Electrification: the key driver for industrial decarbonisation

The global industry energy bill  

What are the global emissions figures for industry?  

Global greenhouse gas (GHG) emissions continue to rise, and totalled 53 billion tonnes of CO₂ equivalent in 2023². Defined as all those economic activities that produce tangible goods by processing and using raw materials, the manufacturing and construction industries together account for 16% of these emissions. Although this proportion is lower than that for electricity and heat generation (40%) or transport (22%), it remains substantial, and is twice as high as the combined level of emissions generated by residential and commercial property (8%)³.

The world is currently not on target to achieve the greenhouse gas emissions targets set in the 2015 Paris Agreement⁴.

Regional differences 

Emissions generation varies significantly between different regions of the world. So only 9% of US emissions are generated by the manufacturing and construction industries, although the figure for these same sectors in China is 23%. In the 27-country European Union, they contribute 14% of all emissions.

How to decarbonise an industrial company 

At individual company level, decarbonisation is a multistage process, as presented by Olivier Lluansi, a lecturer at the Conservatoire National des Arts et Métiers (CNAM) and author of Reindustrialisation; a generational challenge, at the Building Beyond 2026 conference hosted by Leonard, the VINCI Group innovation and foresight platform⁵.

The first point of focus is boosting the efficiency with which the company uses energy, materials and other resources. According to Professor Lluansi, this essential first stage saves the company money and makes good economic sense. The second involves recovering waste heat⁶ produced by the industrial process: in other words, utilising heat generated internally and externally by the company (furnace or boiler fumes, cooling systems, etc.) through the installation of a hot water loop, for example. The third and final stage is to install a carbon-free energy source.

Government schemes have been introduced to support companies through this transition. For example, the ADEME ‘Fonds Chaleur’ (Heat Fund) in France supported and funded 10,000 projects with a total investment of €16 billion, €5.1 billion of which was committed between 2009 and 2023⁷.

The decarbonisation drivers idenified by Actemium 

The Actemium network of VINCI Energies companies serving industrial users supports many companies working to decarbonise their processes. The approach required to achieve this transition can be summarised in three key priorities⁸: 

• working to improve energy efficiency by, for example, using LED technology for all lighting or by electrifying processes such as switching to electric kilns for glass production; 
• adopting a circular economy approach in which reuse takes precedence over recycling;
• switching to new low-carbon solutions, such as green hydrogen.

Removing the barriers to industrial decarbonisation 

Encouraging decarbonisation

In 2005, the European Union introduced its Emissions Trading System (ETS⁹) based on the ‘cap-and-trade’ principle, which requires participants to measure and verify their emissions as the basis for annually surrendering sufficient allowances to the authorities to fully account for their annual emissions. They can also purchase allowances at auction or sell spare allowances to other companies. The result is a clear financial incentive to reduce their CO₂emissions.

Canada and South Korea have also introduced mechanisms to place a value on industrial emissions; the emissions trading scheme introduced by the Chinese government in 2021 has included the steel, cement and aluminium industries since 2025¹⁰.

Financial support for decarbonisation 

In many cases, the main obstacle to industrial decarbonisation remains financial, due to the sheer scale of investment required.

Many countries have introduced programmes to support industrial companies working to transform their processes: the European Innovation Fund¹¹, the GX Policy programme in Japan¹², the UAE Hydrogen Leadership Roadmap, and the Australian Renewable Energy Agency (ARENA) in Australia¹³ are all examples of these initiatives.

But it is not just governments that are investing. Olivier Lluansi also raises the possibility of leveraging personal savings¹⁴ to fund industries, following the lead of the 2022 US Inflation Reduction Act (IRA), which introduced a government scheme to support investment in the USA¹⁵.

VINCI Energies subsidiary Actemium believes that low-carbon hydrogen produced using a water electrolysis process offers even greater environmental benefits if the electricity used to power the process is itself low carbon or from renewable sources. Its potential for industrial decarbonisation is significant and wide-ranging, since it paves the way for a range of different applications, including low-carbon steel and e-fuels.

The appealing image of a clean, carbon-free product 

Demanding environmental measures are not solely a function of legislation; they also reflect the beliefs and ambitions of a growing number of people. Decarbonisation therefore offers manufacturers the potential of elevating their brand image if they are perceived as companies committed to protecting the environment and producing clean, green products. And to help industrial companies measure their carbon impact, Actemium has developed its Actemium Carbon Tool (ACT), which enables its clients to assess the carbon footprint of the solutions it recommends, or to carry out a Quick Scan energy audit to identify areas for improvement.

As industry becomes more carbon-neutral, every link in the value chain is becoming more demanding and looking to identify those manufacturers and products that can meet their requirements. These companies will actively seek to work with others equally committed to the adoption of clean, low-carbon production methods. The resulting virtuous circle encourages other companies to decarbonise their processes.

To succeed, we must continue to develop the new decarbonisation solutions already identified, at the same time as ensuring the widespread implementation of those that have proven their worth in practice. The challenge may be huge, but it can be met as more and more people become aware of these issues.

Sources :

¹ IEA: ‘Industry’  – https://www.iea.org/energy-system/industry  

²SDES: ‘Global overview of CO₂ emissions’ – https://www.statistiques.developpement-durable.gouv.fr/edition-numerique/chiffres-cles-du-climat/en/https://www.statistiques.developpement-durable.gouv.fr/edition-numerique/chiffres-cles-du-climat/en/  

³ Ibidem. 

⁴ Connaissance des énergies: ‘What are the main greenhouse gases and their sources of emission?’ – https://www.connaissancedesenergies.org/questions-et-reponses-energies/quels-sont-les-principaux-gaz-effet-de-serre  

⁵Olivier Lluansi: ‘Plug, baby plug, the challenges of large-scale electrification’ round table discussion, Building Beyond 2026, VINCI  – https://www.youtube.com/live/Xohox_drCSQ  

⁶ Ademe: ‘Waste heat in companies’ – https://fondschaleur.ademe.fr/filieres/la-chaleur-fatale-entreprise/  

⁷ Ademe: ‘Fonds Chaleur key figures: 2009–2023 review’ – https://fondschaleur.ademe.fr/entreprise/

⁸ Esprit VINCI  n°95: ‘VINCI Energies is committed to industrial sustainability’.

⁹ The French ministries of Ecological Transition, Regional Development, Transport, Urban Affairs and Housing: ‘Carbon markets – the EU ETS’ – https://www.ecologie.gouv.fr/politiques-publiques/marches-du-carbone-seqe-ue  

¹⁰ Energynews.pro: ‘China: Ambitious Expansion of Carbon Markets Planned for 2025’ – https://energynews.pro/chine-une-expansion-ambitieuse-des-marches-du-carbone-prevue-pour-2025  

¹¹ European Commission: “Innovation Fund” – https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/innovation-fund_en  

¹² METI: “GX Policy achieving decarbonization and economic growth together” –https://www.enecho.meti.go.jp/en/category/special/article/detail_214.html  

¹³ Arena: official website – https://arena.gov.au/  

¹⁴ Olivier Lluansi: ‘“Plug, baby plug”: the challenges of large-scale electrification’ round table discussion, Building Beyond 2026, VINCI – https://www.youtube.com/live/Xohox_drCSQ  

¹⁵ Vie publique: ‘US Inflation Reduction Act (IRA): European concerns’ – https://www.vie-publique.fr/en-bref/292447-loi-americaine-sur-la-reduction-de-linflation-les-inquietudes-de-lue  

¹⁶ Esprit VINCI n°95: ‘VINCI Energies is committed to industrial sustainability’.