{"id":17279,"date":"2026-02-19T13:06:01","date_gmt":"2026-02-19T12:06:01","guid":{"rendered":"https:\/\/it-u.at\/?post_type=research-project&#038;p=17279"},"modified":"2026-02-19T13:06:02","modified_gmt":"2026-02-19T12:06:02","slug":"global-industry-transformation-redirecting-investments-toward-climate-neutral-processes","status":"publish","type":"research-project","link":"https:\/\/it-u.at\/en\/research\/research-groups\/energy-transition-and-climate-futures\/projects\/global-industry-transformation-redirecting-investments-toward-climate-neutral-processes\/","title":{"rendered":"Global industry transformation: redirecting investments toward climate-neutral processes"},"content":{"rendered":"\n<p>The transformation of industry\u2014especially basic materials such as steel, cement, chemicals, and aluminium\u2014is a crucial bottleneck on the path to climate neutrality. Over recent decades, efficiency gains have not kept pace with rising demands: the<strong> GHG intensities of major basic materials have nearly stagnated,<\/strong> while demand has continued to grow. As a result, <strong>industry emissions have increased faster since 2000 than emissions in any other sector<\/strong>, and when indirect emissions from electricity and heat are included, industry accounts for <strong>around one-third of global GHG emissions<\/strong>.<\/p>\n\n\n\n<p>Reaching climate-neutral basic materials therefore requires going beyond incremental improvements such as energy efficiency. It calls for <strong>demand-side strategies<\/strong> (material efficiency, longer product lifetimes, reuse, recycling, circular economy) alongside <strong>supply-side transformation<\/strong> toward fundamentally new production processes\u2014and the rapid build-out of enabling systems such as <strong>low-carbon electricity and hydrogen<\/strong>, as well as <strong>CO\u2082 transport and storage and expanded electricity and hydrogen infrastructure<\/strong>. The urgency is heightened by the sector\u2019s investment inertia: industrial facilities are <strong>capital-intensive and long-lived<\/strong>, creating a significant risk of fossil-carbon lock-in unless near-term investments shift decisively toward low-emission options.<\/p>\n\n\n\n<p><a>We analyse both supply- and demand-side transformation together with researchers at the Potsdam Institute for Climate Impact Research (PIK).<\/a><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"613\" height=\"283\" src=\"https:\/\/it-u.at\/wp-content\/uploads\/2026\/02\/19\/figureed1_modified1.svg\" alt=\"\" class=\"wp-image-17280\"><\/figure>\n\n\n\n\n<p><em>Global steel production by route and transition levers (2025\u20132070). Stacked areas show annual global steel output (Mt\/yr) across major production routes under three scenarios: Current Policies<\/em><em> (no additional climate policy)<\/em><em>, Transition with lock-in<\/em><em> (based on coal-based steel plants planned today)<\/em><em>, and Fast transition<\/em><em> (averting the lock-in through early investments into direct-reduction shaft furnaces: <\/em><em>DRI\u2013EAF<\/em><em>). <\/em><strong>Based on a paper in review:<\/strong> Bachorz et al. (2026) <em>Averting the steel carbon lock-in through strategic green investments<\/em> (preprint), DOI: 10.21203\/rs.3.rs-8435240\/v1.<\/p>\n\n\n\n<p>A concrete example is our recent work on the global steel sector (currently under review). Combining plant-level asset data with scenario analysis, we quantify how today\u2019s capacity and project pipeline translate into <em>committed<\/em> future emissions. We show that existing and planned coal-based steel plants could commit the world to <strong>nearly 60 Gt CO\u2082<\/strong> through 2070\u2014and that lock-in could rise to <strong>~115 Gt CO\u2082<\/strong> if current investment trends continue beyond currently announced plans. Importantly, we find that <strong>around 60% of this lock-in can be avoided<\/strong> at <strong>moderate average abatement costs (~US$100\u2013150 per tCO\u2082)<\/strong> through timely, strategic green investments into hydrogen-based primary steel making. In India alone, <strong>~22 Gt CO\u2082<\/strong> of future emissions could be avoided by redirecting <strong>~US$50 billion this decade<\/strong> toward <strong>hydrogen-ready DRI\u2013EAF<\/strong> capacity\u2014illustrating how targeted policy and climate finance can unlock early investment decisions and accelerate diffusion.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"435\" src=\"https:\/\/it-u.at\/wp-content\/uploads\/2026\/02\/19\/mfa_example-1024x435.png\" alt=\"\" class=\"wp-image-17282\" srcset=\"https:\/\/it-u.at\/wp-content\/uploads\/2026\/02\/19\/mfa_example-1024x435.png 1024w, https:\/\/it-u.at\/wp-content\/uploads\/2026\/02\/19\/mfa_example-300x127.png 300w, https:\/\/it-u.at\/wp-content\/uploads\/2026\/02\/19\/mfa_example-768x326.png 768w, https:\/\/it-u.at\/wp-content\/uploads\/2026\/02\/19\/mfa_example.png 1429w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n\n<p><em>Global material flows for steel in 2022 (iron flows only), resolved into production, use, recycling\/scrap treatment, and losses &amp; waste.<\/em><\/p>\n\n\n\n<p>Another key low-emission steelmaking option is to increase scrap-based secondary steel instead of primary steel (orange area in the figure above). However, this circular route is constrained by scrap quality (impurities in recycled steel) and scrap availability. To quantify these constraints and the underlying dynamics of scrap availability and trade, we use a <strong>dynamic material-flow analysis (MFA)<\/strong> for steel (based on the <a href=\"https:\/\/remind-mfa.readthedocs.io\/en\/latest\/steel\/\">REMIND-MFA framework<\/a>), implemented with <a href=\"https:\/\/flodym.readthedocs.io\/en\/latest\/\">flodym<\/a>\u2014a new open-source library we are developing as a next step beyond the established <strong>ODYM<\/strong> framework. The MFA resolves steel\u2019s full life cycle from <strong>iron ore extraction and primary production<\/strong> to <strong>manufacturing, use, end-of-life, recycling, and the scrap market<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The transformation of industry\u2014especially basic materials such as steel, cement, chemicals, and aluminium\u2014is a crucial bottleneck on the path to climate neutrality. Over recent decades, efficiency gains have not kept pace with rising demands: the GHG intensities of major basic materials have nearly stagnated, while demand has continued to grow. As a result, industry emissions [&hellip;]<\/p>\n","protected":false},"featured_media":17282,"template":"","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Global industry transformation: redirecting investments toward climate-neutral processes | IT:U<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/it-u.at\/en\/research\/research-groups\/energy-transition-and-climate-futures\/projects\/global-industry-transformation-redirecting-investments-toward-climate-neutral-processes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Global industry transformation: redirecting investments toward climate-neutral processes | IT:U\" \/>\n<meta property=\"og:description\" content=\"The transformation of industry\u2014especially basic materials such as steel, cement, chemicals, and aluminium\u2014is a crucial bottleneck on the path to climate neutrality. Over recent decades, efficiency gains have not kept pace with rising demands: the GHG intensities of major basic materials have nearly stagnated, while demand has continued to grow. 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