The industrial sector, which produces about one-quarter of global GDP and employment, is also one of the biggest sources of greenhouse gas emissions. To achieve the goal of net-zero emissions by 2050, as agreed by many countries under the Paris Agreement, industry needs to adopt decarbonization technologies that can reduce its environmental impact while maintaining its competitiveness and growth.

A new report by ABI Research, a global intelligence firm, projects that the market for decarbonization technologies in the industrial sector will grow from US$1.45 trillion in 2022 to US$4.09 trillion in 2032, at a compound annual growth rate of 10.93%. The report covers five of the most carbon-intensive industries: chemical, petroleum refining, iron and steel, cement, and food and beverage.

The report identifies four key pathways for industrial decarbonization: electrification, energy efficiency, low-carbon fuels, and carbon capture. Electrification, which involves switching from fossil fuels to renewable energy sources and electric machinery, is the most dominant and effective pathway, accounting for 71.5% of the market in 2022. Energy efficiency, which involves improving the use of energy in industrial processes and systems, holds the second largest market share at 23.6%. Low-carbon fuels, which include hydrogen, biomass, and waste, account for 4.6% of the market. Carbon capture, which involves capturing and storing or utilizing the carbon dioxide emitted by industrial processes, accounts for only 0.3% of the market, due to its high cost and low maturity.

The report also analyzes the drivers and barriers for the adoption of decarbonization technologies in the industrial sector. The main drivers are the increasing investments, the decreasing costs of renewable energy infrastructure, the growing global commitments from industrial companies to reduce emissions and develop sustainable products, and the regulation and policy support from governments. The main barriers are the lack of project funding and research and development, the technical challenges and risks of implementing new technologies, the uncertainty and variability of market demand and prices, and the potential trade-offs and impacts on product quality and performance.

The report highlights the leading suppliers and innovators of decarbonization technologies for the industrial sector, such as Honeywell, Shell, Siemens, Air Liquide, Baker Hughes, CarbonCure Technologies, Li-Cycle, and SSAB. The report also emphasizes the need for collaboration and coordination among governments, industrials, and technology suppliers to accelerate the deployment and scaling of decarbonization technologies.

“Decarbonizing the industrial sector is a critical and urgent challenge for achieving net-zero emissions by 2050. The industrial sector has the potential and the opportunity to transform its operations and products with decarbonization technologies that can reduce emissions, increase efficiency, and create value. However, this transformation requires a major increase in global green tech investment, as well as stronger policy incentives and market mechanisms to enable the commercial availability and affordability of these technologies. Decarbonization of the industrial sector will only be achieved through close collaboration and innovation among all stakeholders,” said Alex McQueen, Research Analyst at ABI Research.