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Research and

Innovation

Industrial technology roadmap

ERA

in energy-intensive

industries

for low-carbon technologies

ERA industrial technology roadmap for low-carbon technologies in energy-intensive industries

European Commission

Directorate-General for Research and Innovation

Directorate E — Prosperity

Unit E.1 — Industrial research, innovation and investment agendas

Contact Pauline Sentis

Angelo Wille

Email EU-INDUSTRIAL-TECHNOLOGY-ROADMAPS@ec.europa.eu

pauline.sentis@ec.europa.eu

angelo.wille@ec.europa.eu

RTD-PUBLICATIONS@ec.europa.eu

European Commission

B-1049 Brussels

Manuscript completed in March 2022.

1st edition.

The European Commission is not liable for any consequence stemming from the reuse of this publication.

The views expressed in this publication are the sole responsibility of the author and do not necessarily reect the views of the European Commission.

More information on the European Union is available on the internet (http://europa.eu).

PDF ISBN 978-92-76-44692-7 doi:10.2777/92567 KI-01-21-501-EN-N

Luxembourg: Publications Oce of the European Union, 2022

The reuse policy of European Commission documents is implemented based on Commission Decision 2011/833/EU of 12 December 2011 on the

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EUR 2021.5872 EN

EUROPEAN COMMISSION

Directorate-General for Research and Innovation

2022

ERA INDUSTRIAL TECHNOLOGY

ROADMAP FOR LOW-CARBON

TECHNOLOGIES

in energy-intensive industries

LEGAL NOTICE

This publication by the European Commission’s Directorate-General for Research and Innovation aims to provide evidence-based scientic

support to the European policymaking process. It gives an overview on the state of play in R&I development and uptake of low-carbon

industrial technologies for energy-intensive industries. The report has been developed with help of an external contractor, Member States

and stakeholders. The outputs and recommendations expressed do not imply any policy position on the part of the European Commission.

Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of

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ResearchandInnovationIndustrialtechnologyroadmapERAinenergy-intensiveindustriesforlow-carbontechnologiesERAindustrialtechnologyroadmapforlow-carbontechnologiesinenergy-intensiveindustriesEuropeanCommissionDirectorate-GeneralforResearchandInnovationDirectorateE—ProsperityUnitE.1—Industrialresearch,innovationandinvestmentagendasContactPaulineSentisAngeloWilleEmailEU-INDUSTRIAL-TECHNOLOGY-ROADMAPS@ec.europa.eupauline.sentis@ec.europa.euangelo.wille@ec.europa.euRTD-PUBLICATIONS@ec.europa.euEuropeanCommissionB-1049BrusselsManuscriptcompletedinMarch2022.1stedition.TheEuropeanCommissionisnotliableforanyconsequencestemmingfromthereuseofthispublication.TheviewsexpressedinthispublicationarethesoleresponsibilityoftheauthoranddonotnecessarilyreflecttheviewsoftheEuropeanCommission.MoreinformationontheEuropeanUnionisavailableontheinternet(http://europa.eu).PDFISBN978-92-76-44692-7doi:10.2777/92567KI-01-21-501-EN-NLuxembourg:PublicationsOfficeoftheEuropeanUnion,2022©EuropeanUnion,2022ThereusepolicyofEuropeanCommissiondocumentsisimplementedbasedonCommissionDecision2011/833/EUof12December2011onthereuseofCommissiondocuments(OJL330,14.12.2011,p.39).Exceptotherwisenoted,thereuseofthisdocumentisauthorisedunderaCreativeCommonsAttribution4.0International(CC-BY4.0)licence(https://creativecommons.org/licenses/by/4.0/).Thismeansthatreuseisallowedprovidedappropriatecreditisgivenandanychangesareindicated.ForanyuseorreproductionofelementsthatarenotownedbytheEuropeanUnion,permissionmayneedtobesoughtdirectlyfromtherespectiverightholders.TheEuropeanUniondoesnotownthecopyrightinrelationtothefollowingelements:Imagecredits:Cover:©skypicsstudio#286372753,Viktoriia#345410470,Rudzhan#443123976,2022.Source:Stock.Adobe.comEUR2021.5872ENEUROPEANCOMMISSIONDirectorate-GeneralforResearchandInnovation2022ERAINDUSTRIALTECHNOLOGYROADMAPFORLOW-CARBONTECHNOLOGIESinenergy-intensiveindustriesLEGALNOTICEThispublicationbytheEuropeanCommission’sDirectorate-GeneralforResearchandInnovationaimstoprovideevidence-basedscientificsupporttotheEuropeanpolicymakingprocess.ItgivesanoverviewonthestateofplayinR&Idevelopmentanduptakeoflow-carbonindustrialtechnologiesforenergy-intensiveindustries.Thereporthasbeendevelopedwithhelpofanexternalcontractor,MemberStatesandstakeholders.TheoutputsandrecommendationsexpresseddonotimplyanypolicypositiononthepartoftheEuropeanCommission.NeithertheEuropeanCommissionnoranypersonactingonbehalfoftheCommissionisresponsiblefortheusewhichmightbemadeoftheinformationcontainedinthisreport.2TABLEOFCONTENTSFOREWORD.....................................................................................................4ACKNOWLEDGEMENTS....................................................................................5EXECUTIVESUMMARY....................................................................................6Keyfindings....................................................................................................................6Keyopportunitiesforaction..............................................................................................7INTRODUCTION..............................................................................................8CHAPTER1TRANSITIONOFENERGY-INTENSIVEINDUSTRIESTOCLIMATENEUTRALITY.141Decarbonisationofenergy-intensiveindustries...............................................................14Thegreenhousegasemissionsofenergy-intensiveindustries14Concentrationofemissionsinthemainsectors16Focusonsteels,chemicalsandcement172Currentdecarbonisationscenarios.................................................................................22Needforacceleratedinnovation–theIEANetZeroby2050Scenario22Marketscale-uptrajectories23Threehigh-levelpathwaystonetzeroemissionsforEUheavyindustry243ConclusionsonthetransitionoftheEIIecosystemtoclimateneutrality.............................26CHAPTER2KEYTECHNOLOGICALPATHWAYS..................................................................271Synthesisofpathways,technologiesandlevelsofmaturity..............................................272TheinnovationareasandtheapproachoftheProcesses4PlanetPartnership.......................323TheCleanSteelPartnershipapproachandtechnologicalpathways....................................364TheSETPlanapproachandprioritisedR&Iactivities........................................................405Enablersincludingcircularity........................................................................................446Conclusionsonkeytechnologicalpathways....................................................................47CHAPTER3R&IINVESTMENTS.........................................................................................491R&Ineedsfordecarbonisingenergy-intensiveindustries..................................................49TheProcesses4PlanetPartnership:fundingandinvestmentneedsalongthetimeline49TheCleanSteelPartnership–funding&investmentneedsalongthetimeline51SETPlanAction6onenergyefficiencyinindustry:estimationsoffundingneeds52Threepathwaystonet-zeroemissions–R&Ifunding&investmentneeds532EstimatedpublicandprivateR&Iinvestments................................................................57Public57Private603Patentsandbibliometricsinclimatechangemitigationtechnologies..................................65Updateontrendsingreenpatentingoverall65Patentingtrendsingreeninventionsrelevanttoenergy-intensiveindustries67EUScoreboardcompaniesingreeninventionsforenergy-intensiveindustries70TopScoreboardinnovatorsperenergy-intensiveindustry72Geographyofpatents:regionaltechnologyhotspots74NationalandregionalperformanceintheEU76Bibliometrics784EUpublicinvestmentsandprogrammes.........................................................................80Horizon2020andHorizonEurope80Financialinstruments:EuropeanFundforStrategicInvestment(EFSI)/InvestEU.89InnovationFund933BreakthroughEnergyCatalystpartnership95ModernisationFund96LIFECleanEnergyTransitionsub-programme96COSME96The‘IdeasPoweredforbusinessSMEFund’96EuropeanRegionalDevelopmentFund(ERDF)in2014-202097EuropeanRegionalDevelopmentFund(ERDF)in2021-2027106JustTransitionFund1075Nationalinvestmentsandprogrammes..........................................................................109Recoveryandresilienceplans&nationalenergyandclimateplans:MemberStates’actiontowardsclimateneutralityunderthescrutinyoftheCommission109StrategiesrelatedtoindustrialdecarbonisationandR&I112Specificschemesfordevelopmentandtowardsdeploymentofgreentechnologies113Schemesonspecificstagesoftechnologydevelopment1156ConclusionsonR&Iinvestments...................................................................................117R&Ineedsandpublicandprivateinvestments117Patents118EUprogrammesaddressinglowcarbonindustrialtechnologies119Nationalsupportschemesandstrategies121CHAPTER4FRAMEWORKCONDITIONS.............................................................................1231Regulatoryframeworkconditions..................................................................................123EUregulatoryframeworkforenergy-intensiveindustries1231.3.Policyframeworkfordigitaltechnologiestoenablegreentransformation1321.4.StateaidforR&Dandinnovationintheareaoflow-carbontechnologies–overviewofapplicableEUStateaidrules1331.5.SustainableFinanceandEUTaxonomy1352Valorisationandstandardisationforlow-carbonindustrialtechnologies..............................135ValorisationofR&Iresults135Standardisationasanimportantaspectofknowledgevalorisation137Standardisationusecasesasexamplesforvalorisationofresearchresults138Standardisationgaps1413Conclusionsonframeworkconditions............................................................................143Regulation143Valorisationandstandardisationforlow-carbonindustrialtechnologies143INPUTTOTHETRANSITIONPATHWAY...........................................................143REFERENCES...................................................................................................147ABBREVIATIONS&ACRONYMS......................................................................153FIGURES,TABLESANDBOXES........................................................................157ANNEXES........................................................................................................1624FOREWORDAtthetimeofthispublicationandforseveralmonths,Europehasbeenfacinghighandvolatileenergyprices.AfterRussia’sunprovokedinvasionofUkraine,aspikeinconventionalenergypricesandsecurityofsupplyconcernshaveexacerbatedthesituation.TheCommissiondecidedtoactdecisivelyandpresentedaJointEuropeanactionformoreaffordable,secureandsustainableenergy:’REPowerEU’.WhileEuropeislookingatshort-termsolutionstocaterforthecurrentneeds,weremainmorethaneverboundtotheobjectivesoftheEUGreenDeal.TheEUtransitiontocleanenergyhasbecomeevenmoreurgentandthecasehasneverbeenstrongerandclearer.ImplementingtheEuropeanGreenDealgoeshandinhandwithmakingtheEUindependentfromRussiangasimports.Lookingattheimpactonindustry,Russia’sinvasionofUkrainehitstheEU’senergy-intensiveindustries’ecosystemhard.TheREPowerEUplanofMarch2022showsconfidenceinourcapabilitytoacceleratetheswitchtorenewableelectrificationandgreenhydrogen.MeetingtheobjectivesoftheGreenDealrequiressomechangesofparadigm,climatemitigationmeasuresandastrongresearch-basedenergysector.Acceleratingtheimplementationofourgoalsrequiresevenbolderandstrongerinnovations.Thatiswhy,incomplementtothenewEmissionsandPollutantspackageofproposals,wepublishthefirstindustrialtechnologyroadmapforlow-carbontechnologiesinenergy-intensiveindustries.WerenewedtheEuropeanResearchAreawiththeobjectiveofincreasingtheimpactofresearchandinnovationandtospeedupthetransferanduptakeofresearchresultsbyindustryintheeconomy.Thisroadmapdeliversonthisobjective.Itprovidesasynthesisonthestateofplayinthedevelopmentoflowcarbontechnologiesacrossenergy-intensivesectorsandpointstocriticalinvestmentneeds.Theseneedsappearnotyetfullycoveredinexistinginvestmentagendasandsupportmechanisms.Thisroadmapisdrawingapathwayformoresynergiesintheuseofexistingmechanismsandcooperationinstruments.TheroadmapisaddressedtopolicymakersatEUlevelandintheMemberStatesandregions,butalsotodecisionmakersintheindustry,andallstakeholdershavingastakeinthedevelopmentoflow-carbontechnologies.TheroadmapistheretohelpMemberStatestomaintaintheirtrajectorytowardsclimateneutralityandtoteamupwithresearchers,innovatorsandtheindustryforconcreteaction.IthankallwhohavecontributedtothisreportandIamconfidentthatyoufinditinformativeandinspiring.Iamlookingforwardtocontinuinganddeepeningourcooperation,jointactionandinvestmentstoliveuptoourcommitmentsforasustainable,fair,secureandclimate-neutralEurope.MariyaGabrielCommissionerforInnovation,Research,Culture,EducationandYouth5ACKNOWLEDGEMENTSTheEUindustrialtechnologyroadmapforlow-carbontechnologiesinenergy-intensiveindustrieshasbeenpublishedwithinthecontextofthenewEuropeanResearchAreabytheDirectorate-GeneralforResearchandInnovation(DGR&I)—DirectorateE,Prosperity.TheprojectwascoordinatedundertheleadershipofAngeloWilleandDorisSchröcker(respectively,DeputyHeadandHeadofDGR&I.E1IndustrialResearch,Innovation&InvestmentAgendas).ThisdocumentwasproducedbyAngeloWille,PaulineSentis,AdrianMarica,FlorenceRogerandEvgeniEvgenievasthemainauthors.Inthesameunit,BernhardvonWendland,PatrickMcCutcheonandAlexTalacchi,respectively,contributedtothecontentonstateaid,onpatentsandoninvestments.PeterDröll,DirectorforProsperityinDGR&I,andAndreaCeglia,madesubstantialcontributionstothereviewofthiswork.JürgenTiedje,GarbineGuiuEtxeberriaandDominiquePlanchon(DGR&I.E3,Industrialtransformation,)alsocontributedtothereviewofthedraftreport.InDGR&I,wearealsothankfulfortheirinputstoJulienRavet,OcéanePeiffer-SmadjaandAthinaKarvounaraki(G1,ChiefEconomist);toStefanieKalff-LenaandGergelyTardos(E2,Valorisationpolicies&IPR);andtoDanielSzmytkowski(G6,Commonknowledgeanddatamanagementservice).ThisreportistheoutcomeofstrongcollaborationwithservicesallaroundandbeyondtheCommission,involvingcolleaguesfromtheJointResearchCentre(JRC),theDirectorates-GeneralforEnergy(DGENER),forRegionalPolicy(DGREGIO),forIndustry,InternalmarketandSMEs(DGGROW)andforClimateAction(DGCLIMA),forEducationandculture(DGEAC),forEnvironment(DGENV),theEuropeanInnovationCouncilandSMEsExecutiveAgency(EISMEA).Inparticular,wearegratefultoEricLecomtefromDGENERfortheclosecollaborationonthewholereport.Thechapteronenergy-intensiveindustrieswasbasedoncontributionsfromJRCcolleagues:AndreasUihlein,IgnacioHidalgo-Gonzalez,MariaRuehringer.ThecontentonSMEsreceivedcontributionsfromAlbertoValenzano(GROW),Nicola-ElisabethMorris(GROW)andAurelieGommenginger(EISMEA).ThesectionsondecarbonisationscenariosandkeytechnologieswastheresultofacollaborationbetweentheEuropeanCommissionandtheAustrianInstituteofTechnology.WearethankfulforthethoroughassessmentandanalysisworkconductedbyWolframRhomberg,Karl-HeinzLeitnerandBernhardDachs.WealsothankJulianSomers(JRC)forhisreviewandcontributions.ThechapteronR&IinvestmentsreceivedinputsandsuggestionsfromcolleaguesinJRC(AlikiGeorgakaki,FrancescoPasimeni,AnabelaMarquesSantos,AndreaConte,KarelHermanHaegeman,CarmenSilleroIllanesandNielsMeyer),inCLIMA(JoseJimenezMingo,CarlaBenauges,JohannaSchieleandEwelinaDaniel),inEISMEA(KaterinaBorunskaandAndresAlvarez-Fernandez),KalinaDinkovafromECFINandDaliborMladenkafromEAC.ThesectiononstandardisationandvalorisationwascoordinatedbyAndreasJenetfromtheJRCandinvolvedcontributorsfromtheJRC(PaoloBertoldi,SilviaDimova,EvangelosKotsakis,MarcoLampertiTornaghi,AlainMarmier,JoseMoya,AmaliaMunozPineiro,IouliaPapaioannou,FabioTaucer)andfromCEN-CENELEC(AshokGanesh,PhilipMaurer,LiviaMian).WearegratefultoGraziaAngerame,MartinaDalyandSandraMilev(DGR&I)fortheirsupportinthecommunicationactivities.6EXECUTIVESUMMARYTheEUhastodrasticallyacceleratethecleanenergytransitionandincreaseEurope'senergyindependencefromfossilfuels–andfromRussia.Thisfocusisnotnew:decarbonisationofindustryisakeyelementontheEU’spathtoachievingtheobjectiveofclimateneutralityby2050andanintermediatetargetofreducinggreenhousegasemissionsbyatleast55%by2030,aslaiddownintheEuropeanClimateLaw.However,bringinginnovativelow-carbonindustrialtechnologiesquicklytothemarkethasbecomemoreurgentthanever.TheEuropeanResearchArea(ERA)industrialtechnologyroadmapsketchesoutthekeytechnologiesandthemeanstotransferthemtotheindustrialecosystemforenergy-intensiveindustriesatEUandnationallevel.KeyfindingsScalingupanddeployingthe–manageable–numberofinnovativelow-carbontechnologiescurrentlyathightechnologyreadinessisneededtoreachthe2030emissionobjectivesandtofurtherreduceindustrydependenceongas.Technologiesthatarestillinpilotanddemonstrationphaseandatanevenlowerdevelopmentlevelsarecrucialforreachingthe2050emissiontargets.Thechallengeistospeedupinnovationprojectsatscaletoreachthemarket.•Thereisagapbetweenthecurrentoverallresearchandinnovation(R&I)investmentsacrossenergy-intensivesectorsandtheamountneededtoreachGreenDealemissiontargets.Thebiggestinvestmentgapconcernsinvestmentsinthecomingyearsforfirst-of-a-kind(FOAK)installationsandfurtherdeploymentoftechnologiescurrentlyathightechnologyreadinesslevels.WhileEUco-programmedpublic-privatepartnershipsprovideastrongforumforcross-sectorcooperation,thereisnobroadandopenplatformtoestablishefficientcoordinationofresearch,developmentandinnovationinvestmentplansforlow-carbonindustrialtechnologies.•SeveralMemberStateshavedevelopednationalsector-specificorevencross-sectoralstrategiestowardsdecarbonisationinenergy-intensiveindustries,co-createdwithrelevantstakeholders(suchasinFinland,Germany,SloveniaandSweden).Theseareimportantinstrumentsdesigningadetailedprocesswithmilestonestowardscommonlyagreedemissionreduction(andother)targets.Nevertheless,notallMemberStateswithhighCO2emission(percapita)havehadhighEuropeanregionaldevelopmentfund(ERDF)allocationsforlow-carbonprojectsduringtheprogrammingperiod2014-2020.•AkeybarriertorolloutaretheuncertaintiesaroundauthorisationsofFOAKinstallations.Designingandbuildingapilotordemonstrationplantatscaleisoneofthemajorchallengesforthedevelopmentofmanydecarbonisationtechnologiesontheregionallevelandacrossborders.•Patentingfilingsingreeninventions,whichgiveearlyindicationsoftechnologicalandeconomicdevelopments,continuetoincreasegloballyandpatentsbymajorEUcompaniesstillplayakeyroleinenergy-intensiveindustries.However,theroleofsmallandmedium-sizedenterprises(SMEs)inenergy-intensiveindustries’inventionsremainsunclear.•EUgreenstandardsforseverallow-carbontechnologiesappeartobeunderdevelopedinareassuchascarboncaptureandstorage,hydrogenandindustrialsymbiosis.Ascomparedtoothergreentechnologieslikebiomass,theirnumberofreferencedpolicydocumentsandEuroVocdescriptorsissignificantlylower.7KeyopportunitiesforactionInordertomakebestuseofthepublictoolboxtoleverageprivateR&Iinvestment,toincreasecross-sectorcooperationandacceleratedeployment,thefollowingopportunitiesforactionarise:•Assessthepotentialforestablishinganindustrialallianceorsimilarinitiativeforlow-carbontechnologiesinenergy-intensiveindustriesbasedupontheProcesses4PlanetandtheCleanSteelPartnerships,asreferredtointhe2020NewIndustrialStrategy.Suchinitiativesshouldhaveaspecialfocusoncross-sectoraltechnologieslinkedtotheenergyefficiencyoftheindustrialprocessesanduseandintegrationofrenewables.Implementingthiscross-sectoralapproachandthesynergiesidentifiedbytheroadmapwouldallowamoreefficientuseofthepublictoolboxtoacceleratedecarbonisationandindependencefromgastowardscleartargets.Inthiscontext,relevanthubstructurescouldfacilitateinvestmentintodevelopmentanduptakeofcross-sectorallow-carbonindustrialtechnologies.AwarenessraisingactionsandexpertdiscussionsaboutprivateR&IinvestmentundertheEUtaxonomyforsustainablefinanceandaboutexistingnationalsupportstructuresforuptakecouldhelpincreasingR&Iinvestments.•Facilitatespecificnationalsectoralandcross-sectoralstrategiesorprogrammeswithkeystakeholdersaspartofERApolicyagenda.ThiscanincludejointdiscussionsbetweentheERAForumandtheStrategicEnergyTechnology(SET)-Plan’sworkingpartyonenergyefficiencyinindustryand/orpeercounsellingandworkingunderthepolicysupportfacilityandmutuallearningexercise.R&IinputintotheEuropeanSemestercouldfacilitatebettermatchingofERDFandnationalfundingbyMemberStateswithafocusonthehighestemittingMemberStatesandregions.•EstablishacommunityofpracticetofacilitateauthorisationforFOAKinstallationforlow-carbonindustrialtechnologies,buildinguponsimilarapproachesundertheEuropeanChipsAct,theRegulatoryHubsNetwork(RegHub)undertheregulatoryfitnessandperformanceprogramme(REFIT),EUrecommendationsforapprovalprocessesforrenewableenergyinstallations,theHubs4Circularitycommunityofpracticeandinvolvementofexistingnetworksofrelevantagencies.•Improvetheknowledgeonpatentingforgreentechnologiesandforenergy-intensiveindustries,suchascementandsteel,throughmoregranularsectoranalysis,andthroughenablingsimpleronlinesearchersforexistinggreenpatents.•FacilitatefurthervalorisationbyexploringwithindustrytheopportunitytoopenupIPoncentral(cross-sectoral)greeninventions,wideningtheaccesstoIPforlicensing(e.g.patentpool)andknowledgetransfer.•CooperatewithEuropeanstandardisationorganisations(e.g.CEN,CENELEC)andindustrialpartnershipstoidentifyandfillmainstandardisationgapsforinnovativelow-carbonindustrialtechnologies.8INTRODUCTIONPolicycontextThisindustrialtechnologyroadmapforlow-carbontechnologiesinenergy-intensiveindustriesispublishedatamoment,whentheCommissionandEUleadershavelaunchedstrongmeasurestorespondtoRussia’sunprovokedinvasionofUkraineandtobreaktheEU’sdependenceonRussiangasimports.Veryhighenergypricesandtheneedtostronglyacceleratethecleanenergytransitioncallforacombinationofpragmaticshort-termsolutionsanddeterminedfirststepstoimplementambitiousmedium-andlong-termstrategies.Thistechnologyroadmaphighlightsthetechnologicaloptionsforlow-carbontechnologiesinenergy-intensiveindustries,includingtheuseofgreenelectricityandhydrogen,itpointstoavailablesupportinstruments,synergiesandactiontoacceleratethetransition.ItisacallforadialoguewithMemberStatesandregionsontheirspecificaswellascommonandcross-borderinterestsandneeds,andprovidescomprehensiveinputforEurope’sdecisionmakers.AsacornerstoneoftheEuropeanGreenDeal1,theEuropeanClimateLaw2setsinlegislationtheEU’sobjectiveofclimateneutralityby2050withanintermediatetargetofreducinggreenhousegasemissionsbyatleast55%by2030,comparedto1990levels.Climateneutralityby2050meansachievingabalancebetweenanthropogeniceconomy-wideemissionsbysourcesandremovalsbysinksofgreenhousegasesdomesticallywithintheEUby2050,mainlybycuttingemissions.ThelawaimstoensurethatallEUandnationalpoliciescontributetoachievingthisgoalandthatallsectorsoftheeconomyandsocietyplaytheirpartindoingso.ItstepsupeffortstotackleclimatechangeandtodeliveronimplementationoftheParisAgreementadoptedundertheUnitedNationsFrameworkConventiononClimateChangeandtheIntergovernmentalScience-PolicyPlatformonBiodiversityandEcosystemServices.TheEuropeanClimateLawtakesonboardtheEuropeanCouncil’s3emphasisonthekeyroleofforward-lookingresearch,developmentandinnovationinachievingclimateneutrality.Itsaccompanyingimpactassessmentemphasisesthekeyroleresearchandinnovation(R&I)playsinachievingtheEU’sclimategoalsandshowthatR&Iwilldeterminethespeedatwhichdecarbonisationcantakeplace,atwhatcostandwithwhataccompanyingbenefits.AnupcomingOECDreportadvocatestherolethatR&Ineedtoplayaspartofthetransitiontoaclimate-neutraleconomy4.Thereportshowsthatthescaleofthecurrentinnovationresponseisnotinlinewiththeclimateneutralitytargets.Theempiricalevidencepointstoastagnationinpublicspendingforlow-carbonR&DasashareofGDPandaworrisomedecreaseinclimate-relatedinnovationasmeasuredbypatentfilings,alongwithastableshareofglobalVCfundingdirectedatclimate-relatedstart-ups.Therefore,thereportexploresthepossibilitiestowardsmoreambitiousR&Ipoliciesforclimateneutrality,includinginteractionswithotherpolicyareas.Inthiscontext,Russia’sinvasionofUkraineisastarkreminderthattheEUhastodrasticallyacceleratethecleanenergytransitionandincreaseEurope'senergyindependencefromfossilfuels–andfromRussia5.1COM/2019/640final,CommunicationfromtheCommissiontotheEuropeanParliament,theEuropeanCouncil,theCouncil,theEuropeanEconomicandSocialCommitteeandtheCommitteeoftheRegionsTheEuropeanGreenDeal.2Regulation(EU)2021/1119oftheEuropeanParliamentandoftheCouncilof30June2021establishingtheframeworkforachievingclimateneutralityandamendingRegulations(EC)No401/2009and(EU)2018/1999(EuropeanClimateLaw).3EuropeanCouncilconclusions,12December2019(europa.eu).4OECD(2022),Drivinglow-carboninnovationsforclimateneutrality,OECDPublishing,Paris.Forthcoming.5SeeRePowerEU:https://energy.ec.europa.eu/repowereu-joint-european-action-more-affordable-secure-and-sustainable-energy_en.9ThepurposeofthisfirstERAindustrialtechnologyroadmapforlow-carbontechnologiesinenergy-intensiveindustriesistohelpaligningandlinkingkeypartnershipsunderHorizonEuropewiththeindustrialecosystemforenergy-intensiveindustries,soastoensurethateffortsteamupandthatresearchresultsareknownandrolledoutfasterintheeconomy9.TheroadmappullstogetheranalysisandstakeholderfeedbackonthestateofplayandfutureneedsinR&Itodevelopandtakeupkeylow-carbontechnologies.Withthiscomprehensiveoverview,includingtheavailablepolicytoolbox,itwillfacilitateanefficientuseofthefullsetofsupportmechanismstocrowdinprivateinvestmentsinkeycross-borderprojects.TheroadmapprovidesthebasisforactionatEUandnationalleveltospeedupthetransferofresearchresultsintotheeconomywithR&Iinvestmentagendasfrombasicresearchtodeployment10.ThenewERApolicyagendaincorporatesthetwogreenindustrialtechnologyroadmapsonlow-carbonandcircularindustrialtechnologiestogetherwithcomplementaryactiontoacceleratethetwingreenanddigitaltransitionforkeyindustrialecosystems11.62022FactsandFiguresoftheEuropeanChemicalIndustry,https://cefic.org/a-pillar-of-the-european-economy/facts-and-figures-of-the-european-chemical-industry/.7Pleaseseealso:Leopoldina,AkademiederWissenschaften:Ad-hoc-Stellungnahme8.März2022,WiesichrussischesErdgasinderdeutschenundeuropäischenEnergieversorgungersetzenlässt;https://www.leopoldina.org/publikationen/detailansicht/publication/wie-sich-russisches-erdgas-in-der-deutschen-und-europaeischen-energieversorgung-ersetzen-laesst-2022/.8Asafeedstockformaterials/chemicals(especiallyinthechemicalindustry)itisdifficulttosubstituteandmightcontinuetoplayakeyroleinsmallerquantities.9COM(2020)628final,CommunicationfromtheCommissiontotheEuropeanParliament,theCouncil,theEuropeanEconomicandSocialCommitteeandtheCommitteeoftheRegionsAnewERAforResearchandInnovation(AnewERA).Asecondindustrialtechnologyroadmapwilladdresscircularindustrialtechnologiesandwillbepublishedbeforeendof2022.10Action5oftheNewERAforResearchandInnovation,COM(2020)628.11EuropeanCommission(2021),EuropeanResearchAreaPolicyAgenda–Overviewofactionsfortheperiod2022-2024,p.15andfollowing.CouncilConclusions26November2021(14308/21).Box1IMPACTOFAGASSHORTAGEANDGASPRICERISEONTHEDECARBONI-SATIONOFINDUSTRIALPROCESSESINEUENERGY-INTENSIVEINDUSTRIESDUETORUSSIA’SINVASIONOFUKRAINEComparedwithcoalandoil,naturalgashaslowerCO2emissionsinrelationtoitsrespectivecalorificvalueandisthereforeanimportanttransitionalenergysourceontheroadtoclimateneutrality.Inthechemicalindustryforexample,itaccountedfor35.6%oftheenergyconsumptionin20196.ReplacingRussiannaturalgasposesamajorchallenge,particularlyinthegenerationofprocessheatandheating.Theheatingeffectofnaturalgascanbereplacedinthemediumtolong-termbyacombinationofrenewableelectricityandhydrogen.However,thisalsorequiresenormousadditionalquantitiesofenergygeneratedinEuropeorimported,aswellasaconversionofindustrialplantsandstorageandsupplyinfrastructures7.Existingtransformationpathsmustthereforebelookedatconsideringthenewframeworkconditions.Againstthebackgroundofthescarcityofnaturalgas,-alsoasa"transitionfuel",naturalgasshouldplayonlyaminorornoroleinfuturetechnologicalsolutions/R&Iprojectsforemissionreductionofindustrialprocesses8.TheimplicationsofreducedavailabilityandhighercostofgasonthetechnologypathwaysanalysedinthisindustrialtechnologyroadmapwillbebesummarisedunderChapter2.10TheEU’supdatedindustrialstrategyfromMay202112defines14industrialecosystems,oneofwhichbeingenergy-intensiveindustries(EIIs)13.Followingthisstrategy,thefindingsfromthisindustrialtechnologyroadmapforlow-carbontechnologiesfeedintotheupcomingtransitionpathwayfortheenergy-intensiveindustriesecosystem,whichtheEuropeanCommissionisco-creatingwithstakeholderstofacilitatethegreenanddigitaltransitionandtoincreaseresilience.ItcontributestheR&Ielementstotheenvisagedactionableplan,whichthetransitionpathwayisdesignedtodeliverfortheenergy-intensiveindustriesindustrialecosystem.Anindustrialtechnologyroadmapforlow-carbonindustrialtechnologiesThisERAindustrialtechnologyroadmapforlow-carbontechnologiesinEIIsprovidesanevidencebasetounderpinR&Iactionforaccelerateddevelopmentanduptakeofthesetechnologies,buildingontheHorizonEuropeProcesses4PlanetandCleanSteelpartnerships.ItcomprisesinputfromseveralCommissionservicesconcerned,whileprovidingcomplementaryanalysisoftechnologydevelopmentandexistingEU-wideR&Iactiontosupportit.World-leadingresearchonlow-carbonindustrialtechnologiesisbeingcarriedoutatEUlevelandatnationalandregionallevelswithintheEU.TheHorizon2020andHorizonEuropeprogrammesarefundingcutting-edgeR&Iintheseareas,includingpartnershipswithindustrytohelpmovelow-carbontechnologiesforenergy-intensiveindustriesfrombasicresearchtodeployment.TheEuropeanCommissionregularlycollectsandassessesevidenceonthedevelopmentanduptakeoflow-carbonindustrialtechnologies.Thisincludesindustry’sfocusonR&Dinvestment,MemberStates’engagementinrelevantR&I,andlocalactiontosupportindustrialtransformation.RelevantmonitoringtoolsincludetheEUIndustrialR&DInvestmentScoreboard,theStrategicEnergyTechnologyInformationSystem(SETIS),theScience,researchandinnovationperformanceoftheEU(SRIP)reports14,theHorizonEuropeResultsPlatform,theInnovationRadar,policymechanismprojects15,theGlobalIndustrialResearch&InnovationAnalyses(GLORIA)project,theprogressreportoncompetitivenessofcleanenergytechnologies,etc.Theycontinuouslyimprovetheirmonitoringandassessmentworkincludingonbreakthroughindustrialtechnologiesandinnovationecosystems,incollaborationwiththeEuropeanInnovationCouncil(EIC).TheCommission’sworkwithindustryexpertshasidentifiedspecific(groupsof)technologiesexpectedtohaveaparticularlyhighpotentialtolowerEUcarbonemissionsinEIIs16.Thesetechnologiesalsoplayakeyroleingreenhousegasemissionreduction12COM(2021)350final,CommunicationfromtheCommissiontotheEuropeanParliament,theCouncil,theEuropeanEconomicandSocialCommitteeandtheCommitteeoftheRegionsUpdatingthe2020NewIndustrialStrategy:BuildingastrongerSingleMarketforEurope’srecovery(Updatedindustrialstrategy).13Theenergy-intensiveindustries(EII)ecosystemcoversthechemicals,steel,paper,plastics,mining,extractionandquarrying,refineries,cement,wood,rubber,non-ferrousmetals,ferro-alloys,industrialgases,glassandceramicsindustries,asdefinedbytheCommissioninSWD(2021)277,CommissionStaffWorkingDocumentForaresilient,innovative,sustainableanddigitalenergy-intensiveindustriesecosystem:Scenariosforatransitionpathway(TransitionpathwayfortheEIIecosystem).Thesectorsincludedintheecosystemarecharacterisedbyhighenergyintensityandbybeingatthestartingpointofmostvaluechains,providingraw,processedandintermediatematerialsratherthanfinishedgoods.Inthisdocument,thefocusisonthefollowingsectors:cementandlime,chemicals,ironandsteel,pulpandpaper,ceramics,glass,non-ferrousmetals.14EuropeanCommission,DGR&I(2022),Science,ResearchandInnovationperformanceoftheEU2022report.Forthcoming.15HorizonResultsPlatform(europa.eu);https://www.innoradar.eu;Projectsforpolicy(P4).16Processes4PlanetStrategicResearchandInnovationAgenda(SRIA);CleanSteelPartnershipSRIA;EuropeanCommission(2019),MasterplanforacompetitivetransformationofEUenergy-intensiveindustriesenablingaclimate-neutral,circulareconomyby2050;COM(2020)953finalREPORTFROMTHECOMMISSIONTOTHEEUROPEANPARLIAMENTANDTHECOUNCILonprogressofcleanenergycompetitiveness.11scenariosreferredtointheEU’sfirstStrategicforesightreport17.Thisanalysissuggests,thatscalingupexistinginnovativetechnologiesaswellasdevelopingnewbreakthroughtechnologiesiscrucialtoachieveboththe2030andthe2050objectives18.Formaturetechnologies,thenecessaryinvestmentintolarge-scaledemonstrationanddeploymentmightrequireincreasedpoolingofresources19.Theindustrialtechnologyroadmapforlow-carbonindustrialtechnologiesaimstosubstantiatetheR&Ineedstobringindustryonthepathfortransitiontoreachbothobjectivesandtoprovideabasisforcommonactionwithindustry,memberstatesandotherstakeholders.17COM(2021)750final,COMMUNICATIONFROMTHECOMMISSIONTOTHEEUROPEANPARLIAMENTANDTHECOUNCIL,2021StrategicForesightReport:TheEU’scapacityandfreedomtoact,keypointIII.2“Securingdecarbonisedandaffordableenergy”.18AcleanPlanetforAll,p.157;EuropeanCommission(2020),Science,ResearchandInnovationPerformanceoftheEU2020:Afair,greenanddigitalEurope,p.38;seealsoindustryprioritiesinMasterplanforEIIaCompetitiveTransformationofEUenergy-intensiveindustries,p.25,andCapgemini,FitForNet-Zero.20AccordingtoEmissionTradingSystem(ETS)greenhousegasinventories,2019.21CapgeminiInvent(2020),FitforNet-Zero:55TechQueststoaccelerateEurope´srecoveryandpavethewaytoclimateneutrality(‘FitforNet-zero’),p.58andfollowing;InternationalEnergyAgency(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector(‘Net-Zeroby2050’),p.121andfollowing.Box2THEENERGY-INTENSIVEINDUSTRIESECOSYSTEMINTHEEUEnergy-intensiveindustriesaccountedfor17%oftheEU’stotalgreenhousegasemissionsin201920.Theseemissionsmainlycomefrom(fossil)energyuseorfromemissionsfromprocesses.ThatmakesthedecarbonisationofindustrycrucialforEUandglobalpathwaystowardscarbonneutrality21.Withoutfurthermajorstepsinindustrialinnovationforlow-carbontechnologies,theEUwillnotbeabletoreachitsclimategoals22.Industriesproducingkeymaterials(steel,refineryproducts,fertilisersandcement)andchemicalsemitaround500milliontonnesofCO2ayear,14%oftheEUtotal23.TheEIIecosystemismadeupofaround548000companiesacrosstheEU,employingaround7.8millionpeopleandprovidingavalueaddedofEUR549billion(4.55%oftheEUtotal)24,withdifferentsectorsaccountingfordifferentproportions(seeFigure1).TheEIIecosystemhasahighpercentage(99.4%)ofSMEs,whichrepresent31.3%oftheEIIecosystem’sturnoverand36.9%ofitsvalueadded.Figure1Energy-intensiveindustriesecosystemSource:EuropeanCommission,AnnualSingleMarketReport2021(COM(2021)351final).12ThisindustrialecosystemispresentinproductionfacilitiesinallMemberStatesandisparticularlyrelevantfordecarbonisation,duetoitshighenergyusage,emissionrates,anditsspreadacrosstheEU(seeFigure2).Figure2ProductionfacilitiesoftheEIIsecosystemintheEUSource:EnergyandIndustryGeographyLab(JointResearchCentre).Low-carbonindustrialtechnologiesforenergy-intensiveindustriesarecurrentlyatverydifferentlevelsofmarketreadiness,oftenlaggingbehindwhatisrequiredtocontributetodecarbonisationpathwaysinordertoachieve2030and2050climateobjectives25.However,itisimportanttoassessandmitigaterisksbeforebeginninglarge-scaledeployment26andtoprovideasyntheticviewonindustrialtransformationthroughadvancedtechnologiesinordertoembeditinthebroadervisionofsystemicchangeto21CapgeminiInvent(2020),FitforNet-Zero:55TechQueststoaccelerateEurope´srecoveryandpavethewaytoclimateneutrality(‘FitforNet-zero’),p.58andfollowing;InternationalEnergyAgency(2021),NetZeroby2050:ARoadmapfortheGlobalEnergySector(‘Net-Zeroby2050’),p.121andfollowing.22SWD(2020)176,COMMISSIONSTAFFWORKINGDOCUMENTIMPACTASSESSMENTAccompanyingthedocumentCOMMUNICATIONFROMTHECOMMISSIONTOTHEEUROPEANPARLIAMENT,THECOUNCIL,THEEUROPEANECONOMICANDSOCIALCOMMITTEEANDTHECOMMITTEEOFTHEREGIONSSteppingupEurope’s2030climateambition-Investinginaclimate-neutralfutureforthebenefitofourpeople,p.31,p.211andfollowing.TheEuropeanCommissionhadalsocarriedoutin-depthanalysisexploringhowclimateneutralitycanbeachievedacrossthekeyeconomicsectorsintheSWDIn-depthanalysisinsupportontheCOM(2018)773,ACleanPlanetforall:AEuropeanstrategiclong-termvisionforaprosperous,modern,competitiveandclimateneutraleconomy(‘Acleanplanetforall’),p.241andfollowing.23AccordingtoETSgreenhousegasinventories,2019.24SWD(2021)277,TransitionpathwayfortheEIIecosystem.25Throughoutthisreportweusethetermdecarbonisationtomeanaimingtoreducegreenhousegasemissionsinindustrialprocesses.Thetermdecarbonisationdoesnot,inthecaseofthisreport,meansubstitutingcarbonasanessentialelementofmostchemicalsandpolymers.26Acleanplanetforall,p.243.13ensuretheoverallsustainabilityofoureconomiesandsocieties.Toavoidrisksoftechnologicallock-inandstrandedtechnologies,thoroughconsiderationofR&Iresults-aswithindustryinHorizonEuropepartnershipssuchasProcesses4PlanetandCleanSteel-playsacrucialroleinenablingefficientinvestmentinfuturetechnologies.Therefore,thedevelopmentandimplementationofacommonEUvisionforR&IactionandinvestmentinEUtechnologyroadmapsputtogetherwithindustry,MemberStatesandotherstakeholdersareessentialfortheEUtoachieveitspolicyobjectives27.27SETPlan;EuropeanParliament,2020,Studyonenergy-intensiveindustries;AnewERA;FitForNet-Zero,p.18.14CHAPTER1:TRANSITIONOFENERGY-INTENSIVEINDUSTRIESTOCLIMATENEUTRALITYEnergy-intensiveindustries(EIIs)areamajorcontributortoEU’sgreenhousegas(GHG)emissions.ThischapterprovidesanoverviewoftheEUindustrialecosystemforEIIsandtheemissionfootprintgeneratedbyitsfacilitiesintheEU.Itthenlooksintospecificscenariostowardsnetzeroemissioninenergy-intensiveindustries.1Decarbonisationofenergy-intensiveindustriesThegreenhousegasemissionsofenergy-intensiveindustriesTheEIIecosystem,presentinallMemberStates,isparticularlyrelevantfordecarbonisingandtransformingEUindustry,duetoitssignificantshareofEU’stotalGHGemissions28.AccordingtoEurostat’senergybalances,energy-intensiveindustriesconsumed83%ofthefinalenergyusedbyEUindustriesin2018.Basedongreenhousegasemissioninventories29,energy-relatedemissions(allgases)ofEUmanufacturingindustriesandconstructionamountedto448metrictonsofcarbondioxide(MtCO2)in2018,whileemissionsassociatedtoindustrialprocesseswere349MtCO2(56%and44%ofindustry-relatedemissionsrespectively).Figure3Energy-intensiveindustriesfacilities’CO2emissionsintheEUSource:EnergyandIndustryGeographyLab(JointResearchCentre).28AccordingtoETSgreenhousegasinventories,2019.29EuropeanEnvironmentAgency,https://www.eea.europa.eu/data-and-maps/data/national-emissions-reported-to-the-unfccc-and-to-the-eu-greenhouse-gas-monitoring-mechanism-1715Whileemissionsgeneratedbyenergy-intensiveindustryplantscomefromallMemberStates,thereisacorrelationbetweenemissionintensityandshareofnationalGrossDomesticProduct(GDP)inEU’sGDP.ThetopfourMemberStatesintermsofGDP(Germany,France,ItalyandSpain),withanoverallshareof63%ofEU27GDP30,accountformorethanhalfofallEUgreenhousegasemissionsoriginatinginenergy-intensiveindustriesplants.ThistrendisconfirmedifthenexttwoMemberStateswiththehighestemissionsareincluded–theNetherlandsandPoland.ThisresultsinthetopsixMemberStatesaccountingforalmost73%ofEU27GDP31,andtheircombinedshareofgreenhousegasemissionsoriginatingfromEIIinstallationsmakinguptwothirds(66.9%)oftotalEUEIIgreenhouseemissions.Figure4DistributionofEIIgreenhousegasemissionsbyMemberStateSource:EuropeanEnvironmentAgency,GHGDataViewer.However,dataonEIIplants’CO2emissionspercapitarevealsthatseveralMemberStateshaveaCO2intensitypercapitathatismorethandoubletheEUaverage:Belgium,Slovakia,andAustria.ThecountrieswithaCO2intensitypercapitaalmostdoubletheEUaverageareFinland,NetherlandsandLuxembourg.OtherMemberStateswithaCO2intensitypercapitaconsiderablyhigherthantheEUaverageareLithuaniaandEstonia.Table1EIIsCO2emissionspercapitaCountryCO2emissionsfromEIIpercapitaCountryCO2emissionsfromEIIpercapitaCountryCO2emissionsfromEIIpercapitaBelgium2.7Germany1.5Poland1.0Slovakia2.4Cyprus1.4Ireland1.0Austria2.4Greece1.3France0.9Finland2.3EU27-average1.3Bulgaria0.9Netherlands2.2Spain1.2Slovenia0.9Luxembourg2.1Sweden1.2Romania0.8Lithuania1.8Croatia1.2Hungary0.8Estonia1.7Portugal1.0Denmark0.7Czechia1.6Italy1.0Latvia0.5Note:ERDFprojectsrefertotheperiod2014-2020andCO2emissionstotheyearof2018.MaltaisnotreportedinthetablebecausetherearenofacilitiesoftheEIIinthecountrycoveredbytheETS.Source:MarquesSantos,A.,Reschenhofer,P.,Bachtrögler-Unger,J.,Conte,A.,andMeyer,N.,2022,‘MappingLow-CarbonIndustrialTechnologiesprojectsfundedbyEuropeanERDFin2014-2020’,TerritorialDevelopmentInsightsSeries,JRC128452,EuropeanCommission.30DGR&IcalculationsbasedonEurostatdataonGDPandmaincomponents,https://ec.europa.eu/eurostat/databrowser/view/nama_10_gdp/default/table?lang=en31Ibid.020.00040.00060.00080.000100.000120.000140.000GHGs(ktCO2eq)16FormoreinformationonthelinkbetweenCO2emissionspercapitaandEuropeanregionaldevelopmentfund(ERDF)fundinginlow-carbonprojectsbyMemberState,seesubchapter3.4:EUprogrammes.ConcentrationofemissionsinthemainsectorsThereisanunevendistributionofemissionsnotonlyatnationallevel,butalsoatsectorlevel.Threeofthesectorsintheenergy-intensiveindustriesecosystem–non-metallicmineralproducts,basicmetals,chemicalproducts–accountfor63%ofEIIgreenhousegasemissions,makingthemparticularlyrelevantintheEU’squestforreducinggreenhousegasemissions.Figure5ConcentrationofgreenhousegasbysectorSource:ETS&Eurostatdata,processedbytheAustrianInstituteofTechnology.Lookingatthemostemission-intensivesectorsoftheEIIs(non-metallicmineralproductsandbasicmetals),therearedifferencesbetweenMemberStates’emissionlevels:WhileGermanyexpectedlyranksfirst,thesecondandthirdranksdifferbetweenthesetwosectors.Figure6ConcentrationofGHGemissionsatnationallevelforthetwomostemission-intensivesectorsSource:ETS&Eurostatdata,processedbytheAustrianInstituteofTechnology.CombinedETSandEurostatdatashowsthattherearedifferentemissionconcentrationsbysector.Forinstance,inthebasicmetalssector(e.g.steel,iron,aluminium),justthe18mostemittingindustrialplantsintheEUareresponsiblefor50%ofthesector’semissions;and43plantsfor75%ofthesector’semissions.Bycontrast,emissionconcentrationismuchlowerinthechemicalsector,wheremorethan400ofthemostemittingplantsaccountfor50%ofthesector’semissions.17Figure7ConcentrationofgreenhousegasemissionplantsNote:dataforchemicalsisnotdisplayedtoscaleonthegraphbecauseoftheveryhighnumberofplantsinthesector.Thebluebarreferstothenumberofplantsaccountingfor50%ofgreenhousegasemissionsinthesector,theredbarfor75%.Source:ETS&Eurostatdata,processedbytheAustrianInstituteofTechnology.Focusonsteels,chemicalsandcementThesesectorsareenergy-intensiveindustries,whichtheCommissionincludedinits2022AnnualSingleMarketreport32asspecific‘areasofrelevance’fortheEU’sgreen,digitalandresilienttransformation.FOCUSSECTORSTEELTherearemorethan500steelproductionfacilitiesacross23MemberStates.Thesteelindustryisresponsiblefor2.6milliondirect,indirectandinducedjobsacrosstheEU(ofwhich330000aredirectjobs)33.Figure8EUsteel-manufacturingfacilitiesSource:EnergyandIndustryGeographyLab(JointResearchCentre)basedonPlantfacts.TheEUisthesecond-largeststeelproducerintheworld,anditproducedapproximately160milliontonnesin202034.Chinaisthetopproducer,withproductionexceeding1billion32AnnualSingleMarketReport2022–SWD(2022)40final.33SWD(2021)353final,TowardsaCompetitiveCleanEuropeanSteel.34EuropeanSteelAssociation(EUROFER),https://www.eurofer.eu/about-steel/learn-about-steel/#Facts-at-a-glance18tonnesayear,representingroughlyhalftheworld’sannualproduction(53%).Therehasbeenarecentmoveintheindustrytodecarbonisesteelproduction.Thefivebiggeststeelmakers(byproductionin2019)haveannouncednetzerotargetsby2050.AllthebiggestEUsteelmakershavesettargetstobecarbonneutralorclosetocarbonneutralby2050(withreductionsof80%)35.SteelproductionintheEUismainlydividedintotwomajorroutes36.•Theblastfurnace-basicoxygenfurnace(BF-BOF)routereliesoncoalasthemaincarbon-bearingmaterialforsteelmaking,anditmostlycreatesnewsteel.Thisrouteaccountsforaround60%ofthesteelproducedintheEU.•Theelectricarcfurnace(EAF)route,whichlargelyreliesonscrapsteelasthemainfeedstock.Itaccountsforjustover40%ofEUsteelproduction.Figure9SteelproductionbyMemberStateSource:JRCbasedonWorldSteelAssociation(2021),2021WorldSteelinFigures.CO2emissionintensityofsteelmakingvariesgreatlyacrosstheworld.ThemainfactorinfluencingtheaverageCO2intensityistheshareofsteelcomingfromeachcountry’sdifferentproductionroutes,i.e.theamountofsteelmadefromironorethroughtheBF-BOFrouteversustheshareofsteelmadethoughtheEAFroute,whichmainlyusessteelscrap.ThematerialsusedineachprocessalsoaffecttheaverageCO2intensity.SteelmakersaddsteelscraptoBF-BOFstocontrolthereactiontemperature,buttheamountaddeddependsontheavailabilityandpriceofscrapandthedesiredcharacteristicsofthefinalproduct.Increasingtheamountofscrapreducestheamountofhotmetal(fromtheblastfurnace)neededperfinaltonneofsteel,thusloweringtheCO2intensity.Similarly,EAFscanbeloadedwithironfeedstocksuchasdirectreducediron(DRI),liquidhotmetalorpigiron(fromablastfurnace)inadditiontoscrap,dependingonlocalavailability,costandthedesiredqualityofthecrudesteel.Comparingsteelproduction’saverageCO2intensitybycountry(combiningallproductionroutes),theUSAhasthelowest,followedbyTurkeyandEurope(EU27,UKandNorway).Thisisbecausethefirsttwocountries(USAandTurkey)producearound70%oftheirsteelthroughtheEAFroute.EUcountrieshavethelowestCO2intensityoutofthosecountrieswithover50%ofBF-BOFsteelproduction.3735Somers,J.,TechnologiestodecarbonisetheEUsteelindustry,EUR30982EN,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2022,ISBN978-92-76-47147-9,doi:10.2760/069150,JRC127468.36EUROFER,https://www.eurofer.eu/about-steel/learn-about-steel/what-is-steel-and-how-is-steel-made/37Ibid;Somers,J.,MakingtheEU’ssteelindustryfitforcarbonneutrality,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2021,JRC127468.19Table2Announcedorongoinghydrogen-DRIsteeldecarbonisationprojectsintheEUCountryProject(site)CompanyReductant/fuelTechnologyTechnologydescriptionTimelineStatusBelgium(Ghent)ArcelorMittalNG,thenH2H-DRI2.5MtDRIplantandtwoEAFs2030:Operational2.3MtDRILetterofintentsignedGermanyH2Steel(Duisburg)ThyssenkruppH2(electrolysis)H-DRIDRIwithsubmergedarcfurnaceandBOF2024:Commissionfirstlarge-scaleDRI2025:Produce0.4MtgreensteelwithH22030:Produce3MtofgreensteelAnnouncementGermanyH2morrow(Duisburg)ThyssenkruppBlueH2BlueH2SupplyofblueH2(offshoreCCSstorage)2021:FeasibilitystudycompletedFeasibilitystudyGermanyH2HamburgArcelorMittalGreyH2thenH2(electrolysis)H-DRIGreyH₂,thengreenH-DRI2023:Produce0.1Mt(grey)H-DRIPlantdesigncommissionedGermanyHyBit(Bremen)ArcelorMittalNG,thenH2(electrolysis)ElectrolyserandH-DRI24MWH2electrolyser2026:commercialDRIMoUsignedGermany(Eisenhüt-tenstadt)ArcelorMittalNGthenH2(pyrolysis)H2pyrolysisandH-DRIH2frompyrolysis2026:pilotinnovativeDRIAnnouncementGermany(Wilhelms-haven)UniperandSalzgittterH2(electrolysis)ElectrolyserandH-DRI2MtDRIplantwithupstreamelectrolysern/aFeasibilitystudyGermanySALCOS(Salzgitter)SalzgitterNGthenH2Wind,electrolyserandH-DRIWindpark,electrolyserandH-DRI2020:Commissioned30MWwindparkandelectrolyser2022:DRIplantConstructionstartedSpain(Gijon)ArcelorMittalNG,thenH2(electrolysis)H-DRI2.3MtDRIplantand1.1MtEAF2025:Operational2.3MtH-DRIMoUsignedFrance(Dunkirk)ArcelorMittalNGthenH2H-DRIInitiallyNG,thenH-DRIwithsubmergedarcfurnace2021:MoUsignedwithAirLiquideMoUsignedFrance(Dunkirk)LibertySteelNGthenH2H-DRIInitiallyNG,thenH-DRI2021:MoUsignedMoUsignedAustriaHYFOR(Donawitz)voestalpineH2(electrolysis)H-DRIH-DRIusingfineores2021:PilotplantoperationalPilotAustriaH2Future(Linz)voestalpineH2(electrolysis)Electrolyser6MWH2electrolyserforsteel2020:PEM6MWelectrolysisplantoperationalPilotNetherlandsH2ermes(IJmuiden)TataSteelNG,thenH2(electrolysis)ElectrolyserandH-DRIH2productionforH-DRI2021:Finalinvestmentdecision2025:StartH2productionFeasibilitystudyRomania(Galati)LibertySteelNGthenH2H-DRINGthenH-DRI2023-2025:commercialwithNG(2.5Mt)MoUsignedSwedenHybrit(Luleå)SSABH2(electrolysis)ElectrolyserandH-DRIDecarbonisationoffullsteelmakingvaluechain2021:pilotplantoperational2026:commercialdemonstrationplantPilotplantSwedenLKAB(Kiruna)LKABH2(electrolysis)ElectrolyserandH-DRIOreminershifttoH-DR2029:DRIplantinMalmbergetAnnouncementSwedenH2greenSteel(Svartbyn)NorthvoltteamH2(electrolysis)ElectrolyserandH-DRIGreenfieldplantBefore2030:5MtcapacityAnnouncementSource:Somers,J.,MakingtheEU’ssteelindustryfitforcarbonneutrality,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2021,JRC127468.20FOCUSSECTORCHEMICALSThechemicalsectorhasproductionfacilitiesacross23MemberStates,accordingtodatafromtheJRC’sEnergyandIndustryGeographyLab.TheEUchemicalindustryisthesecond-largestproducerintheworld,afterChina,basedontotalsales38.However,theoverallshareoftheEUchemicalindustryintheworldmarkethasbeendeclining,fallingfrom26.7%in1999to14.8%in2019.ThetotalvolumeofchemicalsproducedintheEUincreasedbetween2004and2007,peakingat314milliontonnesin2007.Followingadecreaseinproductionduringthefinancialcrisisofthelate2000s,productionlevelsresumedafter2010.However,theyremainlowerthanthepre-crisisrecord,inspiteofanincreaseofmorethan10milliontonnesin201739.ThechemicalindustryisconcentratedinafewMemberStates.In2018,around70%ofEUchemicalsalescamefromjustfivecountries:Germany,France,Italy,theNetherlandsandBelgium40.Figure10EUchemical-manufacturingfacilitiesSource:EnergyandIndustryGeographyLab,JointResearchCentre.38Cefic,FactsandFigures2021,https://cefic.org/app/uploads/2021/02/FactsFigures2021_Leaflet_V05.pdf39Eurostat,Chemicalsproductionandconsumptionstatistics,https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Chemicals_production_and_consumption_statistics#Total_production_of_chemicals40Cefic,2020FactsandFiguresoftheEuropeanChemicalIndustry,https://www.francechimie.fr/media/52b/the-european-chemical-industry-facts-and-figures-2020.pdf(datareportedforEU28)21FOCUSSECTORCEMENTTheEUwastheworld’sthird-largestproducerofcementin2019,producingover182.1milliontonnes.Thiswasapproximately4.3%oftheworld’sproduction,afterChina(2300Mt)andIndia(320Mt)41.However,EUcementproductionhasdeclinedby19.2%since2001,when225.5Mtwasproduced.Thesectoremployed35169peoplein2019acrosstheEU.Overall,therewerearound350EUcompaniesactiveinthecement-manufacturingsectorin2015,withanestimatedturnoverofEUR15billionandavalueaddedofEUR4.8billion42.Basedonthetotalnumberofcompanies,mostwereactiveinSpain(22%),followedbyItaly(20%),Poland(11%),Germany(9%)andFrance(4%).However,lookingatthecompanies’turnover,Germanyhadthebiggestshare(19%),followedbyFrance(18%),Italy(10%),Spain(10%)andPoland(8%).Figure11EUcement-manufacturingfacilitiesSource:EnergyandIndustryGeographyLab,JointResearchCentre.41CEMBUREAU,GlobalCementProduction,https://cembureau.eu/media/zutk4pir/global-cement-production-2019.png[datareportedforEU28]42EuropeanCommission(2018)CompetitivenessoftheCementandLimeSectors,http://publications.europa.eu/resource/cellar/07d18924-07ce-11e8-b8f5-01aa75ed71a1.0001.01/DOC_1222CurrentdecarbonisationscenariosSeveralresearchconsortia,agenciesandtwoHorizonEuropepartnershipsinvestigatethepotentialofdecarbonisationthroughtheuseofinnovativeindustrialtechnologiesandtherelevantR&Iinvestmentneedsinenergy-intensiveindustries,includingprocessindustries.ThereisbroadconsensusonthekeytypesoftechnologiesandthelevelofmaturitytheyhavereachedtodaythankstoR&Ieffortsinrecentyears.Thereisalsogrowingconsensusabouttherelativeimportanceofinnovationatlow,mediumandhightechnologyreadinesslevels(TRLs)43,fromtheperspectivereachingtheEU’s2030and2050climatetargetswhileensuringthecompetitivenessofEUenergy-intensiveindustries44.TheProcesses4PlanetPartnership(P4P)andtheCleanSteelPartnership(CSP)underHorizonEuropehavedevelopedspecificroadmaps–StrategicResearchandInnovationAgendas(SRIAs)–forindustrialdecarbonisationwiththeirrespectivepartners.ThesearemainlydrivenbyprivateengagementleveragedthroughHorizonEuropeworkprogrammes(andtheResearchFundforCoalandSteel(RFCS)inthecaseoftheCSP).InthecontextoftheSETplan45,MemberStatesandassociatedcountries,industryandresearchstakeholders,coordinatedbytheEuropeanCommission,updatedtheImplementationPlan46oftheSETPlanActionon‘EnergyEfficiencyinIndustry’in2021.TheSETPlanprioritisesspecificindustrialdecarbonisationR&Iactivities,includingaspectsofcleanenergyproductionoutsidethescopeofthisroadmap.ItalsosetsconcretetargetstobereachedintheirdevelopmentwithinafixedtimehorizonreflectingtheEU’sclimateandenergyobjectivesfor2030and2050.ComplementaryandrelevantanalysishasbeendonebytheHigh-LevelGrouponEnergy-IntensiveIndustries(HLGEII),theInternationalEnergyAgency(IEA),CapgeminiInvent,MaterialEconomics,theEuropeanParliament,FraunhoferandNGOs,whohavepublishedimportantstudiesandspecificroadmaps.Basedonthese,thisanalysishighlightshownewlow-carbontechnologiescanbestcontributetodecarbonisationinenergy-intensiveindustries.Needforacceleratedinnovation–theIEANetZeroby2050ScenarioInitslatestdecarbonisationscenario(‘netzeroemission’–NZE)andpublicationon(industrial)technologicalperspectives,theIEAemphasisestheurgentneedtospeedupinnovationandtheintroductionofnewlow-carbontechnologiesinthecomingdecades47.AccordingtotheIEA’scalculationsandempiricalfindings,amajoraccelerationincleanenergyinnovation,includingitsproduction,willbenecessarytoreachnetzeroemissionsby2050(upto40%quickerthaninthepastfewdecades).IntheNZEscenario,innovativetechnologiesthatareonthemarkettoday(TRL9-10)providenearlyalloftheemissionsreductionsrequiredby2030.However,after2030reachingnetzeroemissionswillrequire43DescriptionoftechnologyreadinesslevelsasperEC,HorizonEurope2020–workprogramme2018-2020,generalannexes:TRL1:basicprinciplesobserved;TRL2:technologyconceptformulated;TRL3:experimentalproofofconcept;TRL4:technologyvalidatedinlaboratory;TRL5:technologyvalidatedinrelevantenvironment(industriallyrelevantenvironmentinthecaseofkeyenablingtechnologies(KETs));TRL6:technologydemonstratedinrelevantenvironment(industriallyrelevantenvironmentinthecaseofKETs);TRL7:systemprototypedemonstrationinoperationalenvironment;TRL8:systemcompleteandqualified;TRL9:actualsystemproveninoperationalenvironment(competitivemanufacturinginthecaseofKETs;orinspace).44Seechapter2.45StrategicEnergyTechnologyPlan(europa.eu)46https://setis.ec.europa.eu/system/files/2021-12/SET%20Plan%20Action6%20on%20EE%20in%20industry-Implementation%20Plan-Rev2021-final-endorsed.pdf47IEA,NetZeroby2050.23thewidespreaduseoftechnologiesstillbeingdevelopedtodayandthereforeatlowerTRLs.In2050,almost50%ofCO2emissionsreductionsintheNZEscenariocomefromtechnologiescurrentlyatdemonstrationorprototypestage(TRL4-8).Thisfigureisevenhigherinenergy-intensivesectors(seefigurebelow).48Figure12GlobalCO2emissionsinheavyindustryandreductionsbytechnologicaloptions(mitigationmeasures)andtechnologymaturitylevel,intheNZEoftheIEANote:CCUSstandsforcarboncapture,utilisationandstorage.Source:IEA,2021,allrightsreserved.Arangeofmeasurescanhelpreduceemissionsinheavyindustry49,withinnovativedecarbonisationtechnologiessuchascarboncaptureandutilisation(CCU),carboncaptureandstorage(CCS),fuelshift,electrification,hydrogenandmaterialefficiency/circulareconomy.TheroleofCCSmightbemoreimportantgloballythaninEurope,asEuropeisaimingforleadershipindecarbonisationandthusinnovative,non-carbonproductionprocessesthatrequirenoorfewercarboncapturingmeasures.Forinvestmentdecisionsinheavyindustries,thelonginvestmentcyclesmeanthatcleantechnologieswillhavetobemadereadyquicklyforlarge-scaledeployment.Therefore,thechallenge–inEuropeandglobally–istoensurethatinnovativelow-carbonindustrialtechnologiesthatareatlargeprototypeanddemonstrationstagetodayreachmarketwithinthenextdecade,whenaround30%ofexistingassetswillbe25yearsoldandthereforerequireaninvestmentdecision50.Marketscale-uptrajectoriesTherecentCapgeminiInventstudy51confirmstheneedforacceleratedinnovationforindustrialdecarbonisationandtheneedtogetmoreinnovativelow-carbontechnologiestomarket-readinessstage.Thefigurebelowshowsthreedifferentmassmarkettrajectoriesfor2020and2050,addressingdifferentlevelsofmaturityoflow-carbontechnologicaloptions(seealsoChapter2).48Ibid,p.12349Heavyindustries:energy-intensiveprocessindustries+shipbuilding,manufacturingetc.50IEA,NetZeroby2050,p.124.51Capgemini,FitforNetZero.24Figure13Industriallow-carbontechnologiesmassmarkettrajectoriesSource:Capgemini,2020.Theorangediffusioncurve‘Drivetomarketscale’comprisesinnovativetechnologiesofTRL9-10.Massdeploymentofsuch(niche)technologiesmustbeachievedby2030+.Thesetechnologiesarereadytobedeployedonthemassmarket.Short-termaccelerationofrelativelymaturetechnologies,scalingup,andquickreplicationarethepriorities.Thegreentrajectory‘Acceleration&scaleup’coverstechnologiesthatcouldreachmassdeploymentby2040+,andtheearlymarketadoption(TRL9)phasefrom2024onwards.TheyhavereachedTRL4-8now,arestillinpilotordemonstrationphaseandarecrucialforreachingemissiontargetsafter2030.Kickstartinginnovationforseveral,existinglarge-scalepilotsites(TRL7-8)tobecomeprofitableinmassmarketdeploymentuntil2025iscrucial.TheambitionhereisforthepredominantshareofinvestedR&DtocontributetoreachingTRL8by2030latest.Thebluemassmarkettrajectory,‘Innovationbets’comprisesbreakthroughtechnologiesfordecarbonisationthatarestillemerging(TRL1-3).Theyhavethepotentialtoreachmassdeploymentby2050+,anearlymarketadoptionphasefromaround2035onwards,andEU-widereplicationby2040.ThemissionistospeedupsuchinnovationprojectsonascaleenablingthemtoreachTRL9inthistimeframe,andtoenablebreakthroughtechnologiesforsector-wideusealsobeyond2050.Whilethesetechnologiesmightnotbeabletoinfluencedecarbonisationupto2050significantly,giventhelonginvestmentcyclesinenergy-intensiveindustries,theyarehighlyrelevantfromtheperspectiveofcontinuedglobaldecarbonisationandcompetitivenessafter2050.Threehigh-levelpathwaystonetzeroemissionsforEUheavyindustryIntheirstudy‘IndustrialTransformation2050–PathwaystoNet-ZeroEmissionsfromEUHeavyIndustry’52,aresearchconsortiumledbyMaterialEconomicsexploredthreegeneralpathwaystonetzeroemissionsforEUheavyindustry(intheirpublicationthis,referstosteel,plastics,ammoniaandcementsectors).TheapproachtakeninthisstudyrecognisesthatEUindustryandsocietycanchoosedifferentwaysandthatviewsdifferonthemostpromisingsolution.Allthreepathwayshaveincommonthattheyleavenoorveryfewemissionsinplacein2050,andusetherangeofpossibletechnologicalandnon-52MaterialEconomics(2019),IndustrialTransformation2050,PathwaystoNet-ZeroEmissionsfromEUHeavyIndustry,p.36andfollowing,https://materialeconomics.com/publications/industrial-transformation-2050(‘Industrialtransformation2050).25technologicalsolutionsfornetzero(seenextchapterontechnologies),buteachwithadifferentemphasis.Thefigurebelowvisualisesthethreepathwaysproposed,‘NewProcesses’,‘CircularEconomy’,and‘CarbonCapture’.Thesethreehigh-levelpathwaysgrouptogetheranumberofmorespecificsolutions(referredtoas“technologicalpathways”inChapter2):materialsefficiencyandcircularbusinessmodels;materialsrecirculationandsubstitution;newprocesses;CCS.Ineachofthethreenetzeropathwaysthemitigationshareofthedistinctivefoursolutions(includingbusinessmodels)iscalculated,withdifferentweightgiventoeachofthem,themostimportantonegivingthenametothepathway.Figure14PotentialemissionreductionsfromEUsteel,chemicals,andcement(MtCO2/year),bymeansofdifferentpathwaystonetzeroemissionsSource:MaterialEconomics(2019),Industrialtransformation2050,p.37.26Inthe‘NewProcesses’pathway,mostemissionreductionsareachievedbyintroducingnewcoreproductionprocessesandnewfeedstock.Thisisahighelectricitydemandscenariothatemphasisesnew,alternativefeedstock.Keythemesareinnovation,elec-trificationandinvestment.Thisscenariothereforereliesheavilyonnewcoreindustrialprocessesdrivenbyelectricity,eitherdirectlyorusinghydrogen.Keyenablersareelectricitysupplyandtherapidcommercialisationofnewprocesses.Inthe‘Circulareconomy’pathway,theEUsucceedsinmakingthetransitiontoacirculareconomy,harnessingmuchofthepotentialformaterialsrecirculation,materialsefficiencyandnewbusinessmodels.Jointly,theseaccountfornearly50%oftheemissionsabatementinthisscenario.Itreliesontherealisationofthepotentialforamorecirculareconomyformaterialsrecirculationandgreatermaterialsefficiency.Keyenablersinthiscasearenewbusinessmodels,digitisationandextensivecoordinationacrosstheentirevaluechain.Inthe‘Carboncapture’pathway,acriticalmassofcarboncaptureinfrastructureisakeyenablerofmajoremissionscuts.Inthisscenario,mostofthe235MtofcapturedCO2isstoredunderground.Thisreducesthispathway’ssocialacceptabilityhowever.CCUcanneverthelessplayaroleasanintermediatestepinacceleratingcarbonemissionreduction,notablyinthesectorcouplingofsteelandchemicalsproduction.KeyenablersareacriticalmassofCCSinfrastructureandriskdistribution,andthereconfigurationofproductionprocessestoallowforhighCO2capturerates.Extensivecarboncaptureinthispathwayprovidesearlyemissionsreductions,buyingtimeforamoregradualintroductionofnewprocesses.Italsorequireslesselectricitythanthe‘NewProcesses’pathway53.3ConclusionsonthetransitionoftheEIIecosystemtoclimateneutrality•Thereductionofgreenhousegasemissionsinenergy-intensiveindustriesisacornerstoneforachievingtheEU’sclimategoalsfor2030/2050undertheEuropeanGreenDeal.TheconcentrationoftheseemissionsfacilitatesasignificantimpactfromR&Ipolicyactiontosupportthedevelopmentanduptakeoflow-carbonindustrialtechnologiesforenergy-intensiveindustries.•Energy-intensiveindustriesaccountedfor17%oftheEU’stotalgreenhousegasemissionsin2019.Threesectors(non-metallicmineralproducts,basicmetals,andchemicalproducts)accountedforalmosttwothirds(63%)ofallgreenhousegasemissionsfromtheenergy-intensiveindustryecosystem.•WithinsomeEIIsectors,installationsarehighlyconcentrated.Forbasicmetals(steel,iron,aluminiumetc.),the18most-emittinginstallationsaccountforhalfofthesector’stotalemissions.Inthechemicalssector,themorethan400mostinstallationsaccountforthesameshare.Thedifferentdegreeofconcentrationinthesectorswillbeanimportantelementofthedecarbonisationapproach,andhaveanimpactontheneedforknowledgedissemination.•WhileEIIfacilitiesarepresentinall27MemberStates,thereisaconcentrationofgreenhousegasemissionsatterritoriallevel.DataonCO2emissionsfromEIIfacilitiespercapitarevealsthatanumberofMemberStates(Belgium,Slovakia,AustriaandFinland)haveanemissionintensityalmostdoubletheEUaverage,whileotherMemberStates(Netherlands,Luxembourg,LithuaniaandEstonia)registersignificantlyhigherratesthantheaverage.Thisisacallfornationalpolicyactiontosupportthedevelopmentand/oruptakeoflow-carbonindustrialtechnologies.53SeealsoMaterialEconomics,IndustrialTransformation2050,p.38.27CHAPTER2:KEYTECHNOLOGICALPATHWAYSThischapterdescribesthekeytechnologicalpathwaysidentifiedforreachingdecarbonisationofenergy-intensiveindustriesintheEUandgivesanoverviewofthestateofplayofdecarbonisationofenergy-intensiveindustriesintheEU.1Synthesisofpathways,technologiesandlevelsofmaturityThefollowingoverviewoftechnologicaldecarbonisationpathwaysisbasedonadeep-diveanalysisandassessmentoftechnologicaloptionsforthedecarbonisationofindustrialprocesses.ItwasputtogetherbytheEuropeanCommissionincollaborationwithitscontractor,theAustrianInstituteofTechnology(AIT),basedonseveralcurrentreports,studiesandroadmaps,includingthoseoftheP4PandCSP54.Themostimportantstudiesonwhichthissynthesisisbased,arereferencedinthefollowingsectionsofthischapter.ThesynthesistableshowsthemaintechnologicalpathwayswithrelevantTRLs,andinallpathways,mosttechnologicaloptionshavealreadyreachedmediumand/orhigherTRLs,exceptinthe‘Electrificationofproductionandprocesses’pathway,wheretherearemorelowerTRLsthaninotherpathways.AccordingtothethestudyandmasterplanoftheHigh-LevelGrouponenergy-intensiveindustriesandthefeedbackofbusinessassociationsduringtheconsultationphase,theapplicationpotentialofthedifferentpathwaysandoptionsidentifiedis‘high’formostoftheeightindustrialsectorsinvestigated55.Exceptionsare‘Useofhydrogen’and‘CCS/CCU’.Inthesepathwaysapplicationpotentialishighparticularlyinthe‘chemicals’and‘iron&steel’sectors.54Thedetailedanalysisofthissummaryisavailableinaseparateannex.Themainstudiesincludedinthisin-depthanalysis,overviewandassessmentare:-EuropeanCommission(2021),Pilotindustrialtechnologyprospectreport–R&IevidenceofEUdevelopmentoflow-carbonindustrialtechnologies;-P4PSRIAandCSPSRIA;-High-LevelGrouponenergy-intensiveindustries(HLGEII)(2018),Masterplan,StudyandAddendum;-EuropeanParliament,CommitteeonIndustry,ResearchandEnergy(ITRE)(2020),RoadmaponEnergy-IntensiveIndustries;-EuropeanParliament,PanelfortheFutureofScienceandTechnology(STOA),Carbon-freesteelroutes-IEA(2020),EnergyTechnologyPerspectives2020;IEA,NetZeroby2050;-Capgemini,FitforNetZero;-MaterialEconomics,IndustrialTransformation2050;-ICF&FraunhoferISI(2019),IndustrialInnovation:PathwaystodeepdecarbonisationofIndustry;-ExponentialRoadmapInitiative(2019,revised2020),Exponentialroadmap2030:Scaling36solutionstohalveemissionsby2030;-EnergyTransitionsCommission(2018),MissionPossible:Reachingnet-zerocarbonemissionsfromharder-to-abatesectorsbymid-century;-Writteninput/feedbackondrafttechnologyassessmentfromenergy-intensiveindustriesbusinessassociationsrepresentingthesectorsatEUlevel.55Industriesincludedintheanalysisare:cement&lime,chemicals,iron&steel,ferroy-alloys&silicon,pulp&paper,aluminium&non-ferrousmetals,ceramics,andglass.28Table3Overviewoftechnologicalpathways,TRLsandapplicationpotentialbysectorTechnologicaldecarbonisationpathwaysinEIIHighpriorityinMaterialEconomicspathways56P4PinnovationareaAssessmentoftechnologyreadiness(i)andapplicationpotentialbysector57(ii)PrioritisedR&IactivitiesintheSETPlan–Action6onenergyefficiencyinindustry,ineachthematicgroup(inbold)Electrification‘Processes’,‘Circulareconomy’,‘Carboncapture’ElectrificationofthermalprocessesElectricallydrivenprocesses(i)low/medium/high(ii)High:chemicals,non-ferrousmetals;iron&steel,ceramics,glassHeat&cold:1.1.HeatupgradefromlowtohighgradeChemicals:4.1.ElectrificationIron&steel:5.2.CO2emissionsavoidancethroughdirectreductionironusingelectricityPulp&paper:6.3.Processoptimisationandelectrification(modularapproach)Systems:2.2.Non-conventionalenergysourcesinprocessindustryincludingCCUUseofgreen58hydrogen‘Processes’,‘Circulareconomy’,‘Carboncapture’Hydrogenintegrationasenergysourceandasreductant(i)low/medium/high(ii)High:chemicals,iron&steelandnon-ferrousmetalsChemicals:4.2.IntegratedproductionofhydrogenwithlowcarbonfootprintIron&steel:5.1.CO2emissionsavoidancethroughdirectreductionofironusinghydrogenCCS‘Carboncapture’CO2captureandconcentration(i)low/medium/high(ii)High:cement&lime,chemicals,iron&steelCement:3.3.CCUSCCU‘CarbonCapture’CO2captureforutilisationCO2utilisationinmineralsCO2&COutilisationinchemicalsandfuels(i)low/medium/high(ii)High:cement&lime,chemicals,iron&steel;butalsoforallotherEIISystems:2.2.Non-conventionalenergysourcesinprocessindustryincludingCCUCement:3.3.CCUSIron&steel:5.5.CCUChemicals:4.4.CO2/COasanalternativefeedstockAlternativefuelsandfeedstocks(excl.H2),bio-basedresources,andintegrationofrenewableenergy‘Processes’,‘Circulareconomy’,‘Carboncapture’Integrationofrenewableenergyandcircularfeedstockasenergysource(i)low/medium/high(ii)High:cement,chemicals,pulp&paper,non-ferrousmetals,glass;butalsoforallotherEIIHeat&cold:1.4.Polygeneration(heat,cold,electricalpower)andhybridplantsintegratingrenewableheatChemicals:4.3.Plasticwasteasanalternativefeedstock;4.5.BiomassasanalternativefeedstockPulp&paper:6.6.BiomassasalternativefeedstockAlternativematerialsandmoreenergyefficientprocesses‘Processes’,‘Circulareconomy’IntegrationofrenewableenergyandcircularfeedstockasenergysourceEnergyandresourceefficiencyHeatreuse(i)low/medium/high(ii)High:cement&lime,chemicals,iron&steel,pulp&paper,non-ferrousmetals,ceramics;butalsoforallotherEIIHeat&cold:1.2.Wasteheattopower(lowandhightemperature);1.3.WasteheattocoldgenerationCement:3.1.Resourceefficiency;3.2.EnergyefficiencyChemicals:4.6.ProcessefficiencyIron&steel:5.3.Processintegration:HIsarnasmeltingreductionprocessforloweringenergyconsumptionandCO2emissionsofsteelproduction;5.4.Processintegration:topgasrecycling–blastfurnaceusingplasmatorchPulp&paper:6.1.Integraldryingandheatrecoveryprocesses;6.5.OnsiterenewableenergyconversionMaterialsefficiency,secondaryresourcesandwastevalorisation(incl.recycling/CEandindustrialsymbiosis)‘CircularEconomy’EnergyandresourceefficiencyCircularityofmaterialsIndustrial-urbansymbiosisCircularregions(i)low/medium/high(ii)High:inallEIIIron&steel:5.6.CirculareconomySystems:2.1.IndustrialsymbiosisPulp&paper:6.2.PapermakingwithoutwaterevaporationNotes:Inthecentralcolumn,phraseshighlightedinboldmeanthatinthistechnologypathwaymosttechnologicaloptionsareatthis/theseTRLs.Source:In-housebytheEuropeanCommission(DGR&I)incollaborationwithAIT.56SeethedescriptionofthethreeMaterialEconomicsoverallpathways,underthesectiononscenarios.57AccordingtotheHLGEIIaswellasfeedbackfrombusinessassociations.58‘Green’meansfullyrenewablesourcestoproducehydrogen;stakeholdershighlightedtheemphasisonrenewablesbutalso‘low-carbon’hydrogen.29Box3IMPACTOFAGASSHORTAGEANDGASPRICERISEONTHEDECABONISATIONOFINDUSTRIALPROCESSESINEUENERGY-INTENSIVEINDUSTRIESDUETORUSSIA’SINVASIONOFUKRAINEThecurrentgeopolliticalsituationmakesitnecessarytodriveandacceleratethetransformationofenergysupplyandindustrialprocessesevenmorevigorouslythanbefore59.Ingeneral,thismeansthattechnologicalsolutionsfordecarbonisationthatarealreadyonthemarket(bestavailabletechniques(BAT))orareinthesuccessfuldemonstrationstage(TRL7-9)mustbequicklybroughttothemarketoftheuserprocessindustriesandimplementedcompetitivelytoachieveshort-termandmedium-termeffectsonemissionreduction.ExistingR&Dprojectsandactivities,especiallyfromthemediumTRL(4)onwards,mustalsobebroughttowardsinnovationandmarkettransfermorequicklythanbeforethroughajointpublicandprivateeffort.Toachievesynergyeffectsanddisseminationasquicklyaspossible,cross-sectorsolutionsandtechnologiesareakeyleverforthatacceleration.Thaturgencymayleadtoastrongeremphasisondisseminationandreplication,andonR&Dneedsthatfocusevenmoreonnon-technologicalissues.AgainstthebackgroundofthepricehikeofnaturalgasandthedependencyonnaturalgasimportsandsupplycutsduetoRussia’sinvasionofUkraine,gasshouldplayonlyaminorornoroleinfuturekeytechnologiesfordecarbonisationofenergy-intensiveindustries.TheimplicationsofreducedavailabilityandhighercostofgasonthetechnologypathwaysidentifiedinTable3canbesummarisedasfollows:•Electrification:Theelectrificationofindustrialprocesses(heat,mechanical,electrochemical)isbecomingevenmoreimportant.Decarbonisationrequiresthattheelectricpowerisproducedascleanenergy.•Useofgreenhydrogen:Sincetheproductionofhydrogenwithnaturalgasnotonlyleadstogreenhousegases,butnaturalgascouldalsobecomea(expensive)scarcecommodity,hydrogenmustbeproducedfromwater,withtheaidofelectrolysisfuelledby‘green’electricity,inparticularfromrenewables.DispensingwithnaturalgasseemsfeasibleassoonascorrespondingquantitiesofhydrogenproducedwithlowCO2emissionsareavailable.•Materialsefficiency,secondaryresourcesandwastevalorisation:Theshortageofnaturalgaswillsignificantlyincreasetheimportanceofrecyclingmaterialsandsecondaryrawmaterialsaswasteproductscontainingcarbon(e.g.slag).Inaddition,wastegaseswillbeusedasrawmaterialsfortheproductionofmaterialsandchemicalswherenaturalgaswasusedpreviously(seealsoCCU).Inaddition,theimportanceofsteelscrapcouldincrease,asindustrymightprioritiseprocesses,whichusemorescrapbutrequirenoorlessnaturalgas(e.g.scrab-basedEAF).•Alternativefuelsandfeedstocks,bio-basedresources,andintegrationofrenewableenergy:Alternativefeedstocks/fuelsmustbepromotedevenmore.Inadditiontorenewable,bio-basedfeedstocks/energycarriers,theproductionofsyntheticfuels/energycarriers(e.g.syntheticnaturalgas)isgainingimportance.Theintegrationofelectricpowerfromrenewableenergysources(wind,hydro,solar)hasveryhighprioritytoenableemission-freeelectrificationofindustrialprocesses(seeabove).Anincreaseduseofheatpumps,alsoinindustry,andanintensifieduseofbiogas(besideshydrogen)becomesmoreurgent60.•Alternativematerialsandmoreenergyefficientprocesses:increasingtheenergyefficiencyofindustrialproductionprocessesisnecessarytoreducetheimportanceofnaturalgasasa"transitionfuel"andtousenaturalgasmoreefficientlythanbeforeinindustry(bothasafeedstockforchemicalproducts(e.g.hydrogen)andasafuel/reductionagent).Short-termandlow-costefficiencymeasuresinindustrygaininimportance.•‘Carboncapture&utilisation’(CCU):iflessnaturalgasasahydrocarbonsourceisavailableasfuel,reducingagentandrawmaterial,theutilisationandvalorisationofCO2/COasfeedstockforfossilebasedchemicalsandtheproductionofsyntheticfuelsorplasticsbecomesmoreimportant.However,thequestionariseswhethertheuseofgreenhydrogenasafeedstock/reactantforCO2/COvalorisationissufficientlyenergyefficient,asithastobeproducedviaelectrolysisbefore.•‘Carboncapture&storage’(CCS):storingCO2inthegroundisrelatedtothereduceduseofnaturalgastotheextentthatlessstoragecapacityforCO2emissionsfromnaturalgasusemayberequired.Theprerequisiteforthisisthatnaturalgasisnotreplacedbyotherfossilfuelsinindustrialprocesses(oil/coal).ThelatterwouldalsobecounterproductiveforEuropeanemissiontargets.30Severaltechnologicaloptions61andR&D&Itopicscanbeappliedacross(several)industrialsectors62.Examplesacrosstheabovepathwaysincludethefollowing:•electrificationofthermalprocesses(furnaces)andprocesssteps;heatpumpsforlow/mediumandhightemperatureprocesses;electricallydrivenseparation;electrochemicalprocesses;•useofhydrogenforbettercombustioninfurnacesofhightemperatureprocessindustries;•captureandstorageofCO2fromprocessemissionsandcombustionprocesses;•CO2captureandpurificationtechnologiesforCO2valorisation;•integrationofalternativefuel(mixes)andrenewables;processingof(non-recyclable)wasteandofbiomassinhightemperaturefurnaces;directuseofbio-basedresourcesasfeedstockinindustrialapplications/processes;hybridsystems,e.g.hybridkilns;•newkilntechnologies,installingheatexchangers;energy/wasteheatrecovery(alsobetweensectors63)andoptimalcombustionprocesses;dryingtechnologies;processintensification,e.g.throughnext-gencatalysis;•industrialandindustrial-urbansymbiosisandreuse;innovativematerialsforbetterlifecycleperformance;inherentrecyclabilityofmaterials;upgradingofsecondaryresources;betterseparationandsortingtechnologies.59Leopoldina,AkademiederWissenschaften:Ad-hoc-Stellungnahme8.März2022,WiesichrussischesErdgasinderdeutschenundeuropäischenEnergieversorgungersetzenlässt.60SeeRePowerEU.61FortechnologicaloptionsandR&D&ItopicsthatcouldbeusedacrossfactoriesandsectorsboundariesseealsoP4Pcross-sectoralinnovationareas,P4PSRIAp.7362SeealsoP4Pcross-sectoralinnovationareas.63Beingalsopartof“industrialsymbiosis”.31SMEFocus1POTENTIALROLEINDEVELOPINGANDADOPTINGNEWTECHNOLOGIESSmallandmedium-sizedenterprises(SMEs)canplayasignificantroleincreatingfurthersynergiesatindustryleveltodevelopandmainstreamtheuseofnewindustrialtechnologiesaimingtodecarboniseEIIs.Around38%ofSMEsreportedtonotyetuseenvironmentaltechnologies,withaneverhighershareofSMEsnotusinglow-carbontechnologies(49%),accordingtoconsultationsranbyDGResearchandInnovation(surveyresults64).Amongtherespondentstothesurvey,theshareoffirmswhichuseenvironmentaltechnologiesishighestinsouthernEurope,followedbywestern/northernEuropeandCentral/EasternEurope.Atthesametime,theshareofcompanieswhichdevelopnewtechnologiesorsolutionsisthelowestamongSMEslocatedincentral/easternEurope.Figure15DevelopmentoruseofenvironmentaltechnologiesatregionallevelNote:West/North:BE,DE,DK,FI,IE;Central/East:BG,CZ,PL,RO;South:ES,GR,IT,PT.Source:EuropeanCommission/EnterpriseEuropeNetworkSMESurvey,conductedfromNovember2021toJanuary2022(seeAnnex1).Thesurveyfurtherindicatesthatthedevelopmentoftechnologiesisinfluencedbythesizeofacompany.Therefore,largercompaniesareexpectedtodevelopnewtechnologiesinaconsiderablyhighersharethantheirSMEcounterparts.Figure16DevelopmentoruseofenvironmentaltechnologiesandfirmsizeSource:EuropeanCommission/EnterpriseEuropeNetworkSMESurvey,conductedfromNovember2021toJanuary2022(seeAnnex1).322TheinnovationareasandtheapproachoftheProcesses4PlanetPartnershipTheEUco-programmedpublic-privatepartnershipProcesses4Planet(P4P)-successortoHorizon2020SPIREPartnership-whichcoverstenleadingsectors65oftheEuropeanprocessindustries(cement,steel,ceramics,chemicals,engineering,mineralsandores,non-ferrousmetals,steel,water,refineries,pulp/paper)istheonlyEuropeanlevelcooperationinvolvingindustryandresearchorganisationsinthedevelopmentofcross-sectorallow-carbontechnologiesforenergy-intensiveindustriesintheEU.Throughinnovationindecarbonisationtechnologiesandprocessesaswellasnon-technologicalinnovations,theP4PPartnershipaimstobringEuropeanprocessindustriesonatransformationpathwaytomakethemcircularandachieveoverallclimateneutralityatEUlevelby2050,whileenhancingtheirglobalcompetitiveness.Forthisreason,thepartnershipemphasisestheneedforcrosscuttingandcross-sectoralinnovation.Throughtechnologicalandnon-technologicalinnovations,cross-sectoralcollaborationandengagementwiththelocalecosystem,P4Pprocessindustriesaimtodevelopanddeploysustainablecircularbusinessmodelsandwillmovetowardsresourcecircularityandresourceefficiency.ToacceleratetheGHGemissionreduction,cross-sectoralcoupling,forexamplebycombiningfossil-basedprocessintegrationwithCCUS,willbeencouraged.Thecross-sectoraldimensionofinnovationchallengesmustalsobeconsideredatregionallevel:processindustriesareoftenclusteredinindustrialparksintheinterestsofbetterenergy,services,infrastructureandmaterialflows.Thereisstillasignificantopportunitytofurtherdevelopthisapproach,enablingthecircularisationofvaluechainsacrossindustrialsectorsandintheurbanenvironment,triggeringthedevelopmentofregionalcircularityhubs.Inthiscontext,industrialsymbiosisandcross-sectoralcooperationmeanalong-termcommitmentacrosstheboundariesofindividualcompaniesindealingwithwasteandtheuseofby-products.Currently,thisoftenfailsduetonumerousbarriersbetweencompanies,evenifthetechnologiesexistandcouldinprinciplebeadaptedandused.ThisiswhytheP4PPartnershipurgentlycallsformoreintegratedapproachesbetweensectorsandcompanies,supportedbycircularityhubsandcross-sectoralandcross-organisationalcooperation.TheP4PPartnershipdefines36detailedinnovationprogrammestoturnthisvisionintoreality.Theyareclusteredin14innovationareas.Thethreehigh-levelpathwaysoutlinedintheMaterialEconomicsstudycovertheseinnovationareas.AsthebackboneoftheP4Papproach,theinnovationareasareexpectedtocollectivelydeliverthenecessarytechnologicalandnon-technologicalsolutionsuptothemarketreadinessstage.64DGR&IhasrunaseriesofconsultationstargetingSMEs,andtheirfindingswillbeindicatedthroughouttheroadmap.Formethodologyindicationsandmoredetails,pleaseconsultAnnex1ofthereport,describingtheresultsoftheSMEsurveys.65Largelybutnotpreciselycorrespondingtoenergy-intensiveindustries.33Figure17EstimateoftheprogressionofP4PinnovationarealevelSource:Processes4PlanetSRIA,October2021.AccordingtotheP4Proadmap,about50%ofthetechnologiesinquestion,whichthepartnershipaddresses,couldbeappliedby2030,and100%by2050(enteringtheTRL9phase).Upto2024,lessthanaquarteroftechnologicaloptionsproposedbyP4Pwillhaveenteredtheirfirstdeploymentstage.P4P’sinnovationprogrammesaredesignedtopushmultipletechnologiestowardscommercialapplication(TRL9),startingwithlow(TRL1-3),medium(TRL4-6)andhigh(TRL7-8)TRLsinthedifferentinnovationareas,dependingonexistinglevelsofmaturity.P4Pexplicitlyfollowsacross-sectoralapproachtogeneratesynergiesfortechnologydevelopmentbetweenindustriesandtocreateconditionsconducivetotechnologytransfer.Itsthreemaingoalsare:•developinganddeployingclimate-neutralsolutions;•closingtheenergyandfeedstockloop;•globalleadershipinclimate-neutralandcircularsolutionstoaccelerateinnovationandunlockpublicandprivateinvestments.AsdoestheCapGeminireport,P4Pstressestheneedfortechnologicaldevelopmenttohappenwithinandbetweenprocessindustriesasquicklyaspossibleinordertoreachclimateneutralityby205066,andtheadditionalsystemicchallengesintegratingprocessindustriesintothenewvaluechainsandalow-carbonenergysystementails.Toreachthesegoals,P4Pemphasisestheroleofenablerssuchasdigitalisationandtheestablishmentof‘hubsforcircularity’toenablethefastdevelopmentofnewmaterialsandprocessesaswellasindustrial-urbansymbiosis,whichinturnmakesamajorcontributiontoimprovingtheenergyandresourceefficiencyofplantsandvaluechains.P4Palsoaimstopromotenon-technologicalinnovationanditsimplementation,particularlyaddressing66SeealsoIEA,NetZeroby2050.34thenon-technologicalaspectsofefficientandeffectivetechnologytake-upanddiffusion,aswellastheneedtoupskillandre-skilltheworkforce,andsocialacceptability.Processindustriesarefacingindustrialcompetitivenessissuesintermsofaccesstoaffordableclimate-neutralenergyandduetotheabsenceofacarbonpricinglevelplayingfieldwithnon-Europeancompetitors67.Thesefactorshinderthetransitiontoclimate-neutralsolutions.However,thepotentialfordigitalisingtheindustryisawaytoboostcompetitiveness.Europeanprocessindustrieshavenotyetexploitedthepotentialofdigitaltechnologiesforresourceefficiencyandproductivitygains.Infact,ICTcurrentlyinvestsverylittleinlow-carboninnovation.However,itdoescontributebydevelopingenablingtechnologies,suchasAI.AccordingtoarecentJointJRCandOrganizationforEconomicCooperationandDevelopment(OECD)study(2021),20%ofclimate-relatedpatentshaveadigitalcomponent,creatingmorepotentialforthedigitaltransformationtoenablethegreentransitionacrossmanycarbon-intensivesectors,andthat60%ofclimate-relatedtrademarksarealsoICT-related.Theuseofdigitalsolutionsisthereforewidespreadatthecommercialisationstage68.AccordingtotheP4PPartnership,manychallengesfacedbyseveralsectorscanbeaddressedthroughcross-sectoralcollaboration,e.g.sharinginformationinthevaluechainquicklyandsafely,withthehelpofdigitaltechnologies.Theeffectivenessandefficiencyofinnovationprogrammescanbeincreasedbydevelopingsuchinnovationjointly,enablingtechnologytransferandmutuallearning.Cross-sectoralinnovationalsohastheadvantageoffasterdeploymentandgreaterimpactatscale,aswellascommonrisksharing.Thefollowingfiguresummarisesthepartnership’svisionofhowtoachievethetransformationofprocessindustries.Industrial-urbansymbiosis,processinnovation,digitalisationandnon-technologicalaspectsarecrucialfortransformingprocessindustries.Processinnovationincludesinnovationinthepathwaysofelectrification,renewables,fuelandfeedstockshiftandhydrogen,thecaptureanduseofCO2,andenergyandresourceefficiency.Industrialsymbiosisaspartofacirculareconomy,digitalisationandnon-technologicalaspectssupportandacceleratethedigitaltransformationandwillintegratetheprocessindustriesofthefutureintoaclimate-neutralandcircularsociety.Figure18P4PapproachtoachievingitsambitionsandgoalsSource:Processes4PlanetSRIA,October2021.67DraftproposalforaEuropeanPartnershipunderHorizonEuropeProcesses4Planet,https://ec.europa.eu/info/sites/default/files/research_and_innovation/funding/documents/ec_rtd_he-partnerships-industry-for-sustainable-society.pdf(underpinningtheMemorandumofUnderstandingfortheCo-programmedEuropeanPartnershipProcesses4Planet,approvedandsignedon14June2021).68SeeAmoroso,S.etal(2021),WorldCorporateTopR&DInvestors:Pavingthewayforclimateneutrality.AjointJRCandOECDreport,PublicationOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-43373-6,doi:10.2760/49552,JRC126788.35Besideothers,theP4PPartnershipalsoemphasisestheurgentneedtodevelopandtransfertechnologicalsolutionsforthedecarbonisationofindustrialprocessesinacross-sectoralapproachtoacceleratethepaceofdecarbonisationanddisseminationofappropriateandpromisingsolutions,andthusalsotoexploitsynergypotentialsbetweensectorsoftheprocessindustry.Manychallengese.g.relatedtotheintegrationofalternativerawmaterialsandfuels,theimprovementofenergyefficiency,thevalorisationofCO2,theincreaseduseofsecondarymaterialsortheelectrificationofprocessesareinprinciplethesamebetweensectors.Technologicalsolutionsthataddressthesecommonchallengeshavethepotentialtoberelevantforseveralsectors,evenifattheendofthedaysector-specificadaptationsandfurtherdevelopmentshavetobemade.Theexamplesgivenabovecanserveasastartingpointforsuchcommon,cross-sectoralsolutionsandapplications,whichcansubsequentlybedefinedjointlyandmorepreciselybytheparticipatingsectors.Forexample,onesectorcouldtaketheleadtogetherwiththeequipmentindustryinsuchapilotanddemonstrationproject(e.g.inintegrationofrenewablesforelectrification,newkilntechnologies,CO2purificationandvalorisation,orbiomassinhightemperaturefurnaces),furtherdeveloptherequiredtechnologicalsolutionssurroundingthischallenge69EuropeanCommission,Directorate-GeneralforResearchandInnovation,Sommer,K.,StudyandportfolioreviewoftheprojectsonindustrialsymbiosisinDGResearchandInnovation:findingsandrecommendations,PublicationsOffice,2020,https://data.europa.eu/doi/10.2777/381211.70SPIRETrendsReport2020.Box4CROSS-CUTTINGANDCROSS-SECTORALINNOVATIONUNDERP4PCross-cuttingandcross-sectoralinnovation,includingcircularbusinessmodels,technologiestoincreaseresourceefficiencyand(urban)industrialsymbiosisareattheheartoftheEUco-programmedpublicprivatepartnershipProcesses4Planet.ThispartnershipencompassestenleadingsectorsoftheEuropeanEnergyIntensiveProcessIndustries(cement,steel,ceramics,chemicalsengineering,mineralsandores,non-ferrousmetals,steel,water,refineries,pulp/paper)andissuccessfullyshowingthewayforwardonhowinnovationchallengescommontoseveralsectorscanbeaddressedthroughcross-sectorialcollaboration.Manysimilarinnovationchallengesareencounteredacrossenergyintensiveindustrialsectorssuchas,achievinghightemperaturesusingelectricity,integratingrenewableenergyintheprocess,makingmoreefficientuseofresourcesincludingenergy,materialsandwater,developingCO2captureanduse,demonstratingindustrialsymbiosis,oraddressingnon-technicale.g.skills,datasharingorstandards,relatedchallenges.Theeffectivenessandefficiencyoftheinnovationpathwayscanbeincreasedbydevelopingsuchinnovationsjointlyandbyputtinglearningsincommon.Cross-sectoralinnovationofferstheadvantageoffasterdeploymentandimpactatscale.Processes4Planet(formerSPIRE)hasshowntheeffectivenessofitsuniquecross-sectoralinnovationapproachandaimstofindmoresynergiesinthecomingperiod.Industrial-UrbanSymbiosis,CO2CarbonCaptureandUseandDigitalisationachievementsaresomeoftheProcesses4Planet(formerSPIRE)processindustriessuccessfulcross-cutting,cross-sectoralinnovations69,70.Industrialsymbiosisistheprocessbywhichwastesorby‐productsofanindustryorindustrialprocessbecometherawmaterialsforanother.Thisincludesallresources:waste,by-products,residues,energyandwater.Inaddition,symbioticindustrialclusterscansharelogistics,capacity,expertise,equipmentandmaterials,andinvestments.Industrialsymbiosisisanimportantelementcontributingtoestablishingacirculareconomythatgoesbeyondtheoptimisationofprocessesatthesinglevaluechainlevel.Thepotentialhasbeenexpandedtowardsindustrial-urbansymbiosisinvolvingalsomunicipalitiesandregionsonissueslikewaste,energyandwaterallowingsuchindustriestodevelopandanchorintheseregions.Thisisthefoundationforthehubsforcircularity(H4C),aninitiativeputforwardundertheGreenDealundertheumbrellaofthepartnership.36togetherwithrepresentativesfromothersectorsuptoTRL9,andinthiswaysecureandshapetheknow-howtransfertotheseotherrelevantsectors.Thiswouldalsoincreasethechancethatthesesectorstakeuptheresultsandtechnologiesandinturnfurtherdevelopthemintoviablesector-specificsolutionsanddemonstrationprojectsoftheirown.Therefore,thiskindofindustrialdevelopmentanddemonstrationprojectsrequiremechanismsandformatsthatenablecross-sectoralcooperationandatransferofsolutionsbetweenlocationsanddifferentsectorsefficientlyandeffectively.Trust-basedmutuallearningandthereadinessfordeepcooperationmustbeintheforegroundandrealisedthroughtransfermechanismsattherighttimealongtheladderoftechnologicaldevelopment.The‘marbles’proposedbyP4P71couldinoneortheothercasebeaneffectivewaytorealisesuchcross-sectoralprojectsuptofirst-of-a-kind(FOAK)andthusTRL9.Forinstance,oneofthemarblesidentifiedintheP4Proadmap2050asM33"Neweraforelectrical&electrochemicalprocesses"isveryrelevantbothforceramicsandformineralssectors;M25andM26referringtoCO2capture,purificationandutilisation,forcement,limeandceramics;M49"BiomassandBiowasteasrenewalenergy-Torrefactionofbiomass"forsteelandceramics.Inalltheseexamples,cross-sectoralcooperationwillenableactorsacrossindustriestooptimiseresearchresults,reacheconomiesofscale,acceleratetheuptakeandwidenthedeploymentofthesetechnologicalpathways.3TheCleanSteelPartnershipapproachandtechnologicalpathwaysEUEmissionsTradingSystem(ETS)dataputthesteelindustry’sdegreeofresponsibilityfortheindustrialCO2emissionstheETScoversatabout20%to25%72.Steelmakersshowahighcommitmenttoreducingtheiremissions,therebycontributingtotheachievementoftheEU’sclimateandenergytargets.ThesteelindustryhasbeenattheforefrontofR&D&Iintobreakthroughtechnologiestoreduceitsclimatefootprintformanyyears73.TheestablishmentoftheEuropeanCleanSteelPartnership(CSP)andthedevelopmentofitsinnovationroadmapisafurther,importantstepinthisprocess.TheCSP’slong-termvisionistosupportthedriveforEuropeanleadershipintransformingthesteelindustryintoaclimate-neutralsector.Sixspecificobjectives,tobeachievedinsevento10years,willsupporttheachievementofthegeneralobjective.Thesespecificobjectivesare:•enablingsteelproductionbymeansofcarbondirectavoidance(CDA)technologiesatdemonstrationscale;•promotingsmartcarbonusage(SCU)-CCUStechnologiesinsteelmakingroutesatdemonstrationscale,therebycuttingCO2emissionsfromtheburningoffossilfuels(e.g.coal)inexistingsteelproductionroutes;•developingdeployabletechnologiestoimproveenergyandresourceefficiency(SCU-processintegration(PI));•increasingtherecyclingofsteelscrapandresidues,therebyimprovingtheuseofsmartresourcesandfurthersupportingacirculareconomymodelintheEU;71SeeP4PSRIA,chapter5.5.A.SPIREmembershavecoinedtheterm“marbles”todescribeafirst-of-a-kind(FOAK)largescaleapplicationofoneormorenewtechnologies,deployedbytheprocessindustry.TheyindicatedtheirintentiontoinvestinmarblestobringthemtoTRL9.72SeeCSPSRIA,p.12.73EuropeanCommission(2018),EuropeanSteel:TheWindofChange.37•demonstratingcleansteelbreakthroughtechnologiescontributingtoclimate-neutralsteelmaking;•strengtheningtheglobalcompetitivenessoftheEU’ssteelindustryinlinewiththeEUindustrialstrategyforsteel.Toachievetheseobjectives,R&D&IactivitiessupportedbytheCSPwillrevolvearoundthefollowingmaininterventionareas:•twotechnologypathways:carbondirectavoidance(CDA)andSCU,furtherdividedintoSCU-CCUSandSCU-PI;•circulareconomy(CE)projectsbroadlysupportingtechnologypathways;•possiblecombinationsofthedifferentpathwaysandCEprojects;•enablersandsupportactions,i.e.activitiesthatcansupporttheimplementationofsolutionsdevelopedintheotherinterventionareas,aswellastheglobalcompetitivenessoftheEU’ssteelindustry.TheCSP’sgeneralobjectiveistodeveloptechnologiesatTRL8toreduceCO2emissionsfromEUsteelproductionby80-95%from1990levels,ultimatelyleadingtoclimateneutrality.IncreasingcircularitythroughtheuseofrecycledsteelandreducingsteeldemandareimportantleversforthedecarbonisationofEUsteelmaking.However,virginsteelwillcontinuetobeneededinthefuture.Thisrequiresthedeploymentofnewsteelmakingtechnologiestoreplacethecoal-basedblastfurnace-basicoxygenfurnace(BF-BOF)route.ThesteelsectoriscurrentlyexploringvariousstrategiestoreduceCO2emissions.Intheshortterm,extensivelymodifyingprocessesandswitchingfromfossilfuelstolow-CO2energysourcescanenablesomelimitedCO2mitigation.CombinedwithCCUStechnologies,deeperemissionscutscanpotentiallybemade.Adifferentpathway,whichseemstobeemergingastheprincipalstrategyformostEuropeansteelmakers,istofullyreplaceexistingprocesseswithbreakthroughtechnologiesthatrelyonhydrogenorelectricitytoreduceironore,makingitpossibletoproducesteelwithlittletonoCO2emissions.Deployingthesetechnologieswouldrequirethereplacementofexistingsteelprocesseswithnewsteelplants.Keytechnologiesincludethefollowing.1.Thedirectreductionofironore(DRI)toironusinghydrogen(H-DRI),therebycompletelyavoidingtheuseoffossilfuels.Thisprocesscouldalreadybedeployedby2030,butreliesontheavailabilityoflow-CO2hydrogenandelectricityinlargequantitiesandatlowcost.Severalsteelmakersareexploringtheuseofnaturalgasasatransitionfueluntilenoughhydrogenisavailableatanacceptablecost.2.Electrolyticprocesses,wherebyironoreisreducedusingonlyelectricity,athightemperature(moltenoxideelectrolysis)orlowtemperature(electrowinning).Whilethesetechnologiesarepotentialgamechangers,theyarenotexpectedtobedeployedbefore2040.3.Thesmeltingreductionofironoretosteelwithfossilfreeinputs,suchashydrogenplasmainasinglereactor.Thistechnologyishighlyintegratedandpotentiallyveryefficient,butisalsoatanearlystageofdevelopmentandnotexpectedtobeavailablebefore204074.74GreensteelforEuropeProject(2021),DecarbonisationPathways2030and2050,Somers,J.(2021),Technologiestodecarbonisethesteelindustry,PublicationsOfficeoftheEuropeanUnion,JRC127468.38ThefollowinggraphfromtheCSProadmapshowsthesixareasofinterventionandhowtheyrelatetoeachother.Figure19TechnologicalpathwaysandenablerstoreducetheEU’ssteelindustry’sCO2emissionsSource:CSPRoadmap,2020.CarbonDirectAvoidance(CDA)includestechnologiesthatavoidcarbonemissionsduringsteelmaking.CDAmainlyreliesonsteelproductionprocessesbasedonhydrogenandgreenelectricity,i.e.producedwithoutcarbonemission.SCU-CCUSencompassestechnologiesthathelpavoidcarbonemissionstotheatmosphere.ThispathwaysupportsalltheoptionsforutilisingtheCOandCO2insteelplantgasesorfumesasrawmaterialtoproducevaluableproducts.Smartcarbonusage,intheformofprocessintegration(SCU-PI),enablesthereductionoffossilfuel(coal,naturalgas,etc.)usedinbothBF-BOFandelectricarcfurnace(EAF)steelproduction,andthecurtailmentofCO2emissions.TheCSPmaintainsthattheviabilityofbothsteelmakingroutes(asdescribedalsoabove,undertheSPIRE/P4Ppartnerships)-theBF-BOFandEAF-mustbepreserved,astheyremainnecessarytoensuretheEUsteelsector’scapacitytodeliverhigh-qualitysteelgradesusingdifferentrawmaterials,therebyensuringstrategiccapability.Hence,R&D&Ineedstofocusonbothproductionroutes.TheshareofproductionbetweenthetworoutesintheEUissplitwithroughly60%producedviatheBF-BOFrouteandabout40%viatheEAFroute.ProductionusingtheEAFrouteislessCO2intensivethantheBF-BOFroute.ForeachtonneofcrudesteelproducedwiththeBF-BOFprocess,about1.3to1.8tonnesofCO2arecreated.OnetonneofsteelproducedwiththeEAFprocessrequiresabout400-500kWh(kilowatt-hours)ofelectricity,and80-120kgofdirectand250-350kgofindirectCO2emissions.Inthefuture,theprimarysteelmakingroutewillalsohavedirectreductionplants.39TheCSP’smaincirculareconomy(CE)targetistoextractfewerrawmaterialsandrecycleandrecovermoreexistingmaterials,andhaveasignificantimpactonresourceefficiency.Doingsowillrequirefewernaturalresourcesandrawmaterialsandlessenergy,creatingupto50%CO2savingsinthesteelmakingprocess76.CEapproachesenhancetherecyclingofsteelandresourceefficiencythroughscraputilisation,scrapsortingandbetterremovalofscrappollutionwithnewdetectingtechnologies.Italsoincludestheutilisationofallresiduesfromsteelproductioninternallyorinothersectors(industrialsymbiosis).CEwillalsosupportthesubstitutionoffossilmaterialswithalternativecarbon-bearingmaterials75SeealsoEUROFERformoredetailedoverviews.Cfthemapaccessibleonhttps://www.eurofer.eu/assets/Uploads/Slide1.PNG76CSPSRIA,p.70andfollowing.Box5EXAMPLESOFBREAKTHROUGHTECHNOLOGIESBYSTEELMAKINGROUTE75EAFrouteBF-BOFrouteProcessintegration(tobecombinedwithCCUand/orCCS):•TopGasRecycling-BFusingplasmatorch(project:IGAR)•CarbonValorisation/CCU(projects:Steelanol,Carbon2Chem,FReSMe)CDAviahydrogen/electricity:•CO2emissionavoidancethroughdirectreductionofironoreusinghydrogenandnaturalgas(projects:HYBRIT,SALCOS/MACOR,H2Steel(H2Future+SuSteel))•Electrowinningofironmetalfromironoxides(SIDERWIN)•Otherprojects:PrimaryEnergyMelter(PEM),StepwiseCCUprojects:•GasfermentationprocessestoreduceCO2emissionsandproducelowcarbonliquidfuelsandchemicals(project:Steelanol)•Usegasesfromsteelproductionprocesses,includingCO2,asastartingmaterialforchemicalproductsandusesurplusenergyfromrenewablesourceintheprocess(project:Carbon2Chem)•EAFsteelmakingprojects,usingEAFasabreakthroughtechnologyforCDABOF,bydirectreductionofironoreusinghydrogenandnaturalgas(projectexamples:GreenEAF2,OSCANEAF,OXYMON,SuperChargeEAF,Fines2EAF,andRINFOAM)Source:CleanSteelPartnership.EAFrouteTheEAFroutewillbefundamentalinCleanSteelPartnershiptoreinforcethepositioninthecirculareconomyofEUsteelindustry.Inthiscontext,bothprimarysteelmakingandscrap-basedsteelmakingmustbeinsymbiosis:themajorityoflongsteelproductsintheEU(79%)isproducedbyEAF,while91%offlatproductsisproducedbyBF/BOF.Moreover,theEAFisanimportantelementinthementionedbreakthroughtechnologiesforCDA.EAFsteelmakingprojectsintheRFCSframeworklikeGreenEAF2,OSCANEAF,OXYMON,SuperChargeEAF,Fines2EAF,andRINFOAMprovidedthebaseforscalingupoftheprocessandgeneratinganewframeworkfordevelopmentofthefuturestrategies/planefromEAFroute.TheH2020Retrofeedprojectincludesthedevelopmentoftoolsandequipmenttoallowtheuseofrenewablefeedstockandindustrialresiduesinthesteelsector.40andalternativereductants(e.g.biomass,syngasfromwastes),andencompasstechnologiesthatidentifyandusewasteheatsources.TheCSPemphasisesthatthecombinationoftechnologicalpathwaysisimportantforthesteelsectortoincreaseitsCO2reductionpotential.Forexample,SCU-PItechnologiesalonecanhelpreduceCO2byupto65%.IfcombinedwithCCUStechnologies,thiscanincreaseupto100%77.4TheSETPlanapproachandprioritisedR&IactivitiesSETPlanAction6onenergyefficiencyinindustryaimstomakeenergy-intensiveindustrieslessenergy-,resource-,andemissions-intensiveandmorecompetitive.MemberStatesandnon-EUSETPlanassociatedcountries,industryandresearchstakeholders,togetherwiththeCommission,identifiedtechnologicaloptionsandR&IactivitiestoincreaseenergyandresourceefficiencyanddrasticallyreduceGHGemissionsinEuropeanprocessindustries.TheresultingimplementationplanwasrevisedandendorsedbytheMemberStatesandassociatedcountrieson7December2021.Theplanspecificallyaddressesfoursectors–cement,chemicals,ironandsteelandpulpandpaper–whiletheareasofheatingandcoolingandsystemintegrationareapplicabletoallsectors.Theobjectiveistofacilitatethedevelopment,deploymentandmarketpenetrationofemergingtechnologies.Inthisimplementationplan,sixthematicgroupsspanningfourindustrialsectorsandtwocrosscuttingtechnologicalfieldsaredefinedanddescribedbytheSETPlanactionmembers,comprisingrepresentativesfrom19SETPlancountries,industrialstakeholdersfromfoursectorsandcross-cuttingtechnologyareas,aswellasresearchinstitutions.Eachthematicgrouppresentstheirsector-levelambitions,whichtheSETPlanAction6R&Iprioritiesaimtocontributeto.TargetscorrespondingtoeachR&Ipriorityactivityareaforallthematicgroupsarealsopresented78.ForeachofthesesixthematicgroupsandtheR&Iactivitiestheyconsistof,operationalimplementationplanswithtargetedTRLs,atimeline,expecteddeliverablesandthebudgetrequiredweredrawnup.ThefollowingtablegivesanoverviewofthesesixthematicgroupsandtheR&Iactivitiesprioritisedandplannedinthemwithaviewtodevelopingrelevantlow-carbonindustrialtechnologies.Table4ThematicgroupsandprioritisedR&IactivitiesintheSETPlan–Action6TGNo.TitleHeat&Cold1.1Heatupgradefromlowtohighgrade1.2Wasteheattopower(lowandhightemperature)1.3Wasteheattocoldgeneration1.4Polygeneration(heat,cold,electricalpower)andhybridplantsintegratingrenewableheatSystems2.1Industrialsymbiosis2.2Non-conventionalenergysourcesinprocessindustry,includingcarboncaptureanduse2.3Digitalisation2.4Knowledgeexchange,trainingandcapacitybuildingCement3.1Resourceefficiency3.2Energyefficiency3.3Carboncapturestorageandusage(CCS/U)3.4Recarbonationandmineralisation77Ibid,p.35.78SeeSETPlanaction6,Revision2021,page23andfollowing.41Chemicals4.1Electrification4.2Integratedproductionofhydrogenwithlowcarbonfootprint4.3Plasticwasteasanalternativefeedstock4.4CO2/COasalternativefeedstock4.5Biomassasalternativefeedstock(sharedactivity,seePulp&Paper6.6)4.6ProcessefficiencyIron&Steel5.1CO2emissionsavoidancethroughdirectreductionofironusinghydrogen5.2CO2emissionsavoidancethroughdirectreductionofironusingelectricity5.3Processintegration:HIsarnasmeltingreductionprocessfortheloweringenergyconsumptionandCO2emissionsofsteelproduction5.4Processintegration:topgasrecycling-blastfurnace(TGR-BF)usingplasmatorch5.5Carboncaptureandusage(CCU)5.6CirculareconomyPulp&Paper6.1Integraldryingandheatrecoveryprocesses6.2Papermakingwithoutwaterevaporation6.3Processoptimisationandelectrification(modularapproach)6.4Mildpulpingprocesses6.5Onsiterenewableenergyconversion6.6Biomassasalternativefeedstock(sharedactivity,seeChemicals4.5)Note:Indicatesactivitiesthatarenewtothe2021SETPlan.Source:SETPlan–Action6onenergyefficiencyinindustry.TheprioritisedR&ItopicsintheimplementationplanforSETPlanAction6,aswellasthetechnologicaloptionsforindustrialdecarbonisationdescribedinotherroadmapsandstudies,wereanalysedindetailandsystematisedalongdifferenttechnologicalpathwaysandsectors.InthesixthematicareasofSETPlanAction6,thefocusisonR&IactivitiesthataimforhigherTRLstoenablethemarketscale-upoftechnologicalandnon-technologicalsolutionsnecessaryforthedecarbonisationofEuropeanprocessindustry79.Twothematicgroupstakeacross-cuttingapproach(‘Heat&Cold’and‘Systems’)toleveragesynergiesandpotentialbetweenindustrialsectors,basedoncommonchallengesandtechnologicaloptionsforlow-carbonsolutions.Thecross-cuttingthematicgroup‘Heat&Cold’targetsdevelopmentuptoTRL7inatimeframeof5to10years.Heatandcoldgeneration,upgradeandrecoverytechnologiesarebeingdeveloped,ortheyalreadyexistbutarenotyetsufficientlyeconomicallyviabletobedeployedinallindustrialprocesses.ThisthematicgroupthereforeincludesR&Iactivitiesforheatupgrade,wasteheattopowerandtocoldgeneration,polygenerationandhybridplantsintegratingrenewableheat.Thethematicgroup‘Systems’targetsdevelopmentuptoTRL7-8,excepttrainingandcapacitybuilding,forwhichTRL9isenvisaged.Thisthematicgroup’stimeframeisalso5-10years.‘Systems’focusesontheintegrationofconcepts(basedontechnologies),theoverallsystemsneeded,embeddedinaregionalsettingandencompassingtrainingandeducation(includingraisingthepublic’sawarenessofwhatisatstakehere).Forthisintegrationtowork,strongdigitaltoolsareneededtomanagedataflows,improveprocessesandguaranteethequalityofproductsandservices.R&Iactivitiesconsistof79SeeSetPlanAction6,Revision2021,page10andfollowing.42industrialsymbiosis,non-conventionalenergysourcesincludingCCUS,digitalisationandknowledgesharing,trainingandcapacitybuilding.In‘Cement’,theexistingTRLismedium/highinthecaseofmosttechnologicaloptions,exceptforelectrification.SETPlanAction6focusesonR&Iactivitiesthatarealreadyatmedium/highTRLsandthereforehavethepotentialtoreachdemonstrationandearlymarketadoptionphase(TRL7-9).Cement-relatedR&Itopicsincludeenergyandresourceefficiency,CCUSandrecarbonationandmineralisation.‘Chemicals’:intheprioritisedR&IactivitiestheexistingTRLismainlymediumand/orhigh,exceptforelectrificationandCCU.Theywillnowneedtobebroughttodemonstrationstageandscaledupformarketadoption,sothetargetinthiscaseisTRL7-9.R&Iactivitiesconsistofelectrificationandprocessefficiency,integratedproductionoflow-carbonhydrogen,plasticwasteandCO2/COasanalternativefeedstock.Across-cuttingtopicistheuseofbiomassasalternativefeedstock(sharedactivitywithpulpandpaper).The‘Iron&Steel’thematicgroupfollowsmainlytheCSProadmap.Itsaimistobringlow-carbontechnologiestoTRL7andabove8,soitwillstartmostlywithmediumTRLs.ProposedR&Iactivitiesarethedirectreductionofironusinghydrogenandelectricity,Hlsarnasmeltingreduction,topgasrecycling-blastfurnace,carboncaptureandusage(CCU).Thenewcross-cuttingtopicisthecirculareconomy.In‘Pulp&Paper’R&IactivitiesrangefromTRL2toTRL8,coveringbothlong-termresearchandshort-termapplication-drivendemonstrationprojects.ProposedR&Iactivitiesareintegraldryingandheatrecovery,papermakingwithoutwaterevaporation,processoptimisationandelectrification,mildpulpingprocesses,onsiterenewableenergyconversion,andbiomassasalternativefeedstock(sharedactivitywith‘Chemicals’).SETPlanimplementationplansarepreparedbyMemberStatesandassociatedcountriesincollaborationwithindustry,researchorganisationsandtheEuropeanCommission.Theydonotincludeafundingcommitmentfortheirexecution.SomeoftheactionsidentifiedintheSETPlanimplementationplansarebeingexecutedmobilisingMemberStates’andassociatedcountries’nationalpublicandprivatefunding,aswellasfundingfromtheEuropeanInnovationFundandtheEuropeanInvestmentBank(EIB).Someexamples:•TheHorizon2020CO2OLHEATproject80isadirectresultoftheimplementationplan’sheatandcoldpriority.TheprojectfocusesondevelopingthesupercriticalCO2(sCO2)cycle,soitcanbedeployedinenergy-intensiveindustrieswiththemainobjectiveofunlockingthepotentialofunusedindustrialwasteheatandtransformingitintopower.Thedevelopmentofinnovative,cutting-edgesCO2technologieswillbeusedtodesignanddemonstrateinarealindustrialenvironmentthefirst-of-a-kindsCO2plantintheEU.•TheHYBRIT81project,co-fundedbySweden,waslaunchedin2016asajointventurebetweenVattenfall,LKABandSSAB,workingtogethertodevelopthefirstfossil-freesteel.HYBRITtechnologyhasthepotentialtoreduceSweden’stotalcarbondioxideemissionsby10%.•TheSTEELANOL82projectfocusesontheproductionofsustainable,advancedbioethanolwithaninnovativegasfermentationprocessthatusesexhaustgasesemittedbythesteelindustry.StartinginMay2015,theprojectreceivedfunding80https://cordis.europa.eu/project/id/10102283181https://www.hybritdevelopment.se82http://www.steelanol.eu/en43fromHorizon2020’sR&IprogrammeandbenefitedfromanEIBloanundertheInnovFinEnergyDemonstrationProjectsFacility.•TheHorizonEuropeCleanenergytransitionco-fundedPartnershipisatransformativeR&D&IprogrammeacrossEuropetoboostandaccelerateallaspectsoftheenergytransitionsoEuropecanbecomethefirstclimate-neutralcontinent.Thepartnership’stotalindicativebudgetisEUR210million,EUR70millionofwhichisanEUtop-up,committedunderHorizonEuropebudgetinannualinstalmentsover2021-2022.SMEFocus2THEROLEOFSMESINDEVELOPINGTECHNOLOGIESSmalltechnologydevelopersareengagedindevelopingvarioustechnologiescoveringtheentirespectrumoflow-carbontechnologies,suchascleanenergy,wasterecycling,carboncaptureandstorage,materialefficiency,hydrogen,biomass,sectorcoupling,anddigitalbusinessmodels.Abouthalfofthefirmshavealreadybeengrantedpatentsdemonstratingtheirtechnologyleadershipambitions,andabouttwothirdsofthefirmsclaimedtospendmorethan25%forR&D&I,furtherhighlightingtheirfocusoninnovation.Mostofthestartups(73%),bothsmallandlargefirms,servetheB2Bmarket.InDGR&I’ssurvey,thesefirmswereaskedtoassessthewillingnessoftheircustomerstobecomemoreenvironmentallyfriendly.Theoverallmarkgivenforthiswas7.4onascalebetween1(verylow)to10(veryhigh).Thisindicatesthatsmallhigh-techcompaniesoftenservecustomerswhoareverywillingtoreducetheirCO2emissions.However,whenitcomestoassessingthemainbarrierswhichsmalltechnologydevelopersencounterfromtheircustomers(usuallyothercompanies),thesurveyindicatesthathighinvestmentcosts(53%)areperceivedasthemostsignificantbarrierinadoptingthetechnologiessuppliedbythesmalltechnologydevelopers.Otherbarriersincludetheunknowncost-benefitratio(52%),alackofawarenessfortheimportanceofenvironmentalmeasureswithinthecompany(29%)andregulatorybarriers(29%).Figure20Barriersencounteredbyrespondents’customerstoadoptenvironmentaltechnologiesorsolutionsSource:surveyonsmalltechnologydevelopers,conductedinNovember2021andJanuary2022(seeAnnex1).445EnablersincludingcircularityInlinewiththeseconsiderations,followingthedifferentroadmapsandstudies,twoenablingpathwayscanbedefined:‘Digitalisation’and‘ecosystemsandsupportactionsfornon-technologicalinnovationanddrivers’.Theyareveryimportantforspeedingupemissionreductionsinprocessindustriesandforachievingacirculareconomy,cross-sectoralcooperationandindustrialsymbiosis.Identifiedtopicsinthiscontextinclude,fordigitalisation:•AI,machine,anddeeplearning;•3Dprintinganddigitalfabrication,includingwithnewmaterials;•digitalisationofthedesignphaseofprocessesandmaterials;•traceabilityofrawmaterialsandproducts;•digitaltwins;•strategicschedulingtoolsforindustrialtransitionprocesses,etc.83Identifiedtopicsinthe‘ecosystemsandsupportactionsfornon-technologicalinnovationanddrivers’:•integratingnon-technologicalaspectsinR&Iactivitiestoimprovethetechnologicalsolution’seffectiveness;•creationof‘EuropeanCommunityofPractices’andhubsforcircularity;•proactiveadjustmentofhumanresourcesand(digital)skillsfortechnologicaldevelopmentandimplementation;•supportactionsforcreatingsynergiesbetweenprojects,upskillingtheindustrialworkforce,fosteringR&D&Icollaboration,creatingnewmarkets,takingupsuccessfultechnologiesdevelopedandtheglobalcompetitivenessoftheEUindustries.AsimilarapproachonpotentialtechnologicalpathwayshasbeenatthecoreoftheworkcarriedoutbyA.SPIRE,withintheSPIREPartnership,underHorizon2020.Energyusageandaccesstorenewables,coupledwiththeelectrificationofindustrialprocesses,isseenaskeyforthewayforward,alongsidefurtherpathways(i.e.CCU,circularity).83SomemoreexamplescouldbetakenfromP4PSRIA,emphasisingtheroleofdigitalisationandnon-technologicalinnovation:page57andfollowing,page61andfollowing.45Box6CIRCULARITYASANENABLEROFDECARBONISATIONStudiesindicatethat,beyondtechnologiesthatreduceCO2emissionsproducedbycurrentprocessesornewproductionpathwayswithlowerCO2footprints,amorecirculareconomyapproachcanmakedeepcutstoemissionsfromheavyindustry.Forinstance,theelectricarcfurnace(EAF)methodusedinthesteelindustryhasbeenidentifiedasavalidwaytodecreasethesector’semissions84.Furthermore,astheEIIecosystemissodeeplylinkedtoallothereconomicsectors,indirectactionslinkedtolimitingtheuseofvirginsteel,cementorconcreteinnewbuildingscansignificantlyreduceemissions.Consequently,itispossibletoreduceemissionsby12%throughoverspecifyingconcreteinbuildingplans,16%throughusinginnovativeandalternativecementtypesand15%throughreusingstructuralsteel85.Theincreasedcircularityofmaterialsisexpectedtoboosttheimportanceofcircularityinreducingemissionsfromtheenergy-intensiveindustriesecosystem,inordertooptimiserawmaterialuseandtocontributetothesecurityofsupply86.RawmaterialsrepresentoneofthehighestcostcategoriesfortheEIIsecosystem,whichmakesthemakeyelementtoaddressinthepathwaytonetzero.Furthermore,availabilityofcriticalrawmaterialsiskeyintheoverallgreentransitionofEurope’senergy-intensiveindustries,especiallygiventhehighdependenceonnon-EUtradingpartnersforanumberofcriticalrawmaterials.Partofthesolutionisindustrialsymbiosis,whichcanensurethatEIIsbenefitfromparallelmaterialflows.ThisoptionbenefitsfromtheoveralllandscapeofEU’sbigproductionfacilities,whicharesometimeslocatedinthesameindustrialzoneasotherplants,thusbeingabletosharesimilarinfrastructure,logisticsandresources.Aspecificwastethatneedstobevalorisedintheenergy-intensiveindustriesecosystemiscarbonwaste,whichshouldbecomeavaluableresourcewithanincreasedproductivity87.However,circularityofcarbonrequiresimprovementinwastecollectionandsorting,asameanstoenableinnovativerecyclingsolutionsforcarbon.Estimatesindicatethat,atagloballevel,thecirculareconomycanreduceglobalCO2emissionsfromjustfoursectors–steel,cement,aluminiumandplastic–by40%by205088.Thewideapplicabilityofmaterialsfromtheseindustries,e.g.tobuildingsormobility,makethemhighlyrelevantforglobalsupplychains.Byeliminatingwasteandcirculatingproductsandmaterials,anoverallemissionsreductionofupto2billionCO2tonnesperyearcouldberegisteredworldwide.TheCommission,withMemberStatesandstakeholders,isworkingonafurtherERAindustrialtechnologyroadmaponcircularindustrialtechnologies.Itwilladdress,amongotherthings,thecircularityofvariousEIIs,suchassteel,chemicalsorceramics.Figure21CircularityintheA.SPIREroadmapSource:A.SPIREroadmap2050.46Furthermore,thepathwaytodecarbonisationisstronglyrelatedtothesupplyanduseofenergy,andnotablyelectricity.Theaccessanduseofrenewablegreenenergyisamajordeterminant,alongwithrelatedquestionsoninfrastructure,notablyfortheincreaseduseofelectricityandhydrogen89.Figure22EfficientintegrationofrenewablesSource:A.SPIREroadmap2050.AspartofthedevelopmentoftheERAroadmap,astakeholderconsultationwasconductedinsummer202190,addressingexpertsfromindustry,researchorganisationsandindustryinterestgroups.Intotal,83expertsfromdifferentorganisationsacrossEuropeparticipatedinthesurvey.Theexpertswereasked,amongotherthings,toassessthehighestpotentialofthedifferenttechnologiestoreducecarbonemissionsinenergy-intensiveindustries.Thefeedbackrevealsthatonoverallelectrification,theuseofbiomassandotherbiofuels,greenhydrogen,andrecyclingwereconsideredasthemostpromisingsolutions.However,theotherpathwayssuchascarboncaptureandstorage,industrialsymbiosisandalternativesolutions(e.g.digitalisation)werealsoconsideredtohaveahighpotential.Thereweresmalldifferencesconcerningtheassessmentofexpertsfromdifferentgroupsofstakeholders,i.e.firms,researchandindustryinterestgroups(seeFigure23,top).Recyclingwasconsideredimportant,particularlyby‘other’stakeholders.Furthermore,therewerehardlyanydifferencesbetweenlargeandsmallfirms(notdisclosedhere),norbetweendifferentcountrygroups(seeFigure23,bottom).84SWD(2021)353final,TowardsaCompetitiveCleanEuropeanSteel.85EuropeanEnvironmentAgency(2020),Cuttinggreenhousegasemissionsthroughcirculareconomyactionsinthebuildingssector.86HLGEII(2018),MasterplanforaCompetitiveTransformationofEUEnergy-intensiveIndustries–EnablingaClimate-neutral,CircularEconomyby2050.87Ibid.88EllenMacArthurFoundation&MaterialEconomics(2021),CompletingthePicture:Howthecirculareconomytacklesclimatechange.89However,thisroadmapdoesnotcoverenergy(includingelectricity)orhydrogenproduction.90Consultationopenfrom23Julyto30September2021.47Figure23Assessmentofthepotentialtoreduceemissioninenergy-intensiveindustriesbytypeoforganisationandbygroupofcountryNote:West,North:AT,BE,FI,FR,DE,IE,NL,SW;Central,East:BG,CZ,PL,SK;South:GR,IT,PT,ES.Source:ERAroadmapstakeholderconsultation,openfromJulytoSeptember2021.6Conclusionsonkeytechnologicalpathways•Theanalysisresultsinalistofmostrelevanttechnologicalpathways(groupsofsimilartechnologies)neededfordecarbonisationoftheenergy-intensiveindustriesecosystem.Theseare:electrification;useofgreenhydrogen;carboncaptureandstorageandutilisation;alternativefeedstockandintegrationofrenewables;alternativematerialsandprocesses;energyandmaterialsefficiencyincludingcircularity;andindustrialsymbiosis.•Thereisaconvergingviewabouta–manageable–numberoflow-carbonindustrialtechnologies,whichareneededtoachieveEUclimateobjectivesintheenergy-intensiveindustriesecosystem.48•Low-carbonindustrialtechnologiesforenergy-intensiveindustries,whichhaveahighpotentialforreducinggreenhousegasemissions,arecurrentlyatvaryingtechnologyreadinesslevels(TRLs)intheirdevelopmentcurve.Theirtechnologicalreadinessisdecisivefortheirimpactonreducingcarbonemissionsinthemarketby2030or2050andforR&Iinvestmentneedsforfurtherdevelopment,asthelattervarygreatlybetweenloworhighTRLs.•Scalingupanddeployingexistinginnovativelow-carbontechnologiescurrentlyathighTRLsiscrucialforreachingthe2030emissionobjectives.Thisisparticularlysoforthe‘bigthree’sectors(steel,chemicalsandcement)butalsoinotherenergy-intensiveindustrysectors.•Atthesametime,technologiesthatarestillinpilotanddemonstrationphaseandtechnologiesthatarenowatanevenlowerdevelopmentlevelswillneedtobedevelopedforreachingemissiontargetsafter2030inthehorizon2050.Thechallengeistospeedupsuchinnovationprojectstoreachthemarketinthistimeframe.•Becauseoftheircross-sectoralnature,anumberoflow-carbonindustrialtechnologiescanbeappliedoradaptedinseveralenergy-intensiveindustries.Thisalsoincludescircularanddigitalindustrialtechnologies.Inaddition,actionstosupportecosystemsandnon-technologicalinnovationareimportantforspeedingupemissionreductionsinprocessindustriesandtomobilisetheaddedvalueofcross-sectoralcooperationandindustrialsymbiosis.•Thedifferentscenariosdescribedinthechapter,includingCommissionanalysisundertheStrategicEnergyTechnologyPlan,pointtotheneedtostrengthenthedevelopmentofrelevanttechnologies,bothatlowandhighTRLs,andsimultaneouslytopursuealternativetechnologypathways.•Thecross-sectorandcross-bordercollaborationonlarge-scaleR&D&Iprojectsdeployedbytheprocessindustry(‘marbles’),namelybringinganumberofkeytechnologiestotheleveloffirst-of-a-kindlarge-scaleapplication,mitigateshighcostsanduncertaintyofreturnoninvestment.•Amongthekeytechnologies,electrificationanduseofgreenhydrogendependontheavailabilityofaffordablecleanenergy.•Therefore,toensuredevelopmentanduptakeoflow-carbontechnologiesintheenergy-intensiveindustriesecosystem,thereisaneedtoensureinparalleltheavailabilityandaffordabilityofsuchcleanenergy.•FundingofrelevantR&IandinfrastructureinvestmentshouldthereforecomplementandnotcompetewithR&Iinvestmentsinlow-carbonindustrialtechnologies.ThiscanbestbeensuredthroughintegratedapproachesforindustrialR&Idevelopment.•EUco-programmedpublic-privatepartnershipsunderHorizonEuropeprovideastrongforumforcross-sectorcooperation.TheyarethelargestEuropeaninitiativesinthisindustrialecosystemtodevelopandimplementtransformationstrategiestosupporttheEuropeanGreenDealandimplementthemthroughjointR&Iactions.TheycoverseveralsectorsconcernedandbringtogetherEurope’skeycompanies,associationsandR&Istakeholders.Forsteel,severalrelevantdevelopmentsareconcentratedorconnectedtotheCleanSteelPartnership.49CHAPTER3:R&IINVESTMENTSThischapterfirstgivesanoverviewoftheR&Iinvestmentneedsforthedecarbonisationofenergy-intensiveindustries,providingestimatesofactivepublic-privatepartnershipsandtheSET-PlanAction6onenergyefficiencyinindustry,followedbyestimatesonthreepathwaysfornet-zeroemissionsbyMaterialEconomics.Second,itpresentsavailablepublicandprivateR&Idataandalsodevelopstrendanalysisofcompanies’R&DexpendituresinEU-27,USA,UK,ChinaandJapanfor2012-2020.Thethirdsectiongivesasnapshotonoveralltrendsingreenpatentingactivityandonthepatentingofspecificenergy-intensiveindustries.ThefourthsectionlooksatEUpublicinvestmentsandprogrammes,whilethefinalsectiondevelopsunderstandingofinvestmentsinnationalschemesandprogrammes.Overall,thechapterofferstheopportunitytocompareneededeffortsandactualaswellaspotentialfundingandinvestmentstowardsEU’sclimate-neutralitytargets.1R&Ineedsfordecarbonisingenergy-intensiveindustriesThissectionfollowsthesamelogicastheoneontechnologies;itdescribestheR&IfundingestimationsbyProcesses4Planet(P4P),Cleansteel,theSETplan,anditalsogivestheprojectionsofMaterialEconomicsthatwerealreadydescribedunderChapter1.TheProcesses4PlanetPartnership:fundingandinvestmentneedsalongthetimelineTheP4PPartnershipestimatesEUR34.5billionininvestmentisneededuntil2050todevelopandadvanceitsinnovationpipelineasdescribedabove,comprising36distinctdetailedinnovationprogrammesclusteredin14innovationareas.ThisestimationincludesthetotalinvestmentsoftheprojectsfromTRL1toTRL9,namelyFOAKdemonstrationplants(the‘marbles’describedabove)91.Italsoincludesfundingfornon-technologicalactivities.Forthe2020-2030period,investmentsareestimatedatEUR19.8billion,ofwhichEUR10.1billionareintheexpectedTRLrangeofHorizonEurope(i.e.TRL4to8)andintheproposednon-technologicalactivitiesofHorizonEurope.Thefollowingfiguredepictsamoredetailedbreakdownofthetechnologicalinvestmentneeds.Estimatesforinvestmentsafter2030aremoreuncertainthanthoseforbefore2030.Thenon-technologicalinvestmentsamounttoEUR303millionuntil2050.91ForadetailedquantificationofinvestmentneedsbydifferentprojecttypesandTRLs,seeP4PSRIA,AnnexE-5.50Figure24Processes4PlanetinvestmentneedsforitsinnovationpipelineSource:P4PSRIA,Roadmap.Theestimatedinvestmentsarehighestinthefirstdecade(2020-2030),asmostinnovationmustbeinplaceduringthisperiodtoreduceGHGemissionsintime.Theinvestmentsneededdecreaseintheseconddecadeandthirddecade.InFigure24,highlightedintheorangeframeontheleftisHorizonEurope’sfocus.Thearrowswithinthegraphvisualisethestepwiseapproachoftheinnovationprogrammeandthecorrespondinginvestmentneeded,buildinguponeachother,movingtheladderuptohigherTRLs.MostinvestmentsneededinTRL9willberequiredinthefirstandseconddecades,alsohighlightingtheincreasedneedforprivateinvestments,complementedbyfundingmeansoutsideHorizonEurope(e.g.ETSInnovationFund,EIB,privateequityanddebt).Ontheotherhand,investmentsrequiredforTRL4-8aremostneededinthefirstdecade,whatunderlinestheparticularimportanceofEU,butalsonationalandregionalR&Dfundinginstrumentswithinthistimeframe.Theinvestmentsfordeploymentaresubstantialandestimatedtobeabout24timeshigherthantheestimatedEUR34.5billioninvestmentneededfordevelopingthetechnologies(TRL1-9),thusoverallaboveEUR800millionuntil2050.Theprojectedcumulativecapitalinvestmentneededby2050toconvertthesteelindustryalonetocarbon-neutralproductionintheEUhasbeenestimatedatbetweenEUR70billionandEUR100billion92.EUwideinvestmentsfordeploymentinthechemicalindustryareestimatedtobeintherangeofEUR220-240billion93.92Somers,J.,TechnologiestodecarbonisetheEUsteelindustry,EUR30982EN,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2022,ISBN978-92-76-47147-9,doi:10.2760/069150,JRC127468.93SeeP4PSRIA,October2021,p.82.TheSRIAmentionsthatamoreaccurateestimationofinvestmentneedsfordeploymentwouldrequiremoredetailedanalysis,furthertheoverallfigurewilldependontheinvestmentsincluded.Forexample,forfulldeploymentacrossEuropeadditionalinvestments,alsointoelectricitypowerproductionandindirectinvestmentsinthesupplychainsortransport,areneededthatareestimatedtoexceed€3trillionbasedonthelimitedinformationavailablecurrently.(p.13,83)51TheCleanSteelPartnership–funding&investmentneedsalongthetimelineTheR&IinvestmenttimelinedevelopedbytheP4PPartnershipislargelyreflectedalsointheworkoftheCleanSteelPartnership(CSP)initsmulti-stageR&D&Iapproachtoacceleratecarbonmitigationinthesteelindustry.Thisapproachprovidestherationaleforthewayinwhichthebudgetissplitovertime.•stage1(short-tomedium-termimpactmeasures)targetsprojectsthatgenerate‘immediate’CO2reductionopportunities;•stage2(medium-termimpactmeasures)focusesonthoseprojectsthatmaynotbeimplemented‘immediately’intheinstalledbase,butallowforaquickevolutiontowardsimprovedprocesses;•stage3(medium-tolong-termimpactmeasures)looksatthoseprojectsthatcan‘revolutionise’thesteelindustrythroughbreakthroughdevelopmentandrequiresignificantcapitalinvestmentinnewprocesses.ThetotalresourcerequirementfortheR&D&IprojectsfallingwithinthescopeoftheCSProadmapisestimatedatEUR3billionduring2021-2030.ThisR&D&Iinvestmentwillthenhavetobefollowedupbyamultipleoftheseresources,toensurethatthetechnologiesaredeployedandrolledout.Thankstothecollaborationwithinthepartnership,areasonableamountofsynergyisexpected,thusreducingtheinvestmentneedtoaboutEUR2.55billion.Theinvestmentneededfromthepublicandprivatesideforthe2021-27period,isestimatedatEUR2billion.TheremainingEUR0.55billionwillbeallocatedtothe2028-2030period,duringwhichtimeprojectswillstillbecompleted.TheexpectedinvestmentstobemanagedwithinthescopeoftheCleanSteelPartnershiparearoundEUR1.4billionfor2021-27.MajorprivatefundingwillmatchEUpublicfunding,suchasHorizonEuropeandtheResearchFundforCoalandSteel.Thepartnership’sactivitieswillmobilisefurtherresourcesfromotherEUfundedprogrammesandtheMemberStates.AsshowninthenextFigure,thebudgetisexpectedtofinance16projectsresultinginbuildingblocksatTRL7(EUR10-30millioneach),12projectsresultinginbuildingblocksatTRL8(EUR30-60millioneach)and4demonstrationprojectsatTRL8(uptoEUR100millioneach).Thesefourdemonstrations,whichwillcombinedifferenttechnologicalbuildingblocks,willbelaunchedin2023,2024,2026and2027.Twoofthemaretargettechnologiesthathaveupto50%CO2mitigationpotentialby2027,andtheothertwosupporttechnologieswithupto80%ofCO2reductionby203094.Becauseofthescaleandcomplexityofthetechnologies,thematurityoftheindustryandthehighcostsassociatedwithinnovation,progressinthesteelsectorhasbeenslowindevelopingthesebreakthroughtechnologies,andadvancingthemtowardsdemonstrationlevelsandsubsequentcommercialisation95.94SeeCSPRoadmap,p.57.95Somers,J.,TechnologiestodecarbonisetheEUsteelindustry,EUR30982EN,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2022,ISBN978-92-76-47147-9,doi:10.2760/069150,JRC127468.52Figure25Budgetdistributionalongthemulti-stageapproachoftheCSPSource:CSPRoadmap.WhilealreadyinthistimelineR&Iinvestmentneedspeakaround2030,theinvestmentneedsforfull-scaleindustrialproductionplantsarealsokickinginwiththemarket-readinessoftherelevanttechnologies(aboveTRL9).Notably,mostoftheoverallinvestmentneedsforthesteelsectorfrom2020onwardswillbeconcentratedinthe2030-2050period96.BeyondtheproposedR&D&Iprojects,theEuropeanCommission,MemberStates,andEuropeansteelindustryarealsoexpectedtoinvestmassivelyinthemarketdeploymentoflow-carbonsteelmakingtechnologiesdeveloped.InstrumentsoutsideoftheCSPliketheEU-ETS-InnovationFund,theongoingworkfordevelopinghydrogentechnologiesandtheirdeploymentincludingthesteelsectorunderboththeIPCEIinstrumentandtheClimate,EnergyandEnvironmentalAidGuidelinesandnationaldecarbonisationfundswillcontributetosupporttheroll-outofbreakthroughtechnologiesinthesteelindustryinthecomingyears.SETPlanAction6onenergyefficiencyinindustry:estimationsoffundingneedsTheimplementationplanoftheSETPlanAction6onenergyefficiencyinindustry,listsfundingrequirementestimationsbythematicgroups,projectsandTRLs.BudgetsformediumTRLprojectsareintherangeofEUR2-5millioneach;forhigherTRLprojects,thebudgetsarebetweenEUR7and30million,butsometimesamounttoEUR50million.Whenreachinglarge-scaledemonstrationplantsandfirstmarketdeployment,theinvestmentsneededamounttoseveralhundredsofmillionsofeuros,andcanalsoreachbillionsofeuros97.TheSETPlanindicatesspecificfundingrequirements,e.g.inthetwocross-cuttingthematicgroups‘Heat&Cold’and‘Systems’.SimilarlytotheP4Passessment,theSETplanseesthemostpressingshort-termR&Iinvestmentneedinthosetechnologies,whicharecurrentlyathighTRLstobringthemtothemarket.ThisiscombinedwiththeneedtobringbreakthroughR&Ionboardnowtomatureintimetounfolditsimpactoverthenextdecades98.Oninvestmentneeds,theimplementationworkinggroupoftheSETPlanAction6(IWG6)concludesthatEUlevelfundsshouldbeguaranteedtoachievetrueacross-sectorialEUdimensionfortechnologydevelopmentanddemonstration.InallTRLdevelopmentphases,theprojectsshouldbeco-financedviapublicgrants(nationaland/orEU)andprivatefunds.96GreenSteelforEuropeproject,InvestmentNeeds,June2021.97SeeSETplanAction6implementationplan,Revision2021,andAnnex2:R&Iactivityfiches.98Thefundingrequirementsforsectorspecificsolutionssometimescanbeevenhigher.Forlarge-scaledemonstrationplantsandFOAKinparticular,therequiredbudgetcanaddupforseveral100millioneuros.ThisappliesforallfourindustrialsectorsintheSETplanAction6.53Othercomplementaryfundsortoolswillcoverspecificterritorialinterests(e.g.nationalorregionalfunds)orsupportdeployment(e.g.investmentandfinancialinstrumentsfromtheEIB,theETSInnovationFund).Inaddition,accordingtoIWG6,risk-sharingmeasuresthroughappropriatefinancialinstrumentsforhighTRLdemonstrationplantsandFOAKplantswillbeputinplace.Threepathwaystonet-zeroemissions–R&Ifunding&investmentneedsAllthreepathwaysproposedbyMaterialEconomicsresearchconsortiarequireanincreaseincapitalexpenditure(allinvestmentexpenditure)toensuretheoperationofindustrialplantsbasedonlow-carbontechnologies.SimilartotheinvestmenttimelinesdevelopedbyP4PandCleanSteelPartnerships,thebaselinerateofinvestmentinthecoreindustrialproductionprocessesisaroundEUR5.1billionperyear,risingbyuptoEUR5.5billionperyearinthenet-zeropathways,reachingEUR11–14billionperyearinthe2030s.Investmentsarehighestinthe‘NewProcesses’pathway.Inthe‘CircularEconomy’pathway,lessinvestmentcapitalisneededbecausemanysolutionsarelesscapital-intensivethannewproduction.Inthe‘CarbonCapture’pathway,somewhatlessinvestmentisrequiredbecausemoreoftheexistingproductionassetscanbemaintained,butfromalong-term2050perspective,theeffectisrelativelymodest.Overthethreepathways,investmentsincreaseby76–107%onabaselinescenariowherecurrentproductionroutesaremaintained99.Overall,chemicals,iron&steelandcementarethesectorswiththebiggestinvestmentneedswhosetransitionwillonaveragerequireadditionalinvestmentsofEUR3.9-5.5billionperyear.Figure26Investmentneedsacrossthe3pathwaystonet-zeroSource:MaterialEconomics,2019.99MaterialEconomics,IndustrialTransformation2050,p.4754Earlyinthetransition,investmentsinpilotanddemonstrationplantsareneeded(TRL4-8).Forindividualcompaniesthisinvestmentcanbeabigchallenge,asdemonstrationrarelyoffersarealbusinesscaseandareturninitsownright.Asmuchofthebenefitfromtheseinnovationsgotosociety,thereisahighriskofunderinvestmentwithoutpolicy(funding)support.Theinvestmentsintheearlydeploymentofnewtechnologies(FOAK,TRL9)willstillbeundertakeninasituationofsignificantuncertaintyabouttechnicalviability,futureavailabilityandcostofnewfuelsandfeedstocks,andthedegreeofpolicysupport.Increasedriskinturnincreasesthebarforraisingcapital,andthecostofbothdebtandequity.Figure27Investmentneedsovertime,2020–2050Source:MaterialEconomics,2019.Additionalinvestmentswillbenecessarytoadaptcurrentproductionsites(conversioncosts).Switchingtheprocessthenrequiresinvestmentnotjustinthecoreproductionmachinery,butalsoinarangeofsupportingandintegratingfunctions.Thesecostsarisewhenthenewtechnologiesarefirstputinplaceandcanbesubstantialinthesteelandchemicalssector.AccordingtotheanalysisofMaterialEconomics,manycompanieswillkeeptheiroptionsopenandmaintainsomedegreeofredundancy,toavoidfullycommittingthemselvestoariskysolution.Thegradualtransitionfromonesystemtoanotherwillthusrequiresomedegreeofparallelproductionsystems,withdualinvestmentrequirementsasaresult(transitioncosts).Inaddition,unlessallinvestmentsareperfectlytimed,thereisariskthatexistingassetsmustbewrittenoffbeforetheendoftheirtechnicallifetime.Fromthemid-2030s,themainreasonforincreasedinvestmentwillbetheintrinsichighercapexassociatedwithsomelow-carbonprocessesandwithcarboncaptureandstorage.Thisisparticularlymarkedinthechemicalssector,wherethereisaneedtoreplacea55singlecoreprocess(steamcrackers)withalternativescontainingmultipleloopstoachieveahighcarbonbalanceandverylowCO2emissions100.Theauthorsofthestudyconcludewithregardtoinvestmentsneeded,that‘themostimportantpolicyinstrumentforinvestmentinlow-CO2productionistoensureafuturebusinesscaseforhigher-costproductionroutes101.’100Ibid,p.49.101Ibid.p.48.Box7FINANCINGR&D&I–RESULTOFSTAKEHOLDERWORKSHOPDesigningandbuildingademonstrationplantisoneofthemajorchallengesfordevelopingmanydecarbonisationtechnologiesandsolutionsandoftenrequirescollaborationbetweendifferentindustriesandpartnersonaregionallevelandacrossborders.Theinvestmentreturnsareuncertainandthereistheriskoftechnologicallock-inandstrandedinvestments.Thesubsequenttransitionfrompilotphasetoindustrial-scaledeploymentisstillassociatedwithrisksandrequiresevenlargerinvestments.Theparticipantsintheworkshopwithstakeholders,organisedinNovember2021,stressedthechallengeposedtobothsmallandlargecompaniesinfinancingR&D&Iprojects.AlackofaccesstofinanceforFOAKinnovationwasperceivedasakeybarrierforinnovationanddeployment.Furthermore,financingthetake-upofnewtechnologieswiththeneedtotestthesolutionsathigherTRLrequireshugeinvestmentsandisamajorbarrierasthereisalackofsubsidies.IfaFOAKissuccessfullyinstalled,thereisalackoftransfertotheothers(appliers,machiningindustry)aswellasalackofprocessesandmeasurestosupportsuchatransfer.Thelackoffundingopportunitiesandrisk-sharingpossibilitiesthroughoutupscalingandintegrationintoexistingsystemsandvaluechainsresultsdirectlyfromthelackofamarketfortechnologydeployment.Therefore,norelevantfinancialpaybackfromdecarbonisationinvestmentscanbeexpectedintheshortandmediumterm.Inaddition,newformsofcross-sectoralcollaborationareneeded.However,newvaluechainsandbusinessmodelsarejustemergingandinvestmentdecisionsinsuchanenvironmentareassociatedwithhighuncertainty,whichcanslowdowndecision-makingonR&D&Iinvestments.56SMEFocus3FINANCINGTHEDEVELOPMENTANDUPTAKEOFNEWTECHNOLOGIESTheanalysiscarriedoutbyDGR&IrevealsthattoohighinvestmentcostsarethemostfrequentbarriertoadoptingnewenvironmentaltechnologiesbySMEs,followedbyalackoffinance.LosingcompetitivenessorthechallengeoftransformingtoacircularbusinessmodelarerarelyregardedasbarriersbySMEswhenmakingabusinessdecisiononinvestinginnewenvironmentaltechnologies.Figure28BarriersfortheadoptionofenvironmentaltechnologiesSource:EuropeanCommission/EnterpriseEuropeNetworkSMESurvey,conductedfromNovember2021toJanuary2022(seeAnnex1).Thesurveyfurthershowstheexistingsomeregionaldifferences,withSMEsinsouthernEuropeclaimingmoreoftenthattheyfacechallengesinrelationtohighinvestmentcosts.Anunknowncost-benefitratioisparticularlyrelevantforSMEsinwestern/northernEurope,wherecompanieslessoftenhavetodealwithchallengesrelatedtofinancingtheadoptionofenvironmentaltechnologies.Figure29Majorbarriersfortheadoptionofenvironmentaltechnologiesattheregionallevel(countrygroups)Source:EuropeanCommission/EnterpriseEuropeNetworkSMESurvey,conductedfromNovember2021toJanuary2022(seeAnnex1).572EstimatedpublicandprivateR&IinvestmentsR&IinvestmentsplayakeyroleinachievingtheEuropeanGreenDealobjectivesandmakingEuropethefirstclimate-neutralcontinentintheworldinafair,resource-efficient,cost-effectiveandcompetitiveway.TheEUGreenDealissupportedbyanunprecedentedEUbudgetunderthe2021-2027multiannualfinancialframework(EUR1074billion)andtheNextGenerationEUrecoveryandresiliencepackage(agreedin2020fortheamountofEUR750billion)102.Atotalof30%oftheoverallbudgetisearmarkedforclimatespending;HorizonEurope’sclimatespendingtargetis35%,whilethatsetinnationalrecoveryandresilienceplansis37%.PublicGlobalgovernmentenergy-relatedR&Dspendingin2019increasedby3%toaroundEUR27.3billion103,ofwhichapproximately80%wasdirectedtolow-carbonenergytechnologies104.Thegrowthratefor2019remainedabovetheannualaveragerecordedsince2014.InChina,thelow-carboncomponentofenergyR&Droseby10%in2019,withbigincreasesinR&Dforenergyefficiencyandhydrogeninparticular.InbothEuropeandtheUnitedStates,spendingonpublicenergyR&Droseby7%,anincreaseabovetherecentannualtrend.NuclearR&Dspendinghasdecreasedovertime,asshowninthefigurebelow.Figure30PublicenergytechnologyR&DanddemonstrationspendingbyInternationalEnergyAgency(IEA)membergovernmentsbytechnology,1977-2019Notes:CCUS=carboncapture,utilisationandstorage.Peakin2009wasduetopost-2007-08financialcrisisstimulus,especiallyintheUSA.Source:IEA(2020),EnergyTechnologyPerspectives2020,IEA,Paris,https://www.iea.org/reports/energy-technology-perspectives-2020.Whenadjustedforinflation,IEAreportsthatthedatashowthatspendingonlow-carbonenergyR&DinIEAmembercountriesalmostdoubledbetween2000and2012,buthassincethenbeenbroadlystable.GlobalenergyefficiencyR&Dspending(includingenergyefficiencyinindustry)hasnotchangedmuchsince2009,whenitdoubledcomparedtothepreviousdecade.102Thebudgetisestimatedat2018prices.103Basedonnationaldatasubmissions,thedatasetcoversIEAmembercountriesplustheEUandisopentoanycountrywishingtoparticipate.Itsscopeincludesspendingallocatedtodemonstrationprojects.Ingeneral,countriesreportenergy-specificresearch-programmespendingregardlessofthesponsoringgovernmentdepartment,butdifferinreportingbudgetsversusactualspendingandintheextenttowhichtheyincludebasicresearchonenergy-relatedtopicsordemonstrationprojectfunds(seeIEA2020,p.318,footnote6).104SeeIEA(2020,p.318).58Overall,IEAconcludesthatalthoughenergyR&Dbudgetsaregrowingintheaggregate,includingfordevelopinglow-carbontechnologies,theyarenotgrowingasashare,andinmostcasestheyaccountforashrinkingproportionoftotalgovernmentR&Dspending105.IntheEU,inspiteofglobalandEuropeaninitiatives,theEU-27’sreportedrateofpublicinvestmentincleanenergytechnologiesneededfordecarbonisationwasthelowestofthemajoreconomies(0.027%ofGDPin2019)106beforethecurrentmultiannualfinancialframeworkandNextGenerationEU.ThisrateisnotfullyrepresentativefortheEU,asonly20EUMemberStatesreportpublicinvestmentfiguresregularlyandtheleveloftechnologicaldetailvaries107.Atthegloballevel,theMissionInnovationinitiativewaslaunchedin2015by22leadingcountries(including8EUMemberStates)andtheEuropeanCommissionwiththeaimofdoublingtheirpublicinvestmentincleanenergyR&Dover5years.Thegoalwastocatalyseactionandinvestmentinresearch,developmentanddemonstrationsoastomakecleanenergyaffordable,attractiveandaccessibleby2020.TheinitiativeincreasedannualinvestmentsbyEUR5billionfrommembers,whichrepresentover90%ofglobalpublicinvestmentsincleanenergyinnovation.MissionInnovation2.0waslaunchedon2June2021toaccelerateprogresstowardstheParisclimategoals.AttheEUlevel,theSETPlanwaslaunchedin2007bytheEuropeanCommissionincooperationwithEUMemberStatesandassociatedcountries.Itaimstospeedupthedevelopmentanddeploymentoflow-carbontechnologiesthroughcooperationbetweenEUcountries,companies,researchinstitutionsandtheEUitself.Theprivatesectorisanimportantpartner,forexample,asstrategicalliancesmeantheburdenandbenefitsofresearchanddemonstrationcanbeshared.In2015,theCommissionestablishedanewintegratedSETPlanforallenergysectors,includingenergyefficiencyinindustry(action6)108.Anumberofactionshavebeenco-fundedbytheCommissionandnationalR&IprogrammesundertheHorizon2020programmeandspecificimplementationplanshavebeenapproved.TostepupcooperationamongEU-wideresearchandinnovationsectorsfortheimprovementofenergyefficiencyandcost-effectivenessinindustry,anenergyefficiencyinindustryworkinggroupwascreatedin2016undertheSETPlan.However,itincludesonly16EUMemberStates,besidesindustryassociations,andtwoassociatedcountries(NorwayandTurkey)109.ByrecognisingthatthetransitiontoamoresustainableEUeconomyneedstoprotectthecompetitivenessofenergy-intensiveindustries,theworkinggroupaimstodesignacommonR&Istrategy,developR&IactivitiestobefinancedeitherthroughnationalorEUsupport,andidentifypotentialfundingsources,amongotherthings.InHorizonEurope,theobjectivesoftheSETPlanaresupportedbyanewpartnership(CleanEnergyTransition)110.105SeeIEA(2020,p.319).106EnergyUnionR&Ipriorities(basedonCOM(2015)80):renewables,smartsystem,efficientsystems,sustainabletransport,CCUSandnuclearsafety.107TheIEAstatisticsarethemainsourceofdataforpublicinvestmentfigures.Thereisa2-yeartimedelayinreportingformostMemberStates.DatagapsaresupplementedbytheMemberStatesthroughtheSETPlanSteeringGroupand/orthroughtargeteddatamining.AdditionalestimatesareprovidedbasedonthecorrelationofmacroeconomicindicatorssuchasGBAORDand/orGDP.108C(2015)6317finalCommunicationfromtheCommission,TowardsanIntegratedSETPlan:AcceleratingtheEuropeanEnergySystemTransformation.109TheworkinggrouphelpsimplementtheSETPlanstrategyandEuropeanGreenDealstrategyonenergysystemintegration.Thegroupfocusesonthemostenergy-intensivesectors,suchasiron&steel,chemicals,pulp&paperandcement,whilealsoaddressingcross-cuttingthemes–heating&cooling,systemsandindustrialsymbiosis–thatarerelevanttoallindustrialsectors.ItincludesthefollowingEUMemberStates:AT,BE,CY,CZ,FI,FR,DE,IR,IT,LV,NE,PO,PT,SK,ES,SE.110Moreinformationathttps://setis.ec.europa.eu/implementing-actions/energy-efficiency-industry_en.59DuringSETPlanimplementation,publicR&IinvestmentsofEUMemberStatesinenergyefficiencyforindustrywasat10%oftheirbudgetsonEnergyUnionR&Iprioritiesin2014-2018.ThecurrentgeopoliticaldevelopmentsandtheevolvingpolicylandscapecallforredirectingtheSETPlan’sobjectivesandscope,aswellasremodellingitsgovernanceinordertoincreaseimpacts.Asaresult,thereisaproposedrevisionoftheSETPlan,foreseenforpublicationinNovember2022.111Overall,publicinvestmentsinR&IprioritisedbytheEnergyUnion112,113wentintodeclineforhalfadecadebetween2010-2019,onlyshowingsignsofrecoveryafter2016whenEUMemberStatesinvestedonaverageEUR3.5billionperyear.Spendingstillremainslowerthanthatobservedadecadeago.AlthoughtheEUcomparedwellwiththeUSAintermsofpublicR&IfinancinginEnergyUnionR&IprioritiesasashareofGDPbetween2010and2019,Japan,KoreaandChinaprovidedmorepublicfundingonaveragethroughouttheyears(seefigurebelow).Figure31PublicR&IfinancingofEnergyUnionR&IprioritiesintheEUinEURbillion(ontheleft)&asashareofGDPinmajoreconomies(ontheright)Note:PublicR&IfiguresforItalyreferto2018.Source:JRCinCOM(2021)952final,p.9-10.AsregardsR&Ispendinginenergyefficiencyinindustry(specificallyenergy-intensiveindustries),EUMemberStatesinvestedonaverageEUR360millionperyearbetween2014and2018.AlthoughthisislessthantheaverageR&Iinvestmentsinenergyefficiencyinindustrybeforethen(EUR435.8millionperyearbetween2009and2013),itishigher111ThemainaimsoftherevisionoftheSETPlanareasfollows:•DeliverontheambitiousgoalsoftheGreenDeal(itsstrategies,implementationoftheFitfor55packageandthe2050climateneutralityobjective),theEnergyUnionandRecovery,andtheERAPolicyAgenda;•StrengthentheEU’sstrategicenergyvaluechainstoincreaseourenergyandtechnologyindependence,globalcompetitiveness,geo-politicalresilienceandsecurityofenergysupply,inparticularinviewofthecurrentcrisiswithRussia;•AdaptthegovernanceoftheSETPlantoensurethedeliveryonissuesofstrategicimportancefortheUnionwhilekeepinganoptimalflexibilityandagility;•StrengthentheanchoringintheERA.Supportthedevelopmentofresearchand/ortechnologyinfrastructures,includingpilotlinesandOpenInnovationTestBeds.InvolvetheEuropeanEnergyResearchAlliance(EERA)inaligningeducationandtrainingwiththeneedsoftheSETPlanpriorities;•Givemoreconsiderationtohydrogenandkeyenablingtechnologiessuchasadvancedmaterialsanddigitalsolutions,andcontinuetheImplementingWorkingGrouponnuclearsafety;•Prepareforandsupportthedeploymentofcleanenergytechnologiesbypromotingsynergiesbetweendifferentprogrammesandleveragingnationalfinancing;considercapitalisingontheincreasedrevenuesoftheEmissionTradingScheme;•IncreasevisibilityandpoliticalsupportfortheSETPlanthroughregularinterventionsintheCompetitivenessCouncilandtheEnergyCouncil,andraisingtheprofileoftheannualSETPlanconference.112COM(2015)80;renewables,smartsystem,efficientsystems,sustainabletransport,CCUSandnuclearsafety.113JRCSETIS,https://setis.ec.europa.eu/publications/setis-reseach-and-innovation-data_en.60thantheequivalentamountsreportedforothermajoreconomies,suchasJapan(averageEUR290million)andtheUnitedStates(averageEUR165million).Overall,asmallnumberofMemberStatesprovidedthebulkofoverallpublicR&Ifunds114.Theamountaccountsforroughly15%oftheEU’sR&IspendingonEnergyUnionR&Ipriorities,giventhatEUfundscontributedanotherEUR200millionperyearonaverage115.ThesefiguresrepresentthebestcurrentlyavailableestimatesofpastpublicinvestmentswhenlookingforR&Iinvestmentsinthedecarbonisationofenergy-intensiveindustries116.Atthesametime,compliancewithRegulation(EU)2018/199onEnergyUnionandClimateActionGovernance,theEU'sEnergyUnionStrategyonenergysecurity,internalenergymarket,energyefficiency,decarbonisationandresearch,innovationandcompetitivenessrequiresEUcountriestoproduceintegratednationalenergyandclimateplansandincludeintegratedreportingonresearch,innovationandcompetitiveness117.PrivatePrivateR&Iinvestmentswillbecrucialtobringtechnologiescurrentlyunderdevelopmenttomaturityordeploythemby2030andbeyond,andtodevelopsystemschangesandbreakthroughtechnologieswhichenablethecontributionofenergy-intensiveindustriestoclimateneutrality.WhiletheConferenceofthePartiesoftheUnitedNationsFrameworkConventiononClimateChange,whichtookplaceinNovember2021,sawanumberofcorporatepledgesforclimateactionandnet-zerotargets,thereiswidespreadunderstandingthattheinvestmentsannouncedwillnotbesufficienttokeeptheaveragetemperatureincreaseatthe1.5°CmaximumsetbytheParisAgreement.Whileingeneralclassifiedaslowtomedium-techindustries,energy-intensiveindustriesdoinvestinresearchanddevelopment.The2021IndustrialR&DInvestmentScoreboard118showsthatprivateR&Dinvestmentbyenergy-intensiveindustriesisthefifthlargestinvestmentbythetop2500R&Dcompaniesintheworld,behindthedigital,health,mobilityandelectronicsecosystemswhichtogetheraccountforabout64%ofthetotalinvestmentin2020.ThechemicalssectorhasbeenthemostprominentR&Dinvestoramongenergy-intensiveindustries,althoughithasregisteredaslowdownintheglobalrankingofthetop2500R&Dinvestorsas4companiesfromEUandUSA,1fromChinaand2fromtherestoftheworldexitedtheranking.TheEUiswellrepresentedintheenergysector,includingcompaniesproducingrenewableenergytechnologies.However,JapanleadsintermsofR&Dinvestmentsbyitscompaniesinthechemicalssector.Therecentlypublished2021SETPlanProgressReportnotedthatfor2018,anestimatedEUR28.7billionwasinvestedinthecleanenergytechnologyR&IprioritiesoftheEnergyUnion.Mostoftheinvestmentcomesfromtheprivatesector(83%)119,while12%114Forexample,Finlandwasthetoppublicinvestorin2010withEUR103.6million,followedbytheNetherlands(EUR87million),Germany(EUR61million),Hungary(EUR38.56million),France(EUR33.4million)andItaly(EUR25million),providing82%oftotalpublicinvestmentintheEU.Intheperiod2014-18,Germany,Finland,Italy,FranceandtheNetherlandstogetherprovidedaround60%ofR&Iinvestmentinenergyefficiencyinindustry.Dataisavailableathttps://setis.ec.europa.eu/publications/setis-research-and-innovation-data_en.115Public(national)investment:IEA’sR&D&Ionlinedataservice;public(EU)investment:Directorate-GeneralforResearch&InnovationandSETIS/JointResearchCentre.Infact,EUfundingforSPIREprojectsalonecametoEUR532millionforprojectsunderHorizon2020by2018,whileR&IfundingprogramsforthesteelindustrygeneratedEUR268millionunderH2020andanadditionalEUR16millionundertheResearchFundforCoalandSteel(RFCS)by2020.116Datacollectionreliesonvoluntarysharingbycountries.Thisiswhythedatamentionedinthischapteraddressdifferentscopesofactivities,dependingonthegranularityofreporting:R&Dforenergyingeneral,low-carbonenergy,energyefficiencyingeneral,energyefficiencyinindustry.117Seearticle25ofRegulationEU2018/1999.118Seethereportathttps://iri.jrc.ec.europa.eu/scoreboard/2021-eu-industrial-rd-investment-scoreboard.119PrivateR&Iinvestmentisestimatedusingpatentsasaproxy,resultinginalongertimelagfordataavailability.SeeCOM(2021)952final,p.9,footnote40.61constitutespublicfundingfromMemberStatesand5%EUfunds120.Accordingtothereport,R&Iinvestmentincreasedbymorethan24%intheperiod2015-2018,mostlydrivenbytheprivatesectorand,toalesserextent,byEUfunds.Withinthis,privatespendingintheEUforEnergyUnionR&IprioritiesisestimatedatanannualaverageofEUR20billionin2014-2018121.PrivateinvestmentintheEnergyUnionR&IprioritiesintheEUisestimatedat0.18%ofGDPin2018,abovetheUSAbutlowerthanothermajorcompetingeconomies(Japan,Korea,China).PrivatespendinginKoreaaloneismorethan3timeshigheras%ofGDPin2018(seefigurebelow).Figure32PrivateR&IfinancingofEnergyUnionR&IprioritiesintheEUinEURbillion(ontheleft)&asashareofGDPinmajoreconomies(ontheright)Note:Privatedatafor2018areprovisional.Source:JRCinCOM(2021)952final,p.9-10.Theestimatedprivatespendingonenergyefficiencyinindustryovertheperiod2014-2018averagesjustoverEUR3billionperyear.AlmosthalfcomesfromcompaniesheadquarteredinGermany(49%),followedbycompaniesheadquarteredintheNetherlands(11%),France(10%),Italy,DenmarkandFinland(5%).Therefore,around85%oftheprivateinvestmentisconcentratedincompaniesheadquarteredin6EUMemberStates.Thefigurebelow(ontheleft)showsthatEUprivatefundingofenergyefficiencyinindustryincreasedfromlessthanEUR2billionin2007toover3billionintheperiod2014-2018,whichcorrelateswiththetrendofglobalspendingonenergyefficiencyasperIEAdata.Technologiestoimproveprocessesinthechemicalssectoraloneaccountfor26%ofoverallprivateR&Iinvestment,whilemetalprocessingconstitutesanother23%andproductionofindustrialorconsumerproductsconsolidatesanother21%ofoverallshareinprivateR&Iinvestmentfor2014-2018(seefigurebelowright).120Shtjefni,D.,Kuzov,T.,Clocchiatti,A.,Lecomte,E.,Lonning,E.V.W.,Baleva,S.andTzimas,E.,SETPlanProgressReport2021,Black,C.,Ruehringer,M.andAndre,S.editor(s),PublicationsOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-43092-6,doi:10.2760/804820,JRC126881.Seethereportathttps://op.europa.eu/en/publication-detail/-/publication/6e4c3e5a-5259-11ec-91ac-01aa75ed71a1/language-en/format-PDF/source-244850864.121SeeCOM(2021)952final,ProgressontheCompetitivenessofcleanenergytechnologies,p.9.62Figure33R&IinvestmentinenergyefficiencyShareinprivateR&Iinindustry(EURbillion)investment(2014-2018)Source:JRCSETIS(2021)122.InformationonR&Iinvestmentathighlydisaggregatedlevelinenergyefficiencyinindustryisnotreadilyavailable.PrivateR&IinvestmentsareestimatedbasedonfinancialinformationfrompubliclyavailablecompanystatementsandpatentdatafromPATSTAT.Aswithpatentdata,completedataserieshavea4-yeardelay.Estimateswitha2-yeartimelagaremadeforeachEUMemberState123.PrivateR&IdatafromMemberStatesareingeneralnotreadilyavailableatnomenclatureofeconomicactivities(NACE)4-digitnumericalcodes.Toprovideabetterunderstanding,availabledataonR&Dexpenditurebycompaniesfromenergy-intensiveindustriesatNACE2-digitnumericalcodesintheEU-27,UK,Japan,ChinaandtheUSAisanalysedfor2012-2020124.Figure34R&Dexpenditureofcompaniesperenergy-intensiveindustryinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)Note:NACE16(wood),NACE17(paper),NACE19(cokeandoil),NACE20(chemicals),NACE22(rubberandplastic),NACE23(non-metalminerals),NACE24(basicmetal).Source:PPMIcalculationsforDGR&I,basedondatafromtheORBISdatabaseofBureauVanDijk.122DataforEUfundingonlyavailable2014onwards;privateinvestmentestimatesonlyavailableto2018.EUandPublic(MS)R&Ifundingmaintainedsimilarlevelsin2019.123Fiorini,A.,Georgakaki,A.,Pasimeni,F.,Tzimas,E(2017).MonitoringR&Iinlow-carbonenergytechnologies.JRC105642.PublicationsOfficeoftheEU.124Thesampleofenergy-intensiveindustriesincluded2996companiesasfollows:wood(59companies),paper(204),cokeandoil(55),chemicals(1370),rubberandplastic(466),non-metalminerals(357),basicmetal,whichincludessteelcompanies(485).Thesampleconsistsofcompaniesinexistenceovertheperiod2012-2020andtheyhadatleast10employeesin2020,oratleastEUR1millionofturnover,oratleastEUR1millionintotalassetsin2020inallNACEcodesrelevanttoenergy-intensiveindustries.05.000.00010.000.00015.000.00020.000.00025.000.00030.000.000201220132014201520162017201820192020NACE16NACE17NACE19NACE20NACE22NACE23NACE2463Asseenfromthefigureabove,mostoftheglobalR&Dexpenditureofcompanieswasconcentratedinthechemicalssector(45%oftotalinvestmentover2012-2020);thebasicmetalsectorcomessecond(16.6%),followedbyrubberandplastic(14%).ItisinterestingtonotethatEU-27companiestooktheleadin2020intermsofR&Dexpenditurebythechemicalssector(seefigurebelow).Intheanalysissample,EU-27companiesinthechemicalssectorwereleadersbetween2012and2014intermsofR&Dintensity,butsloweddownin2018andeventuallytooklastpositionin2019and2020vis-à-viscomparators.Figure35R&DexpenditureofcompaniesinthechemicalssectorinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)Note:1008companiesfallinthesampleasfollows:CN(608),UK(131),JP(122),EU-27(82),USA(65).Source:PPMIcalculationsforDGR&I,basedondatafromtheORBISdatabaseofBureauVanDijk.Unlikethechemicalssector,R&DexpenditureofcompaniesinthebasicmetalsectorintheEU-27islowercomparedwithChina,UK,JapanandUSA.ThisisthesectorwhereglobalR&Dintensityhasincreasedcontinuouslyonanannualbasissince2012.Figure36R&DexpenditureofcompaniesinbasicmetalsectorinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)Source:PPMIcalculationsforDGR&I,basedondatafromtheORBISdatabaseofBureauVanDijk.ThetotalinvestmentofcompaniesinallEU-27energy-intensiveindustriesintheanalysissampleisestimatedatEUR111.7billionintheperiod2012-2020(seeFigure37).ThisplacesEU-27companiesinsecondpositionaftertheUSA(EUR150.6billion)andaheadofcompaniesfromChina(EUR75billion),Japan(EUR54.8billion),andtheUK(EUR14.2billion).010000002000000300000040000005000000600000070000008000000900000010000000201220132014201520162017201820192020CNEU27UKJPUS0200.000400.000600.000800.0001.000.0001.200.0001.400.0001.600.0001.800.0002.000.000201220132014201520162017201820192020CNEU27UKJPUS64Figure37TotalR&Dexpenditureofcompaniesinenergy-intensiveindustriesinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)Source:PPMIcalculationsforDGR&I,basedondatafromtheORBISdatabaseofBureauVanDijk.In2012-2017,EU-27companiesinvestedbetweenEUR10.2andEUR12billion;inthepast3yearsofsampleanalysisinvestmentsincreased,reachingEUR14billionin2018,EUR14.58billionin2019andEUR16.5billionin2020.However,EU-27companiesinenergy-intensiveindustrieswerecontinuouslyinlastplacebetween2015and2020asregardsR&Dintensityofallenergy-intensiveindustries,withUSAandChinesecompanieshavingbecomethetopperformerssince2016(seeFigure38).Figure38AverageR&Dintensityofcompaniesinenergy-intensiveindustriesinEU-27,UK,Japan,ChinaandUSA,2012-2020(in%)Source:PPMIcalculationsforDGR&I,basedondatafromtheORBISdatabaseofBureauVanDijk.Thesampleanalysishaslimitations,asthereisnofulldatasetforR&Iinvestmentsinlow-carbontechnologiesofenergy-intensiveindustries.Thetrendanalysisfor2012-2020showsthatthelevelofR&DexpenditureofEU-27companiesinenergy-intensiveindustriescompareswellwithR&DexpenditureofcompaniesfromChina,Japan,theUSA,andtheUK.However,theperformanceofEU-27companiesvis-à-viscomparatorsintermsofR&Dintensityisthelowest,whichmeansthatEU-27companiesinenergy-intensiveindustriesneedtoinvestmoreinR&Diftheyaretocatchupwiththemainglobalcompetitors.05.000.00010.000.00015.000.00020.000.00025.000.000201220132014201520162017201820192020CNEU27UKJPUS0123456201220132014201520162017201820192020CNEU27UKJPUS653PatentsandbibliometricsinclimatechangemitigationtechnologiesThissectionprovidesanalysisoftheevolutionofgeneraltrendsinpatentingforclimatechangemitigationtechnologies,coveringdatato2018,andadeeperanalysisofsuch‘greeninventions’forenergy-intensiveindustries(EIIs).ItbuildsondataandinformationintheEUIndustrialR&DInvestmentScoreboard2021125whichpioneeredadeeperinvestigationofrelevantpatentingactivities.Focusingontheclimatechangemitigationtechnologiesaddressingtheproductionorprocessingofgoods126,itcoverseightenergy-intensiveindustriesinmoredetail.Box8belowshowstherelevantindustries(cement,ceramics,chemicals,fertiliser,glass,lime,refining,steel)andthecorrespondingCooperativePatentClassification(CPC)codes.Forbothclimatechangemitigationtechnologiesandthefocussectioninenergy-intensiveindustries,analysisissplitintooverallpatentingactivity(companiesandotherplayers)andthenthepatentingactivityofEUScoreboardcompanies127.UpdateontrendsingreenpatentingoverallIntheperiod2000to2018,theaverageannualshareofgreeninventions128inallpatentingactivityamountedto8%.Theglobalnumberofgreeninventionshasbeenincreasingconstantly,drivenbyChina’sgreeninventiveactivity,howevermostlyfocusedonitsdomesticmarket(Figure39).Thisisspurredbyintellectualpropertylawsthatincentivisepatentingactivityviagrantsandalarge,rapidlygrowinginternalmarketinChina.Consideringpatentprotectionbeyondtheowndomesticmarketofmajoreconomies,thepicturechanges:theEUhadthesecondhighestshareofhigh-valueinventions129(57%)justbelowtheUS(58%).Amongmajoreconomies,SouthKoreaandtheEUhavethelargestshareofgreentechnologiesinallinventions(over11%).Largecompaniesplayanimportantrole.Theworld’stopR&Dinvestorsarekeycontributorstoglobalclimate-relatedinnovation.Theyown70%ofglobalclimatechangemitigationoradaptationpatentsandover10%ofglobalclimate-relatedtrademarks,whichislargerthantheircontributiontooverallpatentsandtrademarksacrossallfields.130125Grassano,N.,HernandezGuevara,H.,Fako,P.,Tuebke,A.,Amoroso,A.,Georgakaki,A.,Napolitano,L.,Pasimeni,F.,Rentocchini,F.,Compaño,R.,Fatica,S.andPanzica,R.The2021EUIndustrialR&DInvestmentScoreboard–ExecutiveSummary,EUR30902EN,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-44455-8,doi:10.2760/248161,JRC127360.Chaper4.126SectionY02PoftheCPCclassification.127The2021EUIndustrialR&DInvestmentScoreboardprovidedanextensiveanalysisonpatentingtrendsinclimatechangemitigationtechnologies(CCMTs,alsoreferredtoas‘greenpatents’)fortheEU,comparedwithothermajoreconomies,andinsightsontheperformanceofEUScoreboardcompanies(2500companiesinvestingthelargestsumsinR&Dintheworld)andsubsidiariesingreeninnovation.Inaddition,itofferedashort,broadlookintothedecarbonisationofkeyindustries,suchasmetalprocessing,cementandchemicals.128Weusepatentfamiliesasaproxyforinventions(seealsoBox13).129Aninvention/patentfamilyisconsideredofhigh-valuewhenitcontainspatentapplicationstomorethanoneoffice(seealsoBox8onMethodology).130Amoroso,S.etal(2021),WorldCorporateTopR&DInvestors:Pavingthewayforclimateneutrality.AjointJRCandOECDreport,PublicationOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-43373-6,doi:10.2760/49552,JRC126788.66Figure39Trendofgreeninventionsandshareofinternationalandhigh-valuegreeninventionsNote:Ontheleft:annualtrendintheperiod2010-2018ofgreeninventionsformajoreconomies.Ontheright:totalgreeninventionsformajoreconomiesintheperiod2010-2018(darkcolours)andhigh-valueinventions,internationalinventionsandgrantedinventions(lightercolours)withlabelindicatingtheshareoftotalinventions.Source:JRC.131JRCpublications:-Pasimeni,F.,Fiorini,A.,andGeorgakaki,A.(2021).Internationallandscapeoftheinventiveactivityonclimatechangemitigationtechnologies.Apatentanalysis.EnergyStrategyReviews,36,100677.https://doi.org/10.1016/j.esr.2021.100677-Pasimeni,F.andGeorgakaki,A.(2020).Patent-BasedIndicators:MainConceptsandDataAvailability.JRC121685,https://setis.ec.europa.eu/patent-based-indicators-main-concepts-and-data-availability_en-Pasimeni,F.,Fiorini,A.,andGeorgakaki,A.(2019).AssessingprivateR&DspendinginEuropeforclimatechangemitigationtechnologiesviapatentdata.WorldPatentInformation,59,101927.https://doi.org/10.1016/j.wpi.2019.101927-Pasimeni,F.(2019).SQLquerytoincreasedataaccuracyandcompletenessinPATSTAT.WorldPatentInformation,57,1-7.https://doi.org/10.1016/j.wpi.2019.02.001-Fiorini,A.,Georgakaki,A.,Pasimeni,F.andTzimas,E.(2017).MonitoringR&IinLow-CarbonEnergyTechnologies.EUR28446EN,PublicationsOfficeoftheEuropeanUnion,Luxembourg.ISBN978-92-79-65591-3,https://doi.org/10.2760/434051132SETISResearch&Innovationdata:https://setis.ec.europa.eu/publications/setis-research-innovation-data133Dechezleprêtre,A.,etal.,(2011)Inventionandtransferofclimatechange–mitigationtechnologies:aglobalanalysis.Reviewofenvironmentaleconomicsandpolicy.134Dechezleprêtre,A.etal.,(2015)InventionandInternationalDiffusionofWaterConservationandAvailabilityTechnologies.OECDEnvironmentWorkingPapers,No.82.Box8METHODOLOGYPatentingtrendsareproducedfollowingthemethodologydevelopedbytheJRC131toderiveindicatorsonglobalinventiveactivityincleanenergytechnologies132.PatentdataareretrievedfromPATSTAT2020AutumnEdition,andanalysisisrestrictedtoclimatechangemitigationtechnologies(CCMTs).CCMTs–referredtoasgreentechnologiesinthecontextofthisstudy-areidentifiedthroughtheY02andY04schemesoftheCooperativePatentClassification(CPC).Notethatduetothetimelag,datasetsfor2018areprovisionalandwearenotabletotakefullaccountoftheeffectsoftheCOVID-19pandemic.TheJRCmethodologyusespatentfamiliesasaproxyforinventions;thetwotermsareusedinterchangeablyinthetext.Patentfamiliesincludealldocumentsrelevanttoadistinctinvention,includingpatentapplicationstomultiplejurisdictions,andthosefollowingregional,nationalandinternationalroutes.Statisticsareproducedbasedonapplicantsonly(astheownersofthepatentand,thus,directlyfinancingR&Dactivities)andconsideringdifferentcategoriesofapplicants,namelycompanies,universitiesandnon-profitorganisations.Inthecaseofmultipledocumentsperinvention,andwhenmorethanoneapplicantortechnologycodeisassociatedwithanapplication,fractionalcountingisusedtoproportioneffortbetweenapplicantsortechnologicalareas,thuspreventingmultiplecounting.Aninventionisconsideredofhigh-valuewhenitcontainspatentapplicationstomorethanoneoffice,asthisentailslongerprocessesandhighercostsandthusindicatesahigherexpectationoftheprospectsininternationalmarkets.133,134.Withinapatentfamily,onlypatentapplicationsprotectedina67Patentingtrendsingreeninventionsrelevanttoenergy-intensiveindustriesTheinnovationneededtoreachEUclimategoalsintheEUindustrialecosystemsforenergy-intensiveindustriesiscapitalandtechnologyintensive,andmayrequirelarge-scaleinfrastructuretoestablish;itisthusnoteasilyundertakenbystart-upsorsmallcompaniesoutsidethefield.TheinnovativecapacityofEUleadingcompaniesisthereforecrucialfortheindustrytoremaincompetitive.Theenergy-intensiveindustrysectorisdominatedbylarge,multinationalincumbents,whichmaybemorelikelytodevelopandkeepknowledgein-houseandthushavevaryingpropensitytopatenting,whereasotherinventors,suchasyoungfirms,maydevelopmoreradicalinnovations135.Globally,EIIinventiveactivityaccountsonaverageforabout5%oftheconstantlyincreasingnumberoftotalgreeninventions,anditisaboutathirdoffilingsintheareaof135Amoroso,S.etal(2021),WorldCorporateTopR&DInvestors:Pavingthewayforclimateneutrality.AjointJRCandOECDreport,PublicationOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-43373-6,doi:10.2760/49552,JRC126788.countrydifferenttotheresidenceoftheapplicantareconsideredasinternational.High-valueconsidersEUcountriesseparately;forinternationalinventions,Europeancountries(EuropeanPatentOfficeMembers)areviewedasonemacrocategory.Forexample,apatentfamilyprotectedintwoEUcountries(e.g.GermanyandFrance)isconsideredhigh-value,whileapatentapplicationbyaFrenchapplicanttotheGermanpatentauthority(ortotheEuropeanPatentOffice)isnotconsideredinternational.Inaddition,internationalpatentsdenoteeffortstoprotectsolelyoutsidethecountryofresidenceoftheapplicant.Agrantedinventiononlysumsfractionalcountsofthepatentfamilyrelatedtograntedpatentapplications.Fractionalcountingisalsousedtoquantifyinternationalcollaborationsinpatentingactivity.Co-inventionsarecalculatedbasedonamatrixofallcombinationsamongco-applicants,forinventionsthathavebeenproducedbyatleasttwoentitiesresidentintwodifferentcountries.Sharesofco-inventionsinthesamecountryarenotconsidered.TheanalysisofEUScoreboardcompaniesfocusesoncompaniesheadquarteredintheEU.Theportfolioofinventionsofthesecompaniesincludesinventionsproducedbyallsubsidiaries,irrespectiveoftheirlocation.ThematchingofsubsidiariestoapplicantnamesinPATSTATcurrentlycovers70%oftheEUScoreboardcompanies,whichhoweveraccountfor90%ofR&Iinvestments.TheselectionofCCMTsrelevanttoenergy-intensiveindustries(EII)isdonethroughthecodesshowninTable5.Inthecaseoffertiliserandsteelindustries,itisnecessarytocross-referencetheY02PwithcodesfromthetechnologyclassificationtorestrictthescopeoftheCCMTclass.Forexample,theSteelEIIincludesthosepatentfamiliesthataretaggedwithY02P10(Metalprocessing)andalsohaveatleastonetaginC21B(Manufactureofironorsteel),C21C(Processingofpigiron)orC21D(Ferrousmetals).Table5ConcordanceofCPCclassesandEIItechnologies68productionorprocessingofgoods,whichinturnrepresents17%oftotalgreeninventions(Figure40).Thissharehasbeenalmostconstantoverthelast10years.Nonetheless,thelevelsofactivityarequitedifferentamongmajoreconomies.TheshareishighestforChina,wherethereisalsoamuchmoresignificantcontributionfromnon-businesssectors.Figure40Shareofgreeninventionsinenergy-intensiveindustries(2010-2018)Note:Ontheleft:shareovertheinventionsinproductionandprocessingofgoodsandgreeninventions.Ontheright:sharebymajoreconomies.Darkcoloursrepresentthecontributionofcompanies.Source:JRC.Inlinewiththeabovefiguresonoverallgreenpatenting,Chinaalsoranksfirstintotalnumberofgreeninventionsinenergy-intensiveindustries,withacumulativenumberofinventionsequivalenttothoseproducedbyallotheractorsputtogether.However,whenitcomestoinventionsprotectedinmultiplejurisdictions(i.e.high-valueinventions),againtheEUandUSAareinthelead,followedbyJapan.Insummary,Figure41showsthat–asinthecaseofoverallgreeninventions–Chineseapplicantsmostlyprotectinventiveactivityrelatedtoenergy-intensiveindustriesinthenationaljurisdiction.Incontrast,applicantsfromtheEU,theUSAandJapanhaveamoreinternationalfocus,indicatingthereadinessofinnovativetechnologiesintheirportfoliotoflowacrossbordersandcaptureemergingmarkets.Figure41Trendsingreeninventionsinenergy-intensiveindustriesNote:Cumulativeinventions(left),high-valueinventions(centre),andshareofhigh-value,grantedandinternationalinventions(right)formajoreconomiesintheperiodof2010-2018.Source:JRC.Takingthecountryperspective,Figure42showsthatChinaisthejurisdictionattractingthemostforeign-originatinginventionsinenergy-intensiveindustries(29%),followedbytheUSA(28%).TheEUisthethirdmosttargetedgeographicalareawhereforeignapplicantsdecidetoprotectinventionsinenergy-intensiveindustries(11%).NotethatJapanfeaturesverylittleasadestinationfortheprotectionofinventionsbyforeignapplicants.Itsstrongindustryandtechnologybase,coupledwiththeparticularityofregulationsthatapply,tendtomakethisaratherdifficultandinsularmarketforforeigntechnologyproviders.69Amongmajoreconomies,overrecentyears,Chinashowsthehighestspecialisationininventiveactivityinenergy-intensiveindustries,meaningarelativeconcentrationofcapabilitiesinthisspecificarea.TheUSAandtheEUwereleadinginthisindicatorsince2007buthavesincegraduallylostthisadvantageandwereovertakenbyChinaintheperiod2015-2016(Figure43).JapanandSouthKoreamaintaintheirlevelofspecialisation,whichishoweverlowerthantheworldaverage.Between2010and2018,theEUhasmoreorlessmaintainedthesamelevelofspecialisationintheenergy-intensiveindustriesinfocus,withtheexceptionofthefertiliserandsteelindustrieswheretherehasbeenamarkeddrop,andtherefiningindustrieswherethealreadystrongspecialisationhasincreasedslightlyfurther.Giventhatthespecialisationofaneconomyreflectstheweightofinventionsinenergy-intensiveindustriesascomparedtoothermajoreconomies,thedropcaneithersignaladecreaseinpatentingactivityintheEUortheincreaseinothermajoreconomies,suchasChina’sexponentialincreaseinfilingsduetopolicysupport.Theydohoweverprovideanideaonthechangeofrelativeimportanceofsubjectareasofinnovativeactivitywithineacheconomy–irrespectiveofwhetherornotthisaimstoservethenationalorinternationalmarket.Figure42Flowofgreeninventionsinenergy-intensiveindustriesNote:Countryofapplicant(left)andforeignauthoritiestargetedforprotection(right)intheperiod2010onwards.Source:JRC.Figure43Specialisationindexingreeninventionsforenergy-intensiveindustriesNote:Ontheleft,theshareofinventionsrelevanttoenergy-intensiveindustrieswithinCCMTsfortheproductionandprocessingofgoodsformajoreconomies.Ontheright,thetrendinEUspecialisationbyenergy-intensiveindustrybetween2010and2018.Thehorizontalaxisdenotestheworldaverage.Source:JRC.70Figure44providesabreakdownoftheportfolioofinventionsinenergy-intensiveindustriesbasedonthefilingsofentitiesheadquarteredineachmajoreconomy136.ThenumbersandsharesreflectboththeR&Deffortcarriedoutandthepropensitytopatent,whichmayvarysignificantlybetweenindustrysectorsandtechnologies.Itisnotablethat,onaverage,inventionsrelatedtothechemicalindustryaccountforabout60%oftheportfolioofinventionsinenergy-intensiveindustriesacrossallmajoreconomies.Intheperiod2010-2018,andconsistentwithongoingspecialisationinthisarea,theEUhasoneofthehighestsharesofinventionsrelatedtorefining(13%),secondtothatofUSA(17%).Similarly,anddespitethedecreasingspecialisationoftheEUonthesteelsector,theEUstillhasthesecondhighestshareofinventionsrelatedtosteel(16%),followingthatofSouthKorea(18%).ThedropinrelativespecialisationinEUcouldberatherduetotherelativelyhighshareofrelevantinventionsfromChinathantodecreasedEUefforts.Some23%ofJapaneseinventionsinenergy-intensiveindustriesrelatetotheproductionofglass,thehighestamongallportfolios.Figure44Shareofinventionsperenergy-intensiveindustryformajoreconomies,2010-2018Note:Thenumberinbracketsshowsthenumberofinventions.Source:JRC.EUScoreboardcompaniesingreeninventionsforenergy-intensiveindustriesTheEUScoreboardcompanies,includingtheinventiveactivityofsubsidiarieslocatedoutsidetheEU,accountforaboutathirdofglobalgreeninventiveactivityinenergy-intensiveindustriesfrom2010onwards.Consistentwiththefiguresintheprevioussections,theEUScoreboardcompaniesintheICBchemicalssectorarethosewiththehighestnumberofinventionsinEIIs(Figure45).Thisaccountsforthe17%ofgreeninventionsproducedbyEUScoreboardcompaniesintheChemicalssector(inredinFigure136ForactivityindifferentEUMemberStates,seefigure51infollowingsub-chapters.7145).TheICBsectorsofForestry&Paper,Oil&GasProducers,OilEquipment,Services&Distribution,IndustrialMetals&Mining,andFoodProducersallhaveashareof17%orhigherintermsofinventionsforenergy-intensiveindustriesintheirgreeninventiveactivity.Allthesesectorsarepredominantlyactiveingreeninventionsrelatedtothechemicalsindustry,exceptforForestry&Paper,whichfocuseshalfoftheactivitytowardssolutionsfortherefiningindustryandIndustrialMetals&Mining,whichaddressesoverathirdofinventionstothesteelsector.Notably,theForestry&PapersectormostlycomprisesScandinaviancompanies,mostprominentamongthemUPM-Kymmene.Figure45EUScoreboardcompanies’greenactivityinenergy-intensiveindustriesbyICBsectorNote:Numberofinventionsinenergy-intensiveindustries(blue,leftaxis),andshareofinventionsinenergy-intensiveindustriesingreeninventiveactivitybyICBsector(red,rightaxis)forEUScoreboardcompaniesintheperiod2010-2018.Source:JRC.Figure46showsthesplitofactivityperindustryforthetop10Scoreboardcompanieswiththehighestnumberofinventions.ApartfromNeste(refining)andSMSHoldings(steel),allcompanieshaveastrongfocusonchemicals(overhalfoftheirEIIportfolio)andshareinventionsequallyamongtheminthetop10.BASFalsohasapresenceincement,fertilisersandrefining,AirLiquideinglassandrefining,andSiemensinsteel.Fertilisers,ceramicsandlimearetheindustrieslessaddressedbythetop10–butalsothosewiththelowestnumbersofinventions,oftenproducedbysmaller,regionalentities.Figure46SplitoftheactivityofthetopEUScoreboardcompaniesbyenergy-intensiveindustryNote:Thebubblesizerepresentstheshareofinventionsforeachindustry,withinthetop10(left),andwithinthecompany’sactivityinenergy-intensiveindustries(right).Source:JRC.72TopScoreboardinnovatorsperenergy-intensiveindustryPatentanalysisallowstohighlightspecifictechnologies,whichstandinthefocusofEIIcompanies’greenpatentingactivityincludingsomelow-carbonindustrialtechnologies.GreeninventionsrelatedtothecementindustryOver80%ofgreenpatentingactivityinthecementindustryisclassifiedundergenerallyimprovingoroptimisingproductionmethods.Some15%addressesenergyefficiencymeasuresandtheuseofrenewableenergysources,and5%involvesinnovationsintroducingcarboncaptureandstorage(CCS)intheproductionprocess.WhileJapanleadsinallareas,exceptforCCSwheretheEUhasanadvantage,theEUhasahighershareofinventionsprotectedinternationally.WiththeexceptionofVicat,alloftheEUtop5,alongwithVinciandAirLiquide,haveastrongpresenceinCCS,whichisoneofthemainsolutionsfordecarbonisationoftheindustry.Prominentnon-EUinnovatorsinthisfieldareHolciminSwitzerland,alongwithSchlumbergerandCalixfromtheUS.Consideringinherentpatentquality137basedoncitationanalysis(technologyrelevance),thetopcompanyisArelac,aUScompany.MostoftheR&DappearstotakeplaceinChina.FocussingonR&DforpatentsintheEU,US,JapanorSouthKorea,mostresearchtakesplaceinJapanandtheUS.Ifwelookatspecialisationwithinthesector,whileoverallleadershipiswithUSandJapanesefirms,Holcim,KnaufandHeidelbergarestronginadmixturesandHolcimandHeidelbergareinstrongpositionsinmoltenslagandcalcinationrespectively.GreeninventionsrelatedtotheceramicsindustryTheselectionofcodesdescribinggreeninventionsintheceramicsindustryisnotbrokendownfurthertotechnologicalaspects;thisisnotsurprisinggiventhelimitedactivityinthefield.ChineseScoreboardcompanies(mainlyZTE)accountformorethanhalfoftheactivityinfilings;however,EUScoreboardcompaniesstillaccountforoverathirdofhigh-valuepatents,withthemaincontributorbeingSaint-Gobain,followedbySiemens,SMSHoldings,STMicroelectronics,andBosch.GreeninventionsrelatedtotheChemicalsindustryAbout38%ofgreeninventionsinthechemicalindustriesarededicatedtoimprovementsintheproductionofbulkchemicalsusingselectivecatalysts,withanadditional18%lookingintoinnovationsinrecyclingunreactedmaterialsorcatalysts.Afurther10%isdedicatedtoimprovingprocessefficiency.Inallthesethreeareas,ChinaPetroleum&Chemicalsshowsthemostactivitybyfarinselectivecatalysts,followedbyPetroChina,ExxonMobil,SamsungElectronicsandSaudiBasicIndustries.Nonetheless,ChinaPetroleumisjoinedbyadifferentselectionofcompanieswhenitcomestorecycling;DowChemical,BASF,Honeywell,andArkemamakeupthetop10,indicatingahigherfocusoncircularityfromEUandUScompanies.Chinesecompaniesalsotoptheactivityinprocessefficiencyinventions.SiemensandThyssenKruppareamongthetop5inenergyrecovery(e.g.bycogeneration,hydrogenrecoveryorpressurerecoveryturbines),withSiemensalsothirdininventionsincorporatingrenewableenergysources,twofieldsnotdominatedbyChinesecompaniestothesamedegree.EUcompaniesleadinventionsonthereductionofgreenhousegasesfromthechemicalindustry(anareawithmarkedlylessactivitybyChina),throughAirLiquideandLinde,thelatteralsointhetop5forfeedstockinnovations.EUcompaniesareprominentininnovationrelatedtochlorineproduction.137BasedonDGR&IanalysisinPatentSight,asoftwaresolutionthatprovidesinsightsintothepatentlandscape.73Consideringinherentpatentquality138basedoncitationanalysis(technologyrelevance),thetopcompaniesoverallareExxonandDowwithBASFintheareaofgreenhousegases.MostoftheR&DappearstotakeplaceinChina.FocussingonR&DforpatentsintheEU,US,JapanorSouthKorea,mostresearchtakesplaceinJapanandtheUS.GreeninventionsrelatedtothefertiliserindustryIntheFertiliserEII,about92%oftotalinventionsrelatetothereductionofgreenhousegasemissionsinagriculture,mostlydinitrogenoxide(N2O)usingaquaponics,hydroponicsorefficiencymeasures.TheEUleadswithabout54%oftotalinventiveactivity,followedbytheUSA(about22%).BASF,Solvay,DowChemicalandSaudiBasicIndustriesarekeyScoreboardinnovatorsinthistechnologyarea.GreeninventionsrelatedtotheglassindustryInglassproduction,thefocusisonimprovingtheyield,e.g.byreductionofrejectrates.EvenifJapaneseScoreboardcompaniescollectivelyaccountforabouthalfofallinventiveactivity,Corning(USA)hasthehighestnumberofinventionsaheadoftheJapaneseAsahiGlassandNipponElectricGlass.Inregardtospecialisation139withinthesector,CorningisstronginallareasandtheEUfirmsHeraeus,St.GobainandSchotthavegoodpositionsinsomenicheareas.GreeninventionsrelatedtothelimeindustryIntheproductionorprocessingoflime,mostpatentsarefiledunderthegenericcode,addressingforexamplelimestoneregenerationoflime,withlessthan2%ofinventiveactivitydedicatedtousingfuelsfromrenewableenergysources.EUScoreboardcompaniestaketheleadinthisareawithnearlyhalfofthe(limited)inventiveactivity,withUPM-Kymmene(Finland),ThyssenKrupp(Germany),andAndritz(Austria)sharingthetopspot.GreeninventionsrelatedtotherefiningandpetrochemicalindustryOver70%ofgreeninventiveactivityintherefiningandpetrochemicalindustriesrelatestotechnologiesusingbio-feedstock,withanother25%addressingethyleneproduction.TheUSA(25%ofthetotal)isthemostactivecountry,followedbytheUnitedKingdom(22%)andChina(22%).NesteandUPM-Kymmene(bothfromFinland)togethermakeupathirdofEUinventionsrelatedtobio-feedstock.GreeninventionsrelatedtothesteelindustryRecyclingandprocessefficiencyarethetwomostprominentareasingreeninnovationforthesteelindustry,accountingfor52%and40%ofactivityrespectively.EUScoreboardcompaniesleadinprocessefficiencywithabout38%ofthetotalinventiveactivity,whileSouthKoreancompaniesleadinrecycling(40%ofthetotal).Daimler,ThyssenKrupp,SiemensandSMSHoldings(allfromGermany)arethemostprominentEUcompaniesinproducinginventionsrelatedtoprocessefficiency;nonetheless,theleadinthisareagoestoNipponSteelandPOSCO.SiemensandSMSHoldingsarealsoveryactiveinrecycling.Verylittleactivityisrecordedinotherareas,suchasusingrenewableenergysourcesorreducinggreenhousegasemissions.Lookingatspecialisationwithinthesector,notwithstandingtheoverallAsianleadership,ThyssenKrupphasastrongpositioninconnectingrodsandArcelorMittalinhotrolledsteel140.138Ibid.139Ibid.140Ibid.74Geographyofpatents:regionaltechnologyhotspotsThissectionprovidesamappingofthegeographicallocalisationoftechnologicaldevelopmentsforEEIs,whichcanbeusefulforclusteringactivityandR&Idisseminationactivitiesforlow-carbonindustrialtechnologies.TheanalysisofEIIsreliesonpatentdataextractedfromthe2020AutumnEditionofthePATSTATdatabase.Thebackboneofthefindingsconsistsinidentifyingthenumberofpatentsinthedomainofenergy-intensiveindustries,thatcanbeattributedtogeographicalregions.Inthecaseofpatentingactivity,whichtendstobe'lumpy'overbrieftimewindows,thisimpliesthatitisnecessarytoconsiderhowmanypatentshavebeenproducedinaregionoverasufficientlyprolongedperiod.Toclarify,acompanythatinvestsconsistentlytoinnovateinasetoftechnologieswillnotnecessarilyproduceastablenumberofpatentseveryyear;itwillreapthebenefitsofseveralyearsofworkintoasinglepatentedinvention.Overall,consideringalsothetechnicalconstraintsimposedbythepatentdata,theselecteddataisthepooledsetofpatentsfiledduringtheperiod2010-2018.TherelevantgreentechnologiescomefromtheY02andY04schemesoftheCooperativePatentClassification(CPC).PatentsareassignedtoNUTS2(2013)regionsbasedonavailableapplicantinformation;therationaleforthischoicebeingthatapplicantsaretheoriginalownersofthepatentsand,thus,thosewhodirectlyfinancedtheunderlyingR&Dactivities.TheobjectiveistoprovidepreliminaryinsightsontherelevanceandgeographicaldistributionoftechnologicalinventionsaimedatreducingCO2emissionsforselectedEIIs.SMEFocus4PATENTINGACTIVITYATSMELEVELEvidencecollectedthroughadedicatedstakeholderconsultationindicatesthatcompanieshaveputinplacevariousmechanismstocopewiththerequiredtransformationsbythegreentransition.Oneoftherespectiveactivitiesreferstopatentingnewlow-carbontechnologies,besidesparticipatinginEUcross-borderR&Iprojects,increasingR&Ispendingandundertakingtechnologytransfertobringlow-carbonindustrialtechnologiestothemarket.ThesurveyshowedthatSMEsarelesslikelytopatentnewlow-carbontechnologiescomparedtolargerfirms,butitdoesnotreflectthesignificantdifferencesuggestedbythestrongactivityoflargeincumbents.Still,exceptforincreasingR&Iinvestmentsinlow-carbontechnologies,SMEsareexpectedtoperformlessthanlargercompaniesinmostofthemeasuresindicatedintheconsultation.Figure47Plannedmeasuresinthenext5yearstocopewiththechallengesSource:ERAroadmapstakeholderconsultation,openfromJulytoSeptember2021.75Figure48TopEII-relatedtechnologiesbyNUTS2regionNote:ThecolourofeachregioninthemapreflectstheEII-relatedCCMTtechnologyinwhichtheregionperformedbestintermsofpatentingoutputovertheperiod2010-2018.Theattributionofpatentstogeographicalregionisbasedonapplicantinformation.Source:JRCSETISelaborationofPATSTATdatafortheEUIndustrialR&DInvestmentScoreboard.Inthefirstmap(Figure48)eightpatentgroupsareaggregatedintofivegroups.IthighlightsforeachEuropeanregionattheNUTSleveltheEII-relatedpatentgroupinwhichtheregionrankshighestintermsofmeasuredpatentingactivity.Thedevelopmentofclimatechangemitigationtechnologies(CCMTs)forceramics&glassseemstobemostlybasedinareasofNorthernItaly,Germany,andsomeEasternEuropeanregions.Germany,someregionsinEasternFranceandSwedenarehighlyactiveinCCMTsforrelatedtosteel.CCMTsforcement&lime,refining,andchemicals&fertilizersareinsteadmuchmorescatteredacrossEuropeanregions.Figure49PatentingactivityinCCMTsrelevantforSteelNote:Thecolourofeachregionreflectstheglobalpatentingoutputofapplicantsbasedthereinovertheperiod2010-2018.Regionsrankedinthetopthirdoftherankingpatentoutputrankingaredarkgreen;regionsinthemiddlethirdarelightgreen;regionsinthebottomthirdareyellow.Source:JRCSETISelaborationofPATSTATdatafortheEUIndustrialR&DInvestmentScoreboard.Figure49zoomsintoshowthegeographicaldistributionofCCMTforthesteelsectoronly.Themapshowsahighconcentrationinthedevelopmentofthesetechnologiesinthe76industrialbeltofNorth-WestEuropeencompassingWesternGermany,NorthernFrance,NorthernSpain,andNorthernItaly.Figure50PatentingactivityinCCMTsthatarerelevantforChemicals&FertilisersNote:Thecolourofeachregionreflectstheglobalpatentingoutputofapplicantsbasedthereinovertheperiod2010-2018.Regionsrankedinthetopthirdoftherankingpatentoutputrankingaredarkgreen;regionsinthemiddlethirdarelightgreen;regionsinthebottomthirdareyellow.Source:JRCSETISelaborationofPATSTATdatafortheEUIndustrialR&DInvestmentScoreboard.Figure50focusesontheCCMTforChemicals&Fertilisers.HerethegeographicaldistributionismuchmorewidespreadshowingthatthedevelopmentoftechnologicalcapabilitiesfortheabatementofCO2emissionsinthechemicalsectorisspreadacrossseveralEuropeancountriesandregions.NationalandregionalperformanceintheEUAmongEUmemberstates,Denmarkremainsthecountrywiththehighestshareofgreeninventionsoverallovertotalinventions(21%,nearly3000patentfamilies)initsnationalportfolio.Notsurprisingly,duetothesizeoftheireconomies,Germanycontinuestorankfirstintermsofthetotalnumberofgreeninventions(over47000)followedbyFrance(over15000).Overtheperiod2010-2018,amongtheEUmemberstates,theNetherlandshadthehighestshareofgreeninventionsaddressingtheenergy-intensiveindustriesinfocus(14%)(seeFigure51).Figure51Greeninventionsinenergy-intensiveindustriesperMemberStateNote:ShareofEEIingreeninventions(barscolouredingreen,leftaxis)andnumberofinventionsinEIIs(dotsinred,rightaxis)perEUMemberStateinthe2010-2018period.Source:JRC.77GermanyranksamongthetopfiveineachoftheenergyintensiveindustriesexaminedintermsofshareofinventionsintheEU(Figure52).Whileitleadsinsixoutofnineindustries,itjustlosesouttoItalyonCeramicsandrankssecondandfourthingreeninventionsrelatedtothelimeandrefiningindustries,ledbyFinlandandtheNetherlandsrespectively.FranceissecondhighestinthenumberofinventionsandtheonlyotherEUcountrythatranksinthetopfiveinalltheindustriesinfocus.ItalyandPolandaresecondandthirdinthenumberofinventionsrelatedtoceramics,accountingrespectivelyfor24%and20%ofthetotalEUinventiveactivityinthisarea.Figure52ShareofgreeninventionsandchampionsperindustryandMemberState,2010-2018Note:Thenumberinbracketsshowsthenumberofinventions.Source:JRC.Thereiscoherencethatcompaniesleadinginpatentingarelocatedinthecountriesasdescribedabove,andevenmore,theyareconcentratedinspecificregions,makingthemstandoutasinnovationhotspotsfortheenergy-intensiveindustries.ÎledeFranceistheEUregionwiththehighestnumberofinventions(Figure53).TheOberbayernregioninGermanyfollows,whilefourmoreGermanregionsareintheEUtop10.TheNetherlandshastwo,Zuid-HollandandNoord-Brabant,inthetop10regionallist,andFinlandandDenmarkoneregion(Helsinki-UusimaaandHovedstaden,respectively).Threeoftheseregions,namelyÎledeFrance,OberbayernandNoord-Brabantalsofeatureinthetop10asthehostsofinnovatorsinallclimatechangemitigationtechnologies.DE38%FR25%CZ6%IT5%PL3%Other23%Cement(207)IT28%DE27%PL17%FR9%ES7%Other12%Ceramics(81)DE34%FR17%NL15%PL6%DK5%Other23%Chemicals(2182)DE67%FR16%NL12%IT2%ES2%Other1%Fertiliser(51)DE37%FR33%BE8%IT7%NL4%Other11%Glass(198)FI38%DE21%FR15%SE8%AT7%Other11%Lime(25)NL25%FR21%FI16%DE13%IT6%Other19%Refining(506)DE52%AT13%IT6%FR6%SE6%Other17%Steel(640)DE57%FR12%IT5%DK4%NL4%Other18%OtherY02P(7121)78Figure53Regionaldistributionofgreeninventionsinenergy-intensiveindustriesandkeyindustrialplayersresidentinthetop5NUTSregions(2010onwards)BibliometricsChinaandtheEUarethegloballeadersintermsofscientificoutputonclimateandenvironment,followedbytheUnitedStates.Intermsofscientificquality,whiletheUnitedStateswasclearlyintheleadbefore2018,Chinahasnowthehighestshareofhighlycitedpublications(top10%),buttheUnitedStatesisstillleadingonthetop1%citedpublications.OutputfromChineseresearchershasrisenexponentiallyinthelasttwodecadestofinallyoverpasstheEU’s.IntheEU,researchintensityvariesandthereisapositivecorrelationbetweenscientificqualityandinvestmentinmostcountries.Source:JRC.NUTSregionInven-tionsMajorindustrialplayersÎledeFrance(FR10)333IFPÉnergiesnouvelles,AirLiquide,Arkema,Commissariatàl'ÉnergieAtomiqueetauxÉnergiesAlternatives,Saint-GobainGlass,CentrenationaldelarecherchescientifiqueOberbayern(DE21)200LindeAG,SiemensAG,FraunhoferSocietySouthHolland(NL33)184SHELLInternationaleResearchMaatschappijB.V.Rheinhessen-Pfalz(DEB3)173BASFSEDüsseldorf(DEA1)70EvonikIndustries,ThyssenKruppAG79Figure54Shares(%)oftop10%ofscientificpublicationsonclimateandenvironment,2008(interior)and2018(exterior)Note:DataproducedbyScience-MetrixbasedonScopusdatabase.ThedataisfortheEU27.Source:DGResearchandInnovation,ChiefEconomist-R&IStrategy&ForesightUnit.Intermsofhigh-qualityscientificpublications,Chinahasoverallincreaseditssharesexponentiallybetween2008and2018andhasoverpassedboththeEUandtheUSA.In2018,theEUisnomoreintheleadintopcitedscientificpublicationsrelatingtofood&bioeconomyandclimate&environment,whileChinatakestheleadforfood&thebioeconomywith24,4%ofthetotalshareoftopcitedpublicationsinthefield),followedcloselybytheEU(23%).Inthefieldofclimate&environment,Chinaisintheleadwith24,5%ofthetopcitedpublicationsandtheEUfollowswith22,7%.Asregardsenergy,theEUsharedroppedfrom24%in2008to15%in2018.TheshareofChinainenergy-relatedtopcitedpublicationsiscloseto40%in2018.Itisstillworthnotingthatmanyofthelaggingregions(mostlyineasternandsouthernEurope)improvedtheirperformanceonscientificoutput,whichindicatesimprovedreturnsonR&Dinvestment.In2019,theEUcontributedonly17%ofthepublishedscientificarticlesrelatingtothelow-carbonenergysector.TheleadingcountriesinthismorespecificfieldofsciencewereChina,theUSAandIndia.Nevertheless,theEUdidshowspecialisioninenergyefficiencyinindustry.However,theEU’sshareofinternationalco-publicationsinbothclimatechange,environment,resourceefficiency,rawmaterialsandsecure,cleanandefficientenergyisabovetheworldaveragefortheperiod2000-2020.Thebestperformingcountriesforclimatechange,environment,resourceefficiencyandrawmaterialswereLuxembourg,CyprusandDenmark,and,forsecure,cleanandefficientenergy,Luxembourg,CyprusandBelgium.EUalsohasmoreopenaccesspublicationsin2019thantheworldaverage.804EUpublicinvestmentsandprogrammesThissectionoutlinesthesupporttheEUpublictoolboxprovidesforR&Ionlow-carbonindustrialtechnologies.Itreviewstheperiod2014-2020andlooksforwardtoopportunitiesunderthecurrentmulti-annualfinancialframework2021-2027withitsnewtools,suchastheInnovationFund.TheEUbudgetisatinyfraction(2%)ofcombinednationalbudgetsofallEUcountries141.TheEuropeanR&Ifundingprogrammes,includingHorizon2020,arehoweverresponsiblefor7.2%ofpublicfundingforR&Iin2019inEuropeandasignificantlyhigherpercentagewhenlookingonlyatcompetitivefunding.142Evenifspecificallyforlow-carbontechnologiesforenergy-intensiveindustriesthesharehasbeenhigherthantheaverage,theframeworkprogrammescannotbeexpectedtocoverthemajorinvestmentsinthedevelopmentandespeciallydeploymentoflow-carbontechnologiesthatareneededtoreachthe2030emissionsreductiontargetandclimateneutralityin2050.Inthemultiannualfinancialframework(MFF)for2021-2027ofEUR1.2trillion,EUR95.5billionisdedicatedtoHorizonEuropeforR&I.R&Iandmarketuptakearefunded,amongothers,underInvestEU(Sustainableinfrastructurepolicywindow:EUR9.9billion;Research,innovationanddigitisationpolicywindow:EUR6.6billion)andtheInnovationFund(EUR25billion,dependingonCO2price).TheEuropeanFundforStrategicInvestments(EFSI),throughtheEuropeanRegionalDevelopmentFund(ERDF)(EUR215.2billion),alsosupportR&Iandindustrialinvestmentsinregions.30%oftheEUbudgetwillbespenttofightclimatechange.Inaddition,theRecoveryandResilienceFacility(RRF),thekeyinstrumentattheheartofNextGenerationEUmakesavailableEUR723.8billion(incurrentprices)inloans(EUR385.8billion)andgrants(EUR338billion).MemberStateshaveallocatedalmost40%ofthespendingintheirRecoveryandResiliencePlans(RRPs)toclimatemeasuresacrossthe22plansapprovedsofar.Thisexceedstheagreedtargetsof37%forclimatespending.Itisestimatedthat6%oftheRRPsexpendituresupportingthegreentransitionwillgotoR&Iingreenactivities.TheMFFandRRFprovideanunprecedentedopportunityforMemberStatesandindustrytoacceleratethedevelopmentanduptakeoflow-carbontechnologies.EUCENTRALISEDFUNDSEUprogrammesmanagedcentrallybytheCommissionfinanceslow-carbontechnologiesprojects.ThroughHorizonEurope,theInnovationFundandotherinstruments,morefundingisavailablein2021-2027forlow-carbontechnologiesprojects.Horizon2020andHorizonEuropeHorizonEurope,thecurrentEUR&Iprogramme,hasabudgetofEUR95.5billionfor2021-2027.Thisrepresentsa30%increasevis-à-visHorizon2020,itspredecessor,andmakesitthemostambitiousR&Iprogrammeintheworld.Over35%ofHorizonEuropespendingwillcontributetoclimateobjectives.TheHorizon2020andHorizonEuropeprogrammesarefundingcutting-edgeR&I,includingpartnershipswithindustrytohelpmovinglow-carbonindustrialtechnologiesforenergy-intensiveindustriesfrombasicresearchtodeployment(e.g.SPIRE/Processes4Planetand141https://ec.europa.eu/info/strategy/eu-budget/eu-budget-added-value/fact-check_en142EuropeanCommission.Directorate-GeneralforResearchandInnovation.(2022).Science,ResearchandInnovationperformanceoftheEU2022report.forthcoming81CleanSteelPartnerships)aswellastheEuropeanInnovationCouncil(EIC)andtheEuropeanInstituteofInnovationandTechnology(EIT).4.1.1.EuropeanPartnerships•SPIRE/ProcessesforPlanet(P4P)SPIREhasbeenthecontractualpublic-privatepartnershipactivebetween2014and2020underHorizon2020anddedicatedtoinnovationinresourceandenergyefficiencyenabledbytheprocessindustries.SPIREhasbroughttogethercompanies,world-leadinguniversitiesandresearchorganisationsandotherstakeholdersinvolvedinseveralenergy-intensiveindustrysectors,namelycement,ceramics,chemicals,engineering,mineralsandores,non-ferrousmetals,steelandwater.Thepartnershiphelpedintegrating,demonstratingandvalidatingsystemsandtechnologiesforachievingreductionsofupto30%infossilenergyintensity,andreductionsofupto20%innon-renewableandprimaryrawmaterialintensity.Theaimhasbeenadrasticoverallefficiencyimprovementofupto40%inCO2-equivalentfootprints.SignificantSPIREinnovationsconcernedthreemainareasatallTRLs,namelyefficientprocesses,sustainabilityandcirculareconomy,andenablingsustainableindustrydevelopment(seeChapter2).Therelevantprojectspointedtoa38%reductionofdependencyonfossilfuels,31%reductionofdependencyonnon-renewable,primaryresourcesand29%reductionofemissions.WhilethepartnershipagreementwithSPIREcoveredinnovationsuptoTRL7,someprojectshavemanagedtogobeyondthislevel,showingthelevelofstakeholdercommitmentandtheinnovationpotentialinprocessindustries.Thepartnershiphasachievedaprivateinvestmentleveragefactorof8.5,withatotalinvestmentbyprivatecompaniesofEUR4.52billion.SMEmembershaveseena40%growthinturnover(doubletheEUaverage).Sinceitslaunch,SPIREhasinspiredandinitiatednearly50programmecallsunderHorizon2020,coveringtopicssuchasefficientprocesses,circulareconomyandthedevelopmentoftechnologiesandinnovationsthatenablesustainableindustrialdevelopment.By2020,around125projectshadbeensupportedthroughHorizon2020.ThesuccessorofSPIREisProcesses4Planet(P4P),theco-programmedpartnershiplaunchedbyA.SPIREandtheEuropeanCommissioninJune2021.TheoverallbudgetofthepartnershipisEUR2.6billion(EUR1.3billionfromHorizonEuropeandEUR1.3billionfortheprivatepartners).Thepartnershipwillcontinueworkingonemergingtechnologiesandonthescalingupofalreadydevelopedtechnologiesathighertechnologyreadinesslevels(TRLs)todeliverexpectedCO2emissionreductionsby2030andachievetheirfullimpactby2050.14InnovationAreasand36InnovationProgrammesmovingfromTRL1to9havebeenidentified(seeChapter2).P4PaimstobringtechnologiestoahigherTRLuntilmarketdeployment.Asaconcretetooltoimprovesynergies,P4PhassetupanImpactPanel,whichaimedatfacilitatingthelaunchandmarketuptakeofprojectsbypublicorprivateinvestorsbyestablishinglinkswithnationalprogrammesandinterestedMemberStates,theInnovationFundandtheEuropeanInvestmentBank.SPIREandProcesses4Planethaveshowntheeffectivenessofcross-sectorialinnovation.82•CleanSteelPartnership/RFCSBuildingontheworkalreadycarriedoutunderHorizon2020andwiththehelpoftheResearchFundforCoalandSteel(RFCS),theEClaunchedtheCleanSteelPartnershipin2021,whichspecificallysupportsthetransformationofthesteelindustryintoacarbon-neutralsector.TheCleanSteelPartnershipprovidesfundingthroughHorizonEuropeandthroughtheRFCSforanEUcontributionofEUR700million.Itwillimplement,by2027,atleasttwodemonstrationprojectsleadingto50%CO2emissionreductionandachievingTRL8by2030inatleast12buildingblocksfundedbythepartnership.ThefinalambitionisreducingCO2emissionsby80-95%by2050,ultimatelyachievingcarbonneutrality.TheCleanSteelPartnershipaimstoestablishsynergiesthroughlinkswiththeInnovationFundinviewofensuringfollow-upinvestmentsfordeploymentofinnovativecleansteeltechnologies.TheRFCSisaEUfundingprogrammesupportingresearchprojectsinthecoalandsteelsectors.Thetwobigticketsfundingopportunitiesforcoalandsteel(EUR104million)openedon18February2022andhaveadeadlineforsubmissionon3May2022.Forsteel,thebigticketscallprovidessupportforprojectsthataimtodevelopanddemonstratecleansteelbreakthroughtechnologiesleadingtonear-zero-carbonsteelmaking.ProposalsmustbeinlinewiththegeneralandspecificobjectivesoftheCleanSteelPartnership.UnderbothHorizon2020(andpredecessorprogrammes)andtheRFCS,directdevelopmentoflow-carbonsteeltechnologieshasbeenundertakenbyalimitednumberofprojectsasindicatedinTable6.Table6ProjectsinR&DfundingprogrammesforthesteelindustryfocusingonCO2emissionsreductionFundingprogrammeSelectedfundingperiodNo.ofprojectsTotalbudgetEUcontributionTRLULCOS(FP6)2004-2010€35m€20mRFCS2011-202016€24m€16m2-5H20202014-202042€331m€268m2-7CleanSteelPartnership2021-2030tbd€1.4bn€700m(HorizonEurope+RFCS)5-8Source:Somers,J.,TechnologiestodecarbonisetheEUsteelindustry,EUR30982EN,PublicationsOfficeoftheEuropeanUnion,Luxembourg,2022,ISBN978-92-76-47147-9,doi:10.2760/069150,JRC127468.4.1.2.OtherR&IactivitiesandpartnershipsfundedunderHorizon2020&monitoringtoolsHorizon2020had1522projectsrelatedtolow-carbontechnologiesinenergy-intensiveindustries,excludingSPIREprojects,startingbetween2014and2022,amountingtoEUsupportofEUR3.86billion,including117coordination&supportactionsand487undertheSMEinstrument.ProjectsaddressinglowerTRLsappeartohaveagreaterparticipationofSMEs.TheEuropeanCommission’sHorizonResultsplatform143andtheInnovationRadar144areusefulmonitoringtoolspresentingsomerelevantEU-fundedresearchandinnovationprojects,amongothersinthefieldoflow-carbontechnologies.143https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/horizon-results-platform144https://www.innoradar.eu/83TheHorizonResultsplatformenablesallstakeholdersinR&I,andmorebroadlyanycitizen,tolearnmoreaboutEU-fundedprojects,bymakingresultsavailabletothepublicandgivingthemthepossibilitytoenterintocontactwiththeircreators.TheInnovationRadarisaEuropeanCommissioninitiativetoidentifyhighpotentialinnovationsandinnovatorsinEU-fundedR&Iprojects,givevisibilitytotheseprojectsandmaketheoutputsofEUinnovationfundingavailabletothepublic.Thisdatabasedoesnotgiveanoveralloverviewoftheprojects,asonlysomeofthemareselectedbyindependentexperts.Whenlookingup‘low-carbon’,23projectscanbefound,10ofthemare‘marketready’or‘businessready’,and13inthe‘exploring’phase.SMEsareinvolvedin4ofthem.Furthertotheabove-mentionedpartnershipswithindustry,otherpartnershipaddressthetheproductionofcleanenergyandthewiderenergytransition,whichiscloselylinkedtothedevelopmentanduptakeoflow-carbontechnologies.TheHydrogenandFuelCellspublic-privatepartnership(JointUndertaking)underHorizon2020andthenewHydrogenPartnershipunderHorizonEuropesupportthedevelopmentofgreenhydrogenproductioninEuropeandreachouttokeyusersectorsincludingenergy-intensiveindustries,notablythesteelindustry.HorizonEuropewillalsoco-investwithMemberStatesinthenewCleanEnergytransitionco-fundPartnershipofHorizonEurope.ThisisatransformativeR&D&IprogrammeacrossEuropeboostingandacceleratingajustenergytransitioninallitsdimensionsforEuropetobecomethefirstclimate-neutralcontinent.Itaimsatbringingtogethernationalfundingwithatop–upcontributionfromtheEU.Thetotalindicativebudgetfortheco-fundedEuropeanpartnershipisEUR210million.4.1.3.InnovFinInnovFinwaslaunchedin2014bytheEIBGroupincooperationwiththeCommissionunderHorizon2020,withabudgetofEUR2.7billionfor2014-2021.Until2020,itofferedarangeoftailoredproducts,whichprovidedfinancinginsupportofresearchandinnovationbySMEsandlargecompaniesandthepromotersofresearchinfrastructure.Itsgoalwastohelpbridgethe‘valleyofdeath’fromdemonstrationtocommercialisation,supportingthefurtherrolloutofinnovativetechnologiestothemarket.InnovFinEnergyDemonstrationhassupportedprojectsrelatedtolow-carbontechnologies,includingtheSteelanolprojectmentionedinChapter2.InnovFinhasbecomepartofInvestEUfortheprogrammingperiod2021-2027.Box93DCARBONCAPTUREPILOT,AHORIZON-FUNDEDDEMONSTRATIONPROJECTThe‘3D’carboncapturepilotplantisthebrainchildofaconsortiumincludingTotalenergies,ArcelorMittal,AxensandIFPEnergiesNouvelles.TheplanthasstartedupatArcelorMittal’sDunkirksiteinFranceandisanimportantstepindecarbonisingthesteelmakingindustry,butnotonly:thepilotcanalsobeappliedtorefiningprocesses.Thisdemonstration,whichisscheduledtolastfor12to18months,isthefinalstagebeforethetechnology’sfull-scaledeployment.Duringthedemonstrationstage,itwillcapture0.5tonsofCO2anhour,i.e.morethan4,000tonsayear.TheEUR14.7millionEU-fundedprojectisconsideredbytheconsortiumasa‘vitaldriver’forreachingParisAgreementtargetsandincludestwelvepartnersfromresearchandindustryinsixEuropeancountries.844.1.4.EuropeanInnovationCouncilTheEuropeanInnovationCouncil(EIC)supportsbreakthroughandtransformativeinnovationunderHorizonEurope.Sinceitsinceptioninlate2018–buildingonthealreadyexistingSMEInstrument–theEIChastakendecisivestepstowardsfundingpromisingtechnologicalbreakthroughs.•Pilotphase2018-2020Initspilotphase(2018to2020),theEICprovidedfinanceforgreentechnologies,aspartofEU’sfocusontheEuropeanGreenDeal.InJuly2020alone,64start-upswereawardedfundingofmorethanEUR300millionforEuropeanGreenDealinnovations.Overall,theEIC’sgreentechnologiesportfolioincludes1600companies,withEICfundingofEUR1billion,complementedbyfollow-upinvestmentsofEUR1.15billion.EIC-fundedinnovativenewtechnologiesofferwaysofreplacingcombustionengineswithelectricbatteries,andfossilfuelswithrenewableenergy,andofloweringthecarbonfootprintofvariousindustries.Box10HIGH-POTENTIALSME/EICPROJECTSFORINDUSTRIALLOW-CARBONTECHNOLOGIESLowTRLprojectsThelowTRLprojectsaremainlyinfourareas:electrificationofindustry;useofgreenhydrogen,biomassandotherbiofuels;CCS&CCU;andrecycling.MostprojectsdeveloptechnologiesatTRL3to4,withsometechnologiesaimedatTRL5.Projectexamplesinclude:•Electrificationofindustry:AMADEUS(endTRL3),QuIET(endTRL2-3),HAVERSTORE(endTRL3-4),UncorrelaTEd(endTRL2),MAGENTA(endTRL3),TPX-Power(formerWASTE-NOT–endTRL3),CATCHER(endTRL5),ESiM(endTRL3),ThermoDust(endTRL3),orMeBattery(endTRL3).•Useofgreenhydrogen,biomassandotherbiofuels:112CO2(endTRL4).•CCU&CCS:DIACAT(endTRL3)andFuturoLEAF(endTRL3).•Recycling:EcoPlastiC(endTRL3).Whilethefundedprojectsandthedevelopedtechnologiescanberelevantfortheenergy-intensiveindustriesecosystem,theirapplicabilityforthemarketremainslimited.Furtherdevelopmentoftherespectivetechnologiesisneededinordertodetermineexactapplicabilityintheenergy-intensiveindustriesecosystem.HighTRLprojectsThehighTRLprojectsrelevantforenergy-intensiveindustriesfundedbytheEICareinfourmainareas:electrificationofindustry,recycling,industrialsymbiosisandothertopics.TheaverageTRLsofthedevelopedtechnologiesarebetweenTRL6and8.VariousprojectsfundedthroughtheEIC,athighTRLs,wererecipientsofthe2020EuropeanGreenDealCall,inareassuchasrecycling,industrialsymbiosis,energyefficiencyorreducingcarbonfootprintofspecificindustrialsectors(e.g.cement).Projectexamplesinclude:•Electrificationofindustry:HEAT2VALUEandDUSTCOMB.•Recycling:SENS(TRL5/6to8).•Industrialsymbiosis:Proton(TRL7to8).•Othertopics:CemShaleCemTower(TRL5/6to8),CRCP(TRL6to8),Glazer,CO2Catalyst(TRL6to7)orWillpower.85•2021-2027TheoverallfundingoftheEICforthisprogrammingperiod2021-2027isEUR10.1billion,includingEUR3billionfortheEICfund.TheEICopensfundingopportunitiesworthoverEUR1.7billionin2022.Throughitstailoredapproachforstart-upsandSMEs,theEICmanagestoaddressinnovatorsregardlessofthematurityofthetechnologiesdeveloped:•lowTRL:theEICPathfinder(worthEUR350millionin2022)providesgrantsofuptoEUR3-4millionforearlystageresearchonbreakthroughtechnologies;•mediumTRL:theEICTransitioninstrument(worthEUR131millionin2022)providesgrantsofuptoEUR2.5millionfortechnologymaturationfromproof-of-concepttovalidation;•highTRL:theEICAccelerator(worthEUR1,16billionin2022)providesgrantsofuptoEUR2.5million,combinedwithequityinvestmentsofuptoEUR15million,fordevelopmentandscale-upofdeep-techordisruptiveinnovations.Themajorityoffundingwillbeawardedthroughopencallswithnopredefinedthematicpriorities(‘EICOpen’).TheEICOpenfundingisdesignedtoenablesupportforanytechnologiesandinnovationsthatcutacrossdifferentscientific,technological,sectoralandapplicationfieldsorrepresentnovelcombinations.Thechallengedrivenapproach(‘EICChallenges’)providesfundingtoaddressspecifictechnologicalandinnovationbreakthroughs.ThesechallengestakeintoaccountEUprioritiesfortransitioningtoagreen,digitalandhealthysociety,includingthedevelopmentandtakeupoflow-carbontechnologies(for2022:EICPathfinder‘EICChallenge’(EUR167millionindicativebudget):includes‘Mid-longterm,systems-integratedenergystorage’;EICTransition‘EICChallenge’(EUR60.5millionindicativebudget):includes‘Processandsystemintegrationofcleanenergytechnologies’;EICAccelerator‘EICChallenges’(EUR536.9million)includes‘Technologiesfor‘Fitfor55’’)145.TheEICalsolinkswithothercomponentsofHorizonEurope,includingtheEuropeanResearchCouncil(ERC),theEuropeanInstituteofInnovationandTechnology(EIT)anditsKnowledgeandInnovationCommunities(KICs),andwithotherCommissionfundingprogrammes,suchasInvestEU.Newsynergiesinclude:•TheEIC‘FastTrack’scheme,anoveltyunderHorizonEuropeandaspecificprocessapplicabletotheEICAccelerator.ItprovidesforaspecifictreatmentofproposalsthatresultfromexistingHorizonEuropeorHorizon2020projects.•TheEICpilot‘Plug-in’scheme,whichisalsoanoveltyunderHorizonEuropeandaspecificprocessapplicabletotheEICAccelerator.ItappliestoapplicationsthatresultfromexistingnationalorregionalprogrammescertifiedbytheEuropeanCommission.145EICWorkProgramme2022(europa.eu)Figure55MainfinancingtoolsoftheEuropeanInnovationCouncil86TheEICAcceleratorfocussesoninnovatorsandentrepreneurs,andcomplementsInvestEU,whichisinvestorandfinancialintermediarydriven.Itaimsatdirectlyde-riskingselectedoperationsinordertobetterbridgethesetwoworldsandcrowd-ininvestors.Forthatpurpose,theEICAcceleratorisdesignedtofulfiltheroleofinitialorfirstrisk-taker,whereneeded.1464.1.5.EIT:enablingknowledge&innovationintheEUTheEuropeanInstituteofInnovation&Technology(EIT)createsanarchitecturetopromoteinnovationintheEU,throughitsoperationalarms,theKnowledgeandInnovationCommunities(KICs).TherearecurrentlyeightKICs,ofwhichfourareparticularlyrelevantforR&Iintheareaoflow-carbonindustrialtechnologies:EITClimateKIC,EITInnoEnergy,EITRawMaterialsandEITManufacturing.TheKICsaredynamicandcreativepartnershipsthatbringtogetherbusinesses,researchcentresanduniversities(the‘knowledgetriangle’)inordertodevelopnewinnovativeproductsandservices,totrainanewgenerationofentrepreneursandtosupportnewcompaniesintheirstart-upandscale-upphase.Withthis,theycanplayanimportantroleinsupportingthedevelopmentofpan-Europeanclustersforthedevelopmentanduptakeoflow-carbonindustrialtechnologies.Overall,in2021,anestimatedEUR115millionwasspentbyrelevantEITKICsacrosstheindustrialvaluechainsforthedevelopmentanduptakeofgreentechnologies.Figure56EIT’sknowledgetriangle:businesses,researchcentresanduniversitiesSource:EuropeanInstituteofInnovation&Technology.BesidestheKICs,theEITalsoestablishedtheRegionalInnovationScheme(RIS),forEUMemberStateswithlowerinnovationperformance147andnon-EUHorizonEuropeassociatedcountries,whereEITKICsdisseminateknowledgeandpromoteabroaderparticipationintheirprojectsacrossEurope.TheRIS’saimistoraisethecapacityofinnovationplayersandfacilitatetheiraccesstoservicesandprogrammesofferedbytheEITKICs148,effectivelyincreasingthechancesforwideruptakeofinnovativegreen146https://eic.ec.europa.eu/system/files/2021-05/EIC%20Fund%20Investment%20Guidelines%20-%20Horizon%20Europe.pdf.147BasedontheEuropeanInnovationScoreboard,https://ec.europa.eu/info/research-and-innovation/statistics/performance-indicators/european-innovation-scoreboard_en.148EITRISActivityReport2019-2020,https://eit.europa.eu/sites/default/files/eit_ris_activity_report_-_final.pdf.87technologiesinwideningcountries149.EITRISisbuildingonsynergiesandcomplementaritieswithnational,regionalandEUprogrammessuchasEuropeanStructuralandInvestmentFunds(ESIF)orSmartSpecialisationStrategies.ClosecollaborationofEITKICswithlocalauthoritiesandinnovationplayersishelpingtooperationaliselocalsector-specificplansandstrategiesusinggoodpractices,experiencesandknow-howarisingfromKICactivitieselsewhereandofferingtailor-madeservicestoaddressidentifiedinnovationgapsinlocalsector-specificecosystems.EITKICsengagelocalorganisationstoserveasEITHubs(seeFigure57)withtheambitionofscalingthemintoregionalandnationalinnovationhubs.Theaimistoenablethemtosparkthedesiredcooperationandco-creationamonglocalbusiness,research,academiaandpublicsectorplayerswithaviewtofacilitatingtheuseoflocalcompetencesandresourcesforabetterinnovationoutput.By2020,EITKICshadestablished64EITHubsin18EITRIScountries,andaswellas12Co-locationCentresin5EITRIScountries.Figure57EITRegionalInnovationSchemeHubsSource:EITRISActivityReport2019-2020.TheparticipationofpartnersinEITRISincreasedfromover40toover300partnersbetween2014and2020,whilefundingreceivedbypartnerorganisationstripledinthesameperiod.Thesefiguresincreasedfurtherin2021.Fortheperiod2021-2027,theEITwillreceiveEUR2.96billiontocontinuestrengtheningEurope’sabilitytoinnovate.149Thephrase‘wideningcountries’designatestheMemberStatesthathavejoinedtheEUmostrecently:Bulgaria,Croatia,Cyprus,Czechia,Estonia,Hungary,Latvia,Lithuania,Malta,Poland,Portugal,Romania,SlovakiaandSlovenia.884.1.6.SynergiesBuildingsynergieswithinHorizonEuropeandbetweenHorizonEuropeandotherprogrammesareessential,fortheireffectivenessandfortheefficientuseofR&Iinvestments,butalsotoachievethebestpossibleimpactofotherprogrammes.AnnexIVoftheHorizonEuropeRegulation150setsoutaframeworktodevelopstrategicsynergieswithallothermainEUprogrammes.Thisshouldensureprimarilythat,ontheonehand,researchandinnovationactivitiesinformthedevelopmentofEUpoliciesandprogrammesand,ontheotherhand,thatR&Iideasandresultsreceivethesupportnecessaryfortheirdeploymentandmarketuptake.AdedicatedCommissionguidancedocumentwillpromotesynergiesbetweenHorizonEuropeandtheEuropeanRegionalDevelopmentFund(ERDF),suchas:•TheSealofExcellence,aqualitylabelawardedbytheCommissiontoproposalswhichhavebeenassessedinacallforproposalsunderHorizon2020orHorizonEuropeandcomplywiththequalityrequirementsbutcouldnotbefundedduetobudgetaryconstraints.Theseprojectsarejudgedtodeservefundingandmight150EUR-Lex-52018PC0435-EN-EUR-Lex(europa.eu)Box11EITKICS:GRANTS&NON-FINANCIALSUPPORTFORINNOVATIONNETWORKSEITRawMaterialsfundedprojectsdealingwithreducingenergyconsumptioninenergy-intensiveindustries(i.e.mineralandhydrometallurgyprocessingforprimaryandsecondaryrawmaterialsourcing)withapproximatelyEUR39million.Furthermore,theKIC’sprojectsdealingwiththeCO2footprintofindustrialprocessesreceivedatotalfundingofEUR8.5millionupto2021.Forexample,theSAMOAprojectaimstoupscaletheprocesschainofrawaluminiumalloysfrommaterialefficientpowderproduction,energyefficientlaserandarcwireadditivemanufacturingtomaterialrecyclinginordertoreducethematerialneedbyupto50%.EITInnoEnergyKIC’sportfolioaddressesrelevantthematicfieldsforthedecarbonisationofindustry,suchasenergyefficiencyorthecirculareconomy.RelevantprojectsfundedthroughtheEITInnoEnergyKICincludeinnovationsrelatedtotheelectrificationoflinearmotioninheavymachinesusedinindustrialprocesses.Thisisexpectedtocontributetoanannualavoidanceof33milliontonnesofCO2equivalentemissionsby2030.EITClimateKICRISAccelerator,operationalsince2016,hassupportedcleantechentrepreneursinRIScountriesandregionsonavarietyofactions,includingthroughgrantsforclimatechangeadaptationandmitigation.Oneofitsbeneficiaries,theEstonianstart-upAscalia,createdaplatformtocollectandanalysedatausingartificialintelligence,resultingindetailedanalyticsandoptimisationofprocesses,whichhelpsreducingenergyandrawmaterialsusage,aswellastheenvironmentalimpactofindustry.Since2019,EITClimateKIC,incooperationwithEITRawMaterialsKICandpartneringupwiththegovernmentsofBulgaria,ItalyandSlovenia,supportedtheimplementationof‘ADeepDemonstrationofaCircular,RegenerativeandLow-CarbonEconomy’.Thisaimstoharnesscircularitytotransformanddecarboniseindustrialvaluechainsbydesigninganddeliveringthesmarttransitionofregionsthroughacoordinatedsystemicapproachwhereinnovationandgreentechnologiesareembeddedinproductionandwasteflowsacrosskeyeconomicsystemsandselectedvaluechains,includingtransport,forestry,theagri-foodsectororrawmaterials.Thisprojectcoveredthedevelopmentanduptakeoflow-carbontechnologiesinindustrythroughitssupportforthecreationofalivinglaboratorytofosterinnovation,withcross-sectoralandcross-disciplinaryapproachesandworkingwithstakeholdersfromlocalcommunities,businesses,researchorganisationsandpolicymakers.Iterativedevelopmentofdesigninginnovativesolutionsbasedonexistingprojectsandexperienceswilltakeplaceuntil2025.89receivesupportfromnationalsourcesoffunding.TheSealofExcellenceiscurrentlyawardednotablytoproposalsthatapplyundertheEICAcceleratorandtheEICTransition;•SupportforEuropeanpartnerships:undercertainconditions,financialcontributionsfromprogrammesco-financedbytheERDFmaybeconsideredasacontributionoftheparticipatingMemberStatetoEuropeanpartnerships(‘Co-fundedEuropeanpartnerships’;‘InstitutionalisedEuropeanpartnerships’);•SupporttoTeamingactions:‘Teaming’supportscentresofexcellenceincertaineligiblecountries;beneficiariesaremostlyuniversitiesandresearchorganisations,sometimesalsoregionalauthoritiesandSMEs.ItfacilitatesthefundingfromtheERDFtoco-financeaTeamingactionwithHorizonEurope,andtosupportinvestmentinTeaming-relatedresearchinfrastructure;•Theoption,forMemberStates,totransfercohesionpolicyfundstoHorizonEurope(andtransferbackifnotfullyused):MemberStatesmaytransferupto5%oftheirinitialcohesionpolicyallocationstoanyotherEUfundorinstrumentundershared,directorindirectmanagement.Financialinstruments:EuropeanFundforStrategicInvestment(EFSI)/InvestEU.4.2.1.EuropeanFundforStrategicInvestment(EFSI)Lowinvestmentlevelsfollowingthe2007/2008financialcrisispromptedtheCommissiontolaunchtheInvestmentPlanforEurope,alsoknownastheJunckerPlan,in2014.OnepillaroftheInvestmentPlanforEuropewasEFSI(EuropeanFundforStrategicInvestments),aguaranteemechanismthatenhancedtheEIBGroup’srisk-bearingcapacity.Itsaimsweretohelpfinanceoperationsthataddressmarketfailuresandsuboptimalinvestmentsituationsandtomobiliseprivateinvestment.EFSIcomprisedtheEIB-managedInfrastructureandInnovationWindow(IIW),whichaimedtomobiliseinvestmentininfrastructureandinnovation,andtheEIF-managedSMEWindow(SMEW),whichsoughttoenhanceaccesstofinanceforSMEsandsmallmid-capcompanies.WiththeEFSIsupport,theEIBGroupprovidedfundingforeconomicallyviableprojects,especiallyforprojectswithahigherriskprofilethanthoseusuallyfinancedbytheEIB.ThefocuswasonsectorsofkeyimportancefortheEuropeaneconomy,including:•strategicinfrastructureincludingdigital,transportandenergy;•education,research,developmentandinnovation;•renewableenergyandresourceefficiency;and•supportforsmallandmid-sizedbusinesses.Asof31December2020,theEFSIportfoliocomprised733operationsapprovedundertheIIWtotallingEUR69.8billion(EUR314.5billioninvestmentmobilised),and816operationsapprovedundertheSMEWtotallingEUR33billion(EUR232billioninvestmentmobilised).Together,theseoperationsareexpectedtomobiliseEUR546.6billionofinvestmentacrosstheEuropeanUnion.EFSIhasthusexceededitstargetvolumeofinvestmentmobilisedfromoperationsapproveduptoyear-end2020151.1512020EFSIreportfromtheEuropeanInvestmentBanktotheEuropeanParliamentandtheCouncilon2020EIBGroupFinancingandInvestmentOperationsunderEFSI.90EFSISectorsTheninegeneralobjectiveseligibleunderEFSIwere:R&D&I(RDI),Energy,Transport,Smallercompanies,Digital,Environmentandresourceefficiency,Socialinfrastructure,and,sincetheextendedEFSI,BioeconomyandRegionaldevelopment.AsillustratedinFigure58below,theRDIobjectiverepresents16.79%oftheinvestmentsmobilisedbyapprovalsundertheEFSIInfrastructureandInnovationWindow(IIW)(234projectsandEUR52.8million)andtheEnvironmentandresourceefficiencyobjective6,36%(87projectsandEUR20million).Figure58EFSIIIWinvestmentmobilisedbyEFSIobjectiveSource:EIBREPORTING:EFSIIIW/SMEW/EIBGROUPOperationsApprovedasat31/12/2020.RDIandEnvironmentandresourceefficiencyobjectivesundertheIIWarethemostrelevantcategoriesforlow-carbonindustrialtechnologiesprojects.However,currentEIBreportingdoesnotallowtobreakdownsuchsupporttoRDI-relevantsupportforlow-carbon(orclimatemitigation)technologies.RelevantprojectstosupportR&D&IactivitiesforthedecarbonisationofEIIincludethefollowing152:•AEUR280millionloangrantedtoArcelorMittalinBelgium,France,LuxembourgandSpain,tohelpfundthegroup'sEuropeanresearchanddevelopmentprogrammebetween2021and2023.ThisfundingwillallowsignificantexpansionofArcelorMittal’sresearchanddevelopmentactivitiesondecarbonisation.•AEUR290millionloantoWackerChemieAG.,aGermantechnologicalleaderinthechemicalindustry.ThefinancingsupportsWacker'sresearchanddevelopmentprogrammewithastrongfocusonsustainabilityandenergyefficienteconomy,andispartofthecompany’sshifttobecomeaclimate-neutralchemicalsorganisation.152EFSIprojectlist–EIBwebsite.91•AEUR40millionloantoglobalchemicalscompanyKemiraOyj,headquarteredinFinland,toboostitsinvestmentsinresearch,developmentandinnovationinchemicalapplicationsandtechnicalsolutionsforwatertreatment,pulpandpaperchemicals,andotherchemicals.•AEUR82millionloantoSustainableCementRDI.Theprojectcomprisesthemodernisationofthepromoter'sproductionsitesinFranceandSwitzerlandaswellasitsEU-basedRDIactivitiesrelatedtocementproductsandproductiontechnologiesin2021-2023.InDecember2017,EFSIstipulatedthatatleast40%ofprojectsundertheInfrastructureandInnovationWindowmustcontributetoclimateaction,inlinewiththecommitmentsmadeattheUNFCCC’sCOP21climatechangeconference.Asof30June2021,386operationswithclimateactioncomponents153havebeensupportedundertheEFSIIIWforanamountofsomeEUR20.5billion.EFSIGeographicaldistributionAllEUMemberStatesandtheUnitedKingdom(formerMemberState)benefitedfromthesupportofEFSI,asillustratedinFigure59.France,Italy,SpainandGermanyhavebenefitedthemostfromEFSIfunding,whilethereisalsofundingchannelledtocentralandeasternEuropeanMemberStates.TheshareoftheEFSIsignaturesinEU13(13MemberStatesthatjoinedtheEUin2004,2007and2013)hasconsistentlyimprovedthankstovariousmeasuressincethestartofEFSIinmid-2015,althoughinabsolutefiguresEFSIsupportremainsrelativelylesspredominantinthisregion154.TheextendedEFSI(December2017)broughtamendmentsincludingwithaviewtofurthercontributingtothegeographicalspread.Figure59GeographicalcoverageofEFSIsignedoperationsasoftheendof2020Source:2020EFSIREPORTFromtheEuropeanInvestmentBanktotheEuropeanParliamentandtheCouncilon2020EIBGroupFinancingandInvestmentOperationsunderEFSI.In2021,InvestEUtookoverasthenewlong-termfinancingprogrammeoftheEU,buildingonthesuccessofEFSI.153Inordertoidentifyclimateactionprojectcomponents,EIBusesitsinternationallyagreedmethodologyasforeseenintheEFSIAgreement.1542020EFSIREPORTFromtheEuropeanInvestmentBanktotheEuropeanParliamentandtheCouncilon2020EIBGroupFinancingandInvestmentOperationsunderEFSI.924.2.2.InvestEUFundTheInvestEUFundfocussesonaddressingthelargeinvestmentgapsinkeyareasofthefuturethroughanEUbudgetguaranteeofEUR26.2billion.ItwillthusfurtherboostjobcreationandsupportinvestmentandinnovationintheEU.ItisexpectedtomobiliseatleastEUR372billionofprivateandpublicinvestmentacrosstheEUbyend-2027.Atleast30%oftheInvestEUFundisexpectedtocontributetofightingclimatechange155.DuetoInvestEUtargetinghigherriskinnovationprojectsandSMEs,aswellasthegreaterfocusonEUpolicyobjectives,aslightlymoreconservativemultipliereffectthanunderEFSIisexpected:11.4ratherthan15.156TheguaranteewillbeimplementedbytheEIB(at75%)and,forthefirsttime,byimplementingpartners:nationalpromotionalbanksandinternationalfinancialinstitutionssuchastheEuropeanBankforReconstructionandDevelopment(EBRD),theCouncilofEuropeDevelopmentBank(CEB)andtheNordicInvestmentBank(NIB).AguaranteeagreementwiththeEIBgroupwassignedinMarch2022sothatcompaniesandprojectpromoterscanstartapplyingforfinancing.Guaranteeagreementswithotherimplementingpartnerswillfollowinthecourseof2022.Otherimplementingpartnershavebeenselectedthroughthecallforexpressionofinterest.Thefirstcallwasconcludedin2021.Guaranteeagreementnegotiationswiththeselectedotherimplementingpartnersareongoing.ComparedwithEFSI,InvestEUismoretargetedtospecificpolicyobjectives,throughitsfourpolicywindows.Itremainsamarket/demanddriveninstrumentbutwithastrongerpolicyfocus.TheInvestEUFundoperatesthroughthefollowingfourpolicywindowsthataretoaddressmarketfailuresorsub-optimalinvestmentsituationswithintheirspecificscope:•SustainableInfrastructurePolicyWindow,whichcomprisesinteraliathedeploymentofinnovativetechnologiesthatcontributetoEUenvironmentalorclimateresilienceorsocialsustainabilityobjectivesandthatmeetEUenvironmentalorsocialsustainabilitystandards(EUR9.9billion);•Research,InnovationandDigitisationPolicyWindow,whichcomprisesresearch,productdevelopmentandinnovationactivities,thetransferoftechnologiesandresearchresultstothemarkettosupportmarketenablersandcooperationbetweenenterprises,thedemonstrationanddeploymentofinnovativesolutionsandsupportforthescalingupofinnovativecompanies,anddigitisationofEUindustry(EUR6.6billion);•SMEPolicyWindow,whichcomprisesaccesstoandavailabilityoffinanceprimarilyforSMEs,includingforinnovativeSMEsandSMEsoperatingintheculturalandcreativesectors,aswellasforsmallmid-capcompanies(EUR6.9billion);and•SocialInvestmentandSkillsPolicyWindow(EUR2.8billion).TheInvestEUFund,withitsfourprioritypolicywindows,hasastrongfocusonfinancinginvestmentsthathaveapositiveclimateimpact.TheSustainableInfrastructurePolicyWindowsupportsinvestmentsinsustainableindustrialapplicationswhichhelpreducegreenhousegasemission.TheResearch,InnovationandDigitisationPolicyWindowsupportsnewenvironmentallysustainabletechnologiesthatleadtothereductionof155InvestEUProgrammestatement.156https://europa.eu/investeu/investeu-fund/frequently-asked-questions-about-investeu-fund_en.93greenhousegasemissionsofindustries.Bothpolicywindowsarerelevantforlow-carbontechnologies.TheInvestEUguidelinesindicateundertheSustainableInfrastructurePolicyWindowthat“supportfromtheInvestEUwillalsopromotethedeploymentoflow-emissiontechnologies:projectsthatincludecarboncapture,transport,storageand/oruse(CCUS)technologiesandinfrastructurefortheproductionofrenewableelectricity,heatandcold,low-carbongases(suchashydrogen)orindustrialprocesses,aswellasbio-energyplantsandmanufacturingfacilitiesenablingtheenergytransition,orcarbonremovals”157.TheInvestEUFundfeaturestheoptionofestablishingMemberStatecompartmentsforeachpolicyarea,meaningthatEUcountriesmayaddtotheEUguarantee'sprovisioningbyvoluntarilychannellingapartoftheircohesionpolicyfundstothesecompartments.Inthisway,EUcountriesbenefitfromtheEUguaranteeanditshighcreditrating,givingnationalandregionalinvestmentsmorefirepowerandhighermultiplyingeffect.IntheMembersStatecompartments,EUcountriescanalsouseInvestEUasatooltoimplementtheirrecoveryandresilienceplansundertherecoveryandresiliencefacility,iftheysowish.ThereinforcedimplementationofInvestEUthroughnationalpromotionalbanksmightyieldopportunitiesforfuturesynergieswithnationalfundschannelledbythesamebanks.TheEIBalsofinancesresearchanddevelopmentoflow-carbontechnologiesthroughitsownresources.In2021,theshareofEIBinvestmentsthatwenttoclimateactionandenvironmentalsustainabilityprojectsamountedtoEUR27.6billion158.InnovationFundTheInnovationFundwillprovidearoundEUR25billionofsupportovertheperiod2020-2030,dependingonthecarbonprice(atEUR50/tCO2),forthecommercialdemonstrationofinnovativelow-carbontechnologies,aimingtobringtothemarketindustrialsolutionstodecarboniseEuropeandsupportitstransitiontoclimateneutrality.TheFundisfinancedbyauctioningofasmallpartofemissionallowancesfromtheEU’sEmissionsTradingSystemandanyunspentfundsfromtheNER300programme.Thegoalistohelpbusinessesinvestincleanenergyandindustrytoboosteconomicgrowth,createlocalfuture-proofjobsandreinforceEuropeantechnologicalleadershiponaglobalscale.Thisisdonethroughcallsforlargeandsmall-scaleprojectsfocusingon:•innovativelow-carbontechnologiesandprocessesinenergy-intensiveindustries,includingproductssubstitutingcarbon-intensiveones;•carboncaptureandutilisation(CCU)andcarboncaptureandstorage(CCS);•innovativerenewableenergygeneration;and•energystorage.157InvestEUinvestmentguidelines.158EuropeanInvestmentBank,EIBclimateactionexplained,https://www.eib.org/en/about/priorities/climate-action/explained/index.htm94AsthesuccessoroftheNER300programme159,theInnovationFundimprovesrisk-sharingforprojectsbygivingmorefundinginamoreflexiblewaythroughasimplerselectionprocessandisalsoopentoprojectsfromenergy-intensiveindustries.Itoperatesviagrantsforlarge-scaleandsmall-scaleprojects.InnovationFundLarge-scaleprojectsTheresultsofthefirstcallforlarge-scaleprojectswerepublishedinNovember2021.Sevenprojectsaimingtobringbreakthroughtechnologiestothemarketinenergy-intensiveindustries,hydrogen,carboncapture,useandstorageandrenewableenergywerepre-selectedforgrantagreementpreparations.GrantsforEUR1145millionwillbeawardedforthesevenprojectsinthefirstquarterof2022.Theseprojectsare:•inSweden,toentirelyeliminategreenhousegasemissionsfromsteelproductionbyusingrenewablehydrogeninGällivareandOxelösund(Hybritproject);anotherprojectonbio-energycarboncaptureatacombinedheatandpowerplantandstorageinNorthSea,thuscreatingnegativeemissions;•inFinland,todemonstratetwowaysofproducinglow-carbonhydrogenatarefineryinPorvoo,throughrenewableenergyandbycapturingCO2andpermanentlystoringitintheNorthSea;•inFrance,tocaptureunavoidableemissionsinacementplantandinpartstoretheCO2geologicallyintheNorthSeaandinpartintegrateitintoconcrete;•inBelgium,todevelopacompletecarboncapture,transportandstoragevaluechaininthePortofAntwerpsoastoreduceemissionsintheproductionofhydrogenandchemicals;•inSpain,toproducebio-basedmethanolfromnon-recyclablemunicipalwaste;and•inItaly,onbifacialheterojunctionphotovoltaiccellsproductionatgigawattscale.Theseprojectswillthereforecovermostofthetechnologicalpathways,withtheexceptionofenergystorage,includedinthescopeoftheInnovationFund.Thesesevenprojectstogetherhaveapotentialtoavoid72.8megatonnesCO2-equivalentoverthefirst10yearsofoperation.TheInnovationFundwillprovidefundingforthedemonstrationplantoftheSwedishHybritproject,whoseinitialR&DstageswerepartlyfundedbytheSwedishgovernment.TheCleanSteelPartnershipwillalsoprovidefundingtoaddressthegapatdemonstrationstages.Lookingatthefullpipelineofprojects311proposalsweresubmittedforthecalland70best-rankingproposalswereinvitedtothesecondstageofthecall.Thisshowsthatthereishighdemandforfinancinginnovativelow-carbontechnologiesatthestageofcommercial159TheNER300isafundingprogrammeforinnovativelow-carbonenergydemonstrationprojectsintheEUlinkedtorenewableenergytechnologiesandenvironmentallysafecarboncaptureandstorage(CCS)onacommercialscale.TheprogrammeisfundedfromthemonetisationofemissionallowancesfromtheNewEntrantsReserve.Intotal,39projectshavebeenawardedEUR2.1billionoffundingin20MemberStates.Projectsareatdifferentstagesbut23werewithdrawnduetodifficultiesinraisingsufficientequityand/orattractingadditionalfinancialsupport.ThesewithdrawalsledtoareleaseofalmostEUR1.5billion.TheamendedNER300DecisionallowedtoreinvestEUR708.7millionofunusedfundsthroughtheexistingfinancialinstruments:theInnovFinEnergyDemonstrationProjects(InnovFinEDP)andtheCEFDebtInstrument,bothmanagedbytheEIB.TheremainingunspentfundswillbechannelledtotheInnovationFundwiththeperspectiveoffullallocationofundisbursedfundsbytheendof2022.95deployment.UndertheETSrevisionproposal,theCommissionproposedanincreaseintheresourcesavailableundertheInnovationFund,largersectoralscopeandtoexplorecompetitivebiddingfortheallocationofsupport.TheCommissionlaunchedthesecondcallforlarge-scaleprojectson26October2021,withadeadlinefor3March2022andabudgetofEUR1.5billion,whichisincreasedby50%comparedwiththepreviouscall.InnovationFundSmall-scaleprojectsAtotalof30projectssignedtheirgrantagreements160underthefirstcallforsmall-scaleprojects.Theywillimplementinnovativetechnologiesfocusingonthedecarbonisationofenergy-intensiveindustries(ironandsteel,biofuelsandbiorefineries,pulpandpaper,refineries,non-ferrousmetals,glass,ceramicsandconstructionmaterial,hydrogen)andtheenergysector(innovativeproductionanduseofrenewableenergyorstoragesolutions).Thesecondcallforsmall-scaleprojectswaslaunchedinMarch2022withabudgetofEUR100millionandsubmissiondeadlineinAugust2022.InnovationFundgrantscanbecombinedwithfundingfromothersupportprogrammes,forexample:•InnovFinEnergyDemoProjects•ConnectingEuropeFacility•Horizon2020andHorizonEurope•InvestEU•ModernisationFund•JustTransitionFund•EuropeanInnovationCouncil(EIC)•PrivatecapitalInviewofcreatingsynergieswithotherinstruments,theInnovationFundcanscale-uptocommercialsizecleantechinnovationsdevelopedatearlystagebytheEIC,Horizon2020andHorizonEuropewithitspartnerships,orMemberState'sR&Dprogramme.TheinfrastructurepartcanbesupportedbyConnectingEuropeFacility,MemberState’sprogrammeorInvestEUguarantee161.BreakthroughEnergyCatalystpartnershipTheEU-Catalystpartnership,launchedon3November2021,isanexampleofanewblendingapproach(BillGatesFoundationCatalyst,HorizonEuropeandInnovationFund)withtheobjectivetoacceleratethedeploymentoflowcarbonbreakthroughtechnology.DGCLIMA,DGR&I,DGENER,EIBandCatalysthaveworkedtogetherandacallforproposalswaslaunchedon11January2022forlarge-scaledeepgreentechprojectsbasedinEurope.Therequestwilltriggerinvestmentsinaportfolioofhigh-potentialprojectsintheareasofcleanhydrogen,sustainableaviationfuels,directaircapture,andlong-durationenergystorage.ThepartnershipwillmobiliseUSD1billion(aroundEUR820million)between2022and2026toacceleratethedeploymentandcommercialisationofinnovativetechnologies.EUfundingfortheEU-CatalystpartnershipcomesfromHorizon160https://ec.europa.eu/clima/eu-action/funding-climate-action/innovation-fund/small-scale-projects_en161innovation_fund_cumulation_public_en.pdf(europa.eu).96EuropeandtheInnovationFund,managedunderInvestEU,creatingadditionalsynergies.Eacheuroofpublicfundsisexpectedtoleveragethreeeurosofprivatefunds.ModernisationFundTheModernisationFundisadedicatedfundingprogrammetosupport10lower-incomeMemberStatesintheirtransitiontoclimateneutralitybyhelpingtomodernisetheirenergysystemsandimproveenergyefficiency.ThebeneficiaryMemberStatesareBulgaria,Croatia,Czechia,Estonia,Hungary,Latvia,Lithuania,Poland,RomaniaandSlovakia.TherevenuesoftheModernisationFundcomefromtheauctioningofETSallowancesfor2021-2030.TheModernisationFundsupportsinvestmentsin:generationanduseofenergyfromrenewablesources;energyefficiency;energystorage;modernisationofenergynetworks,includingdistrictheating,pipelinesandgrids;andjusttransitionincarbon-dependentregions:redeployment,re-skillingandupskillingofworkers,education,job-seekinginitiativesandstart-ups.IndustrycanbenefitfromtheModernisationFundiftheirinvestmentsfallintothecategory‘energyefficiency’or‘RESproductionoruse’.LIFECleanEnergyTransitionsub-programmeBuildingonthesuccessoftheHorizon2020EnergyEfficiency(2014-2020)programmes,theLIFECleanEnergyTransitionsub-programmecontinuestosupportthedeliveryofEUpoliciesinthefieldofsustainableenergy.IthasabudgetofnearlyEUR1billionovertheperiodof2021-2027andaimsatfacilitatingthetransitiontowardsanenergy-efficient,renewableenergy-based,climate-neutralandresilienteconomybyfundingcoordinationandsupportactionsacrossEurope.Theprogrammefinancesnetworks,whichprovidesupportservicesfortheuptakeofcleanenergytechnologies.COSMECOSME,theEUprogrammefortheCompetitivenessofSmallandMedium-SizedEnterprises,ranfrom2014to2020withabudgetofEUR2.3billion.AccordingtotheCOSMEdatahub162,EUR3.3millionhasbeenallocatedtoprojectswiththekeyword“low-carbon”.Inthe2021-2027period,theprogrammehasbeenincorporatedtoInvestEUandtheSMEsPolicyWindow.The‘IdeasPoweredforbusinessSMEFund’The‘IdeasPoweredforbusinessSMEFund’isanewgrantschemedesignedtohelpEUSMEsintellectualpropertyrights.TheSMEFundisaCommissioninitiativeimplementedbytheEuropeanUnionIntellectualPropertyOfficeandwillrunfrom10January2022to16December2022.ItcouldhelpSMEstotaketheleadinnewlow-carbontechnologiesbysupportingtheprotectionoftheirinventions.DECENTRALISEDFUNDS(SHAREDMANAGEMENT)OverhalfofEUfundingischannelledthroughthefiveEuropeanStructuralandInvestmentfunds(ESIF).TheyarejointlymanagedbytheEuropeanCommissionandtheEUcountries.Theselection,monitoringandevaluationofprojectstobefinancedareperformedby162https://cosme.easme-web.eu/?mode=7#.97MemberStatesandtheirregions.ThepurposeofthesefundsistoinvestinjobcreationandasustainableandhealthyEuropeaneconomyandenvironment.TheESIFmainlyfocusonfiveareas:researchandinnovation;digitaltechnologies;supportingthelow-carboneconomy;sustainablemanagementofnaturalresourcesandsmallbusinesses.RegionsareencouragedtouseESIFtocontributetoreinforcingtheinnovationeco-systembothintheupstreamand/ordownstreamoftheinnovationprocessorthevaluechain.ESIFcansupportinnovationbybuildingcapacity,suchasR&Iinfrastructure,equipmentandskills–pre-conditionsforsuccessfulengagementinsubsequentR&Iactivities(upstreaminvestments).Moreover,ESIFcancomplementHorizon2020andHorizonEuropeinitiatives,whichareusuallymorefocusedinbasicandappliedresearch,byprovidingfinancialsupportfortechnologydevelopmentortolaunchproductsinthemarket(downstreaminvestments).TheEuropeanRegionalDevelopmentFund(ERDF),whichpromotesbalanceddevelopmentinthedifferentregionsoftheEU,isoneoftheESIFfunds.Ithasfinancedlow-carbontechnologiesprojectsin2014-2020andwillcontinuetodosointhisprogrammingperiod.UndertheERDF,thenewInterregionalInnovationInvestment(I3)enablesthecommercialisationandscale-upofinterregionalinnovationprojects,whichcouldincludelow-carbontechnologiesprojects.TheJustTransitionFund(JTF)willalsofinancethedecarbonisationoftheindustry,withinitsressources.EuropeanRegionalDevelopmentFund(ERDF)in2014-2020Thefollowinganalysisonlow-carbonindustrialtechnologiesprojectsunderERDFin2014-2020isbasedonthemostrecentreleaseoftheJRC-WIFOERDFdatabase163.Thisdatabasecomprisesaround600000observationsonERDFprojectbeneficiariesduringthe2014-2020period,providingauniquecoverageandlevelofdetailsontheERDFoperations.Bymeansoftextanalysistechniques,itispossibletoextractrelevantinformationontheterritorialallocationofbeneficiaries,projectsandinvestmentsunderthedifferentareasrelevanttothebroadcategoryoflow-carbonindustrialtechnologies.4.9.1.MainresultsoftheERDFAround14%oftotalERDFfundingintheprogrammingperiod2014-2020islinkedtoprojectsrelatedtolow-carbonindustrialtechnologies,whichrepresentsEUR26.5billionofEUco-funding.Theaveragesizeofprojectsunderthelow-carboncategory(EUR527000)aremuchbiggerthanthoseclassifiedoutsidethiscategory(EUR298000).16%oflow-carbonprojectfundingisassociatedwithR&Ifunding(EUR4.3billion),ofwhich13%aretransnationalandinterregionalcooperationprojects(EUR549million)undertheInterregprogramme.R&Iprojectsarerelatedtothedevelopmentandimplementationoftechnologieswithafocusonlowcarboneconomy.Non-R&Iprojectsaremainlyassociatedwithcapacitybuilding(e.g.energyandenvironmentalinfrastructuresandbusinessdevelopment)tosupportclimatechangeobjectives(seeFigure60).163https://publications.jrc.ec.europa.eu/repository/handle/JRC127403.98Figure60Low-carbonindustrialtechnologiesprojectsoverthetotalERDFprojects,2014-2020,EU27+UK,byinnovationandcooperationtypologiesNote:Projectsrelatingtolow-carbontechnologieswereidentifiedthroughtextanalysis.TheclassificationofResearch&InnovationprojectsisassociatedwiththeERDFinterventionfields.Interregreferstotransnationalandinterregionalcooperationprojects.Source:JRC-TerritorialDataAnalysisandModelling(TEDAM)analysisbasedonJRC-WIFOdatabase.Chemicals-relatedprojectsaccountformorethansteel-andcement-relatedprojects.TheformerhavearelativelysmalleraveragefundingsizeandarealmostequallydividedintoR&Iandnon-R&Iinvestments.Incontrast,steel-andcement-relatedprojectsunderERDFarealmostentirelyR&Irelated(seeFigure61).Figure61Low-carbonindustrialtechnologiesbyindustry,2014-2020,EU27+UKNote:Projectsrelatingtolow-carbontechnologieswereidentifiedthroughtextanalysis.TheclassificationofResearch&InnovationprojectsisassociatedwiththeERDFinterventionfields.Source:JRC-TEDAManalysisbasedonJRC-WIFOdatabase.Intermsofgeographicalpatterns(seeFigure62),therelativeshareoffunding(left)andbeneficiaries(right)oflow-carbonprojectsoverthetotalERDFregionalallocationallowstoidentifyspecialisationpatternsacrossEurope.Indeed,arelativelyhighersharetowardslow-carbonprojectsseemstoappearincentralandeasternEurope(aswellasintheUK)overtheperiod2014-2020.99Figure62Specialisationpatterns:EUregionsinvestingERDFco-fundinginlow-carbonindustrialtechnologies,2014-2020,EU27+UK%oftotalEUfundinginlow-carbontechnologies%oftotalprojectbeneficiariesinlow-carbontechnologiesNote:Projectsrelatingtolow-carbontechnologieswereidentifiedthroughtextanalysis.Source:JRCTEDAManalysisbasedonJRC-WIFOdatabase.Thefundingintensity,measuredbytheamountofERDFpercapitaassociatedwithlow-carbonprojects(Figure63-left),showsahighervolumeinsomeregionsofCroatia,Greece,Poland,RomaniaandLithuania.ConcerningtheshareofR&Ifundingoftheseprojects(Figure63-centre),theyarehigherinsomeregionsofBelgium,UKandtheNetherlands.TheR&Ifundingintensityoflow-carbonprojects,expressedinpercapita(Figure63-right),appearstobemoreconcentratedinsomeregionsofUK,PolandandFinland.Figure63Fundingintensity:EUregionsinvestingERDFco-fundinginlow-carbonindustrialtechnologies,2014-2020,EU27+UK,TotalandR&IFunding(EUR)inlow-carbonpercapitaFundinginlow-carbon(%R&I)R&Ifunding(EUR)inlow-carbonpercapitaNote:Projectsrelatingtolow-carbontechnologieswereidentifiedthroughtextanalysis.TheclassificationofResearch&InnovationprojectsisassociatedwiththeERDFinterventionfields.Source:JRCTEDAManalysisbasedonJRC-WIFOdatabase.100R&Ilow-carbonindustrialtechnologiesprojectsinchemicalsindustriesareconcentratedinEUregions/countries(Figure64).Forinstance,theintensityofR&IfundspercapitaisparticularlyhighinsomeregionsofPoland,HungaryandFinland(Figure64–left).Furthermore,theshareofR&Iprojectsinchemicalsindustries(Figure64–right)is100%(orcloseto)inmostregionswithlow-carbonprojectsinthisspecificindustry.Figure64EUregionsinvestingR&IERDFco-fundinginlow-carbonindustrialtechnologies,2014-2020,EU27+UK,inchemicalsindustryR&Ifunding(EUR)inlow-carbonpercapitainchemicalsindustryFundinginlow-carboninchemicalsindustry(%R&I)Note:Projectsrelatingtolow-carbontechnologiesinchemicalsindustrywereidentifiedthroughtextanalysisandtheNACEcodeofthebeneficiaries(manufacturingindustriesrelatedtochemicalswithprojectsinlow-carbontechnologies).TheclassificationofResearch&InnovationprojectsisassociatedwiththeERDFinterventionfields.Source:JRCTEDAManalysisbasedonJRC-WIFOdatabase.4.9.2.MatchingemissiondataandERDFallocationsforlow-carbonprojectsDataindicatesthatthemostCO2intensiveMemberStatesarenotnecessarilytheonesinvestingmostfundsintolow-carbonprojectsthroughERDFallocations.Assuch,whilethemostCO2intensivecountriesareBelgium,Slovakia,AustriaandFinland,thehighestshareoflow-carbonprojectsfromERDFisobservedinCroatia,Bulgaria,LatviaandtheNetherlands.Atthesametime,whileEstoniahasasignificantlyhigherthanEUaverageCO2intensitypercapita,itspendsthelowestshareofERDFonlow-carbonprojectsintheEU.Onthecontrary,LatviaregistersthelowestCO2intensitypercapitaintheEU,butitallocatesthethirdhighestshareoflow-carbonprojectswithinitsERDFallocation.101Table7EIIinstallations’CO2emissions&shareoflow-carbonprojects(%totalERDF)inEUMemberStatesCountryCO2emissionsfromEIIpercapitaLow-carbonprojects(%totalERDFamount)CountryCO2emissionsfromEIIpercapitaLow-carbonprojects(%totalERDFamount)Belgium2.712%Spain1.212%Slovakia2.420%Sweden1.25%Austria2.412%Croatia1.233%Finland2.321%Portugal1.06%Netherlands2.225%Italy1.08%Luxembourg2.120%Poland1.018%Lithuania1.821%Ireland1.021%Estonia1.72%France0.910%Czechia1.64%Bulgaria0.927%Germany1.58%Slovenia0.95%Cyprus1.44%Romania0.818%Greece1.318%Hungary0.84%EU27average1.314%Denmark0.713%Latvia0.526%Note:ERDFprojectsrefertotheperiod2014-2020andCO2emissionstotheyearof2018.MaltaisnotreportedinthetablebecausetherearenofacilitiesoftheEIIinthecountrycoveredbytheETS.Source:JRCcalculationsbasedon:MarquesSantos,A.;Reschenhofer,P.;Bachtrögler-Unger,J.;Conte,AandMeyer,N.(2022).MappingLow-CarbonIndustrialTechnologiesprojectsfundedbyERDFin2014-2020.TerritorialDevelopmentInsightsSeries,JRC128452,EuropeanCommission.4.9.3.NationalandregionalSmartSpecialisationStrategies(2014-2021)SmartSpecialisationisaplace-basedapproachcharacterisedbytheidentificationofstrategicareasforinterventionbasedbothontheanalysisofthestrengthsandpotentialoftheeconomyandonanEntrepreneurialDiscoveryProcesswithwidestakeholderinvolvement.Itisoutwardlookingandembracesabroadviewofinnovationincluding,butcertainlynotlimitedto,technology-drivenapproaches,supportedbyeffectivemonitoringmechanisms.SmartSpecialisationStrategieshavebeenanintegralpartofcohesionpolicyinthemultiannualfinancialframework2014-2020,asanex-anteconditionrelatedtoR&DERDFinvestments.EUMemberStatesandregionshavedevelopedover120SmartSpecialisationStrategies(S3),drivingresearchandinnovationinvestmentsofoveralloverEUR40billionprovidedbytheEU(EUR68billionincludingnationalco-financing).Thesestrategieshavebeenimplementedbynationaland/orregionalmanagingauthoritiesthroughcollaborativeprocessesinvolvingstakeholders,suchasuniversitiesandotherresearchandhighereducationinstitutions,businesses,industryandsocialpartners.Inthefollowingsection,theterritorialspreadofsmartspecialisationprioritiesrelatedtosteel,chemicalsandenergywillbeconsidered.Notethatinformationonnationalandregionalprioritiesshouldbeconsideredtogetherwithactualspendingonthosepriorities,ascallsimplementingthesmartspecialisationstrategiesusuallyaddressallprioritiesinacertainterritoryjointly(Gianelleetal,2020)164.164CarloGianelle,FabrizioGuzzo&KrzysztofMieszkowski(2020)SmartSpecialisation:whatgetslostintranslationfromconcepttopractice?,RegionalStudies,54:10,1377-1388,DOI:10.1080/00343404.2019.1607970.102S3Territorialstrategiestargetingsteel,chemicalsandenergy•SteelandmetalWhenconsideringterritorieswithtraditionalheavyindustries,suchassteelandmetalamongthecoreactivities,theirprioritiesoftenrefertothedevelopmentandadoptionofnewtechnologies,capacitiesandprocessesaddressingsustainabilityandcompetitiveness.Figure65Regionswithprioritiesonsteel,metalandotheractivitiesrelatedtometalSource:JRCbasedondatafromDGREGIO/Prognos,2021.TwoEuropeanRegions,NorthernOstrobothniaandPrincipadodeAsturias,havechosen‘Steel’asthehigherleveloftheirspecialisationstrategies.Additionally,11regionsconsidermetalindustriesamongtheirmainlevelprioritiesand43othershave,indifferentways,includedmetalindustriesinthedescriptionofactivitiesincludedintheirprioritisationprocess.InFinland,Oulu165intheNorthernOstrobothniaregionisaclearexamplewheretheobjectiveofinnovationistodecreasethecarbonfootprintofthemetalindustryandtoimproveitsglobalcompetitivenessbyintegratingtheprinciplesofdigitalisation.Itsresearchprogrammeisbuiltaroundsteelrefinementchains.Thekeytechnologyinvolvescorrosion-andwear-resistantsteelsanddurableandlightweightsteels,andtheirapplicationinvariousproductsolutionsrelatedto,forexample,themaritimeindustryandoffshoreoperations.Cooperationisextensiveandwellnetworked.AnotherinterestingregionalexampleistheRIS3ofAsturias,withopeninnovationcentredonanintegratedprocessofsteelproduction(seeBox12).165OuluRegion’sSmartSpecialisation.103•ChemicalsChemicalinnovationsareimportantformanydownstreamindustriesandfostersolutionsforsocietalchallengessuchasenvironmentalprotection,energy,andnewmaterials.‘Chemicals’or‘chemistry’hasbeenmentionedaspartoftheprioritiesof66Europeanregions,and7countriescontainthisdomainamongthedetailsofthedescriptionoftheirsmartspecialisationstrategies.Figure66indicatestheregionswithprioritiesonchemistryandotheractivitiesrelatedtochemicals.Figure66RegionswithprioritiesonChemistryandotheractivitiesrelatedtoChemicalsSource:JRCbasedondatafromDGREGIO/Prognos,2021.166AllprojectsfundedunderASTURIASRIS3canbefoundathttps://www.idepa.es/innovacion/asturias-ris3dulyclassifiedbypriorityandtopic.167https://www.idepa.es/documents/20147/67715/dipticoris3steel.pdf/2e5e487d-12ee-6872-1dc4-c036a57ac1fa.SE224SE232FI1D5FI1D2FI1C1FRM0RO21RO11RO41FRD2FRD1FRH0ES52ES13ES12ES21ES30ES43ES51FRB0FR10PL81PL63PL41PL21PL51PL52PL42FRK2PL84PL72PT11PT17PT18EL54FRC1FRE2FRE1FRF3FRF1FRJ1FRJ2ITC4ITC1FRI3FRI1FRI2ITF1DEDDEBDE7DEANL4NL3DECDEEBE3BE1BE2DEFITI2ITI1PriorityChemistry/ChemicalPrioritycontentrelatedtoChemistryFRY2FRY3FRY4©GISCO©OpenStreetMapcontributorsCanariasGuadaloupeMartiniqueGuyaneMayotteRéunionAçoresMadeiraBox12OPENINNOVATIONINSTEEL–THEASTURIASEXPERIENCEPrincipadodeAsturias,inSpain,hasbeenhistoricallyasteelproductioncentre.ThemanufactureofsteelinAsturiasisresponsibleforthecontemporaryindustrialprofileoftheregion.ArcelorMittalAsturiasistheonlysteelplantinSpainwheretheintegralprocessofsteelproductioniscarriedout.Downstream,thebranchofmanufactureofmetalproductsregistersthegreatestvolumeofemploymentandcompaniesoftheregion’smanufacturingsector.Asturias’2014-2020RIS3Priority‘AsturiasIndustrialSteelHub’hasdefinedtwomainobjectives:diversificationforthemarketsbyR&Dandindustrialleadershipthroughtechnology.Totheseaims,ERDFAsturiasOPhasfundedgrantsdirectedtowardstheexecutionofdifferentialorleadingR&D&Iprojects166andPrimasProofofConceptProgramme167.TheR&DCentreofArcelorMittalisdevelopinganinfrastructure,knownastheSteelSquare(S2)project,thatconsistsofanintegralsteelprocessreproductionthroughpilotplants.Thisprojectwillbeanopeninnovationsetoffacilitiesforpromotingastepforwardinthesteelvaluechain.Tofosterthisfacility,inthe2014-2020frameworktheproject‘AsturiasIndustrialSteelHub’wascarriedout,co-fundedbyERDF,aimingattheformalisationofaclusterfocusedonthedevelopmentofR&Dactivitiesfortheimprovementofproductsandprocessesassociatedwithsteel.104AninterestingillustrationisthesmartchemistryspecialisationstrategyofSaxony-Anhalt(seeBox13).•EnergyEnergyisthemostpopularpriorityinS3.Mostoftheterritoriesthatmentionenergyintheirprioritiesarefocusingondevelopingprocessesandenvironmentaltechniquesfortheenergytransition.Numerousregionsandcountriesmentionfuelsasasustainableoptionamongthecontentsoftheirprioritiesrelatedtoenergy.ThreeFrenchregionsconsiderhydrogenasaRIS3priority.ItisalsointerestingtonotethattwoFrenchregionshaveprioritisedsystemsdesignforenergystorage.Atnationallevel,therearealsocountrieswithselectedChemical,SteelandEnergyprioritiesdomains,asillustratedinFigure67.Figure67CountrieswithprioritiesrelatedtoChemistry,SteelandOtheractivitiesrelatedtometalandEnergySource:JRCbasedondatafromDGREGIO/Prognos,2021.168SmartChemistrySpecialisationStrategy.FinalBrochureofPhase1.Box13SMARTCHEMISTRYSPECIALISATIONSTRATEGYOFSAXONY-ANHALTTheRIS3Saxony-Anhalthasdefinedthechemistryandbioeconomysectorsasanimportantinnovationpriority.Tosupportthedevelopmentoftangibleinnovationprojects,atechnologyroadmaphasbeenimplemented.Afirstestimationofinvestmentcostsisalsoincluded.Over100stakeholdershavebeeninvolvedinthisprocess.Aquestionnairewasdevelopedandcompletedinordertoidentifytheneedsoftheinnovationplayers.Thefinaltechnologyroadmapcontainedseveralinnovationprojectproposalsforeachsub-themewithadescriptionofthepartnership,thematicfocusandfinancialestimates.TheseresultshavebeendiscussedandadoptedincoordinationwiththeMinistryoftheEconomy,ScienceandDigitalisation.Basedontheroadmap,thecompaniesandresearchentitieshavedevelopedspecificprojectapplicationstobefundedbyERDF168.1054.9.4.Smartspecialisationplatformsandlow-carbontechnologiesBuildingontheinternationaldimensionofSmartSpecialisationandbasedontheirlocalpriorities,EUregionshavesetuppartnershipsonareasofcommoninterestandjoinedforcestoexploitcomplementarystrengthsacrossEuropeandbuildsynergieswithotherregional,nationalandEUnetworksandinitiatives.ThoseEUregionsarecommittedtoenhancingthedevelopmentofEUvaluechainsinnewgrowthareas,andtogeneratingapipelineofinvestmentprojectsimplementedbyusinginterregionalcooperation,clusterparticipation,andtheinvolvementofindustry.Some37interregionalS3partnershipsarerunningunderthethreethematicS3platformsonAgri-Food,EnergyandIndustrialModernisation,withalmost200territoriesparticipating(atcity,local,regionalorcountrylevel),frommorethan30differentEUandnon-EUcountries,engagingdifferenttypologiesofstakeholdersbothfrompublicandprivatesectors169.S3IndustrialModernisationpartnershipsAlmost150regionsandcountrieshaveengagedin24interregionalpartnerships,withsharedS3priorities,intendingtodevelopinvestmentprojectsforindustrialmodernisation.•ChemicalsThemainobjectiveofthispartnershipisthemodernisationofthechemicalindustrytoasustainable,energy-andresource-efficientsectorthatisgloballycompetitiveandthatprovidesinnovativesolutions.LedbytheregionsofLimburg(Netherlands)andLombardy(Italy),thispartnershipcountsontheparticipationofCatalonia(Spain),CentralOstrobothnia(Finland),Mazowieckie(Poland),Saxony-Anhalt(Germany),Ustiregion(Czechia)andWallonia(Belgium).Withinthispartnership,theInterregEuropeproject‘SmartChemistrySpecialisationStrategy’(S3Chem)170hasbeendeveloped.From2016to2021,theregionscooperatedtostrengthensmartspecialisationstrategiesinthechemicalandbioeconomysectors.TheS3ChemprojecthaslookedatdifferentdimensionsfortheimprovementofERDFpolicyinstruments:betterinvolvementofregionalstakeholdersandgovernance,projectgeneration,fundinginstruments,andevaluationandmonitoring.Basedongoodpracticesidentifiedinseveralregions,aninterregionallearningprocesshasbeeninitiated.Afterthreeyearsofintensiveexchangeofexperience,thepartnersdevelopedanactionplanthatdescribesfurtherconcreteactionstoimprovetheirpolicyinstrumentsforthepromotionofinnovationinthechemicalandbioeconomysectors.•MetalThereisonerelevantinterregionalpartnershiprelatedtometalmachinery,equipment:SustainableManufacturing,ledbyAuvergneRhone-Alpes(France),Catalonia(Spain)andLombardy(Italy).ItisapilotprojectbornintheframeworkoftheVanguardInitiative.Itisfocusedontechnologiesthataimatincreasingthroughput,quality,andenvironmentalandsocialsustainabilityofmanufacturingactivitieswhilereducingcosts.Reducingemissions,energy,resourcesandmaterialsconsumptionandincreasingtheinclusionofhumanpeopleinfactoriesarealsotargetsofthispartnershipof18regions.S3EnergyandtheSmartSpecialisationPlatformonEnergy(S3PEnergy)S3PEnergypromotesactivitiesforachievingasharedvisiononknowledge-basedenergypolicy,accompanyingEuropeanterritoriesintheimplementationofenergy-related169https://s3platform.jrc.ec.europa.eu/s3-thematic-platforms170https://www.interregeurope.eu/s3chem/106innovationstrategiesandsupportingthemwiththeappropriatemethodologicaldevelopmentandrelatedtools,withregardinparticulartobenchmarking,mutuallearningandinterregionalcooperation.ThegoalofS3PEnergyistosetupacollaborativeframeworkthatwillacceleratethedevelopmentanddeploymentofinnovativelow-carbontechnologiesintheEUintheframeworkofSmartSpecialisation.TheparticipatingregionsintheS3PEnergyInterregionalPartnershipsarepresentedinFigure68.ThelistofinterregionalpartnershipscreatedunderS3PEnergyare:•AdvancedMaterialsforBatteries,fullysupportedbyAllianceforBatteries,isledbyAndalusiaandCastilla-Leon(Spain),togetherwithSlovenia;•SustainableBuilding,ledbyAndalusia(Spain),NorthGreatPlain(Hungary)andNorth-Croatia(Croatia)withmorethan20regionsinvolved;•HydrogenValley,apartnershipthatinvolvesmorethan50regionsandisledbyAragon(Spain)andAuvergneRhoneAlpes(France);•SolarEnergy,ledbyAlentejo(Portugal)andExtremadura(Spain);•SmartGrids,ledbyBasqueCountry(Spain)andProvence-Alpes-Côted'Azur(France);and•Geothermal,ledbyScotland(UnitedKingdom)andTuscany(Italy).Figure68RegionsparticipatinginS3PEnergyinterregionalpartnershipsSource:S3thematicplatforms,https://s3platform.jrc.ec.europa.eu/s3-thematic-platforms.EuropeanRegionalDevelopmentFund(ERDF)in2021-2027In2021-2027,theEuropeanRegionalDevelopmentFund(ERDF)(EUR215.2billion)willcontinueenablinginvestmentsintoresearchandinnovationtodeveloportakeuplow-carbonindustrialtechnologiesunderitspolicyobjectives.TheaimistomakeEuropeand107itsregionsmorecompetitiveandsmarter-throughinnovationandsupporttoSMEs,anddigitisationanddigitalconnectivity-andgreener,low-carbonandresilient171.Basedontheirprosperity,allregionsandMemberStateswillfocustheirsupportonamorecompetitiveandsmarterEurope(firstpolicyobjective),aswellasgreener,low-carbontransitioningtowardsanet-zerocarboneconomyandresilientEurope(secondpolicyobjective),throughthemechanismknownas'thematicconcentration'.AllregionsandMemberStateswillconcentrateatleast30%oftheirallocationtobecomegreener,low-carbonandresilient.MoredevelopedregionsorMemberStateswilldedicateatleast85%oftheirallocationtobothobjectives;transitionregionsorMemberStateswillreserveatleast40%tothefirstobjectiveandlessdevelopedregionsorMemberStatesatleast25%.OperationsundertheERDFareexpectedtocontribute30%oftheoverallEUfinancialsupporttoreachclimateobjectives.TheInterregionalInnovationInvestments(I3)isanewfundinginstrumentundertheERDFregulation(EUR570millionfor2021-2027),implementedbytheEuropeanInnovationCouncilandSMEsExecutiveAgency(EISMEA).Itsupportsthecommercialisationandscaling-upofinterregionalinnovationprojectshavingthepotentialtoencouragethedevelopmentofEuropeanvaluechains,andcouldbeusedtodeploylow-carbontechnologiesacrossregions.JustTransitionFundTheJustTransitionFundisoneoftheelementsoftheJustTransitionMechanismforatransitiontowardsclimateneutrality.Itisimplementedundersharedmanagement,undertheoverallframeworkofcohesionpolicy.TheCommissionprovidesgrantstoMemberStateshavingidentifiedtheterritoriesexpectedtobethemostnegativelyimpactedbythegreentransition.TheJustTransitionFundsupportseconomicdiversificationandreconversionoftheterritoriesconcerned.Thismeans:•investmentsinSMEs;•creationofnewfirms;•researchandinnovation;•environmentalrehabilitation;•cleanenergy;•up-andreskillingofworkers;•job-searchassistance;and•transformationofexistingcarbon-intensiveinstallations.ItisexpectedtomobiliseclosetoEUR30billionininvestmentsfrom2021to2027.InordertounlockandimplementJustTransitionFundresources,MemberStatesarepreparingstrategicterritorialjusttransitionplans.Theseidentifytheeligibleterritoriesthatareexpectedtobethemostnegativelyimpactedbytheclimatetransition.Theterritorialjusttransitionplanshavetobepreparedtogetherwiththerelevantinternalpartners,indialoguewiththeCommission,andmustbeconsistentwiththesmartspecialisationstrategiesandNationalEnergyandClimatePlans.TerritorialjusttransitionplanshavenotyetbeenadoptedbyMemberStatesbutcompaniesandsectorsactiveinorcomprisingcarbon-intensiveindustrieswillbebeneficiariesoftheJustTransitionFundfortheirtransitiontolow-carbontechnologies.171OtherprioritiesaimtomakeEUregionsmoreconnected(mobility),moresocial,supportingeffectiveandinclusiveemployment,education,skills,etc.,andclosertocitizens.108SMEFocus5RELEVANCEOFPUBLICFUNDS&EU’SFRAMEWORKPROGRAMMESFORFINANCINGR&IFundingR&DactivitiesperformedbySMEsreliesontwomajorsources:fundsfromshareholdersandpublicfunds(60%)andcashflow(37%).Figure69ShareofR&DfinancesourcesSource:surveyontechnologydevelopers,conductedfromNovember2021toJanuary2022(seeAnnex1).SMEswerefurtheraskedtogivemoreinformationaboutthetypeofpublicfundsavailable.For64%ofthecompanies,nationaldirectfinancialsupportisthemostimportantfollowedbyprojectsfundedwithinEUR&Dprogrammes(33%).For29%ofcompanies,directfinancialsupportfromtheEUisthemostimportant,whilefor33%itisfundingfromnationalR&Dprogrammes.Figure70Shareofpublicfundingreceivedinthelast5yearsSource:surveyontechnologydevelopers,conductedfromNovember2021toJanuary2022(seeAnnex1).Respondentshavemostlyparticipatedinthe‘Horizon2020/HorizonEuropepartnerships’(29%).Themostrelevantprogrammesaccordingtorespondentsarethoseprovidedthrough‘theEITandKICs’(22%).However,38%oftherespondentsclaimednottohaveparticipatedinanyEUfundedprogramme.Thus,smalltechnologydevelopersare,asexpected,involvedinEUprogrammesmoreoftencomparedtotraditionalSMEs(seebelow).1095NationalinvestmentsandprogrammesThissectionistheoutcomeofaseriesofmeetingswithMemberStates’representativesundertheERAForumforTransition172,inasubgroup‘Industrialtechnologyroadmaps’createdinMarch2021.ThemeetingstookplacebetweenJuly2021andJanuary2022.Thesubgroupwascomposedof20MemberStates:Austria,Belgium,Denmark,France,Finland,Germany,Slovenia,Sweden,Netherlands,Poland,Spain,Slovakia,Ireland,Czechia,Estonia,Malta,Greece,Italy,Portugal,Bulgaria,plusNorwayasanassociatedcountry.Thisoverviewoftheexistinginitiativesfornationalsupportinresearch&innovation(R&I)towardsindustrialdecarbonisationisbasedontheanalysisof:•MemberStates’recoveryandresilienceplans(RRPs)undertherecoveryandresiliencefacility173;•theirnationalenergyandclimateplans(NECPs)submittedtotheEuropeanCommission;•theCommission’sassessmentoftheseRRPsandNECPs;•andtheownvoluntarycontributionfromMemberStates.Recoveryandresilienceplans&nationalenergyandclimateplans:MemberStates’actiontowardsclimateneutralityunderthescrutinyoftheCommissionTherecoveryandresiliencefacility(RRF)allowstheCommissiontoraisefundstohelpMemberStatesimplementreformsandinvestmentsthatareinlinewiththeEU’sprioritiesandaddressthechallengesidentifiedincountry-specificrecommendationsunderthe172TheERAForumfortransitionwasset-upasagovernancestructuretostartimplementingtherenewedERAstrategy.Thesub-grouponindustrialtechnologyroadmapswasoneofthreesub-groupsdedicatedtospecificactions.FollowingtheadoptionoftheERAPactonresearchandinnovationandtheERAPolicyAgenda.173TherecoveryandresiliencefacilityisatthecoreofNextGenerationEU,afinancialinstrumentthatallowstheCommissiontoraisefundstohelprepairtheimmediateeconomicandsocialdamagecausedbythecoronaviruspandemic.RRFiscloselyalignedwiththeCommission’stwintransition–thegreenanddigitaltransformationofeconomies.Figure71ShareofrespondentsinvolvedinEUprogrammesSource:surveyontechnologydevelopers,conductedfromNovember2021toJanuary2022(seeAnnex1).110EuropeanSemesterframeworkofeconomicandsocialpolicycoordination.ItmakesavailableEUR723.8billioninloansandgrantsforthatpurpose.MemberStates’RRPsareexpectedtoboostclimate-relatedinvestmentsbyatleastEUR177billion(whichrepresentsatotalof40%ofthetotalallocationingrantsandloans)andstrengthennecessaryreformsinordertosupporttheclimateandenergytransition174.InOctober2021,theCommissionapproved22RRPsthathaveallocated40%oftheirspendingtoclimatemeasures.Thisgoesbeyondthe37%climatetarget(mainlyintheareasofsustainablemobility,energyefficiencyinbuildingrenovation,renewableenergyandnetworks).About43%ofthisamount(EUR76billion)isdedicatedtoenergyefficiency175.However,itisexpectedthatthebulkofthefundswillgoonenergyrenovationsinprivatebuildingsandpublicinfrastructureandconstructionofbuildings,andonlypartwillcoverenergyefficiencyinindustry,includingSMEs.TheRRFismeanttoacceleratethegreentransitionofEuropeanindustry.Itwilldirectlytargetsustainableindustry(includingsupportschemesforindustryinkeygreenareas,industrialapplicationsofhydrogenandremanufacturingmeasures),butwillalsogobeyondthat.Investmentsinthecirculareconomy,renewableenergyandnetworkswillcontributetomoreresource-andenergy-efficientindustrialproduction.Hydrogen-relatedmeasures,whichmayprovideausefulindustrialfeedstockandareparticularlyrelevantforenergy-intensiveindustries,ortheconstructionofindustrialsitesusingrenewableenergyfallunderthecategoriesofrenewableenergy,R&Iandenergyefficiency,dependingonthetypeofmeasure.TheoverallvolumeofRRF-fundedR&IinvestmentisintheorderofEUR44billion,ofwhichabout37%taggedascontributingtothegreentransition.AlthoughthereisfurtherscopefordeepeningtheR&Ireformefforts,wealsoneedtoconsiderthedevelopmentanduptakeoflow-carbonindustrialtechnologies.Figure72Distributionofclimate-relatedinvestmentsinMemberStates’RRPsSource:ReportontheimplementationoftheRecoveryandResilienceFacilityCOM(2022)of1.3.2022.174StateoftheEnergyUnionReport2021.175SeeCOM(2021)952final,26October2021,ReportfromtheCommissiontotheEuropeanParliamentandtheCouncil.Progressoncompetitivenessofcleanenergytechnologies,p.6.Sustainablemobility;32%Climatechangeadaptation;6%Energyefficiency;29%Otherclimate-relatedinvestment(R&D&I,greenskillsandgreenjobsanddecarbonisationofindustry);6%Biodiversity,circulareconomy,sustainablewaterandpollutionpreventionandcontrol;13%Renewableenergyandnetworks;12%111AccordingtotheCommission’sanalysis176,6%oftheRRPsoveralladdressR&D&IingreenactivitiesundertheGreentransitionpillar.Figure73BreakdownofexpenditureintermsofclimateobjectivesperpolicyareaNote:Eachrecoveryandresilienceplanhastoincludeatleast37%oftheplan’stotalallocationsupportingclimateobjectives.Tothisend,theplanshadtospecifyandjustifytowhatextenteachmeasurecontributesfully(100%),partly(40%)orhasnoimpact(0%)ontheclimateobjectives.ThecontributionstoclimateobjectiveshavebeencalculatedusingAnnexVIoftheRRFRegulation.CombiningthecoefficientswiththecostestimatesofeachmeasureallowstheCommissiontoassesstowhatextenttheplancontributestothe37%climatetarget.Source:EuropeanCommission,RecoveryandResiliencescoreboard.Ingeneral,theRRPscomplementorarelinkedtotheNECPs177.TheseplansgiveanoverviewofhowMemberStatesareapproachingtheirtransitiontowardsclimateneutralityfor2021–2030innon-ETSsectorsacrossfiveareas:decarbonisation,energyefficiency,energysecurity,internalenergymarket,researchandinnovationandcompetitiveness,aswellasR&Iinsupportofthesepolicies.Low-carbontechnologiesusedinETSsectors(incl.energy-intensiveprocessindustries)arenotintheirfocus.TheCommission’soverallassessmentoftheNECPsin2020178concludedonresearch,innovationandcompetitiveness,thattherewasalackofdetailandunderlinestheimportanceoflinkingR&Ipoliciestomatchtheenergyandclimateambitions.Someprogressisnotedintermsofregionalcooperationandbylinkingenergyandclimatepoliciestoenvironmentpolicies,thoughthereisstillspaceforimprovement.InbothcasesoftheRRPsandNECPs,thelevelofdetailsprovidedbytheMemberStatesdosnotenabletheCommissiontoproperlymonitorandmapthenationalsupport,allthelesstheamounts,dedicatedtodevelopmentanduptakeoflow-carbontechnologies.TheEuropeannetworkofenergyagencies(EnR),currentlyunderthepresidencyoftheFrenchAgencyforecologicaltransition(ADEME),hasalsopublishedacomparativestudyontheroleoftheEuropeanenergynetworkagenciesintheimplementationofindustrydecarbonisationpublicpolicies179.Thestudyfindsoutthatnationalenergyagencieshaveawiderangeoftoolsattheirdisposal.Themainonesusedaregrants,R&Dandtraining176RecoveryandResilienceScoreboard(europa.eu)177Nationalenergyandclimateplans(NECPs);https://ec.europa.eu/info/energy-climate-change-environment/implementation-eu-countries/energy-and-climate-governance-and-reporting/national-energy-and-climate-plans_en.178EU-wideassessmentofNationalEnergyandClimatePlans,COM(2020)564final.179https://librairie.ademe.fr/energies-renouvelables-reseaux-et-stockage/5298-comparative-study-on-the-role-of-the-european-energy-network-agencies-in-the-implementation-of-industry-decarbonisation-public-policies.html.112programmes,databasemanagementandcommunicationscampaigns.Onethirdofagenciesarealsoconductingforecastingstudiesorimplementingcertificationprogrammes.ThestudyalsohighlightsthedrivingroleplayedbyEnR,establishingitselfasaplatformthatthevariousagenciescanuseforsharingknowledgeandgoodpractices,aswellasdiscussingexperiences.Inthesamedirection,theERAsubgroupmembershaveunderlinedduringthevariousdiscussionstheneedforbetterknowledgesharingacrosstheEU.StrategiesrelatedtoindustrialdecarbonisationandR&IIntherequirementsfortherecoveryandresilienceplans,MemberStateswereaskedtoallocateaminimumof37%ofinvestmentstothegreentransition.FormanyEUcountries,industrymakesupasignificantshareoftheirgreenhousegasemissions.Someofthemhavesetupnationaltargetstoreducetheseemissions.Therefore,mostofthesubgroupmembershaveadedicatedprogrammeforindustrydecarbonisationthatoftenalsofocusesonenergy-intensiveindustries.However,mostoftheseprogrammesmainlyaddresstheproductionofcleanenergyforindustry(includinghydrogen).Theircontributiontothedevelopmentanduptakeofindustrialtechnologiesfortheuseofcleanenergyinenergy-intensiveindustriesremainsunclear.BelowarelistedthemainprogrammesthatweredescribedintheNECPsandRRPs:•NewEnergyforIndustry&WasserstoffinitiativeVorzeigeregionAustriaPower&Gas(Austria);•VlaanderenCO2-neutraal(Belgium);•Roadmapforthedecarbonisationofenergy-intensiveindustries(Estonia);•Long-TermDecarbonisationStrategy2050(Spain)&Spain2030IndustrialPolicy;•Decarbonisationofindustrystrategy&NationalLow-CarbonStrategy(France);•Fundforthedecarbonisationoftheenterprisesector(Ireland);•Electricity&industryplan(Netherlands);•2050CarbonNeutralityRoadmap(Portugal);•Industriklivetinitiative(Sweden):SEK300millionperyearforR&I&Dfundingin2018-2040;•SlovenianIndustrialStrategy;•Low-carbondevelopmentstrategyofSlovakiauntil2030withaviewto2050.However,afewRRPsandNECPsdonotcoverindustryatall(Malta,Greece)oronlyalittle(Italy).Similarly,mostoftheR&IprogrammesdescribedormentionedintheRRPsandNECPsfocusonenergy.Belowarelistedmostofthem:•InnovationStrategyforSmartSpecialisation,2021-2027(Bulgaria);•THETAprogrammefor2018-2025(Czechia);•7thEnergyResearchProgramme(Germany)from2018,whichprovidesannualfundingofEUR1.301billion,includingforoverarching,cross-sectorissuessuchassectorcoupling,digitisation,energyefficiency,reductionofconsumptionatdifferentTRLs;•Research,development,innovationandentrepreneurship2021-2035(Estonia);113•TheSpanishPactforScienceandInnovationhasearmarkedEUR81millionforclimatechange,newenergysourcesandmaterialsforenergytransition,includingsomeprojectsforthedevelopmentandupgradeofpilotplantsforCO2recoveryinenergy-intensiveindustries,inparticularsteelandcement,basedontechnologiesdevelopedbytheNationalCouncilforResearch;•Smartandcleanenergy,sustainablemanufacturing&smartindustry(Finland);•NationalEnergyResearchStrategy(France);•NationalEnergyResearchDevelopment&DemonstrationFundingProgramme(Ireland);•Nationalresearchprogrammeonclimate(Sweden);•ResearchandInnovationStrategy(Slovenia).Whennotpartofadedicatedstrategy,someMemberStatesalsoinvestinthistopicundertherecoveryandresiliencefacility,suchasSlovakiawiththeircomponent‘Researchandinnovationforthedecarbonisationoftheeconomy’(componentC9,Investment4),whichamountstoEUR79million;orDenmarkwiththeircomponent‘Greenresearchanddevelopment’,whichpromotesgreenR&Dprojects.ItwillfundfourR&Dmissions,includingcarboncapture,utilisationandstorage.Around25%ofthebudgetappearstogotothe‘PowerUp’flagshiparea180,andasignificantamountsupportsthemanufacturingsector.AlthoughmostMemberStatescoverenergyaspectsundertheirR&Iplans,intheRRPsandNECPstheyoftenfailtoexplaintheultimatepurposeoftheseinvestmentsinenergy,inparticulartheiruse,aswellascleartargets.SpecificschemesfordevelopmentandtowardsdeploymentofgreentechnologiesOneofthemostfrequentoutcomesoftheseriesofmeetingsistheacknowledgementthattherearenodedicatedschemesforthespecifictechnologiesorspecificstagesofdevelopment.Asregardshydrogenasasourceofenergy,almostallMemberStatesplantofocusonitintheirdecarbonisationplans(exceptforBulgaria,Czechia,MaltaandSlovenia,atleastnotintheirRRPsandNECPs)butnotnecessarilyinordertouseitinenergy-intensiveindustries.Oftenthefocusisontransportandtheproductionofenergyforconsumption.TheMemberStatesthatspecificallymentionindustryintheirhydrogenstrategyaremostlywesternEuropeancountries:Austria,Belgium,Germany,Spain,Finland,France,theNetherlandsandSweden,togetherwithPolandandSlovakia.Apartfromhydrogen─whichisnotatechnologybutanimportantcomponentofsomemajordecarbonisationtechnologies─thereisnodedicatedinvestmentschemeforaspecifictechnologyconsideredkeyfordecarbonisingenergy-intensiveindustries.However,someMemberStatesdohavesomededicatedfundsforgreentechnologiesingeneral:theGreenTechnologyInvestmentProgrammeinEstonia,theNationalEnergyResearchDevelopmentandDemonstrationProgrammeinIrelandandtheNationalGrowthFundintheNetherlands.AlthoughMemberStatesinsistontheimportanceofbeingtechnology-neutral,somefocusonspecificlow-carbontechnologiesintheirdecarbonisationstrategies.ThisisthecaseinparticularintheNordiccountries:forinstance,DenmarkputstheemphasisonthePower-to-Xtechnology(fallsunderthepathway‘electrification’);FinlandonelectrificationofprocessesandSwedenhasadedicatedprogrammeHYBRIT(HYdrogenBReakthrough180https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1658.114IronmakingTechnology)focusedontheuseofgreenhydrogeninthesteelandironsector.ElsewhereintheEU,itisworthhighlightingtheemphasisthatSpainputsontheCO2captureandcalciumloopingtechnology.TheNetherlandshasgivenprioritytotheuseofbiomassinthechemicalindustrywithitsAgri-BasedChemicalsprogramme(seeBox14).Thisaimstosetupasustainablesugar-basedchemicalandmaterialsmanufacturingindustry.SomeMemberStateshavechosentodevelopsector-specificdecarbonisationprogrammes.ThepioneerhereisFinlandandits13sectorallow-carbonroadmaps,whichhavebeendevelopedbyeachsector.Theseinvolveallstakeholdersandtakeintoaccountthespecificsofeachindustry.Similarly,theFossilfreeSwedeninitiativelaunchedin2015invitedallbusinesssectorstoproduceroadmapsonhowtobecomeclimate-neutralby2045whileincreasingtheircompetitiveness:22industryroadmapsarebeingdeveloped,includingtheenergy-intensiveindustries.Followingthosepaths,Estoniaispreparingsectoraldevelopmentplans;whileGermanyisworkingoncarbon-neutralproductionprocessesin56hard-to-decarboniseindustrialsectors.Onasmallerscale,SpainisdevelopingStrategicprojectsforrecoveryandeconomictransformationthatbuildpublic-privatepartnershipsincertaintechnologiesandsectors.UnderthePolishHydrogenStrategy,Polishcompaniesandindustrialassociations,universities,RTOsandnon-governmentalorganisationshavesignedsectoralpartnershipsonhydrogen.Ingeneral,public-privatepartnershipsareaconvenientwayofworkingtowardsindustrialdecarbonisation.OtherexamplesacrosstheEUincludetwolarge-scaleprivate-publicinitiativesinthechemicalssectorintheNetherlands:GroeneChemieNieuweEconomieandtheAdvancedResearchCenterChemicalBuildingBlocksConsortium.Spainhaslarge-scaleprojectspartneringwiththeprivatesectorinthesteelandcementsectorswithArcelorMittalandLafargeHolcim.Finlandhasajointprojectbetweencompaniesanduniversitiesoncarbon-neutralsteelproduction(TowardsCarbon-neutralMetals,seeBox15).Box14AGRI-BASEDCHEMICALSPROGRAMME(NL)Thisprogrammeaimstomakeplasticsproducedfrombiologicalrawmaterialsavailableonalargescale.Theprogrammewillactasacatalysttoexpandthebio-basedagrochemicalmaterialsindustryintheNetherlands.TheexpectedannualGDP,high-qualityjobsandCO2sequestrationeffectsfor2050amounttoEUR2.7billion,4,800jobs,and4to6MtonCO2respectively.115SchemesonspecificstagesoftechnologydevelopmentMostcountriesfocusonallstagesoftechnologydevelopment.ButsomehavespecificprogrammesforR&Danddemonstration(lowerTRLs),orfocusinsteadondevelopmentanduptake(higherTRLs).Someexamplesofresearch&demonstration:•DenmarksetupafundofEUR17milliontosupportdemonstrationprojectsinenergystorage.•TheAustrianKlima-undEnergiefondsfundsprojectsinappliedresearch&innovation,testingandimplementationoflow-carbontechnologies.•TheGermanEnergyResearchProgrammesupportsapplication-basedresearch.SPRIN-D,thefederalagencyfordisruptiveinnovation,supportsprojectswiththepotentialforbreakthroughtechnologies(seebelow).•TheFinnishInnovationAgencysupportsbusiness-drivenresearch,innovationandbusinessdevelopmentthroughseveralprogrammes.•Francefundsresearchanddemonstrationprojectsfocusedonhydrogenforindustry.•TheSwedishIndustriklivetinitiativeprovidessupporttocompaniesateverystep,fromR&Iprojectstopilotandfull-scaleplants.•SloveniaencouragesinvestmentingreenR&D&Idemonstrationandpilotprojects.•BulgariahasintroducedincentivestoencouragetheprivatesectortoinvestinR&D&Iinwidelyusedproductionmethodsaimedatoptimumresourceefficiency.Box15TARGETEDSUPPORTINFINLANDFORLOW-CARBONROADMAPS&PROJECTSInFinland,13industrieshavedevelopedtheirlow-carbonroadmapsinclosecooperationwithkeycompanies,publicauthoritiesandotherstakeholders.Electrificationofprocesseshasbeenidentifiedasthekeytool.Inparallel,manyjointprojectsunderprivate-publicpartnershipshavebeenfunded.Theseinclude:•Jointprojectbetweencompaniesanduniversities:carbon-neutralsteelproduction(TowardsCarbon-neutralMetals,);•LUT(Lappeenranta-LahtiUniversityofTechnology)UniversityResearchPlatform:GreenHydrogenandCO2forIndustryRenewal(GREENRENEW);•GreenE2:buildinginnovationecosystembetweendifferentsectorstofacilitateacarbon-neutralindustrythroughelectrificationandgreenhydrogen.ThenationalinnovationagencyBusinessFinlandsupportsbusiness-drivenresearch,innovationandbusinessdevelopmentthroughseveralprogrammes,includingsmartandcleanenergy,sustainablemanufacturingandsmartindustry.116Hereareafewexamplesofnationalprogrammesthatfocusonuptake&deployment:•Denmarkwillsupportanddevelopresearchonpower-to-Xdevelopmentandupscaling.•TheEstonianGreenFundsupportsthedevelopmentanduptakeofgreentechnologies.•TheDutchNationalGrowthFundsupportstheapplicationofgreenhydrogeninchemistry,heavytransportationandprocessindustries.•SpainwillupscalepilotsofCO2captureandcalciumlooping.Therearealsosomeschemesthatlookattheentirevaluechain.TheFrenchFutureInvestmentsprogrammecoverstheentireinnovationvaluechain,includingpriorityresearchprogrammesandequipment(TRL1-4)&maturation(TRL3-7),andhasearmarkedEUR20billioninR&Ifor2021-2025.TheSwedishIndustriklivetinitiativeprovidessupporttocompaniesateverystep–fromR&Iprojectstopilotandfull-scaleplants.InSlovakia,EUR78.7millionfromtheRRPwillbedirectedtowardstheentireR&Icycle(TRL1to9).ThelargestallocationwillbechannelledtodemonstrationprojectsandmoreadvancedTRLsongreendecarbonisationthemes.OnefinalschemeofinterestistheonesetupbytheSustainableEnergyAuthorityofIreland.Thisprovidesmarketsupporttotheenergy/low-carbontechnologysectorandtechnology-relatedpolicysupport.Box16SPRIN-D,FEDERALAGENCYFORDISRUPTIVEINNOVATION:THEGERMANEIC?Thisagencyprovidestargetedsupporttoscientificexpertsandentrepreneurstohelpbringbreakthroughinnovationtothemarket.TheinnovationsneedtohavebreakthroughpotentialandalreadybeatTRL3or4.In2021,theagencyreceived375applications.Afteraninitialin-depthanalysis,around7%oftheprojectswerefoundtohavethepotentialfordisruptiveinnovation.Afterfurtheranalysisandadecisionbasedonthefindingsoftheagency’sexperts,around3.5%oftheprojectswerepursuedfurther.Moreinfo:https://www.sprind.org/en/1176ConclusionsonR&IinvestmentsR&Ineedsandpublicandprivateinvestments•Overall,thetransitionwillrequireinvestmentsestimatedatmorethanEUR800bnuntil2050.Thebiggestinvestmentneedswillbeinthechemicalsector,followedSMEFocus6SMES’RELIANCEONNATIONALFUNDINGFORR&D&IDGR&I’ssurveyanalysedtheroleofpublicfundinganditsrelevanceforSMEs.Accordingtotheparticipatingcompanies,nationalfinancialsupportisthetypeofpublicfundingmostavailedof.Morethanaquarteroftherespondingcompaniesindicatednationalfinancialsupportasthemostrelevanttypeofpublicsupportreceivedinthepastfiveyearstodealwithdevelopingoradoptingnewenvironmentaltechnologies.AroundonefifthofthefirmsusefinancialsupportfromtheEU.Figure74Publicsupportreceivedinthepast5yearsSource:EuropeanCommission/EnterpriseEuropeNetworkSMEsurvey,conductedfromNovember2021toJanuary2022(seeAnnex1).Regardingthecompany’slocation,thesurveyillustratesvariousdifferencesbetweenEUregions.SMEsinsouthernEuropeseemtohavetheeasiestaccesstonationalfinancialsupport,whileSMEsincentral/easternEuropefinditeasiesttogetfundingfromtheEU.NationalcollaborativeR&DfundsareparticularlyrelevantforSMEsinwestern/northernEurope.Figure75Publicsupportreceivedinthepast5yearsattheregionallevel(countrygroups)Source:EuropeanCommission/EnterpriseEuropeNetworkSMEsurvey,conductedfromNovember2021toJanuary2022(seeAnnex1).118bysteelandcement,estimatedatadditionalEUR3.9-5.5billionperyearonaverage.•Scenarios,studiesandR&IinvestmenttrendsshowthatthereisagapbetweencurrentoverallR&IinvestmentsacrosssectorsandtheamountneededtoreachEuropeanGreenDealemissiontargets.Thisrequiresmajoraccelerationinlow-carboninnovationandasignificantriseinR&Iinvestments.•ThehighestR&Iinvestmentsshouldhappeninthecomingyears(estimatedatsomewhataboveEUR20billionuntil2030),togetherwithincreasingdeploymentinvestmentswithapeakaroundthemid-toend2030s.•ThebiggestinvestmentgapconcernsR&Iinvestmentsoverthecomingeighttotwelveyearsforfirst-of-a-kindinstallations,large-scaledemonstrationanddeploymentoftechnologiescurrentlyathighTRLs.Giventherisksassociatedwiththeneededlargeinvestments,risksharingandpublicsupportareneeded.•MostEUR&Iinvestmentsinenergyefficiencyinindustryareprivate(around80%).TheyneedtobefurtherincreasedtomatchthesubstantialR&Iinvestmentneeds,especiallyby2030.RelevantR&Iinvestmentshavetobeensuredintheshortterm,giventhelonginvestmentcyclesofenergy-intensiveindustries.•Althoughpublicfundingforenergy-relatedR&Dincreasedfrom2014to2018,ithasstillnotreachedthelevelof2010.•GreaterparticipationbyMemberStatesinenergyefficiencyinindustryundertherevisedStrategicEnergyTechnologyPlanandtheEuropeanResearchAreapolicyagendacouldfacilitateincreasingR&Iinvestmentsindevelopmentanduptakeoflow-carbontechnologiesacrosstheEU.•Morespecificestimationsonexistingandneededinvestmentsandfunding,andregularmonitoringofdataonlow-carbonindustrialtechnologiesindifferentsectorsofenergy-intensiveindustrieswillrequiremoresystematicavailabilityofannualdatawithsufficientqualityandgranularity.TheEnergyUnionandClimateActionGovernanceRegulationanditsreportingprovisionscouldbeusedastopromotetheprovisionofbetterdata,monitortheimpactofpoliciesandadjustinvestments.Patents•Patentfilingsingreeninventionsacrossindustrialsectorscontinuetoincreaseglobally,whichgivesanearlyindicationofcontinuingtechnologicalandeconomicdevelopmentstowardsthegreentransitionofindustry.Patents,whichaddressenergy-intensiveindustriesaccountforabout5%ofthesegreeninventionsonaverage.•AmongtheEUMemberStates,theNetherlandshadthehighestshareofgreeninventionsaddressingtheenergy-intensiveindustriesinfocus(14%),whileDenmarkleadsonoverallgreenpatenting(21%).•ThepropensityofpatentingintheareaofEIIsmayberelatedtotheimportanceoflargeincumbentssuchasthecompaniesintheIndustrialR&DInvestmentScoreboardwhichmaybemorelikelytodevelopandkeepknowledgein-house.•TheroleofSMEsinenergy-intensiveindustries’inventionsremainsunclear,astheroadmapanalysisrevealsonlythetoppatentingpositionstakenbylargeincumbents.Consideringthatotherinventors,suchasyoungfirms,maydevelop119moreradicalinnovations181,thissuggeststheneedtoanalysefurthertheopportunitytostrengthentheircontributiontoinnovationinlow-carbontechnologies.•Between2010and2018theEUhasmoreorlessmaintainedthesamelevelofspecialisationintheenergy-intensiveindustriesinfocus,meaningthatEUindustryputsaconstantlevelofcapacitiesintogreenenergy-intensiveindustries’inventions.Anexceptionarethefertiliserandsteelindustrieswheretherehasbeenamarkeddropininventiveactivity.WhiletheEUstillhasthesecondhighestshareofinventionsrelatedtosteel(16%),thissuggeststheneedtoverifythemaindriversfortheclearnegativetrendinthesetwoEIIsectors.•RegionalhotspotsinEIIgreenpatentingshowpotentialforaleadingroleinlow-carbonindustrialtechnologyclustersforÎledeFrance,South-Holland,OberbayernandfourotherGermanregions.MapsofhotspotsshowavariedleadershipacrossseveralspecificEIIsectors.EUprogrammesaddressinglowcarbonindustrialtechnologiesCentrallymanagedprogrammes•HorizonEurope,includingthenewlyestablishedEuropeanInnovationCouncil(EIC)andtheEuropeanInstituteofInnovationandTechnology,supportthedevelopmentofbreakthroughlow-carbontechnologies.Europeanpartnershipswithindustry,fundedbyHorizonEurope(Processes4PlanetandCleanSteelPartnership),createacriticalmassoffundingwithindustrypartners.•InvestEUisexpectedtomobilise,bytheendof2027,substantialprivateandpublicinvestment(withamultipliereffectof11.4)includingforthedevelopmentanddeploymentoflow-carbontechnologies(Sustainableinfrastructurewindow:EUR9.9billion;R&Iwindow:EUR6.6billion).TheInnovationFundwillalsoprovidesupportovertheperiod2020-2030forthecommercialdemonstrationofinnovativelow-carbontechnologies(EUR25billiondependingonthecarbonprice(atEUR50/tCO2)).•EuropeanR&IfundingprogrammessupportimportantstakeholdercooperationsandsetdirectionswitharelativesmallpartofoverallpublicfundingforR&IinEurope.Evenifspecificallyforlow-carbontechnologiesforenergy-intensiveindustriestheleveragehasbeenhigherthantheaverage,theframeworkprogrammescannotbeexpectedtocoverthemajorinvestmentsinthedevelopmentandespeciallydeploymentoflow-carbontechnologiesthatareneededtoreachthe2030emissionsreductiontargetandclimateneutralityin2050.Programmesundersharedmanagement•Inthelastprogrammingperiod(2014-2020),regionsusedapproximately15%ofERDFfundingtofinanceprojectsrelatedtolow-carbonindustrialtechnologies(EUR26.5billion).Inthecurrentprogrammingperiod(2021-2027),allregionswilldevoteatleast30%oftheirallocationtopriority2(alow-carbontransitioningtowardsanetzerocarboneconomyandresilientEurope).•TheInterregionalInnovationInvestments(I3)instrumentisanewEUR563.5millionfundinginstrumentundertheERDF.Itsupportsthe181Amoroso,S.etal(2021),WorldCorporateTopR&DInvestors:Pavingthewayforclimateneutrality.AjointJRCandOECDreport,PublicationOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-43373-6,doi:10.2760/49552,JRC126788.120commercialisationandscaling-upofinterregionalinnovationprojectsandcanbeusedtofundlow-carbontechnologies.•NotallMemberStateswithhighemissionintensityallocatesignificantERDFfundingtolow-carbonprojects.Forexample,overallERDFfundingintensityforlow-carbonprojects(R&Iandbeyond)iscomparativelylowacrossallregionsinBelgiumandAustriaandEstonia.SomeMemberStateshavenationalR&Ischemes,whichalsosupportdecarbonisationinvestmentsinenergy-intensiveindustries,buttheirrelevanceandmagnitudefordevelopmentanduptakeoflow-carbontechnologiesisdifficulttogauge.•MostwideningcountrieshavesmallersharesofoverallgreenhousegasemissionsatEuropeanlevel(seeChapter1).Nevertheless,fortheirnationalemissions,energy-intensiveindustriesstillplayasignificantrole(especiallyinCzechia,RomaniaandSlovakia),makingsupportfordecarbonisationanimportantelementtoconsiderinnationalpolicies.•However,overallERDFfundingintensityforlow-carbonprojectsishigherinseveralregionsofwideningcountries,suchasCroatia(acrossthecountry),Lithuania,Poland,RomaniaandSlovakia,ascomparedwithregionsinmoreinnovativeMemberStates.•Intermsofclosingtheinnovationdivideintheareaoflow-carbontechnologies,itisnotablethatR&IinvestmentpercapitaundertheERDFinlow-carbonprojectsishigherthanaverageinseveralregionsofcentral&easternEuropeanMemberStates,suchasCzechia,Estonia,Hungary,Latvia,LithuaniaandPoland(alongsideFinland).•InterregionalprojectsaspartoftheSmartSpecialisationPlatforms(forindustrialmodernisation)havegeneratedcross-borderinvestmentinlow-carbonprojects.ThisisespeciallysoinregionsfromMemberStateswithhighemissionspercapitaandlowerthanEUaverageERDFinvestmentinlow-carbonprojects,suchasBelgium,Austria,Estonia,Czechia,GermanyandCyprus(asshowninTable7).SMEs•ThebiggestbarrierforSMEsindevelopingoradoptingnewenvironmentaltechnologiescomesfrominvestmentcosts.OthermajorbarriersidentifiedbySMEsindevelopingand/oradoptingenvironmentaltechnologiesincludetheunknowncost-benefitratio,lackofdemandfromcustomersandregulatorybarriers.•MostSMEsinvolvedintechnologydevelopmentexpecttheEUtoprovidebetteraccesstoventurecapitalfundstosupportinnovationanddeliverenvironmentaltechnologies.Fortheuptakeoftechnologies,SMEsinallEUregionsexpectmoreresearchfundsfromtheEUtosupporttheadoptionofenvironmentaltechnologies.•Astricterenvironmentalregulationandthereductionofregulatorybarriersareconsideredasimportant.SMEsthatarenotparticularlyactiveintechnologydevelopmentoftencalledforraisingawarenessandprovidingtrainingandeducation.121NationalsupportschemesandstrategiesNationalschemes•UndertheRecoveryandResilienceFacility,anestimated6%ofexpendituresupportingthegreentransitiongoestoR&I.Avarietyofsupportinstrumentstacklesthedecarbonisationofenergy-intensiveindustriesaspartofnationalrecoveryandresilienceplansandinfrastructures.•The22recoveryandresilienceplansapprovedsofargobeyondtherequirementofatleast37%ofclimateinvestmentofthetotalallocationofEUR177billion.Overall,totalestimatedexpenditureincleanpower–renewablesandnetworks-isaroundEUR26.7billion,withthelargestamountforrenewableenergygeneration,andimportantinvestmentsinthehydrogenvaluechainandenergynetworks.•AllMemberStateswithenergy-intensiveindustrieshaveputtheirdecarbonisationintheirindustrial,greenandR&Iagendas.•Also,inmostMemberStates,somesupportinstrumentsareavailabletotacklethedecarbonisationofenergy-intensiveindustries.However,itisachallengetoidentifytheactualbudgetaryresources,partlybecausesomesupportschemestakeacross-cuttingapproachforR&Dsupport,ortechnologiesforenergy-intensiveindustriesareaddressedinenergy-relatedprogrammes.•SeveralMemberStateshavedevelopedsector-specificroadmapstowardsdecarbonisation,incooperationwithrelevantstakeholders(suchasinFinland,Sweden,GermanyandSlovenia).Theseareimportantinstrumentsdesigningadetailedprocesswithmilestonestowardscommonlyagreedemissionreduction(andother)targets.SynergiesbetweenEUinstrumentsandnationalfundingschemes•SeveralEUsupportinstrumentsprovidefundingopportunitiesforR&Iandinnovationforthedecarbonisationofenergy-intensiveindustries.Theyaremostlycomplementarywiththeirspecificprioritiesandhavetheirownrules.TheCommissionisengaginginimprovingthelinksandcooperationbetweenservicesandinstitutionsinordertoimplementandcapitaliseonsynergies.•TheEICPlug-inschemeenablesprojectsselectedbynationalandregionalprogrammestoapplyfastertotheEICAccelerator.•AguidancedocumentonsynergiesbetweenHorizonEuropeandtheERDFwillpromotesynergies,includingtheSealofExcellencethatallowsMemberStatestotakeadvantageoftheHorizonEuropeevaluationprocess.•Potentially,nationalprogrammesundertheERDFandtheRecoveryandResilienceFacilitycouldalsobenefitfurtherfromtheselectionprocessofotherEUinstruments,suchastheInnovationFund.•HorizonEuropepartnershipsorInvestEUcanbeusedasavehicleforfundingundertheRecoveryandResilienceFacility.NationalpromotionalbankswillbeinvolvedinInvestEUasimplementingpartners,whichmightyieldopportunitiesforfuturesynergieswithnationalfunds.•TheProcesses4PlanetPartnershiphassetupanimpactpaneltofacilitatethelaunchandmarketuptakeofprojectsbypublicorprivateinvestors.ItdoesthisbyestablishinglinkswithnationalprogrammesandinterestedMemberStates,theInnovationFundandtheEuropeanInvestmentBank.122•TheavailableinformationonnationalandregionalstrategiesandprogrammesgivesaratherfragmentedpicturewithlimitedsynergiesbetweenEUandnationalandregionalinstruments.ThegapasregardssynergiesbetweensupportinstrumentsatEUandthenationallevelcouldbeexplainedbythelackofanybroadandopenplatformtoestablishstrategicroadmapsandefficientcoordinationofresearch,developmentandinnovationinvestmentplansforlow-carbonindustrialtechnologies.123CHAPTER4:FRAMEWORKCONDITIONSBesidesfundingandperformingR&D&I(aspresentedinpreviouschapters),therearevariousconditionscoveringnon-technological,organisationalandeconomicfactorsthatenablethedevelopmentanduptakeoflow-carbontechnologies.ThischapterlooksattheEUregulatoryframeworkconditionsanddescribestherelevantlegislationfortheenergy-intensiveindustries(EII)ecosystem.Itaddressesenablingframeworkconditionsforresearchandinnovation(R&I)activitiestargetingthedevelopmentanduptakeofnewlow-carbontechnologies.Itmatchesbarriers,identifiedthroughconsultations,toexistingEUinitiativesthataddresssimilarbarriersinrelatedsectors.Thechapterlooksattheroleofdigitaltechnologiesindecarbonisation,StateaidrulesandtheirrelevanceforR&I,andsustainabletaxonomy.Buildingontheregulatoryconditions,thechapterexplainsthevalorisationofR&Iresults,analysesavailabletoolsatEUlevelforknowledgevalorisationandlooksindetailatoneofitskeyparts–theroleofstandards.1RegulatoryframeworkconditionsTheexistenceofmultiplebarriersandmarketfailuresfacedbylow-carboninnovation,requirespolicyactiontoaddressthose182.Regulationplaysacrucialroleforthedevelopmentanduptakeofnewlow-carbontechnologies.TheEUandMemberStates’regulatoryframeworksareexpectedtobeessentialinthesuccessfulgreentransitionoftheenergy-intensiveindustriesecosystem.EUregulatoryframeworkforenergy-intensiveindustriesTheEUregulatoryframeworkisimportantforresearchandinnovationinenergy-intensiveindustries,astechnologydevelopmentanduptakeiscrucialfortransformingtheindustrialecosystemandcontributingtoemissionsreductiontargetssetoutintheEuropeanGreenDeal.Energy-intensiveindustriesarehighemittersandsoaredirectlytargetedbyaseriesofEUlegislativepackages.Since2019,theregulatoryframeworkhasshiftedradicallytoreflecttheEU’sambitiontobethefirstclimate-neutralcontinentby2050,throughatotalreductionofgreenhousegasemissions,andtoreduceemissionsbyatleast55%(comparedto1990)by2030.TheEuropeanGreenDealsetsanewvisionforEuropeanindustrytoachieveclimateneutralityby2050bylookingtonewandlow-emissiontechnologies,sustainableproductsandservices183.The2021AutumnPackageoftheEuropeanSemester184highlightedthatasignificantinvestmentisrequiredtomeettheEuropeanGreenDeal’sambitions.AnadditionalEUR520billionwillbeneededeveryyeartocaterforthegreentransition.Alargeportionofthisamountwillneedtobeprovidedthroughprivateinvestment,includinginR&Dandnewtechnologies.Regulatoryframeworks,atbothEUandnationallevel,arethereforedesignedtosupportthenecessaryambitionsfordecarbonisingandtransformingEUindustry.182Onarangeofbarriersandmarketfailures,pleaseseeOECD(2022,pp.14-16),Forthcoming.183AEuropeanGreenDeal,https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/industry-and-green-deal_en.184COM(2021)740final,https://ec.europa.eu/info/system/files/economy-finance/2022_european_semester_annual_sustainable_growth_survey.pdf.124LongbeforetheEuropeanGreenDeal,energy-intensiveindustrieswereregulatedthroughdifferentEUlawstomakeindustrymoresustainableandtotackletheeffectofemissionsontheenvironment.TheapplicablelegislationincludestheEUEmissionsTradingSystem(EUETS)Directive185,theIndustrialEmissionsDirective(IED)186,theExtractiveWasteDirective187,andtheEnvironmentalImpactAssessmentDirective188.OneofthemostprominentandimportantlawsistheEUETS,whichconcernsCO2emissionsfromenergy-intensiveindustries.Theseindustriesincludesteelworks,oilrefineries,andproductionofiron,aluminium,metals,cement,lime,glass,ceramics,pulp,paper,cardboard,acidsandbulkorganicchemicals.AllplantsmustparticipateintheEUETS,withsomeexceptions(i.e.smallerplants,installationsusedforresearch,innovationandtestingofnewproductsandprocesses).TheETSDirectivewasrevisedin2018toensureemissionsreductionsofatleast40%comparedto1990(aspartoftheEU’scontributiontothe2015ParisAgreement).TheCommissionproposedafurtherrevisionoftheETSDirectivein2021aspartoftheFitfor55legislativepackage,inordertobringitinlinewiththeoverallGreenDealtargetofreducingemissionsbyatleast55%comparedto1990189.185EuropeanEmissionsTradingSystem,https://ec.europa.eu/clima/eu-action/eu-emissions-trading-system-eu-ets_en186Directive2010/75/EU,https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32010L0075187Directive2006/21/EC,https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32006L0021188Directive85/337/EC,https://ec.europa.eu/environment/eia/eia-legalcontext.htm189ProposalforaDirectivetoamendDirective2003/87/EC,https://ec.europa.eu/info/sites/default/files/revision-eu-ets_with-annex_en_0.pdfBox17FITFOR55TheFitfor55package,adoptedinJuly2021,isacomprehensivelegislativemix,whichcoverstheenergysystem,industry,transportationandbuildings.WithFitfor55,theCommissionensuresthatthedecadeuntil2030createsthepremisesneedednotonlytoreduceemissionsbyatleast55%inthenext10years,butalsothattheEUisontherighttracktoachieveclimateneutralityby2050.WithouttheFitfor55package,theEUwouldnotbereadytoachieveclimateneutralityin2050solelybasedonthe2014targettoreduceemissionsby40%by2030.Datashowsthatagreenhousegasemissionsreductionofonly60%wouldbeachievedby2050underprevioustargets(SWD(2020)176final).Figure76Fitfor55elementsSource:EuropeanCommission.125Stakeholderconsultation:identifiedbarriersinrelationtotheETSAccordingtofeedbackfromDGResearchandInnovation’s(DGR&I)consultationswhendraftingthisroadmap,stakeholdersarguedthatcarbonpricinginstrumentsarenecessaryandseenasawaytoencourageinvestmentandsupportmarketcreation,butcurrentmarketmechanismsarenotworkingproperly.Nevertheless,participantsinvolvedinDGR&I’sstakeholderconsultationin2021sawtheneedforachangetotheEUETSbenchmarkdesignovertheentiresectorandbusinessactivitiesthroughthelifecycle,withoutdifferentiatingbetweenvariousprocessortechnologyoptions.IthasalsobeenarguedthatcarbonleakageprotectionfrombothdirectandindirectcostsoftheEUETSsupportsthedevelopmentoflow-carbonR&IinEUindustry.TheyalsocommentedthattheETSandrelatedmonitoringandreportinglegislationdoescurrentlynotrecogniseCO2emissionavoidanceresultingfromtheuseofcapturedCO2asalternativecarbonfeedstockintheproductionofchemicalsandpolymers.Stakeholderconsultation:identifiedbarriersinrelationtotheIEDThestakeholderconsultationrevealedthattherevisionoftheIEDshouldlookatexistingBATsandgiveinsightsintoforward-lookingtechniques.Inthisregard,theCommissionisproposingtheNovelTechniquesInnovationObservatory,whichdealswithindustrialemissions,BATs,BATsreferencedocuments(BREFs),andemergingtechniques.EmergingtechniquescouldensureanequivalentorhigherlevelofenvironmentalprotectionbutwithlowercoststhanexistingBATs.Mainlegislationandrelevanceforindustry•RevisedEUEmissionsTradingSystem(ETS)TheproposedrevisionoftheEUETSshouldleadtoreducingoverallemissionsby61%inthesectorsconcernedby2030(comparedto2005).ThiswillcontributesignificantlytotheEU’soverallemissionsreductiontargetof55%190.TherevisedannualemissionreductionfromsectorscoveredbytheEUETSseesanincreasefromtheaverage1.74%reductionrateayear(pre-2018)toaround2.2%ayear(from2021).Tomeettheincreasedambitionandtosupportcompanies,newinstrumentsareavailable.TheseincludetheModernisationFund(designedforinvestmentsinenergysystemmodernisation,justtransitionandenergyefficiencyinthe10MemberStateswiththelowestincome)andtheInnovationFund(availableforallMemberStates,supportinginvestmentsinbreakthroughlow-carbontechnologies).•IndustrialEmissionsDirective(IED)TheIEDregulatespollutantemissionsofindustrialplantsintheEU.Around50000industrialplantsmustadheretotheIED.ManyactivitiescoveredbytheDirectivearedirectlyrelatedtotheenergy-intensiveindustriesecosystem(includingenergyindustries,productionandprocessingofmetals,mineralindustries,chemicalindustries,wastemanagement–includingwastefromEIIs,andproductionofpulp,paper,andcardboard)191.TheDirectiveisimplementedthroughregulationsonsector-specificbestavailabletechniques(BATs)thatEUindustrialplantsmustapplytoprovideahighlevelofenvironmentalprotection.TheCommissionproposedarevisionoftheIEDinApril2022,inlinewiththeEuropeanGreenDeal’sroadmaponkeymeasurestobetaken.190COM(2021)551final,https://ec.europa.eu/info/sites/default/files/revision-eu-ets_with-annex_en_0.pdf191AnnexItoDirective2010/75/EU,https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32010L0075&from=EN126Stakeholderconsultation:identifiedbarriersinrelationtotheproposedCBAMDGR&I’sstakeholderconsultationindicatedconcernsaboutthenewCarbonBorderAdjustmentMechanismbecauseitwouldneedfurtherdevelopmenttoserveasarobustmechanismtosupportaglobalenvironmentallevelplayingfieldforEUindustries.Promotingvoluntarystandards,labellingandcertificationsmightalsoencouragecreatingmarketsforlow-carbonproducts.Representativesfromdifferentorganisations(industry,research,interestgroupsetc.)allagreedthatpublicsupportisneededinthepre-commercialisationphaseanduntilestablishedleversareinplace(e.g.CO2price,carbon-freeproductbonus,bordertax),whichwouldallowthesectorstostayeconomicallyviable.•NewCarbonBorderAdjustmentMechanism(CBAM)R&IenablingframeworkconditionsTheupdated2021industrialstrategyoutlinessignificantactionforindustriesacrosstheEUandpavesthewayfortheirgreenanddigitaltransition.Itproposesco-creatingtransitionpathwaysforindustrialecosystems,whichwillofferabetterunderstandingofthescale,costandconditionsforindustrytohelpcompanies’sustainablecompetitiveness.Tosupportindustriesintheirtransformation,theindustrialstrategyproposestocontinuesupportingindustrialalliancesasatooltoacceleratecoordinationofresearch,innovationanddevelopmentofnewindustrialtechnologies.Industrialalliancesaredesignedascomplementarytopublic-privatepartnerships,suchasHorizonEuropepartnerships.MemberStatesarealsopreparinganimportantprojectofcommonEuropeaninterest(IPCEI)addressingthedecarbonisationofenergy-intensiveindustriestobringcompaniestogetherwiththeexpertise,knowledgeandfinancialresourcestoaddress,forexample,technologicalandsocietalchallengessuchasthoseintheEuropeanGreenDeal.TheCommissionwillexaminetheseprojectplansattentivelyand,wherethecriteriaaremet,willaccompanythemastheyreachmaturity.Particularlyrelevantfortheenergy-intensiveindustriesecosystem,theupdatedindustrialstrategyaimstocreatealevelplayingfield,aneffectiveframeworktopreventcarbonleakage,andmeasurestocreatemarketsforsustainableproducts.Thestrategystatesthat,inmostcases,thereisstillnobusinesscasefortransformativeinvestmentsintheEIIecosystem.TorespondtotheincreasingdemandforR&Iinthedecarbonisationoftheenergy-intensiveindustriesecosystem,DGR&Icarriedoutconsultationsin2021toidentifythemainbarriersindevelopingandadoptingnewlow-carbontechnologies.ThemainfindingsindicatethatframeworkconditionsarekeytodeployingR&Itofurtherdecarbonisethesector.ThisR&Iincludeslarge-scaledemonstrationprojects,accesstocleanenergysourcesandimplementingcirculareconomyprinciples.TheCommissionandMemberStatescanbuildonseveralexistingEUinitiativestoaddressthemainbarriersidentified.127Table8KeybarriersandrelatedEUinitiativesMainbarriersEUinitiativesaddressingsimilarchallengesSettingupfirst-of-a-kind(FOAK)installationsPerformingR&D&Iisoftenassociatedwithsettinguppilotinstallations,newinfrastructuresandsimilarinvestmentsthatrequirelegalapproval.Permitsgrantedontime,whichdonotcompromisehealth,safetyandenvironmentalstandards,cansupportandacceleratetheR&Iprocess.Newtechnologicalandorganisationalsolutionsalsorequirechangestoexistinglocations,buildingupnewsitesforon-siteenergyharvestingandstorage,orprovidingadditionalspaceforstockpiling,embeddedinlocalenergyandmaterialcycles.Designingandbuildingapilotordemonstrationplantatscaleisoneofthemajorchallengesfordevelopingmanydecarbonisationtechnologiesatregionalandcross-borderlevel.Intheconsultation,stakeholdersmentionedalackofaccesstofinanceforfirst-of-a-kindinstallationsasasignificantbarrierforinnovationanddeployment.Theyalsoarguedthatrunningsuchbiglow-carbonpilotprojectsrequirespublicco-fundingtoreducetheinvestmentrisk(particularlyalsobeyondTRL6).However,fundingdecisionsoftentaketoolongforinnovativeplayerscompetingatagloballevel.Inaddition,theEUandnationalpublicsupportstrategiesandprogrammesarenotyetfullyaligned.•EUChipsActThenewEUChipsAct,adoptedbytheCommissioninFebruary2022,proposes‘pilotlinesforpreparinginnovativeproductionandfortestingandexperimentation’.TheActproposesextendedpilotlinestoprototypeandscaleupinnovation,whichactasabridgefromdemonstrationinalabtoproductioninamanufacturingfacility.•TheEUChipsActdefines‘first-of-a-kind’forStateaidassessment,whileprovidingseveralbenefitsforFOAKs.Suchbenefitsincludegrantingfast-trackpermitsandprioritisedaccesstopilotlinessetupundertheChipsAct.•REFITRegHubThenewRegionalHubsNetwork(RegHub)monitorshowEUpoliciesareimplementedonthegroundandatlocalandregionallevels.Suchhubs,partoftheFitfortheFutureplatform,ensurethatregionalandlocalstakeholdersprovidefeedbackonEUpoliciesandfurtherstreamlineprocessesatlocallevelonmatterssuchasauthorisationsandlicensingforFOAKs.TheRegHubidentifiespotentiallyburdensomeproceduresthatdelaybuildinginfrastructuresacrosstheEUandproposewaystospeeduppermitprocedures.•StateaidPleaseseebelowfordetailedinformationonStateaid.AccesstocleanenergyIntegrating(supporting)newtechnologiesintoafullproductionsystemisakeyorganisationalchallenge.Examplesincludeproducinghydrogen,transformingbiomassintofuels,chemicalsandpolymers,andtechnologiestocaptureCO2intheproductionprocess.Reducinggreenhousegasemissionsalsorequiresincreasingquantitiesofzero-carbonelectricity,hydrogenandtherelatedinfrastructure(e.g.electricity,hydrogen,CO2transportandstorage).GeologicalstorageofCO2isalsorequiredforusingCCStechnologies.Intheconsultation,expertsidentifiedstorage,access,andthecostofgreenenergyasmajorbarriers.Thisgoeshandinhandwithlargeinfrastructureneedsifthereisaswitchtogreenenergysources,i.e.bigpowerlines,pipelines,andmodifyingexistinginfrastructure(e.g.naturalgaspipelines).Theexpertscalledforfreedominthelegislationforenergygridoperatorstohavethepossibilitytoinvestininnovativetechnologythatmakestheiroperationsmoreflexibleandleavesroomtoanticipateextensionsneededinthefuture.•REPowerEUPleaseseebelowfordetailedinformationonREPowerEU.•EURenewableEnergyDirectiveSince2018,theEURenewableEnergyDirectivealreadylaysdownthatpermitsmustbeapprovedwithintwoyearsofthepermitrequest.TheCommissionwillprovide,byJune2022,furtherguidanceongoodpracticestoaddressthecomplexandlongadministrativeproceduresforauthorisingnewrenewableenergyplants.•RevisedrulesforTrans-EuropeanNetworksforEnergy(theTEN-ERegulation)Thenewrules,whichshouldbeadoptedinApril2022,willensurecross-bordercooperationonenergyinfrastructuresinlinewiththeEuropeanGreenDeal.ThenewTEN-ERegulationwillhelpdelivercross-borderinfrastructuresontime,byproposingwaystosimplifyandacceleratepermitandauthorisationprocedures.128Otherobstacleswereraised:thelackofanyrealsectoralintegrationandanincreasedcompetitionforresources/energy,togetherwithanunknowntimeframeofavailabilityandprice(e.g.large-scalegreenhydrogenavailabilityatcompetitiveprices).Accordingtotheexperts,thisrequiresabalancedapproachandusingmultipleenergysourcestoensureasustainableandaffordabletransition.AccesstocircularrawmaterialsandsectoralintegrationIndustriesareincreasinglydependentonrecycledmaterialstouseasrawmaterials.Forthemostbasicmaterials,morecircularitywillbecomeevenmorecriticaloverthenextdecades.Morecircularmaterialandenergyflowscancontributetoreducinggreenhousegasemissions,reducingenergyuseandmaintainingsupplysecurity.Thesustainablesupplyofalternativesforemissionintensivefeedstockisessential.Thisincludesbiomass,waste,andCO2(andcarbonfromindustrialwastegases).Severalfactorslimitthepotential,includingnewlimitsontheuseofforestrawmaterial,exportofwasteoutsideEuropeandnolegallybindingEUtargetsonreducingresourceuse.Inthesteelindustry,forinstance,theavailabilityofpurehigh-qualityscrapislimited.Impuritiesarealsoaccumulatedoftenduetoineffectiveorinefficientsortingandseparationtechnologies.Whenfossilcarbonistobereduced,thenthealternativesarewaste,recycledmaterials,biomassandCO2(CCU).However,gettingtherequiredamountofcircularcarbonisdifficultasthesecarbonsourcesarelessconcentratedorpollutedthanoilandgas.Accordingtostakeholders,thereisnocosttruthinindividualsectorsandmanyenvironmentalcostsareexternalised.CheapwasteexportsandresourcesarealsostillleftinEurope.Inthiscontext,thestakeholdersalsoraisedtheissuethat,inmanycasestoday,therearelegalbarrierstorecyclingandreusingandproducingnewproductsinthesamesite,e.g.processingprimaryandsecondaryrawmaterialsinthesamefacilityisnotallowed.Furthermore,participantsintheconsultationarguedthatcircularitydesignisnotyetrewardedinmarkets(especiallyformanufacturedproducts;cradletocradleapproach).Thereisnotenoughfocusoncircularbusinessmodelsandinnovation,whichcaninfluencebothproductdesignanddemandforsustainableproducts.Ingeneral,weakexistingmarkettoolsleadtoaweakbusinesscaseforthecirculareconomy,whichischaracterisedbyverydiversesolutionsandapproaches.•EUcirculareconomyactionplanTheCommissionadoptedthecirculareconomyactionplanin2020toenablegreaterindustrialcircularity,withafocuson‘facilitatingindustrialsymbiosisbydevelopinganindustry-ledreportingandcertificationsystem,andenablingtheimplementationofindustrialsymbiosis’.•ERAcircularindustrialtechnologiesroadmap(dueinQ42022)DGR&IwilldeliveraroadmapforcircularindustrialtechnologiesinQ42022thataddressesthecircularityofenergy-intensiveindustries(steel,chemicals,ceramics).TheroadmapwilldiveintocircularityandhowitcancontributetoachievingtheEU’sclimateobjectives.129REPowerEU:EUjointactionformoreaffordable,secureandsustainableenergyFollowingRussia’sinvasionofUkraineinFebruary2022,theEUinitiatedjointeffortstoensureMemberStateshaveaccesstoenergysourcesandreducetheirdependencyonRussiangas,whichrepresentsroughly45%ofEUgasconsumption192.Inthisregard,industrialtransformationisoneofthekeymeasures,withenergy-intensiveindustriesattheforefrontfordecarbonisingEUindustry.REPowerEUhighlightstheneedforEIIstoacceleratetheswitchtoelectrificationandrenewablehydrogen,whilefurtherimprovinglow-carbonmanufacturingcapabilities.By2030,theobjectiveistoensurefront-loadingelectrificationandrenewablehydrogenuptakebyenergy-intensiveindustries.ThemeasuresannouncedthroughREPowerEUtomeetthisobjectivearetofront-loadtheInnovationFundandextenditsscopetocarboncontracts.Furthermore,toensurethedecarbonisationofEUindustry,theREPowerEUplancouldstrengthentheEU’smanufacturingcapabilitiesofinnovativezero-andlow-carbonequipment,suchaselectrolysers,nextgenerationsolar/windequipment,andothertechnologies.OtherbarriersatEUlevel•Fortheselectionofpromisinglow-carbontechnologiesand(pre-)assessingtechnologyperformance,thestakeholdersconsultedmentionedthathavingtoevaluatemanyfactors(environmental,economic,etc.)ischallenging.Inthechemicalindustry,forinstance,theimpactofindividualtechnologiesdependsonspecificprocessesortargetmolecules.Italsodependsonthegeographicallocationbecausedifferentcompanysiteshavespecificconstraintsanddifferentaccesstoresourcesand/orinfrastructure.Thus,developinganddiffusingstandardmethodstoassessthepotentialandimpactoftechnologiesovertheentirelifecyclecouldhelpdevelopanddiffusetechnologiesindifferentindustries.Theassessmentshouldlookintoeconomic,environmentalandsocialfactors(e.g.impactonclimateandotheremissions,health,safety,costs,businesscase).Suchanassessmentalsoreducescompanies’uncertaintiesabouttheirinvestmentdecisions.•Thestakeholdersconfirmedtheimportanceofcollaborativeprojects.However,changingvaluechains,cross-sectoralandintra-sectoralcollaboration,andnewbusinessmodelsbringuncertainty,whichcanslowdowndecision-makingandinvestmentsinR&D&I.Itisimportanttorememberthatenergy-intensiveindustriesarechanginginmanywaysatthesametime.Thisrequiresasystemperspectiveandacollaborativeapproachwithnewstakeholders.Suchprocessestaketime,andthereisalsoalimitedwindowofopportunitytostaycompetitiveandadapttochangingmarketconditions.•Collaborationamongcompetitorscanprovidebigopportunitiesforsynergies.Flexibilityinthelegislationforenergygridoperatorswouldbeamajorenabler.Thiswouldgivethemthepossibilitytoinvestininnovativetechnologiesthatgivesthemflexibilityintheiroperationsandleavesroomforanynecessaryextensionsinthefuture(otherwisethegridswillbeaseriousbottleneckfordecarbonisation).The192COM(2022)108final.130presenceofsomenegativeviewsonwindandPVparks,amongstothers,isalsoasignificantbarrier.•SomeEIIsectorshaveanolderworkforcewithalowlevelofeducationandalackofinterestamongyoungpeople.Askillsmismatchhasbeenidentifiedinseveralsectorsanddemandforskilledpeopleisgrowing,duetodigitalisationandchangesindataanalysis,robotics,resourceefficiency,recycling,businessprocessesandoveralltransition,bothinproductsandprocessesoftheEIIecosystem193.Inaddition,thewidedeploymentofdecarbonisationtechnologiesentailstheintegrationofworkers,customers,andthepublic.Infact,theadequateprovisionofgreenskillsishighlyrelevantforfirmsengaginginlow-carbontechnologydeploymentandscale-up,andlikelytopromoteinvestment.194Thetransformationoftheindustryrequiresawell-designedtransferofexistingskillsandadaptingtonewskills.Italsoneedseducation,communicationanddiscussionswiththepublictopositiontheindustryasamajorsolutionprovider.Publicacceptanceisessentialforasuccessfulindustrialtransformation.193TheconclusionsonskillsintheEIIsectorscamefromaroundtableeventon7June2021.ThiswasorganisedbyCommissionerSchmitandCommissionerBretontopromoteengagementinthepactforskillsandshapeasectoralpact.Theeventbroughttogetherrepresentativesofthesteel,ferro-alloys,non-ferrous-metals,ceramics,pulpandpaper,chemicalssectors,aswellasrepresentativesfromlocalauthorities,socialpartnersandvocationaleducationandtrainingproviders.ForinformationabouttheEU’sinitiativeonthepactforskills,seehttps://ec.europa.eu/social/main.jsp?catId=1517&langId=en.194OECD(2022,p.36),Forthcoming.SMEFocus7SMESPECIFICCONDITIONSFORR&D&IACTIVITIESThedevelopmentanddeploymentoflow-carbontechnologiesoftenrequirescollaborativeprojectstobecarriedout.Aroundhalfofthesmalltechnologydeveloperswhichparticipatedinthesurveyarguedthatfindingasuitablepartnerisachallenge.However,thetranslationofthefindingsfromcollaborativeprojectsintoinnovation,i.e.thecommercialisation,isaproblemforonethirdofthecompanies.Figure77ChallengesfordoingcollaborativeR&DSource:surveyontechnologydevelopers,conductedfromNovember2021toJanuary2022(seeAnnex1).131Whenitcomestodevelopingnewtechnologies,thesurveyrevealsthatprovidingventurecapitalwasconsideredthemostimportantmeasure,followedbystricterenvironmentalregulationandsignificantlymorefundingforresearch.Infact,aforthcomingOECDstudyconfirmsthattherehasbeenadecliningtrendofglobalventurecapitalinvestmentin2019-2020forcleantechstart-ups,althoughinvestmentshavegrownfromUSD4billionin2010toUSD26billionin2020.195Figure78Europeanpolicysupportforthedevelopmentofsustainabletechnologies&solutionsSource:surveyontechnologydevelopers,conductedfromNovember2021toJanuary2022(seeAnnex1).Ontheotherhand,onthetopicofadoptingnewtechnologies,thesurveyshowsthatverysmallfirmscalledforbetterormoreeducationandtraining.Largerfirms,moresothansmallerfirms,considerthesupportofcollaborativeplatformsandclusters,aswellastheprovisionofventurecapital.Figure79HowEUpolicycansupporttheadoptionofenvironmentaltechnologies,analysisatfirmsizelevelSource:EuropeanCommission/EnterpriseEuropeNetworkSMEfromNovember2021toJanuary2022(seeAnnex1).1321.2.PolicyframeworkfordigitaltechnologiestoenablegreentransformationDigitaltechnologies(includingartificialintelligence(AI),cloud,edgecomputing,5G,theinternetofthings)anddigitisationarekeyforallindustriesandcanacceleratethesustainabletransformation196.Climateneutrality,asaforthcomingOECDreportclaims,willrelyondigitaltechnologies.Forexample,AIcanhelpforecastweatherandelectricityprices,thusmitigatingintermittencyproblemsinthesystemandincreasingenergyefficiency.197AstudybytheJRCandtheOECD198indicatesthat20%ofclimate-relatedpatentshaveadigitalcomponent,and60%ofclimate-relatedtrademarksarerelatedto195OECD(2022,p.10),Forthcoming.196COM(2021)574final,https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52021PC0574197OECD(2022,p.7),Forthcoming.198JRC&OECD,2021,WorldCorporateTopR&DInvestors:PavingtheWayforClimateNeutrality,https://www.oecd.org/sti/world-corporate-top-rd-investors-paving-the-way-for-climate-neutrality.pdfBox18NATIONALACTIONTOIMPROVEFRAMEWORKCONDITIONSDiscussionswithMemberStatesintheERAsubgroupandfeedbackfromtheonlineconsultation(referredtoabove)highlightedpossiblenationalactiontoaddressbarriersforinnovation.Figure80Obstaclesdelayingthedevelopmentoruptakeoflow-carbonindustrialtechnologiesSource:ERAroadmapstakeholderconsultation,openfromJulytoSeptember2021.FrameworkconditionsareanimportantfeaturetostimulateR&Ianddevelopmentoflow-carbontechnologies.Spainisagoodexamplewithasetofinstrumentsinthefollowingareasdescribedbelow.•Disseminationandvalorisation:inSpain,technologyplatformshaveakeyrolecreatingtechnologycommunitiesanddisseminatingresults,bestpracticesandraisingawarenessamongthepublicwithpublications,events,andotheractivities.ExamplesaretheCO2platform(abouttechnologiesforcapture,transportation,storage,anduseofCO2)andtheEnergyEfficiency,Platea(forthesteelsector).•Skills:theSpanishannualemploymentpolicyplanswillhavespecificnationalandregionalprogrammeslaunchedtopromotegreenjobs.•Standardisation:theSpanishAssociationforStandardisation(UNE)hasestablishedatechnicalcommitteeon‘Energyefficiency,climatechangeandrenewableenergies(CTN216)’,whichisdevelopingstandardsinthisarea.•SupporttoSMEs:theCERVERAprogrammehasspecialassistanceforSMEsusingtheservicesoftheRTOsnetworksestablishedforcertaintechnologies.133ICT.Nonetheless,thestudyhighlightsthatthisproportionofnewclimate-relatedpatentswithadigitalcomponentisratherlowinenergy-intensiveindustries.IntheEU,the2030DigitalCompass199setsthegoalthat75%ofEUbusinessesshouldusedigitaltechnologiessuchasAI,cloudcomputingservicesandbigdataby2030.Thiswillalsoconcerntheenergy-intensiveindustriesecosystem.Forinstance,estimatesindicatethatprocessoptimisationthroughdigitaltechnologies(suchascloud-baseddata,digitalplatforms,AI-drivencostandemissionsoptimisation)canreduceCO2emissionsbyanaverageof5%to10%.Furthermore,carbondatatransparency(throughdigitaltechnologiessuchastheinternetofthings,blockchaintrackingsolutions,datavisualisationandimpactreporting)canreduceCO2emissionsbyanaverageof30%to40%200.1.3.StateaidforR&Dandinnovationintheareaoflow-carbontechnologies–overviewofapplicableEUStateaidrulesEUStateaidrulesonlyallowgrantingaidifitdoesnotadverselyaffecttradingconditionscontrarytothecommoninterest.ForR&D&I-aid,theexemptionsaresetoutinArticle107(3)(b)and(c):basically,ifStateaidistobeallowed,itsbenefitsmustoutweighanydistortingeffects.Thismeansthatthemeasuretakenmust:-facilitatethedevelopmentofaproductorservice,forinstanceresearchingcarbon-capturetechnology;-encouragethebeneficiarytocarryoutadditionalactivities,whichitwouldnothavecarriedoutoritwouldhavecarriedoutinarestrictedordifferentmannerwithouttheaid;-notbeinbreachofEUlaw(andthisalsoappliestotheactivitysupportedbythemeasure).WhileEUStateaidruleslaydownconditionsforthecompatibilityofaid,theydonotfavouranyparticulartechnology–theyaretechnologyneutral.ForRDIinabroadersense,criteriaforStateaidaresetoutinthetextsbelow.•GeneralBlockExemptionRegulation201(EU)No651/2014(GBER)isthefastwaytoimplementnecessaryaidmeasures.Today,MemberStatesimplementmostnewStateaidmeasures–95.5%202-underthisRegulation.ThismeanswithoutformalassessmentandapprovalbytheCommission.MemberStatesarenotobligedtonotifyStateaidtotheCommissionforassessment(undertheprinciplesmentionedabove)andformalapproval(iftheaidmeetsallthecriteriasetoutintheGBER).TheGBERpresumesthatthepositiveeffectsofsuchaidprevailoverthenegativeeffects.ThisRegulationisunderrevisionandanupdateisexpectedin2022.•Inallothercases,whereaidexceedsthelimitssetoutintheGBER,theCommissionmustbenotifiedbeforeimplementation,underArticle108(3)oftheTreaty.MemberStatesmustdemonstratethattheaidisinlinewiththeapplicablecompatibility199COM(2021)118final,https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A52021DC0118200BostonConsultingGroup,https://www.bcg.com/publications/2021/how-technology-helps-sustainability-initiatives;estimatesrefertoallindustrialsectors.201https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0651-20210801202EuropeanCommission,StateAidScoreboard2020,p.37.134criteria.Ifanaidmeasuremeetsthesecriteria,theCommissionwillapproveit.Thecriteriaforaidmeasuresthatmustbenotifiedaresetoutinthefollowingtexts.•FrameworkforStateaidforresearch,developmentandinnovation203(RDI-framework):thisappliestocertainRDI-aidmeasuresthat,beforetheirimplementation,mustbenotifiedtotheCommissionforapprovalbydecision.Thisframeworkisunderrevisionandanupdate,adaptedtorecentmarketandtechnologicaldevelopmentsandtheEU’spolicyobjectives,isexpectedinthefirsthalfof2022.•CommunicationonStateaidforImportantProjectsintheCommonEuropeanInterest204(IPCEI-Communication):thisappliestonotifiablelargecollaborativecross-borderprojectsandlargeR&D&Iprojectsevenuptofirstindustrialdeployment,i.e.theupscalingofpilotfacilitiesandthetestingphase.•GuidelinesonStateaidtopromoterisk-financeinvestment205(RFG):theseapplytocertainaidmeasurestofacilitateaccesstofinanceforSMEsandmid-caps.Beforeimplementation,theCommissionmustbenotifiedaboutthemeasuresandapprovethem.•GuidelinesonStateaidforclimate,environmentalprotectionandenergy2022206(CEEAG):theseapplytoaidforawidevarietyofenvironmentalprotectionprojects,includingdemonstrationprojectsandeco-innovation.Beforeimplementation,theCommissionmustbenotifiedaboutthemeasuresandapprovethem.Table9OverviewofeligibleactivitiesandinvestmentsandmarketfailuresthatRDI-aidcanaddress(andaselectionofapplicabletexts)203https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2014.198.01.0001.01.ENG204https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.528.01.0010.01.ENG&toc=OJ%3AC%3A2021%3A528%3ATOC205https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.C_.2021.508.01.0001.01.ENG&toc=OJ%3AC%3A2021%3A508%3ATOC206https://ec.europa.eu/competition-policy/sectors/energy-and-environment/legislation_enEligibleactivitiesandinvestmentsMarketfailureApplicableconditionssetoutunderAidforR&Dprojects–fundamentalresearch,industrialresearch,experimentaldevelopment,andfeasibilitystudies.Ingeneral,thismeansthatR&D-aidforprojectsmustnotgobeyondtechnologyreadinesslevel8Positiveexternalities/knowledgespill-oversleadingtoanunattractiverateofreturnfromaprivateperspectiveImperfectandasymmetricinformationleadingtoahighdegreeofuncertaintyontherisks/benefitsoftheinvestmentorhamperingaccesstofinanceCoordinationandnetworkfailures,e.g.incollaborativeprojectsthesearecausedbydifficultiesincoordinatingalargenumberofpartners,diverginginterests,contractualissues,anddifficultiesinsharingsensitiveinformation−GBER(Article25–25d)−RDI-framework−GBER(Article26)−RDI-framework−GBER(Article27)−RDI-framework−GBER(Article28)−RDI-framework−GBER(Article29)−RDI-frameworkInvestmentaidforconstructionorupgradeofresearchinfrastructuresAidforinnovationclustersInnovationaidforSMEsAidforprocessandorganisationalinnovation1351.4.SustainableFinanceandEUTaxonomyTheEUtaxonomyisaclassificationsystemofenvironmentallysustainableeconomicactivities.ItwillplayamajorroleinhelpingtheEUscaleupsustainableinvestmentandimplementtheEuropeanGreenDeal.TheEUtaxonomywillprovidecompanies,investorsandpolicymakerswithdefinitionsforwhicheconomicactivitiescanbeconsideredenvironmentallysustainable.Listedunder‘climatemitigation’inthetaxonomy’senvironmentalcriteriaarethemanufacturingoflow-carbontechnologiesandthereductionofcarbonemissionsintheproductionofcement,aluminium,iron,steel,andorganicbasicchemicals.R&Dintheseareasisconsideredanenablerforsustainableinvestments.2Valorisationandstandardisationforlow-carbonindustrialtechnologiesValorisationofR&IresultsValorisationofresearchandinnovationinlow-carbonindustrialtechnologies,asinotherfields,oftenreliesonthecollaborationofmanyplayersinthesocio-economicecosystem.Itisamultidirectional,iterativeprocessinwhichmajornewresearchtopicsandinnovationsemergethroughinteractionbetweenacademia,industry,thepublicsector,thefinancialsectorandcivilsociety.Itisimportanttoimprovethiscollaborationandoptimisetheuseofpublicknowledgeandresearchinthegreentransition.Exploitationpatternsarevast,andtheyaregenerallysupportedbyapolicymixbasedonatoolboxofinstrumentsthatacknowledgedifferentvalorisationchannelsandecosystems,whichvaryacrossRisk-financeaidforSMEsCapitalmarketfailurepreventingsupplyfrommeetingdemandatapriceacceptabletobothsides.Thisresultsina‘financinggap’affectingSMEs(andincertainsituationssmallmid-capsandinnovativemid-caps)−GBER(Article21)−RFGRisk-financeaidformid-caps−RFGAidforsmallinnovativeenterprises−GBER(Article22(5))AidfordemonstrationprojectstoreducegreenhousegasemissionsNegativeexternalities:whenpollutionisnotadequatelypricedPositiveexternalities:whenmarketparticipantsotherthantheinvestorbenefitfromaninvestmentAsymmetricinformationonthelikelyreturnsandrisksoftheprojectCoordinationfailures:duetodiverginginterestsandincentives,costsofcontracting,uncertaintyaboutthecollaborativeoutcomeandnetworkeffects−CEEAGEco-innovation:anyinnovationactivityresultinginoraimedatsignificantlyimprovingenvironmentalprotectionMajorprojectsinthecommonEuropeaninterest:thisincludesaidforfirstindustrialdeploymentaslongasthedeploymentfollowsonfromanR&D&IactivityandcontainsamajorR&D&Icomponentthatisanintegralandnecessaryfactorinsuccessfullyimplementingtheproject.Aidformassproductionorcommercialactivitiesisexcluded.MajormarketorsystemicfailuresandsocietalchallengesthatotherwisecannotbeaddressedIPCEI-Communication136countriesthathavevaryingstrengths,notonlyinscienceandindustry,butalsoinotherareas.AsoneofthepriorityactionsofthenewERAforresearchandinnovation,guidingprinciplesforknowledgevalorisationwillbedevelopedtoshapeabroadapproachtoknowledgevalorisationandprovidedirectionality.Theguidingprinciplesconstituteapoliticalcommitmentco-designedwithandendorsedbyMemberStates.TheaimistoachieveacommonlineonmeasuresandpolicyinstrumentsforimprovingknowledgesharingandvalorisationinEurope.TheywillalsohelptoaddressgapsacrossMemberStatesandhelpmoreandmorecountriestobetterbenefitfromR&Iresults.Akeyelementwillbesmartknowledgeassetmanagementandanintellectualpropertyculturethatenablesopenscience,openinnovationandentrepreneurshipwhiletakingaccountofthehighlycompetitiveglobalenvironment.Inaddition,codesofpracticewillprovideguidanceforR&Ipractitionersonhowtoimplementcertainelementsofknowledgevalorisation,suchassmartintellectualpropertymanagementandstandardisationforknowledgeuptake207.Thecodesofpracticewillbebottom-upinitiativesco-createdwithR&IstakeholdersandwillprovidepracticalguidanceandconcretebestpracticeexamplesforallR&Iecosystemplayers.On28January2022,theCommunityofPracticewaslaunched,withthetaskofworkingonacodeofpracticeforthesmartuseofintellectualproperty208.Thisinitiativewillprovideageneralframeworkthatwillbenefittheuptakeoflow-carbonindustrialtechnologiesandmaybeastartingpointformoresector-specificactivitiesifconsidereduseful.TheEUKnowledgeValorisationPlatform209willsupportthisprocessbypromotingandsupportingcross-borderpeerlearningandsharingofbestpractices210andlessonslearned.Theplatformprovidesaninteractiveforumtostimulatecooperationacrossbordersandsectorsbyinvolvingallplayersofknowledgevalorisation,fromacademiaandindustrytopublicpolicyandcivilsociety.Itenablestheexchangeofknowledgeandexpertisetosupportthedesign,implementationandevaluation-includinginspecificareaslikegreentechnologies-ofpolicies,investmentsandmeasures.207Formoreinformation:StandardsdriveinnovationEuropeanCommission(europa.eu).208CodeofPracticeforthesmartuseofintellectualpropertyEuropeanCommission(europa.eu)209KnowledgeValorisationPlatformEuropeanCommission(europa.eu)210RepositoryofbestpracticeexamplesisavailableontheKnowledgeValorisationPlatform,whichiscontinuouslyopenforsubmissionsofnewbestpracticeexamples.Box19BESTPRACTICEEXAMPLESFROMTHEEUKNOWLEDGEVALORISATIONPLATFORMTHATPROMOTEANECOSYSTEMAPPROACHINVOLVINGSEVERALTYPESOFSTAKEHOLDERSTOPROMOTETHEDISSEMINATIONANDUPTAKEOFSUSTAINABLEANDLOW-CARBONTECHNOLOGIES•TheUniversityofAntwerp,Belgium,wantstobethedrivingforceofinnovationinknowledge-intensiveecosystemsinaregionthatischaracterisedbyitsworldport,alargechemicalclusterandastrongcreativesector.BasedontheUniversityofAntwerp'sownstrengthscombinedwiththepeculiaritiesofAntwerp’secosystem,theUniversityofAntwerpdecidedtofocusonthreepriorityareasofvalorisation,oneofwhichissustainablechemistry&materials.•InAmsterdam,Netherlands,amulti-stakeholdercooperationaddressessustainabilityissuesfocusingontherealisationofblue-greenroofsdeliveredbyaconsortiumofthecitygovernment,privatecompanies,housingcorporations,thewaterboard,andknowledgeinstitutions.•TheUniversityofAppliedScienceinTheHague,Netherlands,develops,incooperationwithpotentialusers,asustainableprotocolfor(facility)professionalsinordertostimulatesustainablebehaviourandreductionofrawmaterialflowsinfacilitymanagement.137StandardisationasanimportantaspectofknowledgevalorisationStandardsandstandardisationarerecognisedasatoolforpromotinginnovation,bothforpolicymakersandbusinesses,asstandardsallowtocodifyknowledgeandmakeitavailabletoawiderangeofstakeholders.Astandardisaformal,voluntarydocumentthatsetsthespecificationsforaterminology,aproduct,asystem,aprocessoraservice.Standardscanhelptomakedifferentpartsofaninfrastructureworktogetherortosystematiseprocesses,e.g.energyefficiencyorwastereduction.Standardscanliftbarrierstotheuptakeofenvironmentallyfriendlytechnologiesandmaterials,byspecifyingtests,orproviderobustdefinitionsthatavoidmisleadingenvironmentalclaims211.Typically,standardsaredevelopedandpublishedincooperationbymanydifferentgroupsandorganisationsusingvariousdegreesofconsensusintheirpreparationandapproval.Formalstandardsarestandardsthatareapprovedoradoptedbynational,regionalorinternationalstandardsbodies,whilstinformalstandardsarepublishedbyotherstandardsdevelopmentorganisations.AttheEuropeanlevel,standardsaredevelopedbytheEuropeanstandardisationorganisationsofficiallyrecognisedunderRegulation(EU)No1025/2012:CEN,CENELEC,andETSI212.Itisimportantthatscientistscancommunicateandexchangetheirresearchresultsbyusingagreedvocabulary,definitionsandunits.Itisessentialtoundertakerepeatablemeasurementsandcomparableexperiments.Asstandardsarevoluntary,thereductionofdiversityshouldnotlimitscientificdevelopment.Lookingfromthisangle,onecansaythatscientistsareamongthefirstclientsofstandardisationinthelow-carbonindustrialtechnologiesvaluechain.Forexample,ifaresearchactivitydevelopsaspecificprocedureorprotocoltoovercomeaparticularissue,thiscanrepresentthebasisofastandard.Tobesuitableforprovidingthebasisofastandard,aresearchoutputneedstobeapplicableto,andbeofusefor,oneormoreestablishedgroupsofstakeholders:researchers,industryand/orregulators.Transferringresearchresultsintooneormorestandardscanhaveasignificantimpactonthesubsequentuseoftheresultsbyindustryandotherresearchers,bymakingclearnotonlywhattheresearchoutputsarebutalsohowtoimplementthem213.Standardisationcanberelevantforinnovativeresultsatdifferentmaturitylevels.Althoughstandardsbecomemoreimportantwhenaninnovationmatures(andthusreachesahighertechnologyreadinesslevel(TRL)),standardscansupportallstages,fromknowledgecreationtotechnologyandbusinessdevelopment.Asshownin81,differentstandardscanprovidesupporttodevelopment:semanticstandards(TRL1-3);measurementandtestingstandards(TRL3-5);interfacestandards(TRL5-7);andproductandservicestandards(TRL7-9).211https://www.cencenelec.eu/media/CEN-CENELEC/Areas%20of%20Work/CENELEC%20sectors/Accumulators,%20Primary%20cells%20and%20Primary%20Batteries/Documents/standardsinsupporteuropeangreendealcommitments.pdf212EuropeanCommitteeforStandardisation(CEN),EuropeanCommitteeforElectrotechnicalStandardisation(CENELEC),EuropeanTelecommunicationsStandardsInstitute(ETSI).213https://op.europa.eu/en/publication-detail/-/publication/db289e47-140b-11eb-b57e-01aa75ed71a1/138Figure81Technologyreadinesslevels,linkedtotypicalresearchtypesandstandardisationdeliverablesSource:CEN-CENELEC.Standards,incontrasttopatents,areaccessibletoallatlowcostandaremorelikelytobebroadlyimplementedbecauseall(interested)stakeholdershavereachedaconsensus.Furthermore,standardisationisacooperationandtransferprocess,becauseitrepresentsacommonplatformfordifferentplayerswithheterogeneousbackgrounds,i.e.research,industry,publicadministration,andsocialinterestgroups,e.g.consumers214.Duetotheleveloftransparencyandtheinvolvementofthepublic,thedevelopmenttimeofnationalstandardstakesonaverage18months.ForEuropeanandinternationalstandards,thetimeneededincreasestomorethan2years.Thisisbecausenationalstandardisationbodieshavetodevelopanationalpositionintheirnationalmirrorcommittees,thatvoteatnationalleveltosupportaEuropeanorinternationalstandard.Duetothehighdegreeofconsensus,standardshaveahighlevelofacceptanceinsociety.Standardisationactivitiesinresearchprojectsusuallyfocusonthecreationofpre-standards(suchastheCEN/CENELECWorkshopAgreement).Apre-standardisapublic,freelyavailabledocumentthatdescribesproducts,systemsorservicesbydefiningcharacteristicsandrequirements.Apre-standardischaracterisedbythefactthat,comparedwithastandard,itreflectstheconsensusofinterestedpartiesandisnotdevelopedbasedonthenationaldelegationprinciple.Incontrasttoastandard,thepre-standardisdevelopedinaworkshop(temporarycommittee)withadvicefromastandardisationorganisation.Afterthecommitteeadoptsthepre-standard,thestandardisationorganisationpublishesthepre-standard.StandardisationusecasesasexamplesforvalorisationofresearchresultsMaterialsefficiencyMaterialsefficiencyaspectsinEuropeanstandardisationarecoveredbyCEN-CENELECJointTechnicalCommittee10‘MaterialefficiencyaspectsforproductsinscopeofEcodesignlegislation’.CEN-CLC/JTC10developedeightstandardscontaininggenericprinciplestoconsiderwhenaddressingthematerialefficiencyofenergy-relatedproducts.ThesestandardsaddresstheexactsameaimsoftheEuropeanCommissionto:i)extendproductlifetime;ii)re-usecomponentsorrecyclematerialsfromproductsatend-of-life;iii)useofre-usedcomponentsand/orrecycledmaterialsinproducts.Theseareallhorizontalguidancedocuments,whichmeansthatthereisstillagaptofillbetweentheguidance214https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1527333139providedandtheneedsofspecificproducts(orgroupsofproducts).Examplesofspecificstandardsare:•EN45555elaboratesonrecyclabilityandrecoverabilityinahorizontal,cross-productway.Thisstandarddefinesaseriesofparametersthatmaybeconsideredtocalculateproduct-specificrecyclingandrecoverabilityrates.However,acorrectassessmentcanonlybedoneinaproduct-specificway,takingintoaccountspecificparametersofaspecificproductgroup.•EN45558coversthegeneralmethodtodeclaretheuseofcriticalrawmaterialsinenergy-relatedproducts,forrecyclersandotherinterestedparties.Thisstandardisconsideredtobedirectlyapplicable,althoughmorespecificreferencescanbemadebyproduct-specifictechnicalcommittees.Moreover,CEN-CLC/JTC10hasjuststartedthedevelopmentofastandardthatproposesdetailedprinciples,requirementsandguidanceforamethodtoachievecircular-readydesignsofproductsfallingunderthescopeoftheEcodesignDirective.Low-carboncementsThecementindustryemitsapproximately8%ofglobalCO2.Themajorityoftheseemissionscomefromthecalcinationofclinker,themostprevalentcomponentofcement(whichisitselftheessentialbindingagentinconcrete).Cementandconcreteemissionscanbereducedby:deployingconcreteswithbetterperformance(i.e.lessconcreteneededinconstruction);usingconcretewithalternativecompositions(i.e.lesscementneededinconcrete);andreducingtheclinkercontentofcement(i.e.lessclinkerneededincement).Standardisationcanhelp215,216tofacilitatethemarketuptakeoflow-carboncementsandconcretes,therebyreducingthegreenhousegasintensityofthisindustry.Thiscallsforstandardsaimedat:a)specifyingalternativeconcreteandcementcompositions;b)settingrequirementsforphysicalcharacteristicsofthe–thennewlydeveloped–products(beitconcreteorcement);orc)harmonisingproductsandtestingmethods.EuropeanstandardEN197addressesthecompositionofmostcommoncements.EN197accountsforalternativecementswithsubstitutestoclinker,suchasgranulatedblastfurnaceslag,pozzolanicmaterials,flyash,limestone,andsilicafume.Thelatestupdate(EN197-5:2021)allowsfurtherreductionoftheclinkercontentofcementbyincreasingtheshareofthesealternativematerials.Regardingconcrete,requirementsonspecificationandperformanceareprovidedbyEuropeanstandardEN206:2013+A2.ThisstandardisnotharmonisedatEuropeanlevel,weakeningtheEUmarketforconcrete.Furthermore,itdoesnotexplicitlyaddresscementsnewlycoveredbystandardEN197-5.Thesecementsmaynonethelessbeusedprovidingthatsuitabilityisdemonstrated.Standardsthusneedtobecontinuouslyupdatedtoalloweasieruseofnewclinkersubstitutesincementandofadmixturesascementsubstitutesinconcrete217.AlternativestoordinaryPortlandcementwithlowerCO2intensitiesarebeingdevelopedthroughdifferentprocessesandchemistries218.Belite-Ye’elimite-Ferriteandcalcium215Ecostandard,Breakingdownbarrierstolower-carboncements–ECOSbringssolutionstoconcreteproblems216Cembureau,CementingtheEuropeanGreenDeal.217NewClimate,decarbonisationpathwaysfortheEUcementsector:Technologyroutesandpotentialwaysforward.218E.Gartner,T.Sui,Alternativecementclinkers,CementandConcreteResearch114(2018)27–39.140silicateclinkersaredeemedpromisingchemistries219,220,althoughtheydonotyetcomplywithEU(composition)standardsforcements218,220.Yetsubstitutestoclinkerdoexistatvaryingphasesoftechnologicaldevelopment220,221(suchasCelitement222,Futurecem223,andSolidia224).Thereisthusroomforfurtherspecificationofcementcompositionsinstandards.CarboncaptureandstorageISOcurrentlyleadscarboncaptureandstorage(CCS)standardisationwithISO/TC265regardingcarbondioxidecapture,transportation,andgeologicalstorage.StandardssuchasISO27913:2016ongeologicalstorageorISO27916:2019onCO2storageusingenhancedoilrecovery,laythefoundationfordeployingdecarbonisingtechnologiesincarbon-intensiveindustries.AttheEuropeanlevel,Italy’snationalstandardisationbody,UNI,haspublishedapre-standardPdR99:2021onrequirementsforcarboncreditgenerationprojects.TheBritishStandardsInstitution(BSI)isactivelyexploringlinksbetweenCCSandgreenhydrogenproduction.EstablishingaEuropean-leveltechnicalcommitteeonCCSiscurrentlybeingconsidered.GreenhydrogenInternationalandEuropeanstandardscansupporttheincreaseduptakeofhydrogeninenergysystems.CEN-CLC/JTC6‘HydrogeninEnergySystems’andthe‘CEN-CENELECSectorForumEnergyManagement/WorkingGroupHydrogen’areactiveataEuropeanlevel.TheexistingstandardEN16325onGuaranteesofOriginforElectricityisbeingrevisedbyCEN-CLC/JTC14‘Energymanagementandenergyefficiencyintheframeworkofenergytransition’.Theaimistoextendthescopetoincludehydrogen,aswellasbiomethaneandothergasesforheatingandcooling.Hydrogentechnologiesalsohaveapplicationsasreplacementsfornaturalgashomeheaters/boilers.Europeanprojects,suchastheTHyGAproject(TestingHydrogenAdmixturesforGasAppliances),developadetailedunderstandingoftheimpactofblendsofnaturalgasandhydrogenonend-useapplications.CEN/TC109‘Centralheatingboilersusinggaseousfuels’hasarangeofstandardsandpre-standardsunderdevelopmentaddressingtheseaspectsofhydrogentechnology,suchasprEN15502-2-1.EnergygridandsystemefficienciesTheCEN-CLC/JTC14‘Energymanagementandenergyefficiencyintheframeworkofenergytransition’spearheadsEuropeanstandardsonoptimisingexistingEuropeanenergygridsinlightofthegreentransition.JTC14hasdevelopedstandardsforenergyefficiencybenchmarkingmethodologies(EN16231:2012)andenergyauditingofbuildings,processesandtransport(EN16247series).CEN-CENELECSectorForumEnergyManagementalsoprioritisesthehighqualityandperformanceofenergygridswithalargeshareofrenewables.Standardisationcansupportthechallengesofenergystorageandconversion.Itcanprovidetoolstoimprove219ETH,AsustainablefuturefortheEuropeanCementandConcreteIndustry-Technologyassessmentforfulldecarbonisationoftheindustryby2050.220ChathamHouse,MakingConcreteChangeInnovationinLow-carbonCementandConcrete.221Worldcement,CO2ReducingCement,PartOne:SolidiaCementCompositionandSynthesis222Celitement-Anovelcementbasedonhydrauliccalciumhydrosilicates(hCHS).223https://www.cementirholding.com/en/our-business/innovation/futurecemtm224https://www.solidiatech.com/accomplishments.html141sustainabilitytopolicymakers,efficientandsustainablefinancingschemestoinvestorsandinterestedorganisations,andefficientandaffordableenergytothegeneralpublic.TheCEN-CENELEC-ETSICoordinationGrouponSmartGridsadvisesonEuropeanstandardisationrequirementsrelatingtosmartelectricalgridandmulti-commoditysmartmeteringstandardisation.WhiletheCoordinationGroupitselfdoesnotdevelopstandardisationdeliverables,itcanprovideto,andreceivefrom,theEuropeanCommissioninputfordevelopinginformativematerialforthepublicdomainbeyondthereachoftraditionalstandards.Box20EXAMPLESOFPROJECTSCO-FUNDEDBYHORIZON2020THATUSEDSTANDARDISATIONFORDISSEMINATINGANDVALORISINGR&IRESULTS•NEXTOWER:Overthecourseoftheproject,NEXTOWERcontributedwithaCENWorkshopAgreementproposalforsettingupatestplatformforanupcomingISOstandardforhigh-techcomponents(CWA22517726‘Hightemperatureacceleratedageingofadvancedceramicspecimensforsolarreceiversandotherapplicationsunderconcentratedsolarradiation’).TheprojectalsodraftedandsubmittedtotheISOStandardisationBodyanamendmenttothecurrentstandardISO18755:2005onthermaldiffusivitydeterminationwiththelaser/lightflashmethod(LFA),anISOthatwasreceivedandwhichalsostartedanewprocessforextendingthisISOattheEuropeanlevelandforittobeendorsedbyCEN-CENELEC226.Bothstandardisationaspectsareseenasimportantinensuringthatadvancedceramicsenterthemarketandbringbothsocietalandenvironmentalbenefits.SeeCORDIS:https://cordis.europa.eu/project/id/721045.Projectwebsite:https://www.h2020-nextower.eu/•Innovativemulti-functionalvacuum-insulation-panelsforuseinthebuildingsector(INNOVIP):Overthecourseoftheproject,thecommitteeCEN/TC88/WG11furtherdevelopedthedraftstandard:DraftEN17140Thermalinsulationproductsforbuildings-Factory-madevacuuminsulationpanels(VIP)–Specification.Thiswasusedintheprojecttodeterminemechanicalpropertiesandtheperformanceovertimeforthenewpanels.SeeCordis:https://cordis.europa.eu/project/id/723441.StandardisationgapsThissectionpresentsthefieldsandtechnologiesthatarecurrentlylackingstandardisationinitiativesandthatofferpotentialopportunitieswherestandardisationcanbenefittheirdisseminationandmarketuptake.OnewayofassessingthegapsbetweenR&IandstandardisationisbyexaminingtheEUR-Lexdatabase.Theanalysisconsistsinidentifyingpolicydocuments(directives,decisions,andregulations)containingkeywords–denominators–associatedwiththetopicsoflow-carbonindustrialtechnologiesasgiveninFigure82.Thesedenominatorsare:biomass,thermalprocess,carboncapture,alternativematerials,industrialsymbiosis,greenhydrogen,fuelalternatives,carbonuse,carbonstorage,circularityofmaterialsandmaterialsefficiency,togetherwiththeword‘standard’usingtheBooleanoperator“AND”.Alistofdocumentswasextractedfromtheanalysis,withtheircorrespondingEuroVocdescriptor227andthesubjectmatterstowhichtheyareassociated.Theanalysisalsoshowedthattherearefewpolicydocumentsthatfocusspecificallyonlow-carbonindustrialtechnologies.Figure82presentsthefrequencyandthetypesofpolicydocumentthatcontainthewordstandardorstandardsincombinationwiththe11denominatorsrelatedtolow-carbonindustrialtechnologies.Biomass,asakeywordin225CENWorkshopAgreement(commonlyabbreviatedCWA)isareferencedocumentfromtheEuropeanCommitteeforStandardization(CEN).226EuropeanCommitteeforElectrotechnicalStandardization227EuroVocistheEU'smultilingualandmultidisciplinarythesaurus.Itcontainskeywords,organisedin21domainsand127sub-domains,whichareusedtodescribethecontentofdocumentsinEUR-Lex.142combinationwithstandards,isthemostfrequentlymentioned,followedbythermalprocess,carboncapture,alternativematerialsandindustrialsymbiosis.Figure82Data-mininginEUR-Lex:TypeofpolicydocumentsandfrequencyofEuroVocdescriptorsthatrelatetolow-carbonindustrialtechnologiesforthe11denominators(+standard)Source:ownelaborationbyJRCbasedonEUR-Lex.TheresultsfromtheanalysisareshowninFigure83forthescreeningof452policydocumentsbetween2001and2021.Thefigureshowsatendencyovertimeofanincreasedfrequencyofpolicydocumentscontainingstandardsincombinationwiththe11denominatorsconsidered.Thiscanbeanindicatorofanincreasedsocietaldemandforregulatingaspectsassociatedwithlow-carbonindustrialtechnologies.Theanalysisalsoshowedthattherearefewpolicydocumentsthatfocusspecificallyonlow-carbonindustrialtechnologies.Figure83Data-mininginEUR-Lex:Frequencyofpublicationofpolicydocuments(Directives,Regulations,Decisions)containingthe11denominators(+standard)relatedtolow-carbonindustrialtechnologies(2001–2021)Source:ownelaborationbyJRCbasedonEUR-Lex.1403620552113444731215222122110213121RegulationDirectiveDecision85914111791925101418382624153548322059143ThepreliminaryanalysiscarriedoutwithEUR-Lexindicatesthatstandardisationcouldbenefitseveralareasoflow-carbonindustrialtechnologiesinwhich,currently,standardisationrequestsorreferencesinpolicydocumentsareunder-represented.Theseareasare:•greenhydrogen;•fuelalternatives;•carbonuse;•carbonstorage;•circularityofmaterials;and•materialsefficiency.3ConclusionsonframeworkconditionsRegulation•Designingandbuildingapilotordemonstrationplantatscaleisoneofthemajorchallengesforthedevelopmentofmanydecarbonisationtechnologiesatregionallevelandacrossborders.Akeybarriertorolloutaretheuncertaintiesaroundauthorisationsoffirst-of-a-kindinstallations.Acommunityofknowledgeandpractice,withknow-howonauthorisationprocesses,andobtainingpermitsandlicencesetc.,couldsupportthecreationofnewdemonstrationplantsacrosstheEU.•ThereareseveralmodelsatEUlevelforfacilitatingauthorisationprocesses.Theseincludeefficientset-upofsemi-conductorproductionfacilities(EuropeanChipsAct),thenetworkofregionalhubsforbetterregulation(RegHub)orrecommendationsfromtheCommissiontoMemberStatesonhowtospeedupapprovalprocessesforrenewableenergyinstallations.•SpecificStateaidrules(i.e.directsupportforR&D&Iactivities,intellectualpropertytransfer)allowSMEstobetterprotecttheirintellectualproperty,giventhattheyarelesslikelytopatentnewlow-carbontechnologiescomparedwiththeirlargercounterparts.Valorisationandstandardisationforlow-carbonindustrialtechnologies•Standardscanprovideagreedvocabulary,definitionsandunits.Thedevelopmentoflow-carbontechnologiesfrombasicresearchtodeployment,ateverystage,requirestheuseofstandards.•BridgingthegapbetweenR&Iandstandardisationrequiresstrengtheningthelinksbetweensciencecommunities,inparticularthoseinemergingtechnologies,andstandardisationorganisations.•Similarly,knowledgesharingandvalorisationinEuropehelpsaddressinggapsacrossMemberStatesandtohelpwideningcountriestobetterbenefitfromR&Iresults.•Currentanalysisindicatesthatfurtheractiononstandardisationcouldhelppromotinginnovationforseverallow-carbonindustrialtechnologiesinwhich,currently,standardisationrequestsorreferencesinpolicydocumentsareunder-represented.Theseareasare:digitalisation,greenhydrogen;fuelalternatives;carbonuse;carbonstorage;circularityofmaterials;andmaterialsefficiency.Whileitispossibleandusefultoassessstandardisationgapsusingdata-mininginEuro-LexandEuroVocdescriptors,moreworkisneededtoidentifygapsandprioritisestandardsetting.INPUTTOTHETRANSITIONPATHWAY144TheupdatedIndustrialStrategyconfirmsR&Iasakeyfactortoacceleratethetwintransitionsandinco-creatingtransitionpathwaysacrossrelevantindustrialecosystems,whichshouldtakeintoaccountrelevantinputssuchasindustrialtechnologyroadmapsannouncedintheCommunicationontheEuropeanResearchArea(ERA).ThetablebelowsummarizestheR&Iinputfromtheindustrialtechnologyroadmaptotheupcomingtransitionpathwayfortheenergy-intensiveindustries’ecosystem.Theinputsfromtheindustrialtechnologyroadmapwillalsosupportthefollow-upworkwithMemberStates,industryandotherstakeholdersontheERAPolicyAgenda2022-2024toacceleratethedigitalandgreentransitionofEurope’skeyindustrialecosystems.Table10KeyR&Ifindingsandwaysforwardforthetransitionpathwayonenergy-intensiveindustries’ecosystemFindingsActionsResponsibleActors•Thereisaconvergingviewabouta–manageable–numberoflow-carbonindustrialtechnologies,whichareneededtoachieveEUclimateobjectivesintheenergy-intensiveindustries’ecosystem.•Scalingupanddeployingexistinginnovativelow-carbontechnologiescurrentlyathighTRLsiscrucialforreachingthe2030emissionobjectives.•Atthesametime,technologiesthatarestillinpilotanddemonstrationphaseandtechnologiesthatarenowatanevenlowerdevelopmentlevelswillneedtobedevelopedforreachingemissiontargetsafter2030inthehorizon2050.Thechallengeistospeedupsuchinnovationprojectstoreachthemarketinthistimeframe.•Scenarios,studiesandR&IinvestmenttrendsshowthatthereisagapbetweenthecurrentoverallR&Iinvestmentsacrossenergy-intensivesectorsandtheamountneededtoreachEUemissionobjectives.Thisrequiresmajoraccelerationinlow-carbonR&IandasignificantriseinR&Iinvestments.ThehighestR&Iinvestmentsshouldhappeninthecomingyears(estimatedatsomewhataboveEUR20billionuntil2030),togetherwithincreasingdeploymentinvestmentswithapeakaroundthemid-toend-2030s.•ThebiggestinvestmentgapconcernsR&Iinvestmentsoverthecomingeighttotwelveyearsforfirst-of-a-kind(FOAK)installations,large-scaledemonstrationanddeploymentoftechnologiescurrentlyathighTRLs.•Overall,thetransitionwillrequireinvestmentsestimatedatmorethanEUR800b.until2050.Thebiggestinvestmentneedwillbeinthechemicalsector,followedbyiron&steelandcement.•EUco-programmedpartnershipswithindustryunderHorizonEuropeandEITKICsprovideastrongforumforcross-sectorcooperation.Theyarethelargest1.Assessthepotentialforestablishinganindustrialallianceorsimilarinitiativeforlow-carbontechnologiesinenergy-intensiveindustriesbaseduponP4PandCleanSteelpartnerships,asreferredtointhe2020NewIndustrialStrategy.Suchinitiativesshouldhaveaspecialfocusoncross-sectoraltechnologieslinkedtotheenergyefficiencyoftheindustrialprocessesanduseandintegrationofrenewables.2.Developrelevanthubstructurestoincreaseinvestmentintodevelopmentanduptakeofcross-sectorallow-carbonindustrialtechnologies.3.OrganiseawarenessraisingactionsandexpertdiscussionsaboutprivateR&IinvestmentundertheEUtaxonomyforsustainablefinanceandaboutexistingstructurestosupportuptake,liketheEuropeanEnergyNetworkagencies.Industry,MemberStatesandotherstakeholders,ECEC,Industry,MemberStates,regionalauthorities&otherstakeholdersECincooperationwithMemberStates,industryandotherstakeholders145EuropeaninitiativesinthisindustrialecosystemtodevelopandimplementtransformationstrategiestosupporttheEuropeanGreenDealandimplementthemthroughjointR&Iactions.TheycoverseveralsectorsconcernedandbringtogetherEurope’skeycompanies,associationsandR&Istakeholders.Forsteel,severalrelevantdevelopmentsareconcentratedorconnectedtotheCleanSteelpartnership.•NotallMemberStateswithhighCO2emissionfromenergy-intensiveindustries(includingpercapita),havemadehighERDFallocationsforlow-carbonprojectsduringtheprogrammingperiod2014-2020.SomeofthemhavenationalR&Ischemes,whichprovide(partsof)therelevantfundingsupport,buttheirrelevanceandmagnitudefordevelopmentanduptakeoflow-carbontechnologiesisdifficulttogauge.•FragmentedreportinganddataposeachallengetoanticipateandestimateR&Iinvestmentsandtheireffectsonemissionreduction.Linksbetweendifferentmonitoringmechanisms,coherenceandcompletenessofindicatorsanddataaremissinginordertogettheneededoversightandtoplanandadaptinvestments.4.FacilitatebettermatchingofERDF/Nationaltransitionstrategieswithemissionpatternsinenergy-intensiveindustries.5.DevelopkeyindicatorsanddatasetsformonitoringofindustrialR&IintheEUindustrialecosystemsforenergy-intensiveindustriesalsothroughbetteruseofexistingdata,includingfromEnergyUnionreporting,inthecontextofthenewERApolicyagendaandlinkedtotherevisedSET-Plan(workinggrouponenergyefficiencyinindustry)andotherrelevantmonitoringtools.MemberStates,regionalauthorities,ECEC,industry,MemberStatesandotherstakeholders•ThereisagapasregardssynergiesbetweensupportinstrumentsatEUlevelandwiththenationallevel,whichisalsoduetothelackofabroadandopenplatformtoestablishstrategicroadmapsandefficientcoordinationofresearch,developmentandinnovationinvestmentplansforlow-carbonindustrialtechnologies.6.ExtendandstrengthensynergiesbetweenHorizonEuropepartnershipswithindustryandotherEUinstrumentsaswellaswithnationalinstruments.ThisshouldbebasedongoodpracticesliketheImpactPaneloftheP4Ppartnership,facilitatingthelaunchandmarketuptakeofprojectsatTRL9throughlinkswiththeInnovationFundandtheEuropeanInvestmentBank.Theobjectiveshouldbestrongercomplementarityandlinksbetweentheinstruments.7.Discussopportunityoftargetedlow-carbonR&IfundinginstrumentswithspecializednationalorinternationalpromotionalbanksinimplementationofInvestEU.seealsoaction1ECEC,specializednationalorinternationalpromotionalbanks•SeveralMemberStateshavedevelopedsector-specificorevencross-sectoralstrategiestowardsdecarbonisation,co-createdwithrelevantstakeholders(suchasinFinland,Sweden,GermanyandSlovenia).Theseareimportantinstrumentsdesigningadetailedprocesswithmilestonestowardscommonlyagreedemissionreduction(andother)targets.8.Facilitatedevelopingintegratedlow-carbontechnologyorsector-specificroadmapsatnationallevelwithkeystakeholdersaspartofERApolicyagenda2022-2024.9.ConsiderjointdiscussionsbetweenERAForumandSET-PlanImplementationWorkingGrouponEnergyEfficiencyinIndustry)and/orpeer-counsellinggroups.10.Launchactionunderpolicysupportfacility(PSF)-CountryandMutuallearningexercise.EC,MemberStates,Industry&otherstakeholdersEC,MemberStates,IndustryEC,MemberStates,Industry146•Patentingfilingsingreeninventions,whichgiveearlyindicationsoftechnologicalandeconomicdevelopments,continuetoincreaseglobally.AmongtheEUMemberStates,Denmarkremainsthecountrywiththehighestshareofgreeninventions(21%)initsnationalportfolio.•SMEsappeartoplayaminorroleinenergy-intensiveindustries’inventions,suggestingtheneedtostrengthentheirpossibilitiestocreateinnovationmarketsforbreakthroughlow-carbontechnologies.11.Explorefurthertheroleofstart-upsinpatentingofgreeninventions,includinginnovationforenergy-intensiveindustries.12.Improvetheknowledgeonpatentingforgreentechnologiesandforenergy-intensiveindustries,suchascementandsteel,throughmoregranularsectoranalysis,andthroughenablingsimpleronlinesearchersforexistinggreenpatents13.FacilitatefurthervalorisationbyexploringwithindustrytheopportunitytoopenupIPoncentral(cross-sectoral)greeninventions,wideningtheaccesstoIPforlicensing(e.g.patentpool)andknowledgetransfer.ECwithrelevantpartners/agenciesECwithrelevantpartners/agenciesEC•Currentanalysisindicatesthatfurtheractiononstandardisationcouldhelppromotinginnovationforseverallow-carbonindustrialtechnologiesinwhich,currently,standardisationrequestsorreferencesinpolicydocumentsareunder-represented.Theseareasare:digitalisation,greenhydrogen;fuelalternatives;carbonuse;carbonstorage;circularityofmaterials;andmaterialsefficiency.Whileitispossibleandusefultoassessstandardisationgapsusingdata-mininginEuro-LexandEuroVocdescriptors.Moreworkisneededtoidentifygapsandprioritisestandardsetting.14.CooperatewithCEN/CENELEC,DGJRC,DGGROWandindustrialpartnershipstoidentifyandfillmainstandardisationgapsforinnovativelow-carbonindustrialtechnologies(incl.nextStandardisationWorkProgramme).EC,CEN/CENELEC,EuropeanpartnershipsandMemberStates•AkeybarriertorolloutaretheuncertaintiesaroundauthorisationsofFOAKinstallations.15.EstablishacommunityofpracticetofacilitateauthorisationforFOAKinstallationsforlow-carbonindustrialtechnologies,buildinguponsimilarapproachesundertheEuropeanChipsAct,theRegulatoryHubsNetworkunderREFIT(RegHub),EUrecommendationsforapprovalprocessesforrenewableenergyinstallations,theHubs4CircularityCommunityofPracticeandinvolvementofexistingnetworksofrelevantagencies.ECwithMemberStates,Industry&otherstakeholders147REFERENCESAmoroso,S.,etal.,(2021).WorldCorporateTopR&DInvestors:Pavingthewayforclimateneutrality.AjointJRCandOECDreport,PublicationOfficeoftheEuropeanUnion,Luxembourg,2021,ISBN978-92-76-43373-6,doi:10.2760/49552,JRC126788.A.SPIRE(2021),Processe4PlanetStrategicResearchandInnovationAgenda,https://www.aspire2050.eu/sites/default/files/pressoffice/publication/processes4planet_2050_sria_final_211019_0.pdfBachtrögler-Unger,J.,MarquesSantos,A.andConte,A.(2021).ERDFbeneficiariesdataset2014-2020:anoverviewforpolicy-makers.EuropeanCommission.JRC127403.https://publications.jrc.ec.europa.eu/repository/handle/JRC127403BostonConsultingGroup(2021).HowTechOffersaFasterPathtoSustainability.https://www.bcg.com/publications/2021/how-technology-helps-sustainability-initiativesCapgeminiInvent(2020).FitforNet-Zero:55TechQueststoaccelerateEurope´srecoveryandpavethewaytoclimateneutrality(‘FitforNet-zero’).https://www.capgemini.com/gb-en/resources/investments-in-next-generation-clean-technologies/Cefic(2020).2020FactsandFiguresoftheEuropeanChemicalIndustry.https://www.francechimie.fr/media/52b/the-european-chemical-industry-facts-and-figures-2020.pdfCefic(2021).FactsandFigures2021.https://cefic.org/app/uploads/2021/02/FactsFigures2021_Leaflet_V05.pdfCefic(2022).2022FactsandFiguresoftheEuropeanChemicalIndustry.https://cefic.org/a-pillar-of-the-european-economy/facts-and-figures-of-the-european-chemical-industry/CEMBUREAU(2019).GlobalCementProduction.https://cembureau.eu/media/zutk4pir/global-cement-production-2019.pngCEMBUREAU(2020).CementingtheEuropeanGreenDeal.https://cembureau.eu/media/kuxd32gi/cembureau-2050-roadmap_final-version_web.pdfCEN&CENELEC(2020).StandardsinsupportoftheEuropeanGreenDealCommitments.https://www.cencenelec.eu/media/CEN-CENELEC/Areas%20of%20Work/CENELEC%20sectors/Accumulators,%20Primary%20cells%20and%20Primary%20Batteries/Documents/standardsinsupporteuropeangreendealcommitments.pdfCouncilofOuluregion(2014).Ouluregion’ssmartspecialisation.FI_Oulu_RIS3.pdf(onlines3.eu)DENORMALISATION,C.E.,&NORMUNG,E.K.F.(2021).Hightemperatureacceleratedageingofadvancedceramicspecimensforsolarreceiversandotherapplicationsunderconcentratedsolarradiation.https://www.cencenelec.eu/media/CEN-CENELEC/News/Workshop/2021/NEXTOWER/draftcwa.pdfDechezleprêtre,A.,etal.,(2011).Inventionandtransferofclimatechange–mitigationtechnologies:aglobalanalysis.Reviewofenvironmentaleconomicsandpolicy.Dechezleprêtre,A.etal.,(2015).InventionandInternationalDiffusionofWaterConservationandAvailabilityTechnologies.OECDEnvironmentWorkingPapers,No.82.EllenMacArthurFoundation&MaterialEconomics(2021).CompletingthePicture:Howthecirculareconomytacklesclimatechange.EnergyTransitionsCommission(2018),MissionPossible:Reachingnet-zerocarbonemissionsfromharder-to-abatesectorsbymid-century;ESTEP(2021).CleanSteelPartnershipSRIA.https://www.estep.eu/assets/CleanSteelMembersection/CSP-SRIA-Oct2021-clean.pdf;EuropeanCommission.(1985).Directive(EC)85/337:EnvironmentalImpactAssessment–EIAEuropeanCommission.(2006).Directive(EC)2006/21:ManagementofwastefromextractiveindustriesEuropeanCommission.(2010).Directive(EU)2010/75:Industrialemissions(integratedpollutionpreventionandcontrol)EuropeanCommission.(2014a).C198/1.148EuropeanCommission.(2014b).Regulation(EU)651/2014.EuropeanCommission.(2015).C(2015)6317final.EuropeanCommission(2018a).CompetitivenessoftheCementandLimeSectors,http://publications.europa.eu/resource/cellar/07d18924-07ce-11e8-b8f5-01aa75ed71a1.0001.01/DOC_1EuropeanCommission.(2018b).COM(2018)773final.EuropeanCommission(2018c).EuropeanSteel:TheWindofChange.EuropeanCommission(2018d).HorizonEurope–theFrameworkProgrammeforResearchandInnovation.EUR-Lex-52018PC0435-EN-EUR-Lex(europa.eu)EuropeanCommission.(2019a).COM(2019)640final.EuropeanCommission(2019b).MasterplanforacompetitivetransformationofEUenergy-intensiveindustriesenablingaclimate-neutral,circulareconomyby2050.https://data.europa.eu/doi/10.2873/723505;EuropeanCommission.(2020a).COM(2020)301final.EuropeanCommission.(20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sandPerformanceProgrammeREGHUB:RegionalHubsNetworkRFCS:ResearchFundforCoalandSteelRFG:Risk-financeguidelinesRIS:RegionalInnovationSchemeRO:RomaniaRRF:RecoveryandresiliencefacilityRRP:RecoveryandresilienceplanRTO:ResearchandTechnologyOrganisationSE:SwedenSETPlan:StrategicenergytechnologyplanSETIS:StrategicEnergyTechnologyInformationSystemSI:SloveniaSK:SlovakiaSME:Smallandmedium-sizedenterpriseSPIRE:SustainableProcessIndustrythroughResourceandEnergyEfficiency(Horizon2020Partnership)SRIAs:StrategicResearchandInnovationAgendasSRIP:Science,researchandinnovationperformanceoftheEUSWD:StaffWorkingDocumentTEDAM:TerritorialDataAnalysisandModellingTEN-E:TheTrans-EuropeanNetworks–EnergyTRL:TechnologyreadinesslevelUK:UnitedKingdomUSA:UnitedStatesUSPTO:UnitedStatesPatentandTrademarkOffice157FIGURES,TABLESANDBOXESFigure1Energy-intensiveindustriesecosystem………………………………………………………………………………11Figure2ProductionfacilitiesoftheEIIsecosystemintheEU…………………………………………………………12Figure3Energy-intensiveindustriesfacilities’CO2emissionsintheEU…………………………………………14Figure4DistributionofEIIgreenhousegasemissionsbyMemberState………………………………………15Figure5Concentrationofgreenhousegasbysector………………………………………………………………………16Figure6ConcentrationofGHGemissionsatnationallevelforthetwomostemission-intensivesectors………………………………………………………………………………………………………………………………………………….16Figure7Concentrationofgreenhousegasemissionplants…………………………………………………………….17Figure8EUsteel-manufacturingfacilities…………………………………………………………………………………………17Figure9SteelproductionbyMemberState……………………………………………………………………………………..18Figure10EUchemical-manufacturingfacilities……………………………………………………………………………….20Figure11EUcement-manufacturingfacilities………………………………………………………………………………….21Figure12GlobalCO2emissionsinheavyindustryandreductionsbytechnologicaloptions(mitigationmeasures)andtechnologymaturitylevel,intheNZEoftheIEA………………………………….23Figure13Industriallow-carbontechnologiesmassmarkettrajectories………………………………………..24Figure14PotentialemissionreductionsfromEUsteel,chemicals,andcement(MtCO2/year),bymeansofdifferentpathwaystonetzeroemissions………………………………………………………………………….25Figure15Developmentoruseofenvironmentaltechnologiesatregionallevel……………………………32Figure16Developmentoruseofenvironmentaltechnologiesandfirmsize…………………………………32Figure17EstimateoftheprogressionofP4Pinnovationarealevel……………………………………………….34Figure18P4Papproachtoachievingitsambitionsandgoals…………………………………………………………35Figure19TechnologicalpathwaysandenablerstoreducetheEU’ssteelindustry’sCO2emissions………………………………………………………………………………………………………………………………………………39Figure20Barriersencounteredbyrespondents’customerstoadoptenvironmentaltechnologiesorsolutions……………………………………………………………………………………………………………………………………………….42Figure21CircularityintheA.SPIREroadmap………………………………………………………………………………….46Figure22Efficientintegrationofrenewables…………………………………………………………………………………….47Figure23Assessmentofthepotentialtoreduceemissioninenergy-intensiveindustriesbytypeoforganisationandbygroupofcountry………………………………………………………………………………………………….48Figure24Processes4Planetinvestmentneedsforitsinnovationpipeline……………………………………….51Figure25Budgetdistributionalongthemulti-stageapproachoftheCSP……………………………………..53Figure26Investmentneedsacrossthe3pathwaystonet-zero…………………………………………………….54Figure27Investmentneedsovertime,2020–2050………………………………………………………………………..55158Figure28Barriersfortheadoptionofenvironmentaltechnologies………………………………………………..55Figure29Majorbarriersfortheadoptionofenvironmentaltechnologiesattheregionallevel(countrygroups)………………………………………………………………………………………………………………………………….55Figure30PublicenergytechnologyR&DanddemonstrationspendingbyInternationalEnergyAgency(IEA)membergovernmentsbytechnology,1977-2019……………………………………………………….58Figure31PublicR&IfinancingofEnergyUnionR&IprioritiesintheEUinEURbillion(ontheleft)&asashareofGDPinmajoreconomies(ontheright)………………………………………………………………………….60Figure32PrivateR&IfinancingofEnergyUnionR&IprioritiesintheEUinEURbillion(ontheleft)&asashareofGDPinmajoreconomies(ontheright)……………………………………………………………………….62Figure33R&Iinvestmentinenergyefficiencyinindustry(EURbillion)&ShareinprivateR&Iinvestment(2014-2018)……………………………………………………………………………………………………………………..63Figure34R&Dexpenditureofcompaniesperenergy-intensiveindustryinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)……………………………………………………………………………………………………………..63Figure35R&DexpenditureofcompaniesinthechemicalssectorinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)……………………………………………………………………………………………………………………64Figure36R&DexpenditureofcompaniesinbasicmetalsectorinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)…………………………………………………………………………………………………………………………….64Figure37TotalR&Dexpenditureofcompaniesinenergy-intensiveindustriesinEU-27,UK,Japan,ChinaandUSA,2012-2020(inEUR)………………………………………………………………………………………………….65Figure38AverageR&Dintensityofcompaniesinenergy-intensiveindustriesinEU-27,UK,Japan,ChinaandUSA,2012-2020(in%)………………………………………………………………………………………………………67Figure39Trendofgreeninventionsandshareofinternationalandhigh-valuegreeninventions……67Figure40Shareofgreeninventionsinenergy-intensiveindustries(2010-2018)……………………………69Figure41Trendsingreeninventionsinenergy-intensiveindustries………………………………………………69Figure42Flowofgreeninventionsinenergy-intensiveindustries……………………………………………………70Figure43Specialisationindexingreeninventionsforenergy-intensiveindustries…………………………70Figure44Shareofinventionsperenergy-intensiveindustryformajoreconomies,2010-2018……..71Figure45EUScoreboardcompanies’greenactivityinenergy-intensiveindustriesbyICBsector….72Figure46SplitoftheactivityofthetopEUScoreboardcompaniesbyenergy-intensiveindustry…72Figure47Plannedmeasuresinthenext5yearstocopewiththechallenges…………………………………..75Figure48TopEII-relatedtechnologiesbyNUTS2region………………………………………………………………….76Figure49PatentingactivityinCCMTsrelevantforSteel……………………………………………………………………76Figure50PatentingactivityinCCMTsthatarerelevantforChemicals&Fertilisers…………………………77Figure51Greeninventionsinenergy-intensiveindustriesperMemberState…………………………………77Figure52ShareofgreeninventionsandchampionsperindustryandMemberState,2010-2018……………………………………………………………………………………………………………………………………………………..78159Figure53Regionaldistributionofgreeninventionsinenergy-intensiveindustriesandkeyindustrialplayersresidentinthetop5NUTSregions(2010onwards)………………………………………………………………79Figure54Shares(%)oftop10%ofscientificpublicationsonclimateandenvironment,2008(interior)and2018(exterior)………………………………………………………………………………………………………………80Figure55MainfinancingtoolsoftheEuropeanInnovationCouncil………………………………………………….86Figure56EIT’sknowledgetriangle:businesses,researchcentresanduniversities…………………………87Figure57EITRegionalInnovationSchemeHubs………………………………………………………………………………88Figure58EFSIIIWinvestmentmobilisedbyEFSIobjective…………………………………………………………….91Figure59GeographicalcoverageofEFSIsignedoperationsasoftheendof2020…………………………92Figure60Low-carbonindustrialtechnologiesprojectsoverthetotalERDFprojects,2014-2020,EU27+UK,byinnovationandcooperationtypologies……………………………………………………………………….99Figure61Low-carbonindustrialtechnologiesbyindustry,2014-2020,EU27+UK………………………99Figure62Specialisationpatterns:EUregionsinvestingERDFco-fundinginlow-carbonindustrialtechnologies,2014-2020,EU27+UK……………………………………………………………………………………………….100Figure63Fundingintensity:EUregionsinvestingERDFco-fundinginlow-carbonindustrialtechnologies,2014-2020,EU27+UK,TotalandR&I……………………………………………………………………….100Figure64EUregionsinvestingR&IERDFco-fundinginlow-carbonindustrialtechnologies,2014-2020,EU27+UK,inchemicalsindustry……………………………………………………………………………………………101Figure65Regionswithprioritiesonsteel,metalandotheractivitiesrelatedtometal…………………103Figure66RegionswithprioritiesonChemistryandotheractivitiesrelatedtoChemicals……………104Figure67CountrieswithprioritiesrelatedtoChemistry,SteelandOtheractivitiesrelatedtometalandEnergy…………………………………………………………………………………………………………………………………………105Figure68RegionsparticipatinginS3PEnergyinterregionalpartnerships……………………………………..107Figure69ShareofR&Dfinancesources………………………………………………………………………………………….109Figure70Shareofpublicfundingreceivedinthelast5years……………………………………………………..109Figure71ShareofrespondentsinvolvedinEUprogrammes……………………………………………………….110Figure72Distributionofclimate-relatedinvestmentsinMemberStates’RRPs…………………………….111Figure73Breakdownofexpenditureintermsofclimateobjectivesperpolicyarea………………………112Figure74Publicsupportreceivedinthepast5years………………………………………………………………………117Figure75Publicsupportreceivedinthepast5yearsattheregionallevel(countrygroups)…………117Figure76Fitfor55elements……………………………………………………………………………………………………………124Figure77ChallengesfordoingcollaborativeR&D……………………………………………………………………………130Figure78Europeanpolicysupportforthedevelopmentofsustainabletechnologies&solutions…………………………………………………………………………………………………………………………………………….131Figure79HowEUpolicycansupporttheadoptionofenvironmentaltechnologies,analysisatfirmsizelevel…………………………………………………………………………………………………………………………………………….131160Figure80Obstaclesdelayingthedevelopmentoruptakeoflow-carbonindustrialtechnologies….132Figure81Technologyreadinesslevels,linkedtotypicalresearchtypesandstandardisationdeliverables………………………………………………………………………………………………………………………………………..138Figure82Data-mininginEUR-Lex:TypeofpolicydocumentsandfrequencyofEuroVocdescriptorsthatrelatetolow-carbonindustrialtechnologiesforthe11denominators(+standard)………………………………………………………………………………………………………………………………………….142Figure83Data-mininginEUR-Lex:Frequencyofpublicationofpolicydocuments(Directives,Regulations,Decisions)containingthe11denominators(+standard)relatedtolow-carbonindustrialtechnologies(2001–2021)……………………………………………………………………………………………….142Table1EIIsCO2emissionspercapita…………………………………………………………………………………………………15Table2Announcedorongoinghydrogen-DRIsteeldecarbonisationprojectsintheEU……………………19Table3Overviewoftechnologicalpathways,TRLsandapplicationpotentialbysector……………………28Table4ThematicgroupsandprioritisedR&IactivitiesintheSETPlan–Action6……………………………41Table5ConcordanceofCPCclassesandEIItechnologies…………………………………………………………………68Table6ProjectsinR&DfundingprogrammesforthesteelindustryfocusingonCO2emissionsreduction………………………………………………………………………………………………………………………………………………83Table7EIIinstallations’CO2emissions&shareoflow-carbonprojects(%totalERDF)inEUMemberStates…………………………………………………………………………………………………………………………………………………101Table8KeybarriersandrelatedEUinitiatives…………………………………………………………………………………127Table9OverviewofeligibleactivitiesandinvestmentsandmarketfailuresthatRDI-aidcanaddress(andaselectionofapplicabletexts)………………………………………………………………………………………………….134Table10KeyR&Ifindingsandwaysforwardforthetransitionpathwayonenergy-intensiveindustries’ecosystem…………………………………………………………………………………………………………………………144Box1ImpactofagasshortageandgaspriceriseonthedecarbonisationofindustrialprocessesinEUenergy-intensiveindustriesduetoRussia’invasionofUkraine………………………………………………………9Box2Theenergy-intensiveindustriesecosystemintheEU………………………………………………………………11Box3ImpactofagasshortageandgaspriceriseonthedecabonisationofindustrialprocessesinEUenergy-intensiveindustriesduetoRussia’sinvasionofUkraine…………………………………………………30Box4Cross-cuttingandcross-sectoralinnovationunderP4P……………………………………………………………36Box5Examplesofbreakthroughtechnologiesbysteelmakingroute………………………………………………40Box6Circularityasanenablerofdecarbonisation……………………………………………………………………………46Box7FinancingR&D&I–Resultofstakeholderworkshop…………………………………………………………………56Box8Methodology………………………………………………………………………………………………………………………………67Box93Dcarboncapturepilot,aHorizon-fundeddemonstrationproject…………………………………………84Box10High-potentialSME/EICprojectsforindustriallow-carbontechnologies………………………………85Box11EITKICs:grants&non-financialsupportforinnovationnetworks………………………………………89Box12Openinnovationinsteel–theAsturiasexperience………………………………………………………………104161Box13SmartchemistryspecialisationstrategyofSaxony-Anhalt…………………………………………………105Box14Agri-basedchemicalsprogramme(NL)……………………………………………………………………………….115Box15TargetedsupportinFinlandforlow-carbonroadmaps&projects………………………………………115Box16SPRIN-D,federalagencyfordisruptiveinnovation:theGermanEIC?………………………………116Box17Fitfor55……………………………………………………………………………………………………………………………….124Box18Nationalactiontoimproveframeworkconditions………………………………………………………………..132Box19BestpracticeexamplesfromtheEUknowledgevalorisationplatformthatpromoteanecosystemapproachinvolvingseveraltypesofstakeholderstopromotethedisseminationanduptakeofsustainableandlow-carbontechnologies………………………………………………………………………………………136Box20Examplesofprojectsco-fundedbyHorizon2020thatusedstandardisationfordisseminatingandvalorisingR&Iresults………………………………………………………………………………………………………………….141SMEFocus1Potentialroleindevelopingandadoptingnewtechnologies………………………………………32SMEFocus2TheroleofSMEsindevelopingtechnologies…………………………………………………………………44SMEFocus3Financingthedevelopmentanduptakeofnewtechnologies………………………………………57SMEFocus4PatentingactivityatSMElevel………………………………………………………………………………………75SMEFocus5Relevanceofpublicfunds&EU’sframeworkprogrammesforfinancingR&I…………….109SMEFocus6SMEs’relianceonnationalfundingforR&D&I…………………………………………………………….117SMEFocus7SMEspecificconditionsforR&D&Iactivities……………………………………………………………….130162ANNEXESAnnexesareavailableinaseparatedocumentontheEUBookshop.Annex1:SummaryofSMEssurveys.Annex2:WorkshopReport:ERAindustrialtechnologyroadmapforlow-carbonindustrialtechnologiesinenergy-intensiveindustries-OnlineWorkshop,24.11.2021,14:00-17:00.Annex3:Assessmentoftechnologicaloptionsfordecarbonisationofenergy-intensiveindustriesbypathways.GettingintouchwiththeEUINPERSONAllovertheEuropeanUniontherearehundredsofEuropeDirectinformationcentres.Youcanfindtheaddressofthecentrenearestyouat:https://europa.eu/european-union/contact_enONTHEPHONEORBYEMAILEuropeDirectisaservicethatanswersyourquestionsabouttheEuropeanUnion.Youcancontactthisservice:–byfreephone:0080067891011(certainoperatorsmaychargeforthesecalls),–atthefollowingstandardnumber:+3222999696,or–byemailvia:https://europa.eu/european-union/contact_enFindinginformationabouttheEUONLINEInformationabouttheEuropeanUnioninalltheofficiallanguagesoftheEUisavailableontheEuropawebsiteat:https://europa.eu/european-union/index_enEUPUBLICATIONSYoucandownloadororderfreeandpricedEUpublicationsfrom:https://op.europa.eu/en/publications.MultiplecopiesoffreepublicationsmaybeobtainedbycontactingEuropeDirectoryourlocalinformationcentre(seehttps://europa.eu/european-union/contact_en).EULAWANDRELATEDDOCUMENTSForaccesstolegalinformationfromtheEU,includingallEUlawsince1952inalltheofficiallanguageversions,gotoEUR-Lexat:http://eur-lex.europa.euOPENDATAFROMTHEEUTheEUOpenDataPortal(http://data.europa.eu/euodp/en)providesaccesstodatasetsfromtheEU.Datacanbedownloadedandreusedforfree,forbothcommercialandnon-commercialpurposes.TheenergycrisisresultingfromRussia’sinvasionofUkraineonlyunderlinestheurgencyfortheEUtoreduceitsdependencyonfossilfuel,inordertoreachclimateneutralityby2050,whichisatthecoreoftheEuropeanGreenDeal.Decarbonisingtheindustry,responsiblefor17%ofgreenhousegasemissionsintheEU,isthereforekey.ThisfirstindustrialtechnologyroadmapunderthenewEuropeanresearcharea(ERA)providesanevidencebaseonthestateofplayoflow-carbontechnologiesinenergy-intensiveindustriesintheEUandavailablesupportinstruments,andpointstopossibleresearchandinnovationactioninviewofacceleratingdevelopmentanduptakeofthesetechnologies.Thesepossiblewaysforwardbuildoncontributionsfromindustry,otherresearchandinnovationstakeholders,MemberStates,andrelevantEuropeanpartnerships.Thisroadmapwillfeedintothetransitionpathwayfortheenergy-intensiveindustriesecosystemundertheEUindustrialstrategyandsupportstheworktoacceleratethegreenanddigitaltransitionsundertheERApolicyagenda.ResearchandInnovationpolicy

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