Inclusive Transformation of the European Materials Sector

The report examines the transition of the European basic materials sector (cement, steel, paper, aluminium, chemicals) toward carbon neutrality by 2050. It identifies that these sectors account for approximately 16% of European GHG emissions. Through analysis of Hungary, Poland, and Spain, the document highlights a prevalence of short-term policy focuses on carbon leakage and energy costs over long-term structural transformation. It proposes a policy package consisting of carbon pricing mechanisms (Border Tax Adjustments or Inclusion of Consumption), low-emission and circularity standards, and Contracts for Differences (CCfDs) to incentivise breakthrough technologies and ensure a cost-competitive supply of low-carbon electricity.

• The production of basic materials, including cement, iron, steel, paper, board, aluminium, chemicals, and petrochemicals, is responsible for approximately 16% of greenhouse gas emissions in Europe.
• Decarbonisation of the materials sector can be achieved through a combination of five mitigation options: sharing, repairing and reusing; improving material efficiency in design and manufacturing; increasing the purity and rate of recycling; adopting low-carbon production processes; and substituting materials with lower life-cycle emission alternatives.
• In Hungary, the manufacturing sector's energy consumption increased from 129 TJ in 2008 to 182 TJ in 2017, with a significant rise in electricity consumption. The country's industrial GHG emissions in 2016 were 11.2 million tons CO2eq, with 58% attributed to industrial processes and product use.
• Poland's material industry is characterized by a high dependence on coal as a cost-competitive energy source for chemicals, non-metallic minerals, and paper production, and a high reliance on foreign direct investment in steel and cement.
• Spain's mineral industry, particularly cement, is the largest industrial carbon emitter, accounting for nearly 7% of the country's total CO2 emissions in 2016. While industrial CO2 emissions fell by 42% between 2005 and 2017 due to the 2008 financial crisis, energy intensity in the basic material sector has risen since 2010.
• Current national policies in the studied countries often focus on short-term fixes, such as reducing energy bills or protecting against carbon leakage, rather than providing a long-term vision for deep decarbonisation.
• To restore carbon price signals in the value chain while protecting against leakage, the report suggests either Border Tax Adjustments (BTA) or the Inclusion of Consumption (IoC) of carbon-intensive materials in the EU ETS.
• Standardization, including emission performance standards and circularity requirements (such as minimum component lifetimes and ease of disassembly), is proposed to accelerate the phase-out of carbon-intensive processes.
• Carbon Contracts for Differences (CCfDs) can provide a guaranteed carbon price for low-carbon projects, covering incremental operating costs and reducing regulatory uncertainty for breakthrough technologies.
• Multinational ownership in Central and Eastern Europe presents a dual effect: it allows for the quick uptake of best practices and operational excellence, but may lead companies to prioritize short-term financial gains over environmental transformation without a strong EU-level policy framework.

APA

Climate Strategies (n.d.). Inclusive Transformation of the European Materials Sector. https://climatestrategies.org/wp-content/uploads/2019/05/Inclusive-Transformation-EU-Materials-Sector.pdf

Chicago

Climate Strategies. Inclusive Transformation of the European Materials Sector. n.d. https://climatestrategies.org/wp-content/uploads/2019/05/Inclusive-Transformation-EU-Materials-Sector.pdf.

Wikipedia

{{cite report |author=Climate Strategies |title=Inclusive Transformation of the European Materials Sector |url=https://climatestrategies.org/wp-content/uploads/2019/05/Inclusive-Transformation-EU-Materials-Sector.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatestrategiesndinclusive, author = {{Climate Strategies}}, title = {{Inclusive Transformation of the European Materials Sector}}, institution = {Climate Strategies}, url = {https://climatestrategies.org/wp-content/uploads/2019/05/Inclusive-Transformation-EU-Materials-Sector.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }