Heavy energy-reliant industries face a €20 billion reduction in CO2 emissions

Heavy energy-reliant industries face a €20 billion reduction in CO2 emissions

Italy Accelerates Decarbonization Efforts to Align with European Goals

Italy is taking bold steps to decarbonize its economy, particularly in the hard-to-abate sectors such as ceramics, chemicals, cement, and steel. The country has allocated new funds totaling 1.99 billion euros to support the development of biomethane, and is focusing on accelerating the timelines for CO2 capture, use, and storage (CCUS) and the production of direct reduced iron.

The decarbonization process is estimated to cost around 20 billion euros by 2030, up from the initial estimate of 15 billion euros. Projects such as carbon capture and storage (CCS) require large-scale investments, with Eni's carbon capture projects aiming to capture and store 29 million tonnes of CO₂ annually by 2030.

Despite the increased cost, the potential benefits of decarbonization are significant. Successful deployment of CCS and renewable energy integration could reduce emissions sharply, making regions like Ravenna a major CO₂ storage hub, contributing to national and European climate targets. Decarbonization also promises to position companies competitively in emerging green markets, attracting investments like those from BlackRock and infrastructure funds.

Companies that maintain the status quo and do not pursue decarbonization face increasingly severe consequences. These include rising costs from carbon pricing and regulatory measures, loss of competitiveness, and the risk of stranded assets due to shifts in technology and policy favoring decarbonization.

In Italy, hard-to-abate sectors account for approximately 64% of total direct Scope 1 emissions and around 18% when considering Scope 2 emissions. Companies opting for the status quo face an estimated annual cost of 3.5 billion euros by 2030 due to lost sales, certificate purchases, and increased CO2 certificate prices.

Regulation introducing an incentive system for the use of alternative energy sources and fuels, particularly for the industrial sector, could further facilitate the decarbonization process in Italy. The country is already supporting several hydrogen projects, but stimulating demand, particularly in the industrial sector, is crucial.

The main levers for achieving climate neutrality include electrification of processes, use of green fuels, digitization of processes, energy efficiency in energy-intensive businesses, and the circular economy. The operating costs of traditional plants and new innovative production setups have become closer due to the increase in energy prices, making the transition to cleaner technologies more economically viable.

In summary, decarbonizing hard-to-abate sectors in Italy is costly but essential and economically advantageous. Failure to act risks significant financial and reputational damage. Italy is committed to meeting its climate goals and is taking proactive steps to accelerate its decarbonization efforts.

Sources:

1. European Commission
2. International Energy Agency
3. Eni
4. World Resources Institute
5. International Renewable Energy Agency
6. Environmental science plays a crucial role in spearheading Italy's decarbonization process, particularly in analyzing and proposing strategies for hard-to-abate sectors.
7. In the pursuit of decarbonization, environmental-science researchers in Italy are focusing on optimal combinations of technology, such as carbon capture and storage (CCS), renewable energy, and energy efficiency, to reduce Italy's carbon footprint.
8. As Italy strives to align with European climate-change goals, the finance industry is taking notice, with influential institutions like BlackRock investing in innovative, decarbonized energy companies as they position themselves for the transition towards a low-carbon future.

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