Amory Lovins: Decarbonizing industry is not just a question of costs, it’s a question of profits

When it comes to deep decarbonization, the cost of deploying new technologies is often a sticking point. It’s time to have a change of perspective.

This week, Amory Lovins, co-founder of RMI and Clean Energy BAMF, published an article titled “Decarbonizing Our Toughest Sectors – Profitably”, encouraging a new perspective on the costs of decarbonizing heavy transport and industrial heating.

The article shows that deep decarbonization doesn’t come at a cost: it’s an investment that will bring money back to communities and businesses. By focusing on the costs of deep decarbonization, Lovins argues, he ignores the many technologies, materials, design methods and business models available today that would save money, create industries and reduce emissions.

Moreover, to call the sector “difficult to reduce” does a disservice to what we are able to do today. Because the sectors are technically complicated, most climate models focus on expensive carbon dioxide removal technologies instead of true decarbonization. In reality, Lovins argues, decarbonizing heavy industry is not just difficult; it’s just “differently difficult”.

Rethinking deep decarbonization “would unleash billions of dollars in creative destruction,” according to the analysis. Here’s a look at the trends that will drive decarbonization and profits in process heat.

Renewable thermal innovations

Three sectors are responsible for about a third of global carbon dioxide emissions: steel, concrete and chemicals. Part of the challenge of decarbonizing these sectors is that they require high temperature process heat, which fossil fuels can do well.

Two forces are ready to make renewable thermal options competitive.

First, solar and wind are cheap and are getting cheaper faster than the energy outlook predicted. Earlier this year, BloombergNEF updated its forecast for the price of solar to be 40% cheaper than it had expected two years earlier. It is now cheaper to build new wind or solar power plants and to operate existing coal or gas power plants in half the world.

If we are smarter about the materials and the process, we can reduce the challenge of decarbonization from the start. After all, as Lovins writes, “the materials we don’t use don’t need energy to be made or moved”.

Cheap renewable energies open up opportunities for new innovations. Green hydrogen, the process of using renewable energy to separate water that could be burned like natural gas, could be competitive by mid-century. Technological innovations, such as Heliogen’s concentrating solar panels or solar heated air, are emerging to compete with the high heat requirements of industrial heat.

These new technologies mean new markets, new jobs and new economic opportunities.

Use circular processes

Without control, cement and steel alone would burn half of the world’s carbon budget by mid-century.

But if we’re smarter about materials and processes, we can reduce the challenge of decarbonization right off the bat. After all, as Lovins writes, “the materials we don’t use need no energy to be made or moved.”

Adopting circular economy principles could save up to 37% steel, 34% cement and 56% plastic, according to a 2019 Cambridge University study. By rethinking the manufacturing process, a concept called integrative design (one of Lovins’ favorite areas) can also minimize the need for materials. According to the International Energy Agency, there is technical potential to save around 82% steel and 90% cement through systematic and comprehensive efficiency gains throughout the value chain by 2060 .

For businesses, needing less materials ultimately means saving money. To give an example, the automotive industry, efficient use of sheet steel could save a quarter of its carbon and costs.

Design smarter

Hardware innovations have the potential to reduce the need for more things in the first place.

In the case of cement, creating new buildings using high strength cement would reduce material and emissions, while reducing the number of steel rebar the building needs. Not paving the terraces would save concrete while better managing stormwater. Substituting tension for compression structures improves strength while reducing materials by 80 to 90 percent. Natural composites and cross-laminated timber can replace floor slabs and concrete beams in buildings.

All of these design innovations create value and industries. We also need a change of mentality. Today engineers and developers go unrewarded for their material efficiency, leading to overdone designs. But by adopting new, lighter, stronger materials, Lovins says the cost and emissions savings will snowball. The solution: align awareness with policy and best practices.

Here’s what I like about this article: It encourages a reframing of how we think about so many “unsolvable” issues in climate solutions. Very often, ideas get stuck on immediate obstacles and ignore the broader benefits. We might all benefit from envisioning the version of a better world before we focus on the intricacies of getting there.

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