Decarbonization Strategies for Europe's Industrial Sector

This technical report from Allianz Research outlines the decarbonization strategies for four hard-to-abate industries in Europe: aluminum, ammonia, steel, and cement. These sectors are significant contributors to energy consumption and greenhouse gas emissions, accounting for 7.7% of energy use and 9.7% of emissions in the EU-27. The report details the critical need for these industries to transition to greener practices to meet the EU's climate targets and maintain global competitiveness. It discusses the importance of a reliable energy system based on renewables and a functioning Carbon Border Adjustment Mechanism to facilitate this transition. Each industry is examined for its specific challenges and strategies, such as the shift to green electricity in aluminum production and the adoption of circular economy principles in steel manufacturing. The report emphasizes the necessity of public-private collaboration and increased investment to close the green financing gaps, particularly in the steel and ammonia sectors, to achieve decarbonization goals by 2050.