Innovation for Decarbonisation

Key messages:

  • The European transition towards net-zero emissions by 2050 requires both competitive technology costs and the removal of a wide array of non-cost-related diffusion barriers.
  • Innovation successfully takes place when a diversity of actors and institutions share a common value system, which can be promoted by EU institutions providing a unifying framework across member states to reduce the impact of countervailing national and cross-national pressures.
  • Increased public support for net-zero R&D is still crucial. Support for R&D in small firms and start-ups is a particularly useful tool to advance the twin goals of innovation in hard-to-decarbonize areas and economic competitiveness and opportunities, provided it is designed adequately.
  • Many of the policy instruments that have been deployed to reduce GHG emissions have also been shown to promote technology innovation alongside emissions reductions.
  • Demand-pull policies play an important role in promoting diffusion and reducing different barriers, but they need to be designed to be flexible and adjustable to minimize negative competitiveness and distributional impacts, particularly for small firms and low income households.

Finance for Decarbonisation

Key messages:

  • Policies need to be designed and maintained that enable private capital to flow into low-cost project finance.
  • Policy makers should use the window of opportunity provided by low general interest rate levels post COVID-19 to tackle the climate and the economic recovery challenges at the same time.
  • Public funds and banks should be used to provide the right type of capital and enable financial mainstreaming of low-carbon assets.
  • The European Green Deal provides an excellent policy framework to integrate financial and sector/ technology policy.

Decarbonisation and Labour Markets

Key messages:

  • The effect of subsidizing green employment may be estimated from US experience: green subsidies are more effective in regions with the appropriate green skills.
  • The European Green Deal should make significant provision for retraining, taking account of the nature of workers’ existing skills, and the distribution of green industries across EU countries.
  • Increases in energy prices may have large effects on employment in individual firms, but less effect for the economy as a whole.
  • Increases in energy prices tend to favour employees with technical skills rather than manual workers.

Biochar for Decarbonisation

Key messages:

  • The biochar system is an exceptional negative emissions technology (NET) that can remove carbon from the atmosphere and store it in soil, thereby improving soil and conserving water, as well as having other possible uses.
  • The lack of an enabling and supportive policy framework at the EU level, has been the main barrier to widespread diffusion of the biochar system.
  • Widespread diffusion of the biochar system will require its greenhouse gas removals from the atmosphere to be financially rewarded, but its many benefits could then lead to wide public acceptance.
  • The policy framework to support NETs, including biochar, needs urgently to be agreed and implemented.

Decarbonising Industry

Key messages:

  • Policy makers need to support technology development and diffusion in the decarbonisation of industrial sectors and address associated socioeconomic issues.
  • Deep decarbonisation of industry by 2050 requires an increased rate of deployment of existing technologies and the emergence of breakthrough technologies in manufacturing.
  • The strong involvement of all stakeholders must be secured for the rapid diffusion and deployment of carbon-neutral technologies aimed at the decarbonisation of European industry.
  • Climate policy portfolios for industrial climate-neutrality should be differentiated in their support for short, medium and long-term challenges.

Decarbonising Transport

Key messages:

  • Strong policies are needed to push the EU transport system towards adopting zero-emission technologies tailored to the different transport markets across the EU.
  • Short-term transport decarbonisation priorities include the mass adoption of electric vehicles with a low-carbon electricity generation.
  • Investing in charging infrastructure is key to solve the “chicken-egg” problem for the widespread uptake of electric vehicles in urban areas.
  • Hydrogen-based liquid fuels and advanced biofuels will help reduce emissions in hard-to-electrify sectors such as aviation and shipping.

Decarbonising Buildings

Key messages:

  • Decarbonising European homes will require governments to ensure clear and supportive governance structures to establish, monitor and enforce effective energy efficiency building regulations.
  • Energy efficiency, along with the reduction in the carbon content of the energy consumed, is an essential enabler of decarbonisation of buildings.
  • Heat pumps are likely to be key for decarbonising homes, but their rapid deployment will need governments to put in place stable and long-term economic incentives.
  • Successful decarbonisation of buildings will require governments to engage with the construction industries and associated supply chains, and provide help to build the necessary knowledge, skills and support for ambitious policy.

Decarbonising Electricity

Key messages:

  • A net-zero EU in 2050 requires net-zero electricity emissions by 2040.
  • Achieving net-zero electricity emissions by 2040 in the EU is possible and affordable.
  • Net-zero electricity emissions by 2040 requires existing instruments to be tightened and extended in order to set out a clear long-term pathway to this goal.
  • There are technical challenges to the operation of zero-carbon electricity systems, which need to be addressed early, to ensure a smooth and secure transition.
  • Investments in innovation and skills, attending to all stages in the innovation chain, remain crucial to supporting the transition and capturing its economic benefits.
  • The political challenges are as important as the technical challenges, with attention to just transitions at the regional scale essential to meet net-zero targets.

D 3.7 Report on decarbonisation in the power sector

Summary

This document presents a series of research papers which provide insights regarding how the power sector can drastically reduce carbon dioxide emissions until 2050. They analyze how different flexibility options like transmission grid expansion, storage and hydrogen electrolysis can facilitate the integration of high shares of variable renewable energies; and how tighter EU-ETS targets, necessary to reach 2050 net-neutrality, could affect the power sector.

D 3.8 Report on decarbonisation in residential and services sectors

Summary

The buildings sector represents an essential component of the European energy system. In 2015, the sector consumed 38% of the European final energy. Buildings accounted for 15% of CO2 emissions, when considering only on-site emissions, and 34% when also including induced emissions from energy supply (e.g. emissions from the generation of electricity consumed in buildings). While the high level of energy consumption in buildings is a challenge for decarbonisation, it is also an opportunity as many options exist to decrease energy demand and emissions in this sector. The model developments undertaken in the INNOPATHS project and the resulting scenario analyses in Deliverable 3.8 allowed gaining important insight regarding the mitigation potential and policies in the sector:

  • The global energy landscape will undergo a paradigm change
  • A combination of technological and behavioural changes can deliver large energy demand reductions
  • The economic potential of energy efficiency is important, especially in the long term, but might be smaller than expected in the short term
  • Policies to reduce energy demand should not be delayed and should be comprehensive
  • A variety of policies is necessary to reduce energy demand, with trade-offs between economic efficiency and equity