A new CMCC (Centro Euro-Mediterraneo sui Cambiamenti Climatici) led study finds that energy-intensive industries in the EU can both lower emissions whilst still being competitive, but only through targeted investments and policies for specific sectors, whilst focusing on importing green intermediate products and maintaining the final part of the supply chain.

In 2021, the EU27 industrial sector emitted approximately 600 million tonnes of carbon accounting for around one‑fifth of total EU greenhouse gas emissions, with many existing industrial processes incompatible with decarbonisation, especially in sectors such as iron and steel, cement, chemicals and plastics.

The study, titled Decarbonisation without deindustrialisation: assessing future pathways for European industry, acknowledges that decarbonisation and keeping EU industry alive is a difficult challenge, but solutions such as switching to electricity and green hydrogen and moving factories to sunnier or windier parts of Europe (such as Spain or Nordic countries) could form part of the picture.

At the same time, the paper argues that trying to rebuild a significant green industrial base entirely within the EU would be prohibitively costly, and a pragmatic path would be to protect industrial jobs and expertise and selectively outsource parts of the supply chain.

“The best strategy is to import semi-finished green materials such as iron that is partially processed abroad and perform the final manufacturing step in Europe. This keeps jobs and know-how in Europe while cutting costs by up to €80bn per year compared to producing everything domestically,” suggests Alice Di Bella, lead author of the study.

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