Insight
The European Union aims to be climate-neutral by 2050, with a midterm target to reduce greenhouse gas emissions by at least 55% by 2030. This ambitious goal is at the core of the European Green Deal. Energy-intensive industries play a crucial role in this transformation while remaining vital to the EU economy, employing millions of people. Instruments like Horizon Europe and the Innovation Fund are central to supporting industries in scaling up research and innovation for climate-neutral technologies.
Industry GHG Emissions
In 2021, the European Union’s greenhouse gas emissions exceeded 3 billion tonnes CO2-equivalent, with 23% attributed to industrial activities. Industrial emissions totalled 744 million tonnes CO2-equivalent, including 426 million tonnes from energy-related stationary combustion in manufacturing industries and construction and 318 million tonnes from industrial processes and product use. Key contributors to industrial process emissions included cement and lime (90 million tonnes), chemicals (45 million tonnes), and metals (67 million tonnes).
Economic Relevance of Sectors
Chemicals & Refining
Annual turnover (2022):
760 billion €
Biggest producers (2022):
Germany (30%), France (18%), Netherlands (11%), Italy (9%)
Export sales (2022):
240 billion €
Direct jobs (2018):
1.2 million
Indirect jobs (2018):
3.6 million
Main export markets (2022):
USA (16%), UK (12%), Turkey (4%), Brazil (2%)
Metals Including Iron and Steel
Annual turnover:
Non-ferrous: 120 billion €
Steel (2022): 130 billion €
Annual production:
Non-ferrous: 47 million tonnes
Steel (2022): 130 million tonnes
Direct jobs:
Non-ferrous: 500,000
Steel (2022): 306,000
Steel exports (2022):
16.6 million tonnes
Main steel export markets (2022):
UK, Turkey, US, Switzerland, Egypt
Cement & Lime
Turnover (2019):
Cement: 15.2 billion
Lime: 4.2 billion €
Number of employees (2019):
Cement: 47,000
Lime: 11,000
Annual production (2020):
171.5 million tonnes of cement
Export quantity (2023):
9.3 million tonnes of cement
Main export markets (2023):
Turkey, Algeria, Ukraine
Net-Zero Industry in Europe – Initiatives and Funding
The European Union actively supports industrial decarbonisation through a range of funding mechanisms and initiatives designed to foster innovation and scale low-carbon technologies. The Horizon Europe Programme aims to advance energy-intensive industries to a technology readiness level of 7 or higher, with a funding timeframe spanning 2021 to 2027 and a total budget of 95.5 billion €. The Processes4Planet Partnership focuses on creating circular and climate-neutral industrial processes, supported by an overall budget of 2.6 billion €. The Clean Steel Partnership is dedicated to piloting and demonstrating breakthrough technologies that could reduce EU steel CO2 emissions by 50% compared to 1990 levels, backed by a total budget of 1.7 billion €.
The Innovation Fund, one of the largest global funding programmes for net-zero technologies, is financed through the EU Emissions Trading System and has a projected funding volume of 40 billion €, assuming a carbon price of 75 €/t CO2. It supports innovative low-carbon technologies and processes in energy-intensive industries, alongside projects focused on carbon capture, utilisation, and storage. Additional funding opportunities are provided by the European Investment Council, the Research Fund for Coal and Steel, and IPCEI projects, which further enhance the EU’s commitment to achieving climate neutrality while maintaining industrial competitiveness.
Relevant Policies and Roadmaps
The EU’s Green Deal Industrial Plan, anchored by initiatives like the Net Zero Industry Act and the Critical Raw Materials Act, aims to enhance the competitiveness of net-zero industries and accelerate the green transition. The Industrial Technology Roadmaps highlight low-carbon technologies and circular industrial practices for energy-intensive industries. National Climate and Energy Plans provide a coordinated approach for member states to decarbonise effectively.
Flagship Projects
The European Commission has identified over 184 demonstrators in energy-intensive industries, funded through EU instruments or IPCEI Projects, to drive decarbonisation and innovation. Among these, the Clean Steel Partnership focuses on advancing projects that aim to achieve net-zero steel production, while Processes4Planet highlights demonstrators that promote circular and climate-neutral industrial processes. Noteworthy projects also include Asia’s largest thermal power carbon capture, utilisation, and storage (CCUS) initiative at the Taizhou Power Plant, with a capacity to capture 500,000 tonnes of CO2 annually. Further insights into these and other ongoing projects are accessible through the JRC Energy and Industry Geography Lab and various European industrial associations.
