Regional Industrial Transitions to Climate Neutrality

image of Regional Industrial Transitions to Climate Neutrality

Some manufacturing activities are among the most difficult human activities to make climate neutral and they are typically regionally concentrated. Across Europe these regions are often socioeconomically relatively weak. Yet these sectors provide relatively well-paid jobs in many of these regions. Some of these regions may also have more difficult access to infrastructure to provide the hydrogen, carbon capture and storage and zero-emission freight, which can be important to some of these activities. Industrial transitions to climate neutrality therefore have regional development implications. Since regions differ in their socio-economic conditions, understanding these regional development implications will help policy makers prepare a just transition. This publication identifies manufacturing activities that are particularly difficult to decarbonise and the transformations they require. It shows how these activities are distributed across European regions, focusing on employment at emission-intensive production locations. It identifies conditions for getting access to needed infrastructure and how access conditions differ across regions. It investigates the socio-economic vulnerabilities of affected regions, their manufacturing businesses and workers. In some regions, workers and firms may be particularly vulnerable, for example, because of low-skill jobs, type of employment contract or low productivity.


Regional industrial transitions to climate neutrality: Identifying key sectors

This chapter describes the challenges in moving manufacturing to climate neutrality. It identifies manufacturing sectors subject to the biggest challenges and describes the transformations they require. Manufacturing activities are typically regionally concentrated and the transformations they need to undertake will therefore have implications for regional development. Five sectors – non-metallic minerals (notably cement), basic metals (notably steel), chemicals, oil refining and coke, as well as paper and pulp – stand out in terms of greenhouse gas (GHG) emissions and energy use. Key actions for reaching climate neutrality include reducing energy consumption and moving away from fossil energy use towards electrification. These industries often require high temperatures in their production processes, increasing energy needs and making electrification difficult. Circular economy practices help reach climate neutrality with less pressure on energy and material needs with co-benefits for other environmental outcomes and human health. The motor vehicle industry, which is also included in the analysis, generates few emissions and is not energy intensive but faces challenges from the move to electric, lighter and fewer vehicles the transition is likely to imply.



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