How economic and social actors can champion CO2 phase-out REINVENT: Realising Innovation in Transitions for Decarbonisation Lars J. Nilsson Lund University, Sweden

Questions Yes, absolutely. Why not? Quite a lot actually. Can deep decarbonisation pathways be reconciled with the political objectives of reinvigorating European industries and strengthening economic competitiveness? Yes, absolutely. Why not? What does science have to say about the risks and opportunities related to innovation, deployment, financing or public acceptance? Quite a lot actually.

REINVENT at a glance Zero emissions – a liberating thought. REINVENT complements “top-down” with a “bottom-up” perspective to understand climate innovation and initiatives from within sectors. Will assess the viability, challenges and governance implications of deep decarbonisation pathways in key emissions intensive sectors. A platform for dialogue and learning so that policies can be better aligned with needs and conditions.

Steel, plastics, paper, meat/dairy Content

What have we got to work with?

Materials and decarbonisation Metals, minerals and organic compounds Mitigation through emissions efficiency: Carbon Capture and Storage Biobased feedstock and fuels (biogas, charcoal, wood chips, etc.) Electricity and hydrogen/hydrocarbons for fuel and feedstock Few, if any, co-benefits but more expensive (from 30 % for bulk steel to 300 % for plastics) Potentially large electricity user (e.g., +1500 TWh in EU)

The example of steel industry “This is how the steel industry can become fossil-free“

Industry characteristics and innovation Knowledge infrastructure Government Value chain Processing Manu- facturing End consumer basic material resources Technology providers Recycling Resource extraction product Industry structure: capital intensive, investment cycles, scale economies Innovation strategies: incremental process improvements, some product innovation Markets: bulk commodities, cyclic, small margins (but some nichés) Public policy: safety, pollution, efficiency and shelter against disadvantages Systemic lock-in: incumbents, no markets, no push-pull, CO2-leakage

Governance implications Direction Roadmaps, strategies, etc. System innovation Technology push and market pull, co-evolution of institutions Deployment Risk sharing and financing, state-aid rules International policy coherence Revisit CBDR, sectoral approaches, trade Institutional capacity Responsible agencies, expertise, triple helix

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