From baselines to deep reductions. Improving the modeling of industrial energy demand

Abstract

Despite past energy efficiency improvements and decarbonization efforts, the industrial sector is still responsible for 40% of global energy consumption and more than 43% of global CO2 emissions. It is shown that the role of energy efficiency in combination with increased recycling will be key in reducing industrial energy demand, achieving reductions of approximately one quarter by 2050. But how is the industrial sector represented in most long-term energy models, models widely used for policy assessment and for evaluating different decarbonization pathways? Not in adequate detail, as it is found that very few models capture industrial details while many represent the industrial sector as a whole. But even the more industry detailed energy models could profit by adding knowledge on key areas from bottom-up industry analysis and material flow analysis and improve their projections. Improvements assessed include the energy efficiency and material efficiency options, industry inter-linkages, and change in the approaches used for material demand projections. Results have pointed that i) cost-effective energy efficiency measures do exist, but they are commonly overlooked by models, ii) policies in one sector impact the CO2 emissions in another sector (e.g., the facing out of coal-fired power plants will limit the generation of by-products used for CO2 reduction in the cement industry) and, iii) demand projections can be drastically different when results from material flow analysis are used instead of the simplified and widely used approach of relating historical trends between economic activity and consumption levels.