Local weather and vitality had been once more excessive on the agenda on the current G7 Summit following a document yr of funding in clear vitality. And with good cause: the member international locations are dwelling to 40 per cent of world GDP and 1 / 4 of the world’s emissions, giving them sufficient collective financial clout to have a big affect on the vitality transition.
Because the seven members navigate this transition, one space has popped up rather a lot in emissions-related discussions over the past couple of years: heavy trade. The sector — which incorporates metal, cement and chemical substances — makes up about 1 / 4 of world vitality emissions.
In Canada, heavy trade’s share of emissions is a bit smaller at 11 per cent — nonetheless important, however typically overshadowed by the oil and gasoline sector’s headline-making 28 per cent share.
This yr’s G7 Hiroshima Leaders’ Communiqué made quite a few references to decarbonizing trade, together with patrons golf equipment (the place governments or non-public corporations comply with collectively purchase cleaner supplies), knowledge assortment on emissions depth, and the significance of growing the infrastructure for key applied sciences like hydrogen and carbon seize and storage.
And but challenges stay past acknowledging the position and significance of those options. Many decarbonization approaches are nonetheless of their early phases of growth and their price generally is a sticking level in a world and extremely aggressive market.
In response, lots of our G7 friends are pouring billions into chopping carbon from their heavy industries. The U.S.’s Inflation Discount Act supplied a US$370-billion shot within the arm for clear vitality and industrial transformation.
The European Union launched its Inexperienced Deal Industrial Plan, and international locations together with Germany, France, and Japan have launched a number of demonstration initiatives for near-zero metal and cement.
The funding isn’t merely an emissions crucial, it’s additionally an financial one. As international net-zero commitments mount, demand for cleaner merchandise is rising. The international locations that act early stand to develop into leaders in a decarbonized future.
As our G7 counterparts cost forward on industrial decarbonization, Canada should additionally act ambitiously or danger falling to the again of the pack, in line with a brand new Clear Vitality Canada white paper.
The excellent news is that Canada’s comparatively clear electrical energy provide, current world-class industries and educated workforce give it a built-in head begin within the industrial decarbonization race.
Canada has additionally made a variety of bold spending commitments, together with $25 billion in federal authorities funding for cleaner fuels, applied sciences and companies. Finances 2023 included funding tax credit for carbon seize and clear hydrogen. And Canada has already launched a number of near-zero expertise demonstration initiatives.
What’s extra, the federal authorities has stepped up on the world stage, actively taking part in worldwide standard-setting boards, such because the Industrial Deep Decarbonization Initiative. With rising competitors for inexperienced industries (suppose the battle to maintain the Stellantis EV plant in Windsor), worldwide requirements can construct a degree enjoying subject for Canada to compete with the U.S. and others.
Nonetheless, Canada dangers falling behind in three key areas.
First, in distinction to France, the U.Ok., and different international locations, Canada doesn’t have a transparent, overarching technique for industrial decarbonization, and just one sector (concrete and cement) has printed a co-developed sectoral pathway to web zero. This may very well be a missed alternative for co-ordinated motion and for offering certainty to buyers.
Second, our insurance policies that deal with essential demand-side gaps stay underdeveloped. In a number of G7 international locations, governments are utilizing their very own shopping for energy to create a marketplace for cleaner trade. The U.S.’s new federal Purchase Clear Initiative prioritizes the procurement of low-carbon metal, concrete, asphalt and glass, whereas the European Union’s Huge Patrons for Local weather and Atmosphere helps native and regional governments in shopping for low-carbon supplies. Canada is working by itself Purchase Clear technique, however the velocity and scale of motion stay decrease than some G7 companions.
Lastly, Canada must hone in on decarbonization actions like the place they’ll create essentially the most worth, utilizing our current benefits, akin to producing inexperienced hydrogen, leveraging our low-emitting electrical energy grid to quickly electrify heavy trade processes, or utilizing our current experience within the manufacturing of commercial chemical substances and re-apply these expertise and data to supply low-carbon alternate options. Throughout the G7 international locations, industrial decarbonization approaches give attention to what every nation does finest, or the place their pure assets present a transparent alternative.
Finances 2023 took essential steps ahead, however there’s nonetheless room for strategic coverage and funding — akin to constructing out our clear vitality capability and making certain we’ve got the infrastructure to ship clear hydrogen and transport captured carbon.
Sweden, for instance, has lower than a 3rd of Canada’s GDP however double the variety of clear metal demonstration initiatives. It’s no coincidence it was a Swedish firm that introduced the first fossil-free metal to market in 2021.
With the net-zero transition accelerating world wide, we’re at a key juncture. If we make the proper strategic selections and investments within the coming years, Canada stands to be a hub for clear applied sciences and a pacesetter in industrial decarbonization. However with out clear visions and key insurance policies in place, Canada dangers trailing behind our largest allies and buying and selling companions.
This submit was co-authored by Jana Elbrecht and initially appeared on Canada’s Nationwide Observer.
