Industrial

clusters
Working together to achieve net zero
In collaboration with
the World Economic
Forum
Content
s04 16
Executive Summary Spotlight on Clusters
35
Solution Areas to
Reduce Industrial
17 Suzhou Industrial
Emissions
Park 25 Humber 35 Systemic
Efficiency and
Circularity
45
Direct Electrification

and Renewable
Heat

56 Hydrogen

65 Carbon Capture,
Contributors
We would like to extend our gratitude to the knowledge partners that have played a vital role with their insightful,
informative contributions. Over the course of our research, we held several interviews and discussions with the following
companies that challenged our thought process, inspired our solutions and improved our understanding of the complex
topics at hand:

Acciona Drax
National Grid Ventures
Energia
Admin. Committee of Suzhou Industrial DTEK
National Renewable
Park
Asian Development EDF Energy Laboratory (NREL)
Bank Energy
Agora Energiewende Enel Ørsted

Asia Pacific Urban Energy Enesource Peak Energy

Association AG
BASF Envision Port of
Digital Rotterdam
UK Government Department for Equinor RMI
Business, Energy & Industrial Strategy
Everbright Environment Saipem
Borealis
Fortia SCG
British Steel Energia
Global CCS Institute Schneider Electric
Chinese Academy of Social
Heliogen Sempra
Sciences
China Association of Plant Energy
Hitachi ABB Power SSE
Engineering Consultants
Grids Thermal
Iberdrola/Scottish Power Renewables Vattenfall
China Institute for Studies in Energy Policy
– L’Oréal
Xiamen University
Executive
Summary
Industrial Clusters: The Net-Zero
Challenge
According to the United Nations, almost 70% of the global economy will have committed to net zero in
2021. To fulfill these commitments, demand centers such as cities and industrial clusters need to play a key
role.
With industry responsible for 30% of total
Net-zero emissions targets by 2 0 5 0 / 2 0 6 0 Demand centers will play a key role global CO 2 emissions, industrial clusters will be
in achieving targets a critical player in accelerating the path to net
zero.
By law Industrial Clusters
Industrial CO 2 emissions are considered some of the
most difficult to abate on the path to a net-zero future.
There are many existing initiatives and papers
dedicated to reducing industry emissions, focusing on
specific technologies or sectors. While these efforts
are important and welcome, what is lacking is an
emphasis on an integrated approach across sectors.
Proposed Legislation
Industrial Clusters, geographic areas where industries
are co-located, provide opportunities for scale,
sharing of risk and resources, aggregation and
optimization of demand.
Cities
This report recommends a multi-stakeholder,
integrated approach toward a net-zero future for
In-Policy Document
industrial clusters. We have identified four solutions
•that can helpEfficiency
Systemic lower emissions:
and Circularity
• Direct Electrification and Renewable
Heat
• Hydrogen
• Carbon Capture, Utilization and Storage
Implementing these solutions is more impactful when
pursued through a cross-sectoral, multi-stakeholder
Non-exhaustive approach, where different industries within a cluster
can create synergies.
Global Energy Consumption from
Industry
An industrial cluster can consist of both heavy industry (such as iron and steel) and light industry (such as food and
machinery). Approximately half of industrial emissions come from light industries that are less energy-intensive and easier to
abate.

Global Final Energy Consumption for Industry Global Energy Consumption by Sector (IEA, 2018 data)
Iron and Steel 1% 63% 12% 1% 3%
(IEA, 2018 data, MTOE) 21%

Chemicals and Petrochemicals 11% 20% 31% 0% 24% 13%

Non-Ferrous Metals 3% 17% 12% 65% 3%

Non-Metallic Minerals 10% 56% 16% 3% 14% 1%

Transport Equipment 4% 4% 28% 0% 55% 9%

Machinery 4% 5% 21% 0% 66% 3%

Mining and Quarrying 32% 8% 12% 0 % 45% 3%

Food and Tobacco 5% 15% 28% 18% 26% 7%

Paper Pulp and Print 2 9% 15% 40% 26% 8%

%

Wood and Wood Products 7% 4% 11% 32% 36% 11%

Construction 52% 6% 14% 1% 25% 1%

Textile and Leather 5% 14% 16% 2% 48% 16%

Non-Specified 1% 26% 18% 19% 0% 1%

36%

Oil Coal Heat

Biofuels and Waste
Oil Products Natural Gas
Electricity
MTOE = millions of tonnes of oil
equivalent
Industrial Emissions Abatement by the
Numbers
While industry faces several challenges on the path to net zero, there are also sizeable economic
opportunities from investments in low-carbon technologies.

~37% ~11 GT Up to 2-3x

The industrial sector
accounted for 37% of CO 2 Increase in current carbon price from
current levels (€24 average in 2020) to
total global final as high as ~€89 2 in Europe by 2030 to
Industrial emissions
Challenge energy use in 2018 represent 30% of GHG
support zero-carbon investments
emissions globally

$40 ~40% ~$175 9 0 0 MT

billion billion
Industrial emissions by Captured global
2050 can be abated emissions by 2030
Global investments in via electrification of Estimated global from carbon capture
industrial efficiency, light industries using hydrogen and storage (CCS)
with China and North commercially available market value in
Opportunity America accounting for technology 2019
approximately 47% in
2018
Notes: (1) Monetary figures refer to USD unless otherwise stated; (2) High end of forecasts from a group of analysts including BNEF, Refinitiv, Energy Aspects,
etc.
Net-zero Solutions for Industrial
Clusters
There is a menu of abatement opportunities, and a holistic approach to industrial clusters is required to
optimize emissions solutions and create an integrated energy system that maximizes system value
outcomes.

Systemic Efficiency and Direct Electrification and Renewable

Circularity Heat
Increase circularity within a cluster Electrify low-to-medium temperature and
through cross-entity waste utilization pressure processes

Integrate processes within a cluster to Generate low-cost, renewable electricity and heat onsite
share energy and material streams (e.g., rooftop solar, biomass, concentrated solar
Co-located group power)
Provide cost-effective system
of industries
Pursue shared infrastructure (e.g., microgrid,
benefits outside the cluster storage, flexibility)
Increased
digitalization and
Chemicals stakeholder Cement
collaboration
Hydrogen Carbon Capture, Utilization and
Storage
Leverage electricity and heat from nearby zero-
carbon sources (wind, solar, nuclear, biomass)
Manufacturing Ports
Capture carbon from energy and
(CCUS)
hydrogen production
Produce low-to-zero carbon hydrogen from the Steel
most economical source (e.g., blue, green)
Use captured carbon for industrial and
manufacturing processes
Use produced hydrogen as an alternative fuel
for hard-to-electrify industrial processes,
building heating and transport Store carbon underground where feasible
Industrial Cluster
Characteristics
Industrial clusters can differ significantly in their foundational characteristics, which influence the
applicability, impact and economic feasibility of potential solutions for reducing their emissions.

Industrial Cluster Foundational Characteristics

Industry composition Geography Existing infrastructure Energy costs and policy

Characteristics specific to each Some clusters will be able to take The presence and quality of existing The cost profile and policy related to
industry within a cluster will influence advantage of their surroundings to infrastructure and assets can enable or fossil energy and electricity can
feasibility or economics of potential pursue specific solutions such as CCS block solution viability for clusters significantly influence decision-making
solutions and water cooling
What infrastructure currently exists that Is electrification a cost-effective
Can waste by-products of one facility Is the cluster located close to CO2 can be leveraged or repurposed? Are solution? Is policy and regulatory
be used by another? Are industrial geological storage sites? Near urban assets nearing end of life and need support needed to make solutions cost-
processes low or high temperature, centers to connect into district replacement? competitive?
pressure? heat networks?

Spotlight on Suzhou Industrial Park, Spotlight on Humber,

•China
Mostly lighter industry with low process heat requirement, e.g., electronics and light •UKMostly heavy industry with high temperature processes and hard-to-abate emissions,
manufacturing e.g., steel, refining
• Inland region near metropolitan area • Close to large-scale saline aquifers suitable for CO2 storage and abundant offshore
• Minimal existing infrastructure for repurposing wind resource
• General government support for industrial emissions reduction initiatives • Located near large offshore wind farms and natural gas pipelines
• Government funding, commercial and regulatory support for carbon capture and
Outcome hydrogen development
Emissions reduction focus on systemic efficiency, circularity and electrification with
zero-carbon power sources Outcome
Emissions reduction focus on development of hydrogen (green and blue) and CCS
infrastructure
Maximizing System Value Through
Clusters
Industrial clusters need to select the solutions that maximize system value beyond GHG emissions, pursuing
collaborative actions that improve outcomes across the economy, the environment, society and the energy
system.
Decreased coal and natural Waste heat usage and direct Net-zero clusters can attract
gas combustion in clusters will electrification (e.g., industrial heat foreign companies and investment
improve air quality of nearby pumps) can increase energy to benefit from the cluster’s
Carbon abatement communities productivity and systemic efficiency integrated partnership approach
efforts through
hydrogen and CCUS
Industrial clusters can provide
in Europe have the
demand optimization
potential to create
capabilities for the larger energy
upwards of 900K
system through hydrogen
incremental jobs Air Quality and Foreign Direct production and storage
through 2030 Health Investment

Energy
Jobs and
Productivity Smart
Economic
and Systemic Flexibility
Europe has the Impact
Efficiency
potential to cut
industrial emissions by GHG Equitable Reliability and System
up to ~40% by 2030 Emissions Access Service Upgrade
by pursuing systemic to Quality
Cost and
Electricity Green hydrogen
efficiency, direct Water Investment
Resiliency and
electrification and Footprint Security
Competitiveness production can smooth
renewable heat, wind and solar variability
hydrogen and CCUS by diverting generation
and integrate/optimize the
electricity and gas
Increased domestic energy use An integrated approach to infrastructures
(electricity, hydrogen production) lowering emissions in industrial
decreases reliance on foreign fossil clusters reduces overall
fuel resources, reducing supply risks energy needs and cost

Note: Above hexagons represent desired outcomes; specific applicability and importance of each element may vary by market and timeframe of analysis.
Emissions Reduction Potential by
2030*
A combination of solutions—systemic efficiency, electrification, hydrogen and CCUS—have the
potential to reduce industrial GHG emissions footprint by up to 40% (from 2019 base) by 2030.*
*Analysis based on
EU

Systemic Efficiency and Direct Electrification and Renewable

Circularity Heat

Up to 15% Up to
Estimated industrial GHG emissions
reduction that can be achieved by 2030
GHG emissions savings can be achieved with adoption Co-located group
15%
GHG emissions savings from electrifying
of leading practices such as cogeneration, increased of industries Estimated industrial
low-to-medium GHG emissions
temperature processes
recycling, energy recovery and process integration. reduction that can available
via commercially be achieved by
technology.
2030
Increased
digitalization and
Chemicals stakeholder Cement
Hydrogen collaboration Carbon Capture, Utilization and
Storage
Up to 10% Manufacturing Ports
(CCUS)

Up to
Estimated industrial GHG emissions
reduction that can be achieved by 2030
Steel
Green hydrogen production and import for
industrial use in Europe is projected to be
approximately 7.4 Mt in 2030.
3%
According to the IEA, CO 2 capture is projected to rise to 30-
35 Mt by 2030Estimated
in Europe.industrial
This figure includes
GHG blue
emissions
hydrogen production and that
reduction direct capture
can from industrial
be achieved by
2030 processes.
Will be increasingly important beyond 2 0 3 0 as infrastructure Will be increasingly important beyond 2 0 3 0 as infrastructure
matures matures
Note: Emissions savings from blue hydrogen are captured in CCS.
Applying the
Framework
We highlight two spotlight cluster case studies and several smaller case studies to illustrate how the solution areas in Systemic
Efficiency and Circularity, Direct Electrification and Renewable Heat, Hydrogen and Carbon Capture, Utilization and Storage
have been applied to reduce emissions and maximize system value.

Framework
Systemic Direct Electrification Hydrogen Carbon Capture,
Solution Efficiency and and Renewable Utilization and Storage
Circularity Heat (CCUS)
Cross-industry Waste Electrifying Process Puertollano Green
Symbiosis Heating Hydrogen Port of Rotterdam

Renewable Power for

Digital Waste Management Majorca Green Hydrogen
Aluminum Production

Case Circularity – Meishan

Electrification of
Nuclear to Hydrogen
Agricultural Chain

Studies
Industrial Symbiosis Microgrid Biomass to Hydrogen

Waste Heat from

Solar Thermal Solution
Nuclear

Spotlight
Suzhou In d trial Park Humb e side
u r
Clusters s
Enablers and Risks for Net-Zero
Clusters
In all spotlight clusters and case studies, a mix of supportive policies, available financing and incentives and, increasingly, cost-
competitive technologies were required. Further development in these areas is needed to reduce risks and accelerate the path toward
net zero.

Policy support Enablers Policy risks

Risks
• Negative value on CO 2 – High carbon pricing, carbon border adjustments and • Changes in government and/or specific policies toward climate targets and
other regulatory support measures such as subsidies and tax are recognized as associated regulations can negatively influence much needed investment
effective tools for improving the economics of emissions reduction initiatives. confidence by adding instability and uncertainty for the long-term
• Energy market reform – To value and support the development, production and financial viability for low-carbon investments.
use of alternatives to unabated fossil fuels.
• Path to sustainable commercial models – Clear roadmaps with achievable Investment risk
milestones and commercial frameworks conducive to adoption of low-carbon • Lack of clarity or suitability over sustainable business models (e.g., regulated
technologies and sustainable business models. asset base, contract for differences payments) for low-carbon technologies that
require scale and significant upfront infrastructure investment, such as hydrogen
Financing of investments pipelines, could deter interest from prevent private industry and delay path to
• Government commitment of capital for infrastructure development to net-zero emissions.
demonstrate intent and provide certainty to private industry and investors.
• Funding commitments and shareholder activism from long-term institutional Stranded assets
investors (pension/sovereign wealth) driven by customer/LP pressure to invest in • Rapid policy changes as opposed to a phased-out approach for older assets
sustainability-related sectors and influence industrial and energy companies to without carbon-mitigation potential could lead to accumulation of stranded
pursue sustainability-linked initiatives. assets, which could have wider economic consequences on jobs, health of
• Risk-sharing contracting models and cluster-level markets that support private industry and financial institutions.
long- term offtake and supply commitments and integration of processes.

Technology
• Electrification of low-to-medium temperature processes in light industries using
commercially available technology.
• Cross-sector funding of R&D facilities to unlock new technical and digital
capabilities.
• Ongoing reduction in cost curve of low-carbon technologies such as
renewables, electrolyzers, CCUS, industrial process efficiency and electrification.
Opportunities Through
Collaboration
Through multi-stakeholder collaboration, industrial clusters provide the opportunity to create system value and not only help
reduce emissions, but also help deliver economic benefits in terms of job creation and health benefits from better air
quality.
Industrial R&D Innovation Energy
Governments Financiers
Companies and Digital Companies
Services

• Reduce emissions to avoid • Governments can demonstrate • Patents and published • Increased visibility on industrial • Fulfill climate commitments
potential carbon taxes global leadership in taking academic literature demand for different sources of and pledges to shareholders
and associated financial decisive actions to achieve net- demonstrating reduction of energy to aid CapEx planning and by expanding scope of ESG
Value Opportunity

consequences. zero emissions targets. cost curves and improvement strategic outlook for energy asset class via investments in
of efficiency for key companies. low-carbon infrastructure for
• Business opportunity • Exporting knowledge of policy technologies, e.g., new technologies such as CCS
through development of frameworks, commercial models • Potential for expansion of
electrolyzers, AMR. business lines and/or products and hydrogen.
premium and infrastructure for low-
• Development of commercial (e.g., new class of utility business
low-carbon products (e.g., carbon technology.
frameworks and suitable to include CO2 transport, storage).
zero-carbon steel or • Unlocking system value business models to enable
cement) attractive to • Significant expansion of
benefits such as job adoption of low-carbon renewables , demand
customers in domestic creation, improved air industrial initiatives. optimization and integrated
and/or international markets. quality linked health energy management services.
benefits, GHG emissions
reduction.

• Broad-based collaboration • Government can commit • Cross-sectoral platforms • Leadership from power • Willingness to commit capital
within and across industries, as capital toward infrastructure including academia, generation and utility with the purpose of developing
well as with government and support business models to government and industry. companies to actively cross-sector, low-carbon
What’s Needed

stakeholders. reduce risk for private industry • Allocation of resources for collaborate with industrial infrastructure projects.
by creating a financial further research and innovation demand centers to integrate • Shareholder activism to
• Commitment of capital,
environment that supports in the energy transition space. low-carbon sources of energy encourage investee companies
willingness to share resources into the overall system.
and development of structured achieving net-zero targets, • Cross-sector funding of R&D to pursue initiatives to reduce
including through the creation facilities to unlock new • Commitment of capital and emissions.
plans to match emissions
of subsidies and tax credits. technical and digital resources to develop new
reduction ambition. Companies
capabilities. integrated energy systems at
must have “skin in the game,” scale.
i.e., capital at risk, in order to
see material progress.
Actions to Accelerate Net-Zero
Clusters
Collaboration between government and industry is critical to develop and implement roadmaps
on a cluster-by-cluster basis to reduce industrial emissions and achieve net-zero targets.

Options for Government Actions for Industry

Policy Support Cross-sectoral Collaboration
• Set binding commitments for industrial clusters to • Build trust among cluster partners by forming working
achieve net-zero emissions within a specified time frame. groups with representatives from all stakeholders—industrial
• Develop alternative economic models to support low- partners, government representatives, financiers, etc.
carbon infrastructure, e.g., contract for difference (CFD) • Assess the concentration of industry within the geographic
payments. region and understanding the diverse set of needs (e.g.,
• Support for R&D investment into emissions reduction fuel requirements for industrial processes) within the group.
initiatives, e.g., tax deductions, U.S. President Biden’s ARPA-C • Align on common goals (e.g., scale net-zero technologies,
proposal, partnerships with national labs. deploy digital services, etc.) and develop cluster-
Financial Support specific roadmaps to achieve net-zero targets by a
• target year.
Incentives such as tax credits (e.g., PTC/ITC in United States) or
avoidance charges (carbon tax, carbon border adjustment) to Public-Private • Develop commercial models and risk-sharing initiatives
such as joint venture formation, public-private partnerships,
encourage investment into GHG-abatement initiatives.
• Financial support in the form of loans and grants for Cooperation long-term power purchase agreements (PPAs) and take-or-
pay agreements that help accelerate implementation of
development expenditure to technologies with no
roadmaps.
immediate financial attractiveness, e.g., CCUS.

Infrastructure Support
• Leverage existing infrastructure for emissions reduction
solutions, such as natural gas lines and storage that can be
adapted to hydrogen or hydrogen blending and oil and
gas reservoirs that can be used for CO2 storage.
Spotlight on Clusters:
Suzhou Industrial
Park
China’s Industrial Parks
Policy Targets
• Peak CO 2 emissions by 2030 and carbon neutrality by 2060.
• As part of the 13th Five-Year Plan for Controlling Greenhouse Gas Emissions, China has highlighted near-zero-carbon
zones as one of the key policies to achieve reductions, including a specific call for 5 0 near-zero-carbon zones by 2 0 5 0 .
• Since 2013, China has been developing the pilot project of low-carbon industrial clusters. The project has included
52 industrial clusters; Suzhou industrial cluster is among the first wave.

Commitments and Considerations

• Since 2014, the Administration Committee of Suzhou Industrial Park (SIPAC) has started a three-year action plan
to close substandard enterprises and eliminate outdated production capacity in the cluster. So far, 41
noncompliant enterprises have been shut down.
• Since 2014, SIPAC has established the decarbonization target responsibility assessment and evaluation system.
The cluster signed target-oriented responsibility contracts with major coal-consuming enterprises to reduce the
total coal consumption year by year.
• In 2016, the Environmental Protection Agency of Suzhou Industrial Cluster has developed an energy and
carbon- emission management platform in cooperation with Tsinghua University to achieve data integration,
visualization and monitoring. The platform has connected more than 200 enterprises and received energy
consumption data uploaded by 13 public building projects.
• In 2017, SIPAC established the green credits providing loans to projects offering energy savings or
emission reductions, with a 10 million RMB risk compensation capital pool.
• In 2019, SIPAC published the policy Management of Special Funds for Green Development, which guaranteed
to begin subsidies to established distributed gas turbine and energy storage projects with 0.3 RMB per kWh of
electricity generated until 2022.
Case Study: Suzhou Industrial Net Zero Framework Focus
Areas

Park
The industrial cluster at Suzhou, Suzhou Industrial Park, is pursuing steps to achieve
carbon neutrality through systemic efficiency and shared energy and resource Systemic
Efficiency and
Direct
Electrification and
infrastructure. Circularity Renewable Heat

Overview
• China’s Suzhou Industrial Park (SIP) was established in April 1994 as a
collaboration between China and Singapore, covering a total area of 278 km 2
near Shanghai. Carbon Capture,
Hydrogen Utilization and
• Accounting for more than 3% of the city of Suzhou’s area, the cluster contributes Storage (CCUS)
more
than 13% of city of Suzhou’s GDP.
• The two largest industries are electronics and high-end equipment manufacturing
($10 billion+ industries). Additionally, three strategic emerging industries in SIP are
bio- medicine, nanotechnology and cloud computing ($1 billion - $110 billion
industries). Trend in energy consumption (TWh) and
emissions
intensity (tCO2 /$K) in Suzhou Industrial
• While total energy consumption has been increasing, energy consumption per unit
of GDP has dropped by 10.3% over the past four years. Likewise, emissions
Park
Emissions Reduction
intensity relative to GDP hasTargets
dropped and
over this time period.
TWh tCO 2 /$K
60 0.35
Initiatives
• SIP’s CO 2 emissions are also expected to peak by 2 0 2 0 (11.7 million
50 49 51 53
46 0.30
tonnes) and become carbon neutral by 2050.
40
• Clean energy represents more than 75% of energy usage in SIP, the 0.25
30
largest share among all national development zones in China. 20
0.20
• Four key projects implemented in the SIP’s carbon abatement push: 10 0.15
1. Circularity of industrial by-products and waste 0 0.10
2016 2017 2018 2019
2. Distributed clean energy microgrid
Emissions (tCO2/$K) Energy Consumption (TWh)
3. Ubiquitous IoT service platform
4. Integrated green transport system

Note: Exchange rate of $1 to ¥6.54

Circularity of Industrial By-products and
Waste
Suzhou Industrial Park is a leader in systemic efficiency through circularity of industrial waste and by-
products.

Suzhou Industrial Park’s Key Takeaways of Circular

Circularity of Industrial Model
• Through planning and construction of infrastructure, the cluster
Byproducts has formed a circular industrial chain to maximize reuse of
Waste heat steam Electricity generation by- products such as heat and sludge and produce biogas
used for anaerobic and biomass fuel.
Purify fermentation Incineration
biogas to ash used as • There are two sewage treatment plants in SIP and its daily
merge into construction
gas network materials
processing capacity is up to 350,000 tonnes. Meanwhile, the
Biomass fuel sludge drying plant can process about 5 0 0 tonnes of sludge
Waste treatment plant Waste incineration each day.
for kitchen/greening power plant
waste • By connecting infrastructure and supply chains, the cluster
collectively saves resources and energy, resulting in
Waste heat
environmental, economic and social benefits.
Biogas Reclaimed Dry sludge
steam used • Each ton of kitchen waste processed can reduce about
water used as
to dry sludge
slurry fuel 0.75 tonnes of CO 2
• Natural gas produced from biogas purification can reduce
Wet sludge and 8 , 0 0 0 tonnes of CO 2 each year
reclaimed
water • Dry sludge and biomass resulting from anaerobic
fermentation can be used as alternative fuels to save
Sewage
the equivalent of over 1 0 , 0 0 0 tonnes of standard
Sewage treatment Sludge drying coal
plants plants
Distributed Clean Energy Microgrid
Project
Suzhou Industrial Park features a “six-in-one” distributed clean energy microgrid
system that helps improve systemic efficiency throughout the area.
Combined cooling,
heating and power (CCHP)

Project Overview
• A distributed microgrid currently provides up to 10% of SIP’s energy
consumption. It integrates green energy, microgrid benefits, energy
savings, and energy creation and storage.
• The system integrates several renewable energy sources and
efficient solutions:
• Combined cooling, heating and power (CCHP) Energy Wind power
End Users
storage system
• Wind power
• Solar PV
• Low-level heat
• Energy storage
• The project includes two clean energy centers, 10 microgrid systems, 100 Photovoltaic
power
distributed energy systems including 25 MW photovoltaic generation, 50
MW wind generation, 22 MW storage capacity and 1,000 EVs, forming a Ground heat pump
clean energy system that is over 1 GWh. Power Heating Cooling

Expected Future Benefits

↓ 1,10 0 3.75 GWh ↓ 40% > 50% ↓ 30%

kW Clean power Energy Emissions reduction Energy investment
consumption
Peak power load
Ubiquitous IoT Service
Platform
Suzhou Industrial Park (SIP) worked with delivery partner Enesource and AIoT platform partner Envision Digital
to create an open energy, internet-shared service hub for SIP tenants to benchmark and optimize energy
demand, reduce emissions and increase efficiency.

Project Overview Key Platform

Features
The project partners built a 4D digital energy network Stakeholder Dashboard
map for SIP, a digital twin of its physical energy system, Real-time visualization of energy production and use as well as
on a cloud-based AIoT platform. emissions across SIP. Enables monitoring and optimization of
energy consumption and energy efficiency.
This platform enables SIP to monitor the operation of its
energy system, the relationship between energy supply and Smart Park Diagnostics
demand, and asset performance. It also allows for better Solution provides energy and infrastructure alerts and alarms
energy system planning and better-informed operations to manage equipment performance, asset health and energy
and construction decisions. load optimization.

Tenant Benchmarking
Key Project
Data mining to benchmark enterprise energy usage
Outcomes performance, providing suggestions for energy-efficiency
The platform integrates real-time data across
10,0 0 0+ devices, 3000+ businesses and 50+ service improvement and cost reduction.
providers, processing 48 million data points daily.
Services e-Marketplace
In SIP, estimated $316 million gross merchandise B2B energy solution hub for park tenants—platform for
value prescreened energy and infrastructure solution providers in
(GMV) on the platform by 2024. SIP to sell value-added services.
It optimizes 8 GW+ of assets across SIP improving
performance and energy utilization. This has led to a more Public Data as a Service (DaaS) Portal
than 10% reduction in average energy cost and CO 2 Open data platform that turns energy IoT data into a valuable
emissions. public resource. Transparency on water, electricity, gas and
heating systems to help accelerate research and innovation.
Suzhou L’Oréal’s Path to Zero-Carbon
Factory Suzhou L'Oréal Zero-Carbon Factory: Comprehensive
Utilization of Photovoltaic System, Wind Power and
Biomass
Zero-carbon emission roadmap for L'Oréal factory

Photovoltaic and Wind Power Multiple Energy Sources Zero-Carbon Emission

2014 2018 2019

• The factory constructed a 1.5 MW distributed • • In June 2019, the factory realized its
L'Oréal and the SIP administration committee
photovoltaic power system—a national sign the “Zero-Carbon Factory” project target of carbon neutrality.
demonstration project. The system was contract.
funded by the Suzhou Ministry of Finance and
the solar panels were provided by the Suzhou • The factory cooperated with GCL Towngas
Guohua Technology Company. and established a distributed heat and power
cogeneration system, using biomass gas as
• The same year, the factory began to utilize • The factory’s CO2 emissions have been
raw material to produce steam and power.
wind power. reduced by 100% while output has
increased by 3.5 times compared to 200 5.
• Factory is now equipped with +6 , 0 0 0 solar
panels
• The PV system can generate 1.2 GWh of
power each year, accounting for 8% of the • The multi-energy supply system can generate 1.8
factory’s power consumption and reducing GWh power each year, accounting for 12% of
1,100 tonnes of CO 2 emissions annually. the factory’s power consumption.
• Wind power accounts for 80% of the factory’s
power consumption, reducing about two-
thirds of CO 2 emissions.
Integrated Green Transport in
Suzhou
Similar to a city, Suzhou Industrial Park has aimed to build a low-carbon, high-
efficiency transportation system that also provides premium commuting for citizens.

Overview of Transport System Bus Type Breakdown

• Suzhou received the “City of Public Number CO2 Emission Reduction Energy Cost Saving vs.
Transportation” award for its development Category
of Buses VS. Fuel Bus Each Year (t) Fuel Bus (%)
pattern that emphasizes clean transport while
also providing personalized, affordable Electric Bus 437 20,000 40%
travel options for citizens.
• 100% of the buses within the cluster are Plug-in Hybrid
236 4,000 32%
powered by clean energy. The full Electric Bus
replacement of fuel buses has helped reduce
CO2 emissions by about 240,000 tonnes per
year. Additional Green Transport Efforts
• There are nine bus charging stations and Bicycles
approximately 2 0 0 bus charging piles. • The cluster actively encourage citizens to commute by bike and
They cover about half of residential areas to promotes public bike services.
help encourage increased use of public • They have built 461 public bike sites and provided 15,141 bikes. These are
transportation and make commuting greener. borrowed and returned over 2 0 0 , 0 0 0 times a day (cumulatively).
• SIP has a goal to achieve 100% intelligent
transportation coverage in 2 0 23. They will Electric Vehicles
do so by accelerating the construction of • Citizens can borrow and return EVs on apps with low hourly leasing cost,
intelligent transport infrastructure and up to
information systems and investing in new $23 one day.
energy vehicles. • The service achieves zero carbon emission and is complementary to the
public
bus and bike systems, meeting citizens’ different commuting
preferences.
Suzhou Cluster System Value
Impacts
Carbon-abatement efforts around systemic efficiency and electrification at Suzhou Industrial Park have a wide range of
impacts.

11.74 MtCO 2 SIP will reach peak carbon emissions of about 11.74 million
tonnes
GHG in 2020 and achieve carbon neutrality by 2050
Emissions
24,000 The clean transportation system of SIP can reduce 24,000 tonnes of CO 2 for
SIP

tCO 2
75% The clean energy consumption rate accounts for more than 75% of consumption
in SIP, greatly reducing pollutant emissions
Air Quality
and
Health 5 0 mg/m 3 The annual average concentrations of PM2.5 and PM10 are expected to be
respectively reduced to below 50 and 70 mg/m 3 in 2020

90% More than 90% of the investment in SIP is from foreign-owned enterprises
and
more than two-thirds of the industrial output value is created by foreign
130 More than 130 Fortune 5 0 0 companies have invested in the
capital
cluster
Spotlight on
Clusters:
Humber
UK’s Industrial Clusters
Policy Targets
• National net-zero target by 2 0 5 0
• 5 GW of low carbon hydrogen production by 2030
• 10 MT of carbon captured by 2030
• Facilitate development of CCS infrastructure in at least 2 clusters by mid-2020s and another two by 2030
• Achieve net-zero emissions in at least one industrial cluster by 2 0 4 0
• Demonstrate CCS and H 2 leadership and net-zero industrial cluster ambition at COP26

Commitments and Considerations

• Invest up to £1 billion to support the establishment of CCUS in four industrial clusters.
• Establish a new UK Emissions Trading System aligned to net-zero target, giving industry confidence to invest in low-
carbon technologies.
• Detail revenue mechanisms and commercial frameworks by 2021 to attract private sector investment, encourage regional
and cross-sector collaboration between organizations, and create optimal conditions to maximize system benefits.
• The government plans to provide CAPEX co-funding for industrial CCUS to reduce cost and risk incurred by early adopters
as well as a contract for difference with a strike price per tonne of carbon abated, for an agreed duration of time after
carbon capture is operational.
• Create a new utility class for carbon transport and storage (T&S) infrastructure, given the business case for industrial CCS
near-term dependence on a high carbon price (e.g., considering regulated asset base model for CCS infrastructure).
• Financially support oversizing of T&S infrastructure for rapid onboarding of future users and to reduce cost burden on
early adopters.
• UK government’s “levelling up” agenda to ensure economic prosperity of industrial regions, with low-carbon technology
to play an important role in attracting industry, creating high skill jobs and potential for export of premium low-carbon
products.
• Create “Super Places” in areas such as the North East, the Humber, North West, Scotland and Wales to exploit geological
and geographical advantages to implement low-carbon technologies such as CCS and hydrogen.
Case study: Humber Industrial
Cluster
Multiple cross-sector projects are in progress to achieve net zero for the UK’s largest industrial cluster, primarily via hydrogen and
CCS.
Overview of the Humber Industrial 2018 Industrial Energy Consumption Net Zero Framework Focus
in the Humber and Yorkshire (GWh) Areas
Cluster
• The Humber industrial cluster in Yorkshire is the UK’s
largest cluster by industrial emissions, emitting 10 1%

million tonnes of CO 2 per year, more than 2% of the UK’s Coal and Coal-
Solid Fuels
derived
total GHG emissions. 15% Systemic Direct
Electricity Efficiency and Electrification and
• Primary industries include steel, chemicals, cement 36% Circularity Renewable Heat
and oil refineries. Petroleum Products
• Six companies contribute to 87% of “big emitter” 23%
Gas
emissions: British Steel’s coal plant (Scunthorpe), VPI
Immingham combined heat and power (CHP) plant, 25%
Bioenergy and Waste
Carbon Capture,
Saltend cogeneration plant, Phillips 66 oil refinery, Total Hydrogen Utilization and
Storage (CCUS)
Lindsey oil refinery and EP UK’s South Humber Bank
CCGT plant.
• The high concentration of heavy industry means that 6%
of England’s C&I energy use is from businesses in the Emissions Reduction
Humber region. •Projects
Three main collaborative emissions reduction projects are being conducted
• The cluster adds £18 billion annually to the UK in the Humber region:
economy, a quarter of which is related to manufacturing. 1. Zero Carbon Humber is a coalition of 12 entities collaborating on CCS
• 55,0 0 0 people are employed in manufacturing and and hydrogen infrastructure.
engineering jobs in the Humber cluster, with an additional 2. The Gigastack project is working to advance green hydrogen production
19, 0 0 0 people employed in the energy sector. in
• As many as 49,70 0 direct, indirect and induced the Humber area, utilizing offshore wind as a renewable energy source.
jobs could be created as a result of deploying CCS 3. Phillips 66, Uniper and Vitol’s VPI Immingham CHP plant have come
and hydrogen technologies in the Humber region by together to codevelop Humber Zero, a project that will integrate CCS and
2027. hydrogen technology.
Zero Carbon
Humber
Zero Carbon Humber is a coalition of 12 entities collaborating on joint CCS and hydrogen infrastructure
projects.
Zero Carbon Humber (ZCH) Map of Planned
Overview
• ZCH is aiming to establish the world’s first net-zero industrial Operations Dogger Bank

cluster by 2 0 4 0 via creation of CCS infrastructure and production of Illustrative Atwick Gas
Storage
blue and green hydrogen. Hornsea

• H2H Saltend will be a first mover in utilizing the shared CO 2 and 01

Aldbrough
Gas Storage Northern
hydrogen transport and storage infrastructure. This will eventually 02 Saltend
Endurance
Drax Partnership
enable multiple carbon abatement projects (e.g., SSE Thermal, biomass chemicals

British Steel, Drax BECCS) in the region to scale quickly to achieve Easington Gas
Terminal
net-zero targets for the cluster and the UK. 05 Cemex
Cement
• Industrial users will be able to reduce emissions by capturing
carbon and transporting it via shared pipelines for offshore storage 03 Keadby
as part of the Northern Endurance Partnership – the offshore Gas (SSE)

component and sister project to ZCH. 04 British

Steel
• Access to shared hydrogen infrastructure will spur demand for CO2 Pipeline
use as feedstock in industrial processes and enable potential for H2 Pipeline

further use outside the cluster.

• The coalition recently applied for £75 million in private and Zero Carbon Humber
public sector funding to advance Phase 2 operations, with the
first infrastructure expected to go online by 2026.
Partners
Associated British Ports PX
• There will be three major areas of project work: British Steel National Grid Ventures
1. Develop a carbon-capture usage and storage network. Centrica SSE Thermal
Drax Triton Power
2. Produce low-carbon hydrogen and create shared hydrogen
Equinor Uniper
infrastructure.
Mitsubis University of Sheffield
3. In the longer term, produce green hydrogen using offshore hi Power – AMRC
wind
electrolysis.
Zero Carbon Humber Pathway:
CCS
Zero Carbon Humber’s CCS capabilities will enable CO 2 abatement from industry and power stations throughout the cluster.

Overview of Humber’s Onshore CCS Snapshot of Onshore CCS

•Infrastructure
The ZCH project will capture CO 2 at scale from industrial sites via pipelines that will Infrastructure
transport emissions to compressor stations and permanent storage under the
southern North Sea.
• National Grid Ventures is in the process of designing/developing the options for
the CO 2 and hydrogen pipeline networks, which will connect many energy-intensive
plants and pair with the hydrogen infrastructure.
• CO2 will be compressed at Centrica Storage’s Easington site.
• Small-scale carbon capture technology is being deployed through Drax Power
Station’s bioenergy CCS system (BECCS). It is estimated that this production will
be scaled in the 2020s to become the world’s first carbon-negative power station.
• Negative emissions through BECCS will enable Humber to reduce emissions faster
than any other UK cluster, as it will be able to offset emissions from difficult-to-abate
sectors.
• SSE Thermal is developing its Keadby 3 project, which has the potential to be the UK’s
first gas-fired power station with CCS by the mid-2020s, with an annual carbon 1 Electricity is p r od u c e d and enters the g r i d system
offset of at least 1.5 million tonnes of CO2.
2 Flue gas containing CO2 leaves the power production process and is
cooled and treated
CO 2 abatement
Industrial potential
Cluster and Power per annum (millionCCS
Bioenergy tonnes)
(negative
CCS emissions) 3 Inside the absorption tower, CO2 is extracted from the flue gas and
13 the CO2-free gas is released into the atmosphere

8
8 4 Solvent containing CO2 is heated in a boiler, which then separates the
10
3 16 CO2 from the solvent
5 Solvent is recirculated back into the carbon capture system
Planned CO 2 Additional 2040 with Planned CO2 Additional 2040 with 6 The pure stream of CO2 is transported via pipeline for permanent
abatement in CO2 abated, additional CO2 abatement CO2 abated, additional storage in the North Sea
2030 2030-2040 abated in 2030 2030-2040 CO2 abated
Northern Endurance
Partnership
As part of ZCH, this coalition will develop offshore CO 2 transport and storage in the UK North Sea.

Overview of the Northern Map of Planned

Endurance Partnership Operations
• The partnership was formed in October 2020 to accelerate
the development of offshore transport and storage
infrastructure for CO 2 emissions in the North Sea. It
encompasses emissions from both ZCH and Teesside, a
nearby industrial cluster.
• BP, Eni, Equinor, National Grid Ventures, Shell, and Total
are all coalition members.
• BP is the primary operator with support from Equinor and
National Grid.
• If successful, the Northern Endurance Partnership will enable
GHG emission reduction of almost 50% of the UK’s
industrial emissions.
• The project is currently working on securing funding
through the UK government’s £170 million industrial
decarbonization challenge.
• The Endurance reservoir is the most mature large-scale
saline aquifer for CO 2 storage in the offshore UK
continental shelf. The partnership has gained approval for a
carbon storage license at the Endurance site.
Zero Carbon Humber Pathway:
Hydrogen
Blue and green hydrogen will be produced at scale to replace fossil fuels for transport and heat for industrial and residential
use.
Overview of Humber’s Hydrogen Snapshot of Blue Hydrogen
Economy
• As part of ZCH, Equinor is building the Hydrogen to Humber (H2H) Saltend Infrastructure
Chemicals Park, which will produce hydrogen for use in existing power plants and
industrial sites.
• Blue hydrogen will be produced from natural gas and delivered to nearby industrial
plants (replacing natural gas) and power station (blended with natural gas) to reduce
emissions.
• CO 2 byproduct will be captured from blue hydrogen production and stored offshore in
the North Sea. It is estimated that Saltend will have captured and stored 8.25 million
tonnes of CO2 by 2030.
• In the longer term, it will be possible to develop green hydrogen at Saltend
through electrolysis from offshore wind and utility-scale solar.
• Scaled production of hydrogen within the cluster will also allow for usage in the
surrounding areas in transport and building heating applications.
• The project is set to begin construction in 2024. By 2027, it is expected that the Park 1 Natural gas and oxygen enter the reformer from an air
ATR
will blue hydrogen
be able Green
to expand its impact to across hydrogenregion.
the Humber separation unit (ASU)
cumulative production cumulative production A partial oxidation reaction takes place, helping to
potential (TWh) potential (TWh) 2
perform the reformation
32 12
11
20 3 Synthetic gas is produced and
separated, creating pure hydrogen and
10 *Figure does CO2
not include CO2 is transported by pipeline to be permanently stored
2 non-ZCH 4
projects under the North Sea

Planned Additional Cumulative 5 Hydrogen is transported for use in power, industry, heat
Planned Additional Cumulative
cumulative blue hydrogen blue hydrogen cumulative blue hydrogen blue hydrogen and transport
blue hydrogen capacity, production blue hydrogen capacity, production
production in 2030-2050 2050 production in 2030-2050 2050
2030 2030
Zero Carbon Humber System Value
Impacts
ZCH’s net-zero efforts from CCS and hydrogen infrastructure will have a wide range of system value benefits.

By 2040, Zero Carbon Humber has the estimated potential to capture up to 44 Mt CO2 per year,
4 4 MtCO2 around 10% of the UK’s current annual GHG footprint.

If ZCH’s Net Zero 2040 ambition is achieved, Humber will achieve 30% of the total CO2
30%
GHG
Emissions
reduction from CCUS that the Committee on Climate Change recommends for the UK by 2050.

Zero Carbon Humber will protect 55,000 current jobs and add approximately 5 0 , 0 0 0 new direct
Jobs and
Economic
50k and indirect jobs across the Humber region.
Impact
jobs
Analysis by Element Energy estimates that total £148 million in public health costs could be saved

Air Quality
£148m between 2040 and 2050 due to Zero Carbon Humber’s efforts, reducing the burden on public
health services through improved air quality.
and
Health

The scale up and success of zero-carbon clusters will make them increasingly attractive to investors
Cost and based off reputation. If businesses across the Humber fail to reduce emissions, they could face loss
Investment
Competitiveness £2.9bn of investment as well as carbon taxes of up to £2.9 billion per year by 2040 based on UK Treasury
forecasts. This could put their financial future at risk and lower their ability to be competitive
players in a global marketplace.
Gigastack: Green Hydrogen in
Humber
Separate from Zero Carbon Humber, the Gigastack project is working to produce renewable green
hydrogen at an economically viable, large scale in the Humber region.

Project Overview
Project Phase 1
• The Gigastack consortium is made up of cross-sector partners—
Orsted, ITM Power and Phillips 66—and aims to produce green Timeline: Concluded in September 2019
hydrogen to help reduce GHG emissions in Humber’s industrial cluster.
Key Objective: A feasibility study was conducted to demonstrate
• ITM Power’s new 5 MW electrolyzer “stack” will enable the deployment of the delivery of bulk, low-cost renewable hydrogen through
GW-scale systems, and a planned 100 MW electrolyzer will supply up to gigawatt-scale polymer electrolyte membrane electrolysis, with
30% of the refinery’s existing hydrogen demand. Further scaling will funding provided by BEIS.
allow costs to fall below € 4 0 0 / k W.
• The consortium of companies will highlight regulatory, commercial
and technical challenges to be overcome with clean hydrogen Project Phase 2
production, ultimately developing a blueprint for deploying scalable (current)
electrolyzer technology across the UK.
Timeline: 2020 to mid-2021
Key Objective: Identify and highlight regulatory, commercial and
technical challenges for application of industrial-scale renewable
hydrogen systems. Includes a 100 MW electrolyzer front-end
engineering design study and a trial of manufacturing equipment.

Project Phase 3
Timeline: Mid-2021 and beyond

ITM Power Phillips 6 6 Ørsted Key Objective: Deployment of a large electrolyzer in the Humber region, and
Will produce green Will utilize renewable Will build and operate an creation of a blueprint for deploying large-scale electrolyzer technology
hydrogen through hydrogen to reduce refinery offshore wind farm with across the UK for wider GHG emissions reduction. Further, enabling export of
electrolysis powered by CO2 emissions a capacity of 1.4 GW UK-built electrolyzer equipment.
renewable electricity
Humber
Zero
The Humber Zero project is also aiming to create CCS and hydrogen infrastructure off the coastline of the south Humber river.

Project Overview Map of Planned Energy Infrastructure C0 2 transmission pipeline

• Humber Zero is a cluster of energy-intensive industries located 1 Operations Housing Hydrogen pipeline

Industry Landmarks
kilometer from the coastline on the south bank of the Humber River.
• Primary partners include Phillips 66, Uniper and Vitol’s VPI Immingham
power plant, which is a combined heat and power (CHP) plant in North Easington
southern Humber. Residential Humber Gas
Area Hull Industry & Terminal
• The portside location and connectivity to critical infrastructure make the Humber Docks
project a natural gateway for further carbon abatement in the region. It is Bridge
expected that the infrastructure will be operational as soon as the mid-
2 0 2 0s.
• The project aims to remove up to 8 Mt/CO 2 per year by the mid 2020s and up
to
Emissions Reduction
40 Mt/CO 2 annually Technology
as carbon abatement continues across the Humber region. Saline
Aquifer
NTS Gas
• Offshore wind: The world’s largest offshore wind development, Hornsea One,
is currently being built near Humber Zero and will be capable of producing Network
Other South
2.6 GW of electricity. Excess electricity from this project will be used to Industry Humber
generate hydrogen to power approximately 5 0 , 0 0 0 homes per year. Offshore
Industry
• Hydrogen: Humber Zero aims to produce a combination of blue and
Windham
green hydrogen to reduce emissions from local industry and generate VPI Immingham
Residential Immingham Port
enough hydrogen to help power over one million homes. The project will Area Phillips
generate green hydrogen using excess capacity from Hornsea One. 66+
Gas
• CCS: CCS will be integrated into processes at both the VPI plant and its Blue Storage
neighboring oil refineries. The post-combustion captured carbon will Hydrogen Hydrogen Locations
ATR Electrolyzer
be transported via pipeline to either storage fields in the North Sea or
to Immingham Port for export to international markets.
Systemic
Efficiency and
Circularity
Levers for reducing industrial emissions
Systemic Efficiency and
Circularity
Why does Systemic Increase circularity within a
cluster through cross-
Efficiency and Circularity entity waste utilization
Matter?
Systemic efficiency is the most underutilized lever
Integrate processes within a
in the carbon abatement of industrial clusters and is
cluster to share energy
one of the key areas in China’s plans to reduce and material streams
emissions from industry. Although much progress
has been made in the energy efficiency of individual Systemic
plants and sharing of utilities and products is
common in chemicals clusters, much more can be
Efficiency and Provide cost-effective system
benefits outside the cluster
achieved at a cluster level in areas around the world. Circularity

Key Barrier: Commercial contracting and lock-in of operating models

Areas of exploration in this section
• Opportunities for circularity and waste valorization
• Opportunities for process integration across clusters
Spotlight Cluster Example of • Opportunities to utilize waste heat
Systemic Efficiency and • Systemic efficiency cluster case studies
Circularity: Suzhou Industrial Park • Challenges and actions for systemic efficiency

In Suzhou, industrial byproducts and waste such

as heat and sludge produce biogas and biomass
fuel. By connecting infrastructure and supply
chains, the cluster collectively saves resources
and energy, resulting in environmental, economic
and social benefits.
Systemic Efficiency and
Circularity in Industrial Clusters
Collaboration on efficiency and circularity can deliver financial and environmental benefits to the cluster and the wider
system.
Overview Cluster Circularity
• Building on the efficiency improvements in Companies in industrial clusters can evaluate the waste
individual industrial plants and processes, Circularity
streams they produce to identify which could be
clusters can further progress by adopting valuable inputs for their counterparts.
within
a systems-thinking approach to exploit the
industrial cluster Waste valorization through trading waste without physical
synergies between cluster partners and integration of processes. Opportunities to combine or
processes. process waste streams into useful products.
• Entities in a cluster can map out their waste
streams to identify opportunities for Cluster Symbiosis
cross- company and cross-industry Symbiosis across
the industrial A systems-thinking approach can be applied to enable
collaboration to utilize waste, process integration and demand pooling across the
cluster
consequently cutting waste disposal costs companies in a cluster.
and generating new revenue. Building infrastructure for the recovery and shared
• Through symbiotic relationships, utilization of waste energy, water and materials streams can
Wider system benefits
implementing process integration in the reduce process input requirements, GHG emissions and
use of energy, water and materials, costs in a cluster.
companies can scale up efficiency gains,
driving shared value across the cluster and Wider System Benefits
the surrounding areas. Systemic efficiency can create value outside the cluster, e.g.,
injecting industrial waste heat into district heating networks or
incinerating local landfill waste to power industry.

Integrated energy systems enable new cluster-level business

models that can increase grid flexibility and reliability.
Case Study: UK Glass
Industry
The UK glass industry is prioritizing process innovation and collaboration across sectors and industries in its push to
boost productivity and achieve net zero by 2050.
Overview Cross-Industry Waste Symbiosis: EnviroAsh Project
Several projects are being driven by consortiums of glass industry stakeholders This project convenes partners from across six foundation industries—glass,
(manufacturers, R&D labs, academia etc.), with UK government funding support, ceramics, steel, paper, cement and chemicals—as well as the energy
researching and piloting initiatives for greater efficiency and emissions reduction in the sector, academia and the waste and raw material supply chain.
glass industry.
Some key areas of research activity include: The main aim of this project is waste valorization. Partners will identify
opportunities for waste ashes, slags, mineral by-products and filter dusts from
Raw material efficiency: The industry is looking to reduce demand for across the industries to be converted into new raw materials for a range of
virgin raw materials in glass production through increased recycling rates products in the glass, ceramic and cement industries.
and recycled content or changing glass compositions and the use of waste Another aim is to explore how new feedstocks created from waste might provide
ash. opportunities for cost-effective improvement of product performance. With a
Research projects such as EnviroGlass2 led by Glass Technology Services and combination of practical lab-scale and commercial-scale demonstrations, the
Sheffield Hallam University have shown the emissions reduction benefit of batch consortium is assessing the incorporation of the new-waste materials into
reformulations. They showed that using waste ash can cut CO 2 emissions and existing products and processes.
replace up to 20% of conventional mined and man-made raw materials in
glass production. There is an added circularity benefit, given that UK biomass
power plants currently produce more than 1 million tonnes of waste ash Complementary Industries – Glass and Steel
annually. The glass and steel industries can utilize each others waste to create valuable
Fuel switching: The industry is researching alternative fuels for emissions
reduction and potential energy-efficiency benefits. Glass Futures and other products and raw materials.
partners are investigating transitioning from gas fired furnaces to
biofuels, hydrogen, fully electric and hybrid fuel furnaces.
Glass – Steel: British Steel is developing a technology to convert low-grade
waste glass shards to improve the skid resistance of blast furnace slag enabling
Process technology innovation: There are further innovation projects being it to be used as surface roadstone.
carried out with Innovate UK funding support. These projects are exploring
areas such as leveraging sensor technology from the steel sector in glass and Steel – Glass: Blast furnace slag is used to make Calumite, a raw material for
ceramic manufacturing, hybrid sintering techniques to increase speed and glass production that cuts energy consumption and emissions while improving
lower temperature requirements and techniques for using recovered waste glass quality.
heat to generate electricity with CO 2 fluids.
Case Study:
SCG
Digital platforms for waste management and circularity

Overview: KoomKah Overview: PaperX

• “KoomKah” (Thai, translates to “worth for value”) is a digital platform that supports • “PaperX” is a digital circular economy platform for paper products in operation
waste management processes such as collection and sales in industrial estate areas as since 2017.
well as surrounding community waste banks. The application connects suppliers
and users of waste and increases the quality and scale of the waste segregated.
How it
•works
Incentivizes ecosystem partners via a digital application to collect, sort and return
How it works paper/box waste.
• Conducts and records all waste transactions digitally (buy waste, redeem items, sell • The application also provides environmental savings certificates. The underlying
waste to junkshop), and uses underlying data to create a database of waste history. process then converts paper product waste to recycled products that can be sold
back to the market (e.g., new copy paper, paper furniture, wood-plastic composite).
Key Benefits
• 100% digitization for all transactions (sales, collection, etc.) Key Benefits
• 24/7 real time data and smartphone accessibility • Connects more than 76 commercial establishments, 250 retail and factory sites, one
• 1,500 tonnes of waste exchanged in 2020 industrial estate and 63 condominium complexes
• 724 tonnes of CO2 reduced in 2020 • Recycled over 180 tonnes of paper waste since 2017
Case Study: Meishan Near-Zero
Carbon Demonstration Zone
Overview Systemic Efficiency and Circularity Initiatives in
• Meishan is an integrated urban development zone in Ningbo, Meishan
Zhejiang province, China.
• It is a hub for logistics and high-tech industries, with its port having
Integrated Energy Service Provider (IESP) Model
a
container throughput of 2.2 million 20-foot equivalent units. A business model that allows stakeholders to share the risk and return of
delivering a more efficient, economical energy system. In Meishan, this is a
• Meishan has set ambitious climate targets—aiming to keep 2030 joint effort between the local government and the electric utility covering:
emissions at 2017 levels with a fourfold increase in GDP and integrated energy planning, power system emissions reduction using
threefold increase in population and targeting carbon neutrality renewables, increased energy utilization, distributed energy resources, market-
around 2 0 5 0 . based trading, and the construction of a smart grid for real-time matching of
energy supply and demand.
• To achieve these targets, Meishan is transforming energy
consumption through demand optimization alongside changing
energy supply. Smart Port System
• The Meishan pilot uses a “port-industry-city” integrated development
Promoting the use of clean energy by gradually electrifying container trucks,
model emphasizing synergy between activities across all three facets improved coordination of mass-transit railway transport and construction of
of the system, working in tandem toward emissions reduction and high-voltage, on-dock power charging stations. This project will improve both
regional economic development. energy efficiency and port logistics efficiency.

Multi-Stage Resource Utilization

Maximizing resource utilization across industry and the wider system. One
example involves recovering the cooling load from a liquified natural gas (LNG)
terminal to support a freezer warehouse and subsequent recovery of this cooling
to support a snow park.
Aerial view of Ningbo Meishan Near-Zero-Carbon Demonstration Zone
Case Study: Industrial
Symbiosis
Denmark’s Kalundborg Symbiosis showcases efficiency gains possible through cross-industry collaboration.

Overview Kalundborg Process Schematic

• Kalundborg Symbiosis, located in Denmark, is the
world’s first functioning example of industrial
symbiosis—a local partnership where partners provide,
share and reuse resources (25 different resource streams)
to create shared value.
• Closed-loop exchange of material, water, and energy
streams among the industrial partners minimizes
leakage and waste in the loops, creating a local circular
economy and improving resilience for the partners while
reducing financial and environmental costs.
• Based on public-private partnerships and collaboration
dating back to 1961, Kalundborg is an example of cross-
industry collaboration to increase systemic efficiency
and circularity and create shared value. This
collaboration has cultivated an innovative culture locally,
attracting several startups and demonstration projects to
the area.
• Symbiosis also triggers business model innovation. At
Kalundborg, Orsted shares high temperature steam from
its CHP plant to many partners, pivoting from producing
steam as a by-product of electricity generation to making it
the primary product and revenue source.

Estimated annual benefits Industrial Partners at

Kalundborg
Novozymes Ø rsted Equinor
• Bottomline savings of €24 million • 3.6 million m3 water
Novo Nordisk Biopro
• €14 million in socio-economic savings • 100 GWh of energy Unibio Kalundborg Kommune Gyproc
• 635,000 tonnes of CO2 abated • 87,000 tonnes of materials Argo
Waste Heat
Spotlight
The U.S. Department of Energy (DOE) estimates that about a third of industrial energy input is lost as waste heat. While much of
this waste heat is not industrial grade, it can be stepped up in quality or utilized in non-industrial lower temperature applications.

Four Routes to Waste Heat Utilization

Reuse within individual facilities Transfer to other

•industries
Waste heat can be recovered using heat • Varying temperature requirements across
exchangers and then used to reduce industrial processes in a cluster means waste
heat demand elsewhere in the facility, heat recovered from one industry can
e.g., by satisfy demand in another with a lower
pre-heating input streams to another temperature requirement.
process. • This is a common feature of
• This application is demonstrated across many industrial symbiosis and is
industries. demonstrated in the Kalundborg
Symbiosis.

Supplying local heat Waste heat to

demand
• Waste heat produced at temperatures too low •power
Recovered waste heat can be used to
for industrial use can be valorized through generate power using a steam Rankine cycle
supplying local residential or commercial system for high temperature heat and Organic
heat demand. Rankine Cycle (ORC) and Kalina Cycle for
• This application is common in many parts of low- temperature heat.
Europe and is being demonstrated in • Widely used in the Chinese cement industry
Dublin, with data centers set to supply with more than 700 installations of waste heat-
waste heat to local district heating to-power systems.
networks.
Waste Heat Case Study-
Nuclear
Waste heat recovery or cogeneration from nuclear power plants presents a low-carbon industrial process heat alternative

Overview Challenges to deployment

• Only 26% of total industrial heat demand in the EU is for high-temperature Location: Nuclear reactors tend to be sited in remote areas and need to evaluate
heat (greater than 4 00 ° C ) and the majority of this is supplied by burning the hazard posed by siting industrial facilities nearby. While heat can be
fossil fuels. transported across long distances, this may not be economical. However, the
• While heat generated from nuclear power plants can satisfy process heat advent of new reactor types such as small modular reactors (SMRs) can loosen
demand and reduce resultant emissions, it currently has limited industrial location constraints.
applications.
• Temperature: Water reactors (most prominent design) tend to generate steam at less
Industrial applications of nuclear heat include heat from a pressurized water
than 300˚C, too low for many energy-intensive processes. However, this temperature
reactor (PWR) at Gösgen in Switzerland used in cardboard production, and
level is suitable for a large proportion of industrial heat demand, although these
heat from a pressurized water reactor (PWR) at Stade in Germany being used in
processes are less likely to be geographically clustered.
a salt refinery.
• The Royal Society (UK) estimates the cost of thermal energy from a nuclear
Collaboration: Industry and nuclear operators as well as their respective investors will
reactor (based on a PWR) would be $7.42 – $11.42 /GJ compared to $3.5 –
need to overcome cultural differences and knowledge gaps to build the trust necessary
$8/GJ for unabated natural gas, while another estimate costs
for significant process integration.
hydrogen heating at $7.59 – $13.34/GJ (blue and green hydrogen).

EDF Energy – Sizewell C Nuclear Power Station Proposal,

•UK
Sizewell C is a proposed new nuclear power station in Suffolk, UK, being developed
by EDF in partnership with CGN. A planning proposal has been submitted for the
construction of two European pressurized reactors (EPRs) with a capacity of 3 2 0 0
MWe.
• The proposed design will include valves that allow for steam to be collected after
the main steam isolation valve, giving flexibility to shift the balance between
heat and electricity production.
• Flexible cogeneration makes Sizewell C a potential source of low-carbon
process heat for light industry. This could incentivize siting of industry in the
vicinity with heat uses such as cryogenic storage, data center cooling and
building heating. Likewise, the heat could be used in processes at the nearby Port Sizewell proposed design – EDF Energy
of Felixstowe.
Challenges and Actions for
Systemic Efficiency and Circularity
Collaborating across multiple entities in a cluster comes with challenges, but there are actions that can be taken to set up for
success. Challenges Actions
• A systemic approach to driving efficiency in a cluster requires • Create cluster-wide consortiums and appointing decision-making
strong partnerships and a culture of shared value built on groups with clear responsibilities.
trust. • Cluster collaboration initiatives should be driven by companies
• Joint decision-making across companies with a variety of with
Cooperation
interests and incentives could slow down progress. strong reputations, ambition and willingness to invest.
• Agree on cluster-wide targets that align individual interests.

• Initiatives might have high upfront costs and long payback periods. • Public-private partnerships can provide external funding,
• Policy cycles are shorter than investment cycles so policies reducing capital outlay for the cluster and de-risking investment.
enabling investment profitability can change prior to asset • Business models that reduce dependence on specific policies
depreciation. and improve commercial feasibility need to be developed.
Investment • Difficulty in capital cost allocation and differing financial positions.
• Companies in a cluster may be subsidiaries of multinationals with
limited ability to make major investment decisions.

• Sharing waste streams across companies within a cluster will • Capacity for production and demand for waste streams should be
require a system of valuing byproducts. evaluated and commercial agreements put in place among cluster
• Clusters need clear signals on the value of externally shared waste partners in the collaboration planning phase.
streams, e.g., heat injected into district heating networks. • Commercial agreements such as PPAs should be put in place to
secure value from providing wider system benefits.
Valuation

• Process integration restricts scope to change production • Business models and flexible arrangements which reduce process
volume or production process, as there are obligations rigidity introduced by integration should be developed.
on input to produce for or output to consume from • Companies should invest in process integration as part of
partners. long-term strategy for operating in a certain cluster.
Integration • Barriers are erected to exiting a cluster as there is “take-
or-
pay” risk with process integration agreements.
Direct
Electrification and
Renewable
Solution Heatemissions
areas to reduce industrial
Direct Electrification and Renewable
Heat Why Do Direct Electrification and Electrify low-to-medium
temperature and pressure
Renewable Heat Matter? processes
Direct electrification has not been widely
implemented due to the high cost of electricity
relative to natural gas and stranded investment in Generate low-cost, renewable
fossil-based assets. However, the attractiveness of electricity and heat onsite (e.g.,
electrification is rising due to carbon pricing, falling rooftop solar, biomass, CSP)
renewables costs, shared infrastructure (such as
microgrids) and emissions reduction targets that Direct
Pursue shared infrastructure
eliminate the use of unabated natural gas. Electrification (e.g., microgrid, storage,
and Renewable flexibility)
Heat
Key Barrier: Cost-competitiveness of electricity against unabated
natural gas and fossil-based assets not yet fully depreciated
Areas of Exploration in this Section
• Direct electrification technology viability across industries
Spotlight Cluster Example of Direct • Emergence of cluster electrification enablers such as microgrids, shared
renewable generation and storage, and demand optimization
Electrification and Renewable
• Direct heat solutions
Heat: Suzhou Industrial Park
• Direct electrification and renewable heat case studies
Suzhou has implemented a microgrid, increased
• Challenges and actions for direct electrification and renewables heat
the renewable electricity supply through both
onsite and renewable energy PPAs, and
electrified transportation in the cluster.
Direct Electrification
Overview
Electrification provides a feasible route to reduce emissions from most industrial processes across sectors.
Overview Easily Electrifiable Industrial
Processes
• Many industry electrification discussions focus on the technical difficulty of electrifying high- • It is technically feasible to electrify most industrial processes, including
temperature processes on a commercial scale; however, research shows that significant benefit can heavy industry.
be achieved from electrifying low- and medium- temperature processes with commercially • The table below summarizes key processes in various industries that can
available technologies. be electrified with commercially available technologies.
• Research on the EU by the Potsdam Institute found that less CO 2 -intensive sectors (e.g., paper, wood, • In addition to these processes, industrial site non-heat-related energy
textiles) can be nearly completely electrified with mature, commercially available technologies. These use such as machine drive and light-duty transport are also electrifiable.
industries accounted for 40% of EU industrial emissions in 2015 and electrifying these industries
would cut 36% of EU industry emissions by 2 0 5 0 .
• Likewise, the National Renewable Energy Laboratory (NREL) found that without changing heavy
industry, it is possible to electrify 43% of total U.S. industry fuel energy use with Electrifiable
commercially available technology. Industries Technologies
Processes
• While natural gas is a cheaper energy vector, in a carbon-abatement scenario it is more accurate to • Low-temperature • Compression heat
compare direct electrification to other low-carbon solutions such as natural gas with CCUS and process heat, pumps and chillers
hydrogen or to factor in carbon prices. When feasible, electrification provides a lower cost, All industries (including
i.e., cooling, • Electric boilers
food and textiles)
technologically mature and more efficient low-carbon solution. drying, space • Mechanical vapor
heating, steam recompression
• In addition to electrification of combustion-based process heating, industries currently using electricity generation
as their main energy source can cut emissions and save costs in the long term by transitioning from
fossil-based electricity generation to zero-carbon sources. Wood • Curing • Ultraviolet curing
• Limestone
Paper and pulp • Electric kilns
Share of electricity in energy mix by sector (IEA, 2018) calcination
• Firing ceramics
• Glass melting,
Machinery 4% 5% 21% 66% 3
Heat Ceramics and glass • Resistance heating
% annealing and
Non-Ferrous Metals 3% 17% 12% 65% 3% Electricity tempering
Biofuels and Waste
Food and Tobacco 5% 15% 28% 18% 26% 7% Machinery • Process heat • Induction furnace
Natural Gas
Transport equipment • Process heat • Induction furnace
Paper Pulp and Print 2% 9% 15% 40% 26% 8% Coal
Oil Products Manufacturing • Process heat • Resistance heating
Chemicals and Petrochemicals 11% 20 % 31% <1% 24% 13%
Oil • Melting • Induction furnace
Iron and Steel 1 63% 12% 1% 21% 3% Non-ferrous metals and
• Smelting • Resistance furnace
% secondary steel
• Metals refining • Electric arc furnace
Case study: Electrification of Industrial Process
Heating
There are limited commercial examples of electrifying previously combustion-based heating in industry, however,
activity in this space is rising due to technological maturity and the potential to unlock wider productivity improvement.

Secondary Steel Production with Electric Arc Furnaces (EAF) BASF – Electrification in the Chemicals Industry
• The production of secondary steel from recycled scrap using electric furnaces is an • BASF SONATRACH PropanChem S.A. is a joint venture between BASF and SONATRACH,
established process, accounting for 28% of global steel production. producing about 3 5 0 , 0 0 0 tonnes of propylene per annum at a propane
• This process is highly technologically mature and can require as little as a fifth of the dehydrogenation (PDH) plant in Tarragona, Spain.
energy needed in the conventional blast furnace, coupled with basic oxygen furnace (BF- • In November 2017, the company replaced a steam turbine in the propylene
BOF) route. In addition to reduced energy intensity, using low-carbon electricity can purification unit of the PDH plant with an electric motor and a frequency inverter,
enable significant emissions reductions. investing €6 million targeted at improving energy efficiency.
• With the support of a grant from the Spanish government, this project yielded its
intended outcomes and delivered unplanned productivity benefits across the
Crude Steel Production by Process in 2019 wider production process.

China Asia (Except China) Europe North America

Benefits achieved from electrification
Energy savings: Greater efficiency of electrical power enabled the
997 349 196 120 replacement of a 19 MW steam turbine with a 10 MW electrical motor.
Mt Mt Mt Mt Coupled with power consumption control from using a variable speed motor,
annual primary energy demand was reduced by ~80 GWh.
Oxygen Blown Converter Electric Arc Furnace Water consumption: Replacing the steam turbine reduced cooling water
demand, freeing up capacity to cool other processes across the plant and
cutting annual water demand by ~500 million liters.
Considerations for Scaling
Up
• Raw material availability: In some regions, steel recycling rates are high (~85% Emissions reduction: Reduced energy and water consumption along with the
in Europe), limiting the potential for scale up of production from scrap. reduced carbon intensity of the energy source resulted in a reduction of
• Value chain emissions: Electrifying blast furnaces will reduce emissions, but similar ~34,000 tonnes CO 2 emissions annually.
emphasis should be placed from coke-based iron ore reduction. Direct reduction of
iron using hydrogen is one potential solution being explored. Plant performance: Reduced temperatures across the plant enabled better
control of reactions, separation columns and other equipment contributing
• Stranded assets: Many operating blast furnaces may not be near end of life and are
to more than three years of continuous plant operation instead of
unlikely to be retired soon. Other abatement measures can be used in these cases and
previously required annual technical shutdowns.
new investments focused on low-carbon technology.
Renewable Electricity in Aluminum
Production
For industries like aluminum where electricity generation accounts for a high percentage of costs and GHG
emissions, changing power source is a crucial step in the path to net zeros.

Industry Context Global Examples (Not

• The aluminum industry generates more than 1.1 GtCO2e annually—~2% of global anthropogenic emissions—and exhaustive)
this is set to grow with the increasing demand for aluminum. Coal – Hydropower Transition
• Cutting emissions in this sector is critical as aluminum is the second-most-used metal in the world by mass and a • Hongqiao Group began production at a hydro-
vital resource for a net-zero future, with end uses including manufacturing of EVs, solar panels and transmission powered aluminum smelter in Yunnan, China in
cables. September 2020. This commences a relocation
China
• Already heavily electrified, 60% of aluminum industry emissions come from electricity generation. The power of production close to hydropower sources to
sources used in aluminum smelting vary depending on geographical accessibility as shown below. reduce reliance on coal-fired generation with
• Electricity accounts for about a third of operating costs for aluminum smelters. Given the low margins at rising state sanctions on coal to support GHG
which aluminum producers operate, they must use the most affordable, consistent power source and have emissions reduction targets.
difficulty funding the capital investment needed to transition power source.
• However, with falling costs of renewables, it will soon be cost-competitive to invest in construction of new Long-term Wind PPA
onshore wind or solar rather than continue operation of conventional sources. With rising carbon prices,
falling costs of storage and the availability of renewable PPAs to balance supply and demand, the time is right for • In July 2018, Norsk Hydro signed a 29-year PPA
(a fixed-volume agreement) with Green
the aluminum industry to transition.
Norway Investment Group for a 235
• The business case for the transitioning power sources can be further strengthened by government support
MW onshore wind
and incentives, clear carbon pricing signals and low-carbon aluminum demand signals.
farm in Sweden. This will be used to power their
Aluminum Smelting Power Consumption Mix by Region in 2019 aluminum production and reduce carbon
footprint.
China Europe GCC North America Low-carbon Aluminum Financing
• In September 2020, Trafigura Group, a
leading commodities trading company,
484 115 84 55 Singapore established a first-of-its-kind “low-carbon
TWh TWh TWh TWh
aluminum” financing platform of up to
$500
million in response to its growing downstream
demand for manufacturers.
Coal Hydro Oil Natural Gas Nuclear Other Renewable Other Non-Renewable
Cluster Electrification
Enablers
Beyond direct electrification of processes, clusters and cluster entities have the potential to deploy onsite
electrical infrastructure, grow renewables through PPAs and provide balancing services back to the grid.

On-site and shared Virtual Renewable PPAs Demand Optimization Retrofitting and
Renewables, Storage Hybrid Technologies
When energy demand cannot For grid electricity consumption,
and Microgrids feasibly be supplied by on-site industry can, where possible, Some technologies allow for
renewables, clusters can pool increase flexibility to shift gradual transformation by
Through on-site renewables demand for renewable PPAs production from peak price hours to
generation, shared dispatchable retrofitting existing machines or
(e.g., similar to U.S. community lower price hours. In addition to installing hybrid systems. This
zero-carbon sources (e.g., biomass choice aggregation (CCAs). lower costs, this can increase
plant, SMR or hydropower), allows for reducing fuel costs by
revenue from providing flexibility switching between energy vectors.
storage and microgrids, industrial services to the grid.
clusters can increase energy
autonomy and share and reduce
risk associated with variability of
wind and solar.
Case Study:
Genagricola
Electrification and emissions reduction of an agricultural chain

Overview
• Genagricola, a holding company of the Generali Group, is the largest Italian agricultural
company.
• Genagricola is conducting a project to increase circularity among its companies/sites and set
a new sustainable strategy with focus on emissions reduction and electrification.
• Enel X developed a unique methodology to assess the circular economy maturity level of
businesses at a corporate and an energy site level (CE Energy Score) and was able to identify
an improvement roadmap.
• The initial average of CE Energy Score on all 22 sites is equal to 15% while the delta average
improvement is estimated in + 44%.
• Improvement areas include shared renewable energy production, energy efficiency of
buildings, and implementation of shared electric mobility assets.

Electrification Initiatives in Genagricola

100% Renewable Target for Energy Electrification of Corporate Monitoring and Verification
Consumption Fleet
1. A fleet electrification detailed analysis has been To increase efficiency and save resources, an
Three main solutions have been adopted to transition energy conducted on all of Genagricola’s fleet to identify integrated AI-based monitoring system
consumption from traditional fossil sources towards mobility needs and provide a quantification of journeys, will be installed which will allow
renewables: vehicles eligible for retrofit into EVs and localization of management to optimize processes and
charging infrastructures. machineries by identifying anomalies and
1. Roof photovoltaic systems at full physical capacity.
2. A feasibility study is in progress to assess the retrofit inefficiencies promptly.
2. Direct PPA from large PV plants constructed by Enel on
potentials of the existing trucks suitable for the
Genagricola’s land (land-lease contract).
transition to the electric engine that would allow to carry
3. Energy supply from renewable sources (guarantee of out agricultural activities avoiding the consumption
origins) for the remaining consumption needs. of fossil fuels.
Case Study: Microgrid
Solution
As reliance on electricity in industrial clusters grows, microgrids enable clusters to boost
resiliency of their electricity supply and reduce strain on the grid caused by rising
demand.
Project context Solution overview
• The Port of Long Beach (POLB) in California is the second busiest container port The POLB Microgrid Project, due for 2021 completion, will help achieve long-term
in the U.S., handling $200 billion annually in trade and supporting close to islanding at the port’s Joint Command and Control Center, a critical response facility. Key
5 00 , 00 0 jobs. features of the project:
• As the POLB transitions to net-zero, electrical load is expected to
quadruple. Given the large delta between port-wide base and peak load, 3 0 0 kW solar carport: For zero-emissions photovoltaic energy production.
connecting this incremental load would necessitate grid investment.
• With increasing dependence on electricity, reliability will be critical as failure Batteries (330 kW stationary BESS and 250 kW mobile BESS): These will provide
could cause millions of dollars in damage daily in lost work hours and grid services, such as demand response and peak shaving, during regular
perished cargoes. operation of the utility grid. Additionally, during wide-spread outages or
• emergencies, the mobile battery will act to extend the microgrid as a generator
To avoid a single point of failure (i.e., utility grid), the port is looking to microgrid
where needed, such as stormwater pump stations and refrigerated container
systems that integrate zero-emission DERs and grid services to add resiliency
yards.
to seaport operations, reduce pollution from diesel generators and alleviate
Energy control center: Hosts microgrid controls and stationary battery.
intermittent pressures on the grid.

Innovation: A key project innovation is the installation of both DC and AC bus

controllers in the system, resulting in significantly improved efficiency of
stored energy by allowing direct DC transfer of energy from the PV system to
the battery.

Benefits Project Partners

• Lower costs: Smart load management to avoid electricity peak price hours and
Schneider Electric
cheap on-site solar power generation.
• Energy security: Microgrid will help prevent service interruption due to power NREL
outages and reduce reliance on fossil fuels for emergency power.
• Environmental benefit: Microgrid enables onsite renewable electricity generation and California Energy Commission
reduced fossil fuel dependence.
Southern California Edison (SCE)
• Grid reliability: Storage and demand response capability enable the facility to
respond to utility signals and shave load during peak demand. Note: Partner list non-exhaustive
Onsite Production of Renewable
Heat
Renewable heat provides a low or zero-carbon option for industrial process heat.

Overview Benefits and Barriers to Renewable Heat in Industrial

• Process heat is the largest industry energy need and accounted for 50% of 2019 global heat demand. Clusters
However, only 10% of industrial process heat was from renewable sources. Bioenergy
• Bioenergy accounts for almost 90% of renewable heat in industry and is predominantly used in  Can supply heat over a wide variety of temperatures
industries producing biomass waste such as paper and pulp and food. The cement industry in China  Already extensively used in certain industries
and the EU is increasing bioenergy consumption using municipal waste.
 Opportunities for circular economy and productive waste use
• Renewable heat can be used to supply both direct and indirect process heat (e.g., hot water or steam
generation) and has the potential to abate up to 120 Mt CO 2 by 2 0 3 0 .  Can be used for cogeneration of heat and power
•  Potential for zero or negative fuel cost
In addition to renewable sources discusses, waste industrial process gases with calorific value
can be burnt to generate process heat in clusters. × Low and variable calorific value compared to fossil-based fuels
• Industrial clusters can collaborate across industries to leverage technical expertise, existing × High transport costs and potential raw material availability issues
process infrastructure and waste streams for the generation of low-carbon heat. Solar thermal
 Zero fuel
× High cost
capital andfor
cost zero emissions
set-up and process integration of CSP
Common Renewable Heat Sources × CSP dependent on location irradiance and space availability
Bioenergy × Variable source of heat with expensive storage solutions
• Biomass: Solid fuels such as virgin wood chips and uncontaminated waste wood.
Geothermal
• Biogas: Methane gas produced from biogenic substances in an anaerobic digester.  Zero fuel cost and zero emissions
• Syngas: Gas from pyrolysis or gasification of solid waste or biomass.  Low footprint above ground level
• Fuels derived from waste: Solid recovered fuel (SRF), refuse derived fuel (RDF) from treated waste  Once developed, can produce heat 24 hours a day
such as municipal solid waste.
× High capital cost for set-up and process integration
× Low achievable temperatures at commercial scale
Solar thermal: Collection (and concentration) of solar irradiation to generate heat.
Technology ranging from flat plate collectors to heliostat tower systems. × Highly location-dependent
General renewable heat considerations
Geothermal heat: Utilizing heat from within the earth’s crust for industrial processes using • Renewable heat can also ease the transition from existing high-temperature
technology like ground source heat pumps and hot sedimentary aquifer systems. heat sources by preheating process streams and provide protection from
fossil fuel price volatility
Other sources: Renewable electricity and hydrogen are other heat sources explored elsewhere in
• The most cost-effective renewable heat solution will depend on cluster
this report and renewable district heating is applicable, but is not been explored at depth here.
location, existing infrastructure and raw materials access
Case study: New Solar Thermal
Solutions
New CSP technology from companies such as Heliogen could provide an integrated
cost-effective solution for the carbon abatement of heavy industry.
Overview Heliogen’s Sunlight-to-Energy Process
• Heliogen, a renewable energy technology company with backers including Bill Gates and Patrick Soon-Shiong, can—for the
first time in history—cost-effectively concentrate solar energy to achieve ultra-high temperatures (up to 1500°C).
• Heliogen has invented the world’s first Sunlight Refinery™, a green hydrogen and 24/7 electricity plant that captures,
concentrates and refines sunlight into cost-effective energy on demand.
Sunlight
• Sunlight refineries harness the power of artificial intelligence (AI), using computer vision and object recognition to
precisely align an array of mirrors (heliostats) to reflect sunlight at a single target with unprecedented accuracy.
• Sunlight refineries are built in modular 5 MWe/13 MWth modules and can be rapidly deployed at scale to generate heat,
electricity or hydrogen for heavy industry.

HelioHeat™ HelioPower™ HelioFuel™

AI-Controlled Heliostat (Mirror) Field
• Carbon-free, ultra-high
• Electricity made from • Renewable fuels like 100% green
temperature heat that provides
concentrated sunlight using hydrogen made from concentrated
Description an alternative to burning fossil
thermal energy storage sunlight and electrolysis
fuels for industrial process
heat • Target cost: <5¢/kWh • Target cost: <$2/kg
• Target cost: <delivered natural
gas
• Transportation, heavy equipment, Tower, Receiver and Thermal
Target • Utilities, mines, data centers,
• Cement, steel, petrochemicals chemicals, steel, other industrial Energy Storage (TES)
Industries etc.
uses

• Calcining, reforming, melting,

Industrial • Any industrial use of 24/7 • Iron ore reduction, chemical
roasting, sintering, thermal
Applications electricity feedstocks
decomposition

• Reduced fuel costs, reduced

• Reduced fuel costs, reduced GHG emissions, higher margin • Reduced fuel costs, reduced GHG
Benefits GHG emissions, higher margin “green” products emissions, higher margin “green”
HelioHeat HelioPower HelioFuel
“green” products products
Challenges and Actions for
Electrification
Increasing direct electrification of industry will require action to improve cost-competitiveness compared to natural
gas.
Commercial and Technical Challenges to Industry Policy and Industry Actions for Industry
Electrification Electrification
Cost-competitiveness: With electricity three times the cost of natural gas, Carbon pricing: Clear carbon price signals help reduce investment
electrification significantly raises operating costs. Competitive global trade and uncertainty and reduce the relative cost of electricity.
thin profit margins greatly disincentivize increasing production costs,
however, the declining cost of renewable electricity, and likely carbon Carbon regulations: Consumption-based regulations such as CO 2 footprint
pricing, may reduce this cost differential in the near future. requirements for materials in cars and buildings can encourage
carbon
Capital investment: Transitioning to electric technology could require abatement. CO 2 -based tariffs, while complex to implement, can address
significant financial outlay to purchase new equipment. competition issues that arise from regional asymmetry in net-zero efforts.
Reducing electricity taxation and levies: This will reduce the cost of
Limited productivity gains: Many electrifiable processes have limited electricity relative to gas. In Sweden, this led to an electricity and gas price
impact on productivity or profitability, the main drivers of technology difference half the European average.
adoption.
Sectoral agreements: International agreements across an industry to
Technical complexity: Electrification of some processes will require complex
reduce emissions will lessen the impact of production cost increases on
changes in technology, requiring upskilling of operators and potentially
competitiveness in global trade.
secondary process changes to accommodate new technology.

Technology support schemes: These will drive down costs of electrification

Process disruption: Replacing process equipment with electric alternatives technologies, incentivize adoption and increase technical expertise.
could cause significant production disruption.

Retrofitting and hybrid technologies: Some technologies allow for gradual

Stranded assets: Electrification could require early retirement of long- transformation by retrofitting existing machines or installing hybrid
life, fossil-based assets—jeopardizing return on investment. systems. This allows for minimizing fuel costs by switching between energy
vectors.
 Hydrogen
Solution areas to reduce industrial emissions
Hydrogen
Produce low-to-zero carbon hydrogen
Why does Hydrogen Matter? from the most economical source (e.g.,
There is growing recognition that hydrogen blue, green)
will be required to reduce industrial
emissions and achieve net-zero targets by
2050, with significant investments being Leverage electricity and heat from
announced and the emergence of hydrogen nearby zero carbon sources (wind, solar,
hubs. nuclear, biomass)

Hydrogen
Key barrier: Viable storage locations and applications and Use produced hydrogen as an alternative
lack of transport and storage infrastructure fuel for hard-to-electrify industrial
processes, building heating and transport

Spotlight Cluster example of

Hydrogen: Humber Areas of exploration in this section
Industrial Cluster • Hydrogen value chain
• Emergence of hydrogen hubs
Humber is pursuing a mix of blue and green
hydrogen, including hydrogen produced • Colors of hydrogen- many sources of zero- (or low-) carbon hydrogen
from natural gas through an autothermal • Case studies of hydrogen produced from other technologies- solar,
reforming plant (ATP) and CCS infrastructure. nuclear, biomass (in addition to those covered in the Humber
Green hydrogen is also produced from which include blue from natural gas and green from offshore wind)
offshore wind electrolysis using the same
infrastructure.
Hydrogen Overview
Hydrogen has significant potential to enable the transition to a clean, zero-carbon economy, particularly where
electrification technology is nascent or there are significant process emissions from conversions.

Benefits of Hydrogen
Hydrogen is the most promising technology capable of addressing
Hydrogen’s Potential in Industrial
reducing GHG emissions in hard-to-abate sectors of the economy. It can be Clusters
Industrial clusters can create Although dedicated
used in the follow applications:
an internal market for renewable capacity is likely to
• Industry: In addition to its conventional uses in chemicals and refining hydrogen, where production be needed, integrated
industries, hydrogen can be an alternative feedstock in some high- and consumption are co- hydrogen production with
temperature industrial processes that are difficult to electrify. located. Therefore, the wind and solar will support
• Power: Hydrogen provides a long-term, large-scale storage solution to market can develop without periods of excess wind and
support integration of intermittent renewable energy generation and can investment in long- solar generation providing
replace natural gas for power generation or heat. distance infrastructure. storage and flexibility to the
system.
• Mobility: Hydrogen has the potential to be used to derive fuels for long-
haul
land and maritime shipping as well as aviation. Potential is greatest where Stored hydrogen can be
hydrogen can be primarily used as an energy source
Barriers and Action to Widespread Deployment of used as a feedstock for for a variety of sectors
Low/ Zero Carbon Hydrogen industrial processes or is during disruptions to the
an integral part of the energy system.
• The infrastructure necessary to support a low/zero hydrogen economy
reaction/ process, with an
consists of transport, storage and distribution stations, and is extremely additional option to
costly at present compared to other decarbonization efforts such as leverage for secondary
electrification. applications such as
• Cheaper and more abundant renewable energy sources are integral transport fuel and domestic
to scaling low and zero-carbon hydrogen use. heating.
• The lack of proven application at scale to date though large-scale efforts are
in planning phases.
Emergence of Hydrogen
Hubs
Hydrogen Hubs bring together industry, local businesses and other local stakeholders to develop and deploy hydrogen projects
to meet energy and transportation needs of the local community.

Overview of Hydrogen Hubs (Illustrative) Global Examples (Not Exhaustive)

Asian Renewable Energy
Hub
Australia • The Asian Renewable Energy Hub is a large-scale clean energy hub based
• It is expected to utilize 20+ GW of wind and solar capacity to produce
in Western Australia.
Renewable Electricity Natural green hydrogen for domestic and export consumption.
Energy Grid Gas Grid Datong Hydrogen Hub
• Datong, the coal capital of China, is transforming into a hydrogen hub by
supporting the rollout of hydrogen fuel cells for transport and the creation
H2 China of a hydrogen energy industrial park.

Green Hysland
Hydrogen • The Green Hysland project in Mallorca will create a green hydrogen
Production ecosystem in the Balearic Islands.
Spain • It will generate, distribute, and use at least 3 0 0 metric tonnes
Fueling of renewable hydrogen per year, produced from solar sources.
Transportation H2

Stations Tees Valley Transport Hub

Hydrogen Distributed • Tees Valley is set to host the UK’s first hydrogen transport hub, with a
Storage hydrogen-powered mainline train trail.
Generation UK • The project will explore how green hydrogen could power buses, rail,
Material Fuel Cells maritime, and aviation transport.
Handling Backup Power Combined
Heat and Sohar Port
Power • Oman’s Sohar Port, partnering with the Port of Rotterdam, will be one of
the Middle East’s first green hydrogen hubs, powered by 3.5 GW of solar.
Oman • Hydrogen will be stored for later use for industrial and transport
purposes.
Heat Hydrogen Electricity Natural Gas
Colors of
Hydrogen
Several key factors determine the hydrogen type that is most suitable to a particular industrial cluster.
Type Production Process Energy Input Emissions Intensity Pros and Cons
Electrolysis Zero carbon as feedstock electricity is + Zero-carbon production of pure hydrogen
powered by renewable sources such as + Pure hydrogen can be used in fuel cells for transport applications
wind, solar and hydro
+ Opportunity to integrate into gas networks, long-term storage for electricity
H2 - CapEx-intensive due to large-scale renewables needed to feed electrolyzers
Wind or Solar - Geographical constraint due to resource requirement
- Scale: Largest electrolyzer is currently 10 MW with 20 MW projects underway

Electrolysis Zero carbon as feedstock electricity is + Production of hydrogen using zero-carbon dispatchable power
powered by nuclear energy + High-purity hydrogen can be used for industrial processes
H2 + Low-carbon hydrogen production via electrolysis or combining with gas and CCS to
provide heat in SMR
Nuclear - CapEx-intensive unless using small modular reactors

Gasification with CCS Low intensity, with potential for negative + Low-carbon hydrogen or even negative emissions if paired with CCS
CO2 emissions if byproducts of gasification - CapEx-intensive due to CCS infrastructure requirement
H2 CO 2 process are captured and stored
- Potential concerns on environmental sustainability of biomass production
Biomass - Geographical constraint due to availability of feedstock resource

Autothermal reforming (ATR) Low intensity as CO2 emissions from + Low carbon due to CCS
and/or steam methane feedstock gas are captured and stored + Intermediate solution to exploit low gas prices
reforming (SMR) with CCS
H2 - CapEx-intensive due to CCS infrastructure requirement
CO 2 - Exposure to natural gas price fluctuations
Natural Gas
- Scale requirement on demand side (i.e., outside of clusters in domestic heating)

Autothermal reforming (ATR) High Intensity with CO2 released into + Less need for additional infrastructure
and/or steam methane atmosphere + Hydrogen can be used for industrial processes
H2 reforming (SMR)
- Carbon-intensive
Natural Gas - Exposure to natural gas price fluctuations

Note: Classification of colors of hydrogen is not fixed and is subject to some variation depending on sources
Case study: Puertollano Green
Hydrogen
Iberdrola, in partnership with Fertiberia, plans to place Spain at the forefront of the green hydrogen economy of Europe.

Current Project Key Players

• Iberdrola has launched what will be the largest plant producing green hydrogen by
2021, in partnership with Fertiberia, for industrial use in Europe.
• Iberdrola will supply solar PV electricity to be used in an electrolyzer supplied by
Nel,
that will provide green H2 to be used in Fertiberia’s fertilizer production plant.
• Fertiberia will modify its plant to use green hydrogen to manufacture green fertilizers,
significantly reducing natural gas requirements and emissions at the plant.
Located in Planned buildout Expected
Puertollano, Spain of 100 M W completion by
solar 2021
Electrolyzer Investment cost Battery Storage
capacity of 2 0 MW of €150m capacity of 2 0
M Wh
Expected to add Annual CO 2 savings
150 new jobs of 39,000 tonnes

Future Pipeline
• Iberdrola and Fertiberia plan to expand the Green Hydrogen project and develop 8 0 0
MW of electrolysis capacity.
• The hydrogen development would cover 25% of Spain’s national target of 4 GW and
is
expected to create 4,000 jobs and use more than 5 00 local suppliers.
• The projects are set to be completed in phases between 2023 and 2027, with an
expected investment cost of €1.8 billion.
Case study: Majorca Green
Hydrogen
Power-2-Green Hydrogen will be the first flagship project in Southern Europe and will create a "green hydrogen ecosystem" in
the Balearic Islands. The project will generate, distribute and utilize renewable hydrogen produced from solar energy.

Project Context
•
Key Partners
The Power-2-Green Hydrogen project aims to pioneer a solution for
island GHG emissions reduction and industrial reconversion in the
island of Majorca, Spain.
• Power-2-Green Hydrogen is planned as a revitalization project for the
Balearic town of Lloseta, which has been significantly impacted by
the end of cement production, a major employer in the area.

Power-2-Green Hydrogen Layout

Project Overview
• The project consists of two solar PV plants making up > 13 MW of
combined
generation capacity and a 2.5MW PEM electrolyzer. O2 ~2,588 tonnes/year Industry
• The output from the electrolyzer will support multiple end-use applications:
• Powering part of the island’s public transportation fleet.
• Green hydrogen injected into the gas grid to supply industrial Hydrogen Compression Injection into Residential
parks. H2 pipeline gas grid

• •TheAs back-up
project will energy foratbuildings
generate least 3 3 0(public
tonnesbuildings, ports,per
of hydrogen hotels,
year and
etc.)
is expected to reduce CO emissions in Majorca by over 20 , 7 0 0 tonnes Lloseta PV plant Electrolyzer H2 ~330 tonnes/
2
6.9 MWn year Hotel
per year.
• Power-2-Green Hydrogen is expected to contribute substantially to local
GDP and create jobs during the construction (expected to commence in
2021) and O&M phases. Buses
• H2 O
The project was awarded a €10 million grant by the Fuel Cells and Hydrogen
Storage Hydrogen filling
Joint Undertaking (FCHJU), making it the second-largest grant awarded by Compression Storage Transportation
station
FCHJU to a green hydrogen project, and the largest grant offered to a Mobility: rental
Mediterranean country. In addition to this grant, the project has also cars, fleets
received public funding from Institute for Diversification and Saving of Petra PV plant etc.
Energy (IDAE). 6.5 MWn
• The renewable origin of the hydrogen will be traced by ACCIONA’s
GreenH2chain®, the world's first platform based on blockchain Fuel cells in building,
technology that guarantees the renewable origin of green hydrogen. Transportation Storage hotels, ports etc.
Hydrogen Production from
Nuclear
Nuclear energy can play an important role in the production of hydrogen through either electrolysis or steam methane reforming
by providing zero-carbon electricity and/or heat.

Considerations for Nuclear Energy to Key Players

•Hydrogen
Nuclear energy’s high-capacity factor and non-intermittent profile
compared to other renewable sources such as wind and solar make it an
Power Source Electrolyzer Power
efficient source of power for zero-carbon hydrogen production, either as
the primary source of electricity or as baseload power for intermittent Source
sources.
• Nuclear energy can provide heat from its reactor, supplementing some Electricity from
wind/solar power 99% pure
natural gas during production of gray hydrogen and thereby reducing
Renewables
its carbon intensity. Hydrogen
• Heat from nuclear can be used in high-temperature steam electrolysis H2
(HTSE) to produce hydrogen. Based on early indications in Germany, this
is expected to reduce cost by 10% due to lower electricity requirement at Electricity from Feed water and alkaline
high temperatures. nuclear power solution (KOH) or solid
as baseload or polymer electrolyte
• Advanced modular reactors (AMR) can potentially produce hydrogen
Nuclear primary
more efficiently, as it produces less waste and higher temperature heat.
source
• Small modular reactors (SMR) could provide an effective, economic
solution for hydrogen production in remote areas with limited grid access. Steam from nuclear heat
• Given the reluctance to co-locate hydrogen production plants with nuclear
reactors, realizing benefits of hydrogen production via nuclear energy is more
• Low-temperature electrolysis is used to split water molecules using
influenced by economics of heat transport infrastructure and demand
an electrical current to produce high purity hydrogen and oxygen.
willingness than technological breakthroughs. For example, heat has been
transported approximately 80 km via pipes in Russia. • High-temperature steam electrolysis (HTSE) uses both heat and
electricity, thereby reducing the total electrical energy demand by
approximately 30%.
• HTSE requires that the solid oxide electrolyte be connected to both a heat and
electrical source, therefore nuclear plants, in particular those of the fourth
generation, could provide the electricity and heat.
Hydrogen Production from
Biomass
Biomass can be used as an input to produce viable hydrogen for industrial processes, with several countries and groups around
the world exploring this hydrogen production method.

Considerations for Biomass to Hydrogen Global

Examples
• Hazer is seeking to build a $15.8 million, 100-tonne per annum
facility by 2021 to demonstrate its hydrogen production
technology, converting biomethane from sewage to renewable
hydrogen.
Australia
Forestry crops Sewage Agricultural Industrial Municipal and • Hazer group has received €6 million in funding from the
and residues residue residues animal waste Australian Renewable Energy Agency (ARENA) for
development of green hydrogen from biomass.
Biomass
• Indian Oil Corp. (IOC) has signed an agreement with the Indian
CO 2 H2
Institute of Science to develop and demonstrate biomass
gasification-based hydrogen generation technology.
High-temperature • The goal is to produce fuel-cell-grade hydrogen at an affordable
steam provided at India
price to be used in fuel cell buses as part of IOC’s larger aspiration
>700 C to usher in hydrogen economy for India.
Pressure swing
absorption • IOC has submitted an expression of interest (EOI) to procure 15
Air separation hydrogen fuel cell buses for mass transport.
Gasifier
unit CO reacts with Hydrogen-
Oxygen-
rich steam water to form rich • The BIONICO project (€3.4 million project cost) is assembling a
CO2 steam
pilot plant to convert biogas directly into hydrogen using a novel
Water Gas reactor concept at its core.
Shift Reactor • The plant will be the first example of a biogas-to-hydrogen plant
EU
based on membrane reactor technology installed and is expected
to produce 100 kg of hydrogen daily.

Syngas including Water

hydrogen, CO and CO2
Carbon Capture
Utilization and
Storage
Solution (CCUS)
areas to reduce industrial emissions
Carbon Capture, Utilization and Storage
(CCUS)Why does CCUS matter? Capture carbon from energy
and hydrogen production
CCS, where suitable infrastructure exists, is
emerging as a promising opportunity for heavy
industry, with CCS hubs emerging. However, Use captured carbon for
the economics of CCU are still a challenge. industrial and manufacturing
processes
Carbon Capture,
Key barrier: Viable storage locations and applications and Utilization and Store carbon underground
lack of transport and storage infrastructure where feasible
Storage (CCUS)

Spotlight Cluster example of

CCUS: Humber Industrial Areas of exploration in this section
Cluster • Emergence of CCS hubs
• Feasibility and barriers of CCS
Humber is planning CCS infrastructure
(transport via pipeline and storage) to be • CCU (utilization)—emerging uses and barriers that need to be overcome
shared across cluster entities and treated as a
regulated asset base—an innovative method
of shared funding and proposals.
Overview of
CCUS
CCUS technology requires scale but can permanently store carbon or recycle it for reuse.

1 Site selection 3 Transport

Carbon capture and purification CO2 is then usually dehydrated
plants are ideally situated near and compressed to prepare for
1
heavy industry, to further reduce transport. It is usually transported
costs down the value chain. Site via pipelines operating at a
However, in some cases, 3 Transport pressure that enables the CO2 to
selecti
pipelines may connect emissions remain in a dense phase.
on
from industry to CCUS plants over It can also be moved via rail, truck
far distances. or ship.
2 Capture
2 Capture 4 Storage
CO2 gas from industrial Compressed CO2 is injected and
processes is captured and stored in deep saline
separated from other by-products formations or depleted oil and
into a “dense phase” or liquid- natural gas reservoirs for
like state. Emissions can be permanent, safe storage.
captured pre- or post-
combustion. The most common
4
separation tactic is amine
absorption. Storage

Carbon utilization
It is possible to use captured CO2 for energy processes. Uses include enhanced oil recovery (EOR), the manufacture of fuels or use as a raw material for
a variety of industries (such as beverages and cement). It is estimated that the utilization rate for captured carbon is only 1%, but this could increase
with further market and technology development and investment.
Emergence of CCS
Hubs
CCS hubs bring together shared infrastructure, emissions and storage availability from local industrial players and
surrounding geography to reduce overall emissions and store and utilize carbon.

Overview of CCS Hubs Global Examples

Hydrogen Coal Natural Gas China North West

Production Gasification Project
• The China North-West CCS hub is aiming to capture and store CO2 from the
Processing hydrogen production units of refineries in surrounding areas.
China • Potential emitters include cement, chemical and the power sector.
H2
• The project is currently still in the demonstration phase but is expected to reduce
more than 3 Mt CO2 per year by 2030.

Longship Project
Power • Norway’s Longship Project has three main components contributing to a CCS
Collection Hub Factories
infrastructure: (1) Carbon capture at the Heidelberg cement factory in southern
Generation Norway, (2) Carbon capture at Fortum Oslo Varme’s waste incineration facility
Norway
Oslo and (3) the Northern Lights project, which will transport and store carbon
CCS CCS offshore in the North Sea.
Storage Hub
Storage Storage • The project is expected to capture 4 0 0 , 0 0 0 MtCO2 and cost $2.7 billion.

Gulf of
•Mexico
In the U.S., Texas and Louisiana (which border the Gulf of Mexico) are both
exploring options to scale CCS infrastructure.
U.S. • It is estimated that CO2 storage capacity in the Gulf of Mexico area exceeds 30Gt
CCS based on depleted hydrocarbon and saline reservoirs.
Storage • U.S. federal incentives such as the 45Q tax incentive can support CCS hub
development.
Carbon Capture and Storage
Overview
To help meet climate change mitigation requirements, an estimated 2,000 large-scale CCS facilities must be deployed by 2040. There
are currently 26 in operation, three under construction and 34 in development stages globally, according to the Global CCS Institute.

Increasing Feasibility of
Market Segment Costs Range for Carbon Capture
•CCS
To accelerate CCS development, policies that increase demand and improve financials will be
needed. National tax credits for carbon sequestration, such as the Section 45Q tax incentive in the Storage and Capture comprises
U.S, or tax programs such as the EU Carbon Border Tax, can help to improve the price of carbon. transport are most of the CCS
• Facilities that are on the path to success have been underpinned by favorable commercial estimated at cost and varies by
conditions and supportive government policies and funding. For example, the UK government $30-$40 / tonne industry
provided £200 million in funding to industrial clusters at Humber and Teesside to help develop their of CO2
CCS technology, and the EU provided a £9 million subsidy to the Port of Antwerp for CCS.
• Industrial clusters are ideal locations for implementing CCS, as costs across the value chain
can be driven down due to scale. Heavy industries in shared locations can transport emitted CO2
via a single capture, transport and storage system that is nearby, ultimately reducing
transportation and cost barriers and increasing economies of scale. Further, industrial clusters
offer commercial synergies that reduce the risk of investment. CO 2 Capture Cost by Industry ( $ /tonne)

Barriers to CCS
Direct Air Capture 134 342
Adoption
• Cost: The equipment and energy needed during the capture phase accounts for the greatest cost.
Capture costs can span a wide range depending on the sector (see chart to the right), but cement, Power Generation 80
40
petroleum refining, iron and steel are the most expensive, at more than $100 per tonne in some
instances. Transport and storage are cheaper than capture costs, usually around $30/tonne of Cement 120
60
CO2 . The Carbon Capture & Storage Association estimates that the total cost of CCS can be
reduced to Iron and Steel 100
40
$40-$57 per tonne through technological advancements.
• Investor Weariness: Due to the nascency of CCS, some investors view the technology as a financial Hydrogen (SMR) 50 80
risk. There is also the possibility that certain projects could become stranded assets. Therefore,
fewer investments are made into CCS and higher premiums are imposed. Chemicals 25 35
• Transportation: To safely transport condensed CO2, pipelines must be specially designed and Low CO2 Concentration
pressurized. Existing oil and gas pipelines must be renovated accordingly. Natural gas processing 15 High CO2 Concentration
• Geological Factors: Pipelines must connect to the appropriate storage site, which can make CCS 25
more difficult and expensive to implement in areas without nearby geological reservoirs.
Note: “Chemicals” in the above chart refers specifically to ethylene oxide, bioethanol and ammonia.
Carbon Capture and Utilization
Pathways
Captured carbon can be used in a variety of ways. Enhanced oil recovery is currently the most advanced method, but
technological advancements and cost-efficiency measures can help advance usage in other applications to reach a larger scale.

Circularity of CO 2 in Oil and Gas Thermochemical

• Enhanced Oil Recovery (EOR): EOR involves injecting CO2 into reservoir rock of an • High-temperature reactions with CO2 are used to produce useful hydrocarbons. CO2 can
existing oil or gas field to recover increased oil and natural gas. The injected CO2 trades be used as a feedstock, a co-reactant or a mild oxidant. Carbon monoxide is one of the
places with the released oil and is permanently stored in minute pore spaces. CO 2 can primary products created from the reaction.
also be injected into unmineable coal deposits and basalts. Studies show that oil • Hydrogen is a major input and catalyst in the thermochemical use case, so it is important
produced from existing fields using EOR with captured CO2 have 63% fewer emissions. that there is a renewable and clean source of hydrogen available.
• CO 2 Fracking: As a relatively less environmentally intensive process than hydraulic
fracking, CO2 fracking would replace and/or reduce water used during the process.
Additionally, the CO2 injected would be trapped underground and removed from the Barriers to Scale
atmosphere.
The primary factor that Technology maturation in this
Biological Conversion
limits the growth of carbon area is needed to help bridge
• This process uses biological pathways to convert CO2 and other products into biomass, utilization is the lack of the gap between lab concept
chemicals, and fuels. locally available, affordable and commercially viable scale.
• Both photosynthetic and non-photosynthetic processes can convert CO2 into desired CO 2 that can be delivered
products. at a price below that of the
project itself.
Carbonation and Cement
• Inorganic reactions are used to transform gaseous CO 2 into solid carbonates for The conversion of CO2 Carbon utilization pathways can
building use, industrial water residue, and nanoparticles. Strong potential in cement to chemicals, fuels and have negative indirect
production and green construction. materials requires significant impacts, so it is crucial to
energy. Therefore, cost and consider the environmental
Electrochemical and Photochemical efficiency improvements are impact of the full life cycle of
• Electrons and protons are used to activate CO2 to create products. The electrochemical essential to increasing CCU utilization strategies to confirm
pathway uses electricity from renewable sources to power the reaction, whereas the adoption. emissions are reduced
photochemical path uses sunlight convert CO2 and water into solar fuels. permanently.
CCS Example: Port of
Rotterdam
The Port of Rotterdam CO 2 Transport Hub and Offshore Storage Project (Porthos) will transport CO 2 from industry in the Port of
Rotterdam in the Netherlands and store it in empty gas fields in the North Sea. It is currently still in preparation and planning
stages.
Porthos Map of Operations
CO2

Carbon capture Transport and storage Emissions reduction

A shared pipeline will run Pressurized CO2 will be sent It is expected that the
through heavy-industry from the compressor station project will be able to store
refineries and hydrogen to an offshore platform via approximately 2.5 Mt of Gas field
producers in the Rotterdam pipeline and pumped into CO 2 per year, equivalent to platform
Port area and will transport empty gas fields that are 10% of the total emissions
CO 2 to a compressor more than 3 km beneath the produced by Rotterdam’s CO 2
station. North Sea seabed. industrial sector. pipelines

Compressor
station

Cost and investment Project partners Timeline

The European Commission Four companies— Air Porthos has started with the
has proposed awarding Liquids, Air Products, FEED phase as well as the
£102 million in funding to ExxonMobil, and Shell— SDE++ grant. The final
the Porthos project, out of a have agreed to supply CO2. investment decision is
total expected investment The transport and storage expected in early-2022 and
of will be supported by the Port the first storage will occur
£ 45 0 to £550 million. of Rotterdam Authority, by end of 2 0 2 4 .
Gasuine and EBN.
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Pg.68 “Longship: The Greatest Climate Project Ever In Norwegian Industry,” Intelligent Living, Oct 2020,
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