Progress in transitioning industrial clusters
Achieving deep decarbonisation globally will only be feasible if industrial clusters reduce their GHG emissions significantly. Building up on my previous blog Clusters to accelerate the net zero transition, you are finding out how clusters, in the last two years, have developed strategies to reach net zero while attaining their full economic and employment potential by digging into the Transitioning Industrial Clusters Annual Report.
At this point, the Transitioning Industrial Clusters towards Net Zero initiative has grown in members, it encompasses 20 signatory clusters across 10 countries on four continents, representing a potential for carbon dioxide-equivalent (CO2 e) emissions reduction of 626 million tonnes. To put this into perspective, this amount of CO2e reduction is roughly equivalent to the emissions of a country like Canada.
This initiative represents a diverse global community of clusters at different development stage. On one end, 40% percent of members have made public announcements but no collaborative physical asset improvement or construction has begun. And on a more developed phase, 35% of the clusters are already avoiding emissions a result of clean technology integration through collaborative measures, which is encouraging.
The four pillars of the Transitioning Industrial Clusters towards Net Zero initiative are partnerships, policy, technology and finance, which are the same as the four transversal areas we cover in this blog as key to accelerate the deployment of the decarbonization roadmap. So, let´s reveal what progress the signatory clusters showcase and what are the strategies established to engage communities, companies and government entities, creating a sustainable and economically viable energy transition business model.
They are moving the needle trough participation in workshops where clusters, communities and policy makers meet to accelerate taking steps towards their transition to net zero.
The initiative published the second volume of its white paper on the National Policy Enablement for Industrial Decarbonization. The paper examined policy support for industrial decarbonization through key technologies. The clusters are deploying decarbonization across the four solution areas:
Systemic efficiency and circularity
Direct electrification and renewable heat
CCUS
Hydrogen
Progress made in 2023 per region
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Accelerating set up of Regional Hydrogen Hubs
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Advancing Carbon Capture and low-carbon hydrogen infrastructure
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Decarbonizing global supply chains
“The primary challenges faced by clusters do not revolve exclusively around the project bankability or innovative technology.
Instead, they are rooted in confidence levels, essential governance frameworks and required shifts in business mindsets.
Sharing risk among stakeholders and developing risk mitigation mechanisms that facilitate the mobilization of private funding is equally important.”
A shift in mindset to prioritize systemic approaches and long-term goals is key
One of the clusters showcased in the last report is Brightlands Circular Space, an initiative of Brightlands Chemelot Campus, Maastricht University and TNO. These organizations bring together knowledge, resources and determination to accelerate circular plastics. This cluster adopted a systemic approach with a collaboration mindset using a new governance model which is pivotal to overcome the potential feedback mechanisms that could hinder or enable the feasibility of deep emission reductions in an industrial cluster.
As stated in the article Industrial clustering as a barrier and an enabler for deep emission reduction: a case study of a Dutch chemical cluster, clustering may hinder reaching deep emission reductions by three reinforcing feedback mechanisms, or ‘traps’, related to: incremental changes; short-term focus; and companies acting alone. These mechanisms could ‘trap’ the Chemelot cluster or lock it in to high GHG emissions. In the past years it is obvious that the cluster is escaping these traps by applying the mechanisms the same study proposes to escape those traps, by for example, joining the Transitioning Industrial Clusters towards Net Zero initiative. The cluster is increasing its autonomy, activating public support, promoting changes in the supply chain and attracting long-term investors. The cluster is undergoing an integral transformation of the existing plastics value chain towards a circular economy.
