition aimed at having a fully functional, reliable, and efficient energy system.

The speakers shared their opinions on policy measures to secure green financing, trigger industry’s decarbonization and promote the clean energy transition through enhanced digitalization, smart decentralization and technology advances (renewables, green hydrogen, bioenergy with CCS, heat optimization) and human capital. AFID speakers were Mr. Marco Margheri, Head of USA International Relations Office, Eni, Mr. Rich Voorberg, Siemens Energy, President, North America, Mr. Wouter de Groot, VP Sustainability, FLSmidth, Mr. Bruce Douglas, CEO, Global Renewables Alliance, Mr. Nour Sobh, Senior Advisor - Corporate Energy Sourcing, Eurelectric, and Ms. Mikki Corcoran, VP Sustainability, SLB.

It was highlighted during the event that while the energy transition undoubtedly requires time, there is significant potential to implement many of the available technology options today. Upward trends in the deployment of these solutions demonstrate that the technical and economic case is sound. There was a general consensus that comprehensive policies are needed across all sectors to ramp up deployment. This is besides instigating the systemic and structural overhaul required to realise climate and development objectives.

A good number of industrial firms and stakeholders operating in energy-intensive sectors have furthered the discussion by sharing their ambition to decarbonize their activities along their value chains and companies that have knowledge and expertise in the deployment of energy transition technologies. All reporting companies serve as role models for other members of the AFID but also to many large, medium, and small companies around the world.

It was stressed that AFID has over 50 members and knowledge partners; about half of the AFID members published reports on their companies’ emissions and reduction targets until 2030 on Scope 1 & 2 and less members reported on Scope 3. AFID Speakers were Daniel Trillos, Vice-Chair of ISO's technical committee on environmental management, Bratin Roy, Sr. Vice President Sustainability TÜV SÜD, Khushboo Oswal, Business Line Manager Climate Action Certification, TÜV SÜD, and Ahmed Samir ELBERMBALI, Sustainability Market Leader, Bureau Veritas.

The workshop concluded with highlighting the need to accelerate the agreed global actions to decarbonize industrial value chains and promote understanding of renewables-based solutions and their adoption by industry with a view to contributing to country-specific net-zero goals.

The side event on “Accelerating net-zero ambitions through clean hydrogen for decarbonization of industrial value chains” held at CEM14/MI-8 in Goa on 19 July 2023, featured presentations on international collaboration platforms to foster decarbonization of industrial value chains as well as a panel discussion on international standards, conformity assessment, and regulations.

IRENA informed about progress under Alliance for Industry Decarbonization that aims to facilitate dialogue on industry level and increase cooperation to help companies to develop solid decarbonization strategies and implementation plans, aligned with their countries’ net-zero and decarbonization commitments. The Alliance is to serve as a global platform for enhancing dialogue through exchange of insights, experiences and best practices.

UNIDO presented Global Programme For Hydrogen In Industry which powers net zero industrialization and economic development in the Global South and contributes to accelerate local green hydrogen production & application, global trade and decarbonization.

The Net-Zero Industries Mission (NZIM) presneted ongoing collaboration across countries, government, and industry to drive and accelerate the adoption of decarbonisation technologies by the hard to abate, energy intensive industries. The Mission’s goal is to catalyse the development and demonstration of cost competitive solutions for the efficient decarbonisation of hard to abate energy intensive industries worldwide by 2030.

Australia informed about its policy landscape and the Clean Hydrogen Mission where the country is taking a lead role on the Storage and Distribution Working Group. Australia presented a global interactive map of collected case-studies with best practice in innovation, development, and demonstration of hydrogen storage and distribution.

Following the presentations on international collaboration platforms, the speakers from IPHE, IEC, IRENA, Hydrogen Council and Tata Steel continued panel discussion on standards and conformity assessments as interdependent determinants of the development of green hydrogen and thus industry decarbonization. They noted about increased international confidence in green hydrogen and lowered costs. Panellists urged that these determinants are accelerated, and emphasised that standards require greater awareness, the inclusion of developing countries, and focus on the role of guiding governments to create enabling environments. Regulations and certificates were also underscored as essential, especially for facilitating the trade of green hydrogen.

Innovation was another key topic during the event, and the importance of standards for innovation, as well as renewable energy, was noted. It was highlighted that innovation will be essential for supporting the growing hydrogen workforce; additionally, anticipated innovations were shared, including the injection of hydrogen into blast furnace. Throughout the presentations and panel discussion, the value of international collaboration was stressed, especially through knowledge sharing.

It has been concluded that standards, conformity assessment, and regulations – also known as Quality Infrastructure (QI) – play a fundamental role for safe hydrogen production, trade and use. The fundamental rules, standards and certifications have been defined to enable the safety of infrastructure and its installation, storage, use, repair/maintenance and transport of hydrogen, including GH2. All countries with hydrogen initiatives are encouraged to participate in international standards setting and use existing infrastructure elements such as International ISO and IEC Standards, as well as international certifications such as IECEx. They help industry to develop the quality and safety infrastructure needed once GH2 projects become operational, largely avoiding the need for investments in technical conformity assessment infrastructure.

The Alliance for Industry Decarbonization was represented at the World Utilities Congress hosted by Alliance member TAQA. The Congress, which ran from 8-10th May 2023, brought together energy leaders, policymakers, innovators, and industry professionals from around the globe to share perspectives on the trends, opportunities, and challenges of the industry in pursuit of a secure and sustainable utilities future.

The Alliance powered the Global Panel Discussion on Exploring the role of utilities in decarbonising industrial demand. Amidst the urgent need to decarbonize industry, the panel discussion considered how cooperation between utilities and industry can enable the utilities industry to assume its critical role in this regard. There was a focus on how green hydrogen and carbon capture and storage can be harnessed, the use of demand response programs, and how energy-efficient technologies and practices can be developed and implemented.

The Deputy Director-General of IRENA, Gauri Singh, emphasised that: “Targets must be implementable, achievable and tangible.” Among other key messages was the consensus that collaboration throughout and beyond industry must be optimised to navigate the complexities of industrial decarbonization, to produce tangible impacts and to account for the interests and challenges of stakeholders. The value of best practices and lessons learnt from experiences with technologies in informing the way forward was also emphasised. Another key message that emerged was the importance of creating a conducive and enabling environment for the utilities sector to adequately contribute to decarbonizing industrial demand, with an emphasis on policy frameworks and effective innovation.

The Alliance for Industry Decarbonization powered a session at the Hannover Messe which took place from 17th-21st April 2023. The world’s leading industrial fair brought together key stakeholders from within the sector and beyond to convene under the theme of “Industrial Transformation” to which decarbonization is a key issue.

The session Decarbonizing industries – Tackling the tough stuff was hosted by co-founding partner Siemens Energy and began with technology pitches from start-ups focused on scaling technologies to reduce Europe’s natural gas consumption under the Energy Resilience Leadership Group initiative. Following this, a high-level panel discussion ensued whereby experts discussed industry decarbonization with a focus on technologies, the role of partnerships and what is required by industries through topics including investment, measuring and reporting, and innovation.

Panelists emphasised that although it is relative by industry and context, the four key solutions for decarbonizing industry are electrification, energy efficiency, hydrogen and carbon capture, usage and storage. The key message of the panel was the importance of cross-sectoral partnerships in accelerating efforts, especially in confronting challenges such as the scarcity or lack of availability of certain technologies and the need to establish green markets with demand to match supply. The panel also brought forward key considerations including the potential need to source energy internationally through global value chains to adequately satisfy the high demand required to meet decarbonization targets.