IEA proposes approaches to curb greenhouse gas emissions in the key sectors, industry and power

“In the global fight against climate change, the industry and power sectors both play a key role,” said Nobuo Tanaka, Executive Director of the International Energy Agency (IEA) today in Paris.

“Industry is one of the largest users of electricity, and together, both sectors account for almost two-thirds of global energy-related CO2 emissions,” Mr. Tanaka stressed at the launch of two new IEA publications: Energy Technology Transitions for Industry – Strategies for the next industrial revolution and Sectoral approaches in electricity – Building bridges to a safe climate. “Decarbonising the power sector and reducing the CO2 intensity of key sectors such as iron and steel, cement, paper, chemicals and petrochemicals, as well as aluminium will be critical to achieve the ambitious targets for halving global CO₂ emissions by 2050,” he added. “The task is huge and requires nothing short of a low-carbon industrial revolution. Solutions exist but cannot be achieved overnight. Urgent action is needed, and our two new publications plot the course.”

Industry: applying existing and new technologies worldwide is key
In the industry sector alone, implementing today’s best available technology worldwide, would already reduce energy use by 20% to 30%. However, this measure alone will not be sufficient to curb emissions, as global energy demand is expected to more than double by 2050. To realise significant emissions reductions in the long term, a wide range of new technologies, including carbon capture and storage (CCS) in industry, will need to be developed and widely deployed. Engaging developing countries and their industries in this transition will be a top priority as most future growth in CO₂ emissions will be in these countries.

“I welcome the fact that a number of regional and international industrial associations have started to examine options available to them to reduce their CO₂ intensity,” Mr. Tanaka said. “Nevertheless, additional international co-operative efforts involving both governments and industry are needed. We reaffirm our commitment to work closer with key stakeholders to identify a more sustainable path forward.” The IEA will soon release a technology roadmap for the cement sector which was developed in collaboration with the World Business Council for Sustainable Development.

Electricity must be decarbonised, especially outside OECD, to avoid “lock-in”
To realise the necessary CO₂ reductions in industry, decarbonising the power sector is critical. Since it is still mostly generated from fossil fuels, electricity is at the core of the world wide climate challenge, causing 41% of global energy-related CO₂ emissions. Growth in power demand is particularly high in the developing world, and this increases the risk of practically irreversible investment in CO₂-intensive electricity generation capacity (the so-called carbon lock-in). If the power sector in the developing world grows without any regard for climate change, it could alone threaten the world’s capacity to stabilise climate. “Power generation CO₂ emissions outside OECD have grown by 90% since 1990, and are on a path to double from today’s level by 2030; this is highly unsustainable from a climate perspective and collective action is needed now,” Mr. Tanaka declared.

Sectoral approaches in electricity – Building bridges to a safe climate connects this threat with decisions that international climate negotiations will need to make at the UN climate change conference in Copenhagen in December 2009. “We need a two-tiered sectoral approach to this problem in the medium term: a strong signal to investors in power generation to promote less carbon-intensive technology, and ambitious new policies to push for a more efficient use of electricity,” Mr. Tanaka said. The Kyoto Protocol has fostered some cleaner investments in developing countries’ electricity sector but this is far from enough, and a vast potential for cost-effective energy efficiency improvements remains untapped on the demand side.

“The climate negotiators must therefore see the electricity sector as a priority, and set up mechanisms to support effective efforts in developing countries. These mechanisms could rely on a broader access to the “carbon market”, to introduce a price on CO₂ emissions and create incentives for most efficient and low-CO₂ generation technologies. This includes carbon capture and storage or nuclear. These technologies are currently not allowed to contribute to carbon market projects in developing countries,” said Mr. Tanaka. The IEA provides practical recommendations on this front.

Further, much effort is needed internationally to share and transfer best policy practice. China, India, Mexico and South Africa have adopted policies or launched processes that go in the right direction – from an expansion of renewables and nuclear, to more ambitious energy efficiency policies and even plans for domestic emissions trading systems. This book deals with the critical question: how to encourage countries to go farther and faster towards curbing demand growth and decarbonising power generation, when they have abundant fossil fuel resources at their disposal.