Accelerating Global Industrial and Energy Decarbonization – A Growth/Economic Modernization Agenda

Achieving net-zero emissions goals by 2050 means delivering on the potential of renewables, energy efficiency, and clean technologies to decarbonize the industry and energy sectors. By realizing that potential, the world can supercharge economic growth and job creation while delivering wins for the climate.

At this event, policymakers and industry experts discussed the challenges and opportunities in decarbonizing sectors that are key to achieving a net-zero future.

Moderated by Mary Burce Warlick, Deputy Executive Director, International Energy Agency (IEA), the event opened with remarks by Wopke Hoekstra, European Commissioner for Climate Action, who emphasized a “bright future ahead of us” as decarbonization drives economic growth. Hoekstra pointed to a 68% gain in EU Gross Domestic Product as net emissions have declined by 37%, demonstrating that “competitiveness and sustainability can and should go hand in hand and could actually be mutually reinforcing.” Hoekstra stressed that the European Commission’s new term will involve discussions about a new Clean Industrial Deal to bolster investments and industrial growth in Europe by making clean technologies more accessible and affordable, unlocking private and public capital, and upskilling workers. He stressed the importance of government collaboration with industry and workers to understand their needs.

Pointing to the growth of the clean energy sector, Warlick referenced the IEA’s Energy Technology Perspectives 2024 report showing that global investments in clean energy manufacturing increased by 50% in 2023, contributing 10% growth in investment in the global economy. Warlick also pointed to the IEA’s World Energy Employment 2024 report, highlighting that job growth in the global energy sector is outperforming broader job markets. She stressed that innovation and international collaboration are crucial for accelerating the energy transition.

Opening the panel discussion, Hoekstra detailed how the EU is supporting clean energy sectors by pointing to USD 40 billion in innovation investments for member States, with key gains coming through the EU Emissions Trading System. He called this a “huge game changer” that drives down emissions and generates money for investing in clean energy. Hoekstra also pointed to funding through the EU Global Gateway for projects such as solar, offshore wind, and hydropower in Viet Nam. Finally, Hoesktra noted that, while still subject to European Commission discussions, a new Clean Industrial Deal should include several key elements: making life simpler and easier for businesses without lowering the bar in terms of performance; making sure more capital is freed up; and advancing innovation, research and development, and artificial intelligence.

Nik Nazmi bin Nik Ahmad, Minister of Natural Resources and Environmental Sustainability, Malaysia, highlighted his country’s ambitious climate goal of achieving net-zero emissions by 2050. Ahmad noted that Malaysia is retargeting subsidies to accelerate the growth of energy-efficient industries. He added that Malaysia’s robust ecosystem, infrastructure, and climate governance are attracting international manufacturers, including solar PV manufacturers. Finally, Ahmad stressed the importance of Malaysia’s collaboration with small- and medium-sized businesses to ensure they are not left behind in the clean energy transition.

Mariana Espécie, Ministry of Mines and Energy, Brazil, emphasized that the energy transition must include social, as well as technological, transformations. Espécie highlighted Brazil’s people-centered approach to make sure the transition is just and inclusive. She also highlighted the increasing proportion of renewables in Brazil’s energy mix, which has climbed from 74% since Brazil submitted its first NDC in 2015 to 89%. Now, she added, Brazil is preparing for a “second wave” of its energy transition, with a push for green hydrogen and the launch of an investment platform to support decarbonization.

Guangzhe Chen, World Bank, pointed out that de-risking investments is key to tackling the decarbonization of carbon-intensive industries on a global scale. He noted four ways to de-risk investments: developing carbon pricing to address price gaps in technology; providing public support and incentives, which includes government subsidies; developing innovative technologies that are commercially viable; and increasing international collaboration. He shared the World Bank’s development of the Energy Sector Management Assistance Program, a global matchmaking platform that allows countries to partner on finance and technology assistance.

Marco Mensink, Director General, European Chemical Industry Council (CEFIC), emphasized that to decarbonize as many industries as possible, it is critical to address: the development of infrastructure necessary to deliver energy from one point to another; the creation of markets that allow for cheap electricity; and collaboration with governments to ensure private sector investments are rewarded in this sector.

Among ideas that have been discussed, Warlick asked panelists to share what they think should be prioritized to accelerate progress towards net-zero.

Ahmad stated that “building regional cooperation” is critical for the Association of Southeast Asian Nations (ASEAN), citing an ASEAN proposal to create a common carbon framework for the region that allows for scaling up of carbon markets.

Espécie noted Brazil’s key challenge is to retain its “high share of renewable energy” use in view of its growing economy and population. She pointed out the need to adopt new technology and create the right legal frameworks to spur the development of renewable energy in Brazil, such as the recently passed law for the development of low-carbon hydrogen.

Chen highlighted using innovative technology, identifying investments required to help reduce carbon emissions, and supporting countries to chart their medium-term plans for carbon ambition.

Mensink noted the EU’s progress in decarbonizing different industries, such as energy and transport, but pointed out the need for policy alignment on low-carbon products, citing subsidies for the aviation industry as an example.

In summarizing the event, Warlick noted: challenges as well as the “enormous potential” of decarbonizing industries, such as economic growth and job opportunities; the “transformative investments” which are crucial to innovation; the importance of fostering international collaboration and cooperation among governments, financial institutions, and the private sector; and the need to ensure policy coherence. To achieve the speed of change necessary to achieve energy transition, she emphasized the need for sharing best practices and building on commitments.

Organizers: EU (DG-CLIMA) and IEA

Contact: Franck Gouéry | franck.gouery@ec.europa.eu

Website:  https://commission.europa.eu/about-european-commission/departments-and-executive-agencies/climate-action_en