How can Europe cut industrial emissions without slowing development?

By&nbspCraig Saueurs
Published on
15/09/2026 – 17:01 GMT+2

A new study suggests importing some of the materials used to make steel, fertilisers and chemicals could help Europe keep more manufacturing at home

Europe wants to clean up its heavy industries without sacrificing jobs or economic growth. A new study suggests that may be possible – but it will require compromises

Researchers from the Euro-Mediterranean Center on Climate Change (CMCC Foundation), Politecnico di Milano and Technische Universität Berlin say that Europe could cut industrial emissions dramatically without hollowing out its manufacturing base

The cheapest path to doing that, however, could require importing some of the materials that require the most energy to produce, and then using them to make higher-value goods in European factories

How can Europe cut industrial emissions?

To find out how Europe could do this, the researchers modelled steel, cement and chemical production through 2050

Steel and chemicals could be made using far fewer fossil fuels, the study found

Under the strictest emissions targets studied, which requires a 90 per cent cut in greenhouse gas emissions by 2040, most steel, ammonia and methanol would be produced using green hydrogen – hydrogen made using renewable electricity instead of fossil fuels

Steelmakers, meanwhile, would also use recycled scrap metal and power more of their work with electricity rather than coal or gas

Cement is more complicated. The process of making it releases carbon dioxide, even if the energy used to produce it comes from environmentally friendly could reduce the amount that gets released into the atmosphere, though critics say this technology remains unproven at scale

But green production comes at a price

The transition would be most expensive around 2040, when European industry would need major investments in infrastructure and equipment. Costs would fall by 2050, but Europe would remain at a disadvantage to places with cheaper renewable energy

Could moving factories closer to renewables cut costs?

One solution is to put factories where renewable electricity costs less

In the model, when companies were allowed to relocate, they sent their production to Spain, the Nordic countries and the UK, where cheaper, abundant renewable power lowered electricity costs

But the savings come with a catch: the calculations left out the cost of relocating factories, building new infrastructure, finding workers and untangling existing supply chains

The authors stress that the exercise was a benchmark for potential savings, however, and not a forecast of Europe’s future industrial map

Green imports could keep manufacturing in Europe

They did find one cheaper alternative

Importing some of the most energy-intensive materials – such as ammonia, methanol and hot-briquetted iron (HBI) – produced bigger savings than moving production within Europe. It would also allow companies to keep the later stages of manufacturing in their existing European factories

HBI is a form of iron used to make steel. The researchers say it could be made in countries with cheaper renewable electricity and shipped to Europe for the final stages of production

Would importing green materials just create a new dependency?

But relying on imports carries its own risks. The study doesn’t account for wars, pandemics or other seismic events that could disrupt international supply chains

Europe has already seen how vulnerable some of them can be

This year, conflict in the Middle East interrupted shipments ofoil, gas and fertiliserthrough the Strait of Hormuz. Meanwhile, Russia’s cuts to gas supplies after its invasion of Ukraine sent energy prices soaring, forcing some European factories to cut production

The researchers argue that fossil fuels come from a handful of suppliers through fixed infrastructure like pipelines, whereas green iron, ammonia and methanol, “can be shipped from any region with cheap renewables”

There’s also a difference in what the supply chain can become, they say. A fossil fuel supply chain “is emitting by construction”, whereas an iron or ammonia supply chain “can be progressively decarbonised” – which is what the EU’s Carbon Border Adjustment Mechanism (CBAM) is designed to encourage

And the alternative isn’t really independence, they add. Producing everything at home is what pushes subsidy costs above €200 billion a year. A dependence “avoided only through permanent state aid isn’t obviously more secure”

What would it cost to keep more production in Europe?

Trying to grow European industry without imports could be pricey, though

In the most expensive scenario the researchers modelled, Europe would increase its industrial production and continue making the most energy-intensive materials needed to do so at home. Governments would need to spend around €235 billion a year to cover the difference between European production costs and import prices

“Europe should be practical about its capacity to expand its heavy industry,” says Massimo Tavoni, co-author of the study and institute director at the CMCC Foundation

“It should prioritise decarbonisation and the retention of existing industrial capacity, supported by targeted, time-limited public support and smart use of green imports.”

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Source: www.euronews.com