Modernization and Innovation in the materials sector: lessons from steel and cement

The European steel and cement sectors face substantial surplus production capacity and limited reinvestment, hindering the adoption of low-carbon technologies. While energy efficiency and fuel-switching have provided some gains, breakthrough process technologies like carbon capture and storage (CCS) require significant public funding and a credible, long-term carbon price signal for both producers and consumers to be viable. The report argues that a comprehensive policy package—combining the EU ETS, innovation funding, and updated building standards—is essential to transition these capital-intensive industries toward sustainable, high-value production.

• European steel and cement sectors have suffered from substantial surplus production capacity since 2007, which has limited reinvestment in primary production and threatened the long-term economic viability of many plants.
• Energy efficiency improvements for primary steel and cement production in Europe are limited, with estimated potentials of only 10–20 percent, and are typically only pursued if payback periods are between 2 and 4 years.
• Fuel-switching has reduced emissions, such as the cement sector reducing fuel-related carbon intensity by 6 percent between 2005 and 2011 by replacing 9 percent of coal with biomass residue. In steel, Direct Reduced Iron (DRI) combined with Electric Arc Furnaces (EAFs) can reduce primary production emissions by 20–40 percent, though high gas prices currently make this unattractive in Europe.
• Breakthrough technologies like carbon capture and sequestration (CCS) or carbon capture and use (CCU) are necessary to address process emissions, which account for around two-thirds of emissions in both sectors. However, these technologies face high risks and funding gaps, as seen with the NER 300 program, where support was considered too risky because funds had to be returned if the technology failed.
• Material efficiency and innovation can reduce emissions, such as the steel sector achieving 25 percent savings in automobile body weight since 2005 through high-strength steel. In cement, clinker substitutes like slag and fly ash reduce emissions, but their adoption is often hindered by construction industry resistance and outdated codes and standards.
• A successful policy framework requires a strengthened carbon price signal for producers and the preservation of that signal for intermediate and final consumers to create a business case for low-carbon materials. The decline of the EU ETS price from 30 €/t in 2008 to 5–10 €/t in recent years has significantly reduced the scheme's credibility.

APA

Neuhoff, K., Ancygier, A., Ponssard, J.-P., Quirion, P., Sabio, N., Sartor, O., Sato, M., & Schopp, A. (2015). Modernization and Innovation in the materials sector: lessons from steel and cement. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2015/07/EEI-Climate-strategies-Report-July-2015.pdf

Chicago

Neuhoff, Karsten, Andrzej Ancygier, Jean-Pierre Ponssard, Philippe Quirion, Nagore Sabio, Oliver Sartor, Misato Sato, and Anne Schopp. Modernization and Innovation in the materials sector: lessons from steel and cement. Climate Strategies, 2015. https://climatestrategies.org/wp-content/uploads/2015/07/EEI-Climate-strategies-Report-July-2015.pdf.

Wikipedia

{{cite report |last1=Neuhoff |first1=Karsten |last2=Ancygier |first2=Andrzej |last3=Ponssard |first3=Jean-Pierre |last4=Quirion |first4=Philippe |last5=Sabio |first5=Nagore |last6=Sartor |first6=Oliver |last7=Sato |first7=Misato |last8=Schopp |first8=Anne |title=Modernization and Innovation in the materials sector: lessons from steel and cement |publisher=Climate Strategies |date=16 July 2015 |url=https://climatestrategies.org/wp-content/uploads/2015/07/EEI-Climate-strategies-Report-July-2015.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{neuhoff2015modernization, author = {Neuhoff, Karsten and Ancygier, Andrzej and Ponssard, Jean-Pierre and Quirion, Philippe and Sabio, Nagore and Sartor, Oliver and Sato, Misato and Schopp, Anne}, title = {{Modernization and Innovation in the materials sector: lessons from steel and cement}}, institution = {Climate Strategies}, year = {2015}, month = jul, url = {https://climatestrategies.org/wp-content/uploads/2015/07/EEI-Climate-strategies-Report-July-2015.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }