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Amory Lovins: Decarbonizing industry isn't just about costs, it's about profits

Steel blast furnace

A blast furnace smelting liquid in a steel mill.

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When talking about deep decarbonization, the cost of deploying new technologies is often a sticking point. It’s time to have a perspective shift.?

This week Amory Lovins, co-founder of RMI and clean energy BAMF, released a paper, "Decarbonizing our toughest sectors — profitably," encouraging a fresh perspective on the costs of decarbonizing heavy transport and industrial heating.?

The paper makes the case that deep decarbonization isn’t a cost: It’s an investment that will make communities and companies money. Focusing on the costs of deep decarbonization, argues Lovins, glosses over the many technologies, materials, design methods and business models available today that would save money, create industries and reduce emissions.?

Additionally, labeling the sector "hard-to-abate" does a disservice to what we are able to do today. Because the sectors are technically complicated, most climate models emphasize costly carbon dioxide removal technologies instead of true decarbonization. In reality, argues Lovins, decarbonizing heavy industry isn’t uniquely hard; it’s just "differently hard."?

Rethinking deep decarbonization would "trigger trillions of dollars in creative destruction," according to the analysis.?Here’s a look at the trends that will drive decarbonization and profits in industrial heat.?

Innovations in renewable thermal?

Three sectors are responsible for about one-third of global carbon dioxide emissions: Steel, concrete and chemicals. Part of the challenge of decarbonizing these sectors is they require high temperature process heat, which fossil fuels can do well.?

Two forces are poised to make renewable thermal options competitive.

First, solar and wind are cheap and getting cheaper faster than energy outlooks predicted. Earlier this year, BloombergNEF updated its forecast for the price of solar to 40 percent cheaper than it had predicted just two years earlier. It is now cheaper to build new wind or solar plants and to run existing coal or gas-fired plants in half the world.

If we’re smarter about the materials and process, we can make the decarbonization challenge smaller from the outset. After all, as Lovins writes, 'materials we don’t use need no energy to make or move.'

Cheap renewables open up opportunities for new innovations. Green hydrogen, the process of using renewable energy to split water that could be burned like natural gas, could be competitive by mid-century. Technological innovations, such as?Heliogen’s concentrated solar arrays or solar-heated air, are emerging to rival the high-heat needs of industrial heat.?

These new technologies mean new markets, new jobs and new economic opportunities.?

Use circular processes?

Left unchecked, cement and steel alone would burn through half of the global carbon budget by mid-century.?

But if we’re smarter about the materials and process, we can make the decarbonization challenge smaller from the outset. After all, as Lovins writes, "materials we don’t use need no energy to make or move."

According to 2019 research from Cambridge University, adopting circular economy principles would save up to 37 percent of steel, 34 percent of cement and 56 percent of plastics. Rethinking the manufacturing process, a concept called integrative design (one of Lovins’ favorite areas of focus) also can minimize the need for materials. According to the International Energy Agency, there is a technical potential to save about 82 percent of steel and 90 percent of cement by systematic and comprehensive gains in efficiency across the value chain by 2060.?

For companies, needing fewer materials means ultimately saving money. To give one example, the auto industry, efficient use of sheet steel could save one-fourth of its carbon and costs.?

Design smarter?

Material innovations have the potential to decrease the need for more stuff in the first place.?

In the case of cement, creating new buildings using high-strength cement would cut down on the material and emissions — while cutting down on the number of steel reinforcing bars the building needs. Not paving patio areas would save concrete while better managing stormwater. Substituting tension for compression structures improves strength while reducing materials by 80 to 90 percent. Natural composites and cross-laminated timber can replace concrete floor slabs and beams in buildings.

All of these design innovations create value and industries. It also takes a mentality shift. Today, engineers and developers aren’t rewarded for being materials-efficient, leading to excessive designs. But through embracing new, lighter, stronger materials, Lovins argues the cost and emissions savings will snowball. The solution: Aligning awareness with policy and best practices.?

Here’s what I love about this paper: It encourages a reframing of how we think about so many "intractable" problems in climate solutions. So often ideas get hung up on immediate barriers and fail to consider the broader benefits. We could all benefit from contemplating the version of a better world before focusing on the complexities of getting there.?

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