Reducing emissions
in primary industry

The industrial sector is the second largest emitter of greenhouse gases after the energy sector. Most of these emissions can be attributed to primary industry: primarily, steel production, cement production and basic chemicals. The Office of Technology Assessment at the German Bundestag commissioned Prognos with compiling an expert report on the opportunities for the successful transformation of the industry. The Wuppertal Institute was also involved in the project as a subcontractor.

Primary industry must reduce emissions for climate change mitigation

The aim of the project was to record the current technologies in these industries and their applications as well as the savings potential for low carbon production. In addition, policy options for the promotion of a sustainable transformation for primary industry were also to be identified.

The new low-emission technologies and processes that make a climate-neutral primary industry possible are either already available or will be in the near future. However, it is integrating them into the industry that poses the greatest challenge. This begs the question as to how the transformation of the production of steel, cement and high value chemicals can be achieved in Germany and what the prerequisites are.

The core results of the study are as follows:

• The opportunities for a successful transformation already exist.
• Steel production would achieve extensive greenhouse gas neutrality with a cost increase of one third.
• Cement production would require high CO₂-capture rates despite new binding agents.
• The production of high value chemicals would have to be largely electrified in the future.
• The economic effects on downstream production fields and the overall economy would be limited.
• The impacts on employment and import dependency present extremely positively.
• The risks of the transformation (carbon leakage and green leakage) should be actively confronted with targeted instrument packages and by establishing the necessary framework conditions early on.

Our approach

Prognos’ contribution comprised:

• an overview of current production technologies in use as well as potential avoidance technologies, including the identification of technical and economic challenges on the basis of comprehensive literature research,
• the model-based development of two climate neutrality pathways taking into consideration promising avoidance technologies, as well as
• the model-supported calculation of the economic effects of the transformation when it comes to jobs, upstream and downstream value-added chains, import dependency and risks for the competitiveness of Germany’s primary industry.

The Wuppertal Institute’s work comprised:

• a qualitative analysis of the economic impacts, risks, and opportunities of the transformation for the three named branches,
• deriving conclusions for the design of political instruments from the results.

For this purpose, current studies and interviews with experts from primary industry, plant engineering as well as industry associations were analysed.

Prognos used quantitative and model-based analysis on the socio-economical impacts of the transformation to expand on these results.

Links and downloads

The report (PDF in German)

Project team: Dr Almut Kirchner, Paurnima Kulkarni, Jan Limbers, Sebastian Lübbers, Dr Fabian Muralter, Dr Alexander Piégsa

Latest update: 06.06.2024