G7 ‘well-placed' to lead in slashing heavy industry emissions, IEA says

A new report lays out recommendations to speed up technology development and overcome high costs in reducing emissions from steel and cement production

G7 members account for about 25 per cent of the energy system carbon dioxide emissions, the IEA said. AFP

The Group of Seven bloc of major industrialised economies is "well-placed" to take the lead the world in cutting emissions from the heavy industry sector and pave the way for other countries to follow suit, according to the International Energy Agency.

G7 countries – Canada, France, Germany, Italy, Japan, the UK, the US and the EU, which is a ‘non-enumerated’ member, – account for about 40 per cent of the global economy, 30 per cent of energy demand and 25 per cent of the energy system carbon dioxide emissions, the Paris-based agency said in a new report on Thursday.

“The G7’s economic heft, technology leadership and international alliances present it with a special role in leading the way and inspiring successful energy transitions in these crucial sectors,” it said.

The US, the world’s largest economy as well as Canada, Britain and the 27-member EU plan to become carbon neutral by 2050 and are focusing on reducing emissions with new renewable projects.

“There is no way to reach net zero without dramatic reductions in emissions from heavy industry, and G7 economies have both a responsibility and an opportunity to take a leadership role in driving that forward,” said IEA executive director Fatih Birol.

“Emissions from heavy industry are among the most stubborn, making it essential that countries with significant financial and technological resources use them to scale up practical solutions in a co-ordinated way.”

But heavy industries still struggle to curb emissions, according to the report.

Much technology required for the industry sector’s transition is at the prototype or demonstration stage and not yet ready for widespread distribution and use, it said.

Products of heavy industries such as steel are traded internationally in competitive markets, with margins that are too slim to absorb elevated production costs and encourage first movers to adopt new technology, it said.

The IEA recommendations to G7 countries included developing ambitious long-term sustainable transition plans for industry, backed by policy , as well as financing a portfolio of demonstration projects for near-zero emission industrial production technology.

The report also calls for G7 governments to adopt stable, absolute and ambitious thresholds for material production with near-zero emissions. It proposes definitions and relevant thresholds the G7 could adopt as a starting point that are compatible with a global pathway to net-zero emissions by 2050.

“G7 members should work with the industry to establish agreed-upon thresholds, definitions and measurement standards for what constitutes steel and cement production with near zero emissions,” the report said. “This is essential for establishing policy and production guidelines.”

Heavy industry, including steel and cement production, is responsible for more than 15 per cent of coal use and about 10 per cent of oil and gas use in G7 members.

This “makes the net zero transition in the heavy industry an important pillar for reducing the reliance on fossil fuels in the G7 in the wake of Russia’s invasion of Ukraine”, according to the report.