Decarbonisation of the Industrial Sector
Sustainable Finance as an Opportunity?
Industrial decarbonisation issue is a particularly sensitive topic for Czechia, a country with a long tradition of industrial production and with more than one-third of added value coming from industry.
The EU steel, cement, and chemical sectors face unprecedented challenges to decarbonise their processes, while maintaining their market share and competitiveness. Because of the high emission intensity of their production process, the phase-out of the EU Emissions Trading Scheme's free allowances will bring additional costs, affecting profit margins.
This report summarises the Czech financial and policy framework, and explores the main barriers and technological options to decarbonise the hard-to-abate industries. It analyses the margins of companies in recent years as well as the potential for mobilising capital from both public and private sources. Decarbonisation of these sectors is going to require major scale-up in some ground-breaking technologies, such as hydrogen production and carbon capture, use and storage. The report assesses if the current policy framework supports the development of innovation and development of new technologies.
Further research will focus on designing a financial and policy roadmap for decarbonisation and will aim to suggest specific steps leading to a more competitive and sustainable production.