Decarbonisation of the Czech industry is both necessary and beneficial. New INCIEN study addresses emission reduction in the processing and use of steel or cement

30. 10. 2023 / Vesna Mrazkova

The manufacturing industry and construction combined account for 30% of gross value added and 34% of employment in the Czech Republic*. That makes them key sectors of the Czech economy. Society cannot do without industrial materials such as steel, concrete and cement, but their production generates large amounts of ‘embodied carbon’. A set of strategies collectively known as industrial decarbonisation strategies aim to reduce emissions in industrial production. For the second year running, these strategies have been a central theme for the Institute of Circular Economy’s Think Tank. In a new study, the research team presents an analysis of transformation opportunities, potential emissions savings and risks in the main manufacturing sectors.

Last year’s study by the Institute of Circular Economy (INCIEN) primarily served as an overview, aiming at engaging key stakeholders in the debate. It quantified the potential of the circular economy to reduce emissions in key industries at both global and European level. This time, the Think Tank supported by the European Climate Foundation focused on analysing a shortlist of priority measures in the context of the Czech Republic. The main obstacles and opportunities for development in the domestic economic environment are identified for each of the measures.

“The main output is a set of measures that can help mitigate and overcome existing obstacles, and a proposed common agenda to tackle them further. In our opinion, decarbonisation is a necessity for industry and construction. One only has to look at the current agenda in the EU. The “Fit for 55” legislative package on energy and climate is almost ready, aiming to reduce CO2 emissions of sectors covered by the EU ETS (including heavy industry) by 62% by 2030 compared to 2005. A revision of the EU Energy Performance of Buildings Directive referred to as EPBD 4 is also currently being negotiated. For the first time, it will include a requirement to measure the global warming potential of buildings, i.e. their CO2 emissions over their entire life cycle, including those embodied in materials. These emissions account for approximately 20% of emissions from buildings today, but in ten or fifteen years’ time they could account for the majority. It is the first step towards setting targets in this area as well. Similar criteria will apply to the assessment of sustainable buildings under the EU Taxonomy starting from January 2024. In this regard, increasing the proportion of recycled materials and extending the lifetime of buildings and building materials will be key. This can be achieved, for example, through renovation, modular design or reuse,” says Benjamin Hague, head of the research team.

The research team lists many reasons for the transition to decarbonisation. They point out economic reasons resulting from the decreasing amount of free emission allowances or the planned transition from fossil fuels to renewable energy sources. In addition, they refer to an analysis by Material Economics and Agora Industry* which calculates that up to 30% of capital and energy costs can be saved by reducing emissions using circular measures compared to other technological solutions. The data on potential emission reductions are the strongest argument.

“With the planned transition to recycled steel production, up to 75% reduction in emissions in the Czech steel industry compared to today can be achieved by 2031. Furthermore, cement accounts, on average, for 95% of the carbon footprint of concrete and 40% of embodied CO2eq emissions in building materials in the EU. Given that approximately two thirds of these emissions are generated during the calcination process in clinker production, the key measure in this area is to reduce the clinker content in cement or replace it with alternative binders,” explains Tadeáš Rulík, an analyst with INCIEN’s research team.

The publication is primarily intended for two groups of stakeholders: industry representatives and political representatives. During the research process, INCIEN made an effort to include the most diverse group of experts possible and invited experts from universities, corporate representatives from different sectors and representatives of ministries.

“Similarly to the previous study on decarbonisation, the study being prepared will be freely available at incien.org (from November 2023) to encourage the implementation of the circular economy in practice and to multiply the positive impact of the data collected and relevant findings,” says Andrea Veselá, INCIEN analyst and co-author of the study.