Part 3 Of The WBCSD Net Zero Manufacturing Masterclass Series
When seeking to achieve Net Zero within the manufacturing footprint, decarbonizing the heating requirements on site is a lever that plays a key role—but it also presents a significant challenge. Fortunately, some solutions already exist and can be deployed immediately.
Additional innovative solutions are being developed in parallel, enabling manufacturers to get started on this facet of the decarbonization journey straight away, while also being confident about the future.
As we delve into the process of decarbonizing heat in manufacturing more effectively, we will mainly focus on four questions:
The Net Zero Manufacturing Masterclass series was conceived and developed out of a recognition of the need to adapt our operations to meet a new climate paradigm. The participating WBCSD members and the broader manufacturing industry must significantly increase the pace and scale of emissions reduction in this decade. This assertion is nothing new, but the urgency and magnitude of the change required is often underestimated. We only have about eight years left to cut our Scope 1 & 2 emissions in half if we plan to align with the established targets—whether the nearer-term EU Climate Target Plan or the longer-term Paris Climate Agreement. The goal of this masterclass is to produce a realistic Net Zero strategy to help industry members meet these targets.
To understand why decarbonizing heat is such a challenge, we first need to identify what is meant by industrial heat. Industrial heat primarily results from the processing of energy vectors such as gas, coal, or oil, and produces Scope 1 emissions. It can also be the heat that produces Scope 2 emissions if it is converted from electricity drawn from the grid and this electricity is not decarbonized. In this event, decarbonizing heat is directly linked to the sourcing of power, as one of the levers for decarbonizing heat is to electrify it, provided that the electricity is green. The heat in question meets the typical needs an industry may have, such as producing hot water, cold water, steam, hot air, or space heating.
Heat is difficult to decarbonize for several reasons, including:
1. Industrial heating has a variety of temperature and quality requirements. Unlike electricity, heat is not just one vector; it is multiple vectors serving multiple needs that may require low-grade, medium or high-temperature heat, complicating potential heating solutions.
2. As industrial heat is used for a variety of processes, any new heat solution will have to be compatible with the specific process it serves, as well as with the reactor—the place where the process reaction occurs—which might have some limitations or require adaptation to the way the assets operate.
3. Operational and commercial risk can also be a challenge. As an example, installing a biomass boiler to replace a gas-based asset requires a new operational method, a new fuel supply (such as wood chips), new sourcing avenues to feed the decarbonized assets, as well as new handling and storage capabilities on-site—any of which could encounter disturbances.
4. Some heat decarbonization solutions are still in the early stages of commercialization and development, particularly for high-temperature requirements. And any new solution will have to be compatible with the strict safety standards for each site.
5. Carbon leakage (transferring production to countries with laxer climate restraints) can occur should the decarbonization of heat at one site change that site’s production costs—spurring the transfer of production elsewhere.
6. Energy assets generally have a long life and may not have reached their end of life before new assets are acquired and deployed on-site, leading to stranded assets. This is less than optimal for return on investment.
Compounding these challenges is the scale of the issue that heat and its decarbonization represents. The industrial sector consumes about 32% of all energy globally, with heat representing about three-fourths of that consumption, the rest being electricity. It is a massive vector, with about half of all industrial heat requiring high temperatures and 90% of all industrial heat currently generated through fossil fuels–so there is enormous potential to reduce emissions with new solutions.
Decarbonizing heat is challenging, but solutions are available and ready to be deployed.
There are diverse types of heating for the full range of heat requirements—low- to high-temperature—depending on the relevant industrial sector needs. The food and pharmaceutical sectors typically need low-temperature heat, the plastics and chemicals sectors medium-temperature heat, while high-temperature heat is usually needed for materials processing–metals, cement, glass and ceramics. These can also be understood based on the underlying processes, for instance: thermization (a method of sanitizing raw milk) requires low-temperature heat while material transformation and melting require high-temperature heat.
For low-grade heating requirements, there are many mature, low-carbon solutions for manufacturing—geothermal solutions, biomass, electric boilers, solar thermal and heat pumps. There are a few proven technologies for higher temperature needs as well–biogas and biomethane.
The question for manufacturers is how to identify which solutions are relevant for a site and its activities.
Four key assessment criteria will help to reduce the long list of potential heat decarbonization technologies to a shortlist of applicable ones:
Following the assessment of a broad range of decarbonization options, one must determine which of the feasible solutions will have the greatest impact at the lowest cost.
Here are sample assessments of two popular options for decarbonizing heat: solar thermal and industrial heat pumps.
This is a mature, commercially available solution with negligible operating costs, limited maintenance, and a long life expectancy (20-25 years). Its efficiency, however, is latitude dependent, so the amount of heat one may expect from employing that technology, and thus the economics of the solution depends on the location. It is also an intermittent energy source, which means it can never fully cover your heating needs, requiring other solutions to compensate. Fortunately, significant innovation has occurred in the solar-thermal space, particularly for addressing higher temperature needs.
This option makes use of active heat recovery and performs three basic functions: receive heat from waste-heat sources, increase waste-heat temperature and deliver useful heat at elevated temperatures. This is a mature technology for hot water and low-temperature steam but is still immature for medium- to high-temperature applications. These pumps are highly efficient, mediating the high investment cost with low energy consumption costs, but you must make sure the electricity you are sourcing is green—otherwise, your heat pump will not contribute to the decarbonization of your operations.
Our observations from multiple techno-economic studies show the most likely scenario and best economic approach will involve several more options. For instance, a recent positive business case from the specialty chemicals sector involved a combination of technologies (heat pump, woodchip boiler, biomethane boiler, e-boiler, on-site photovoltaic and a virtual power purchase agreement) to meet a variety of needs (baseload space heating, baseload steam, peak space heating and steam, electricity demand). Finding the right combination led not only to the full decarbonization of the site, but also a lower total cost of ownership—the investment costs plus expected operating costs including commodities—over the lifetime of the assets.
All of this said, while there are various technologies to harness on our journey to decarbonize manufacturing, we must never lose sight that energy efficiency and energy demand reduction are always the first levers to pull.
Learn how to move industrial energy efficiency towards Net Zero. View Article→
Today’s innovations around heat decarbonization are primarily focused on addressing medium- and high-temperature heat. A few exciting innovations include:
Hydrogen can be used with existing assets. For instance, up to 20% can typically be mixed with natural gas without any additional adjustments. Using more than 20% hydrogen in the fuel mix will involve converting or retrofitting existing equipment, but you will still be able to use some of your existing equipment.
This technology already exists but is in its early stages of commercialization. It allows the conversion of biomass feedstock into a gaseous fuel called syngas (synthetic gas), which can be used in conventional equipment or even fuel cells in the same way natural gas is currently used.
This is primarily electrification of equipment in the process itself—for example, replacing gas burners with electric furnaces.
High-temperature heat pumps, concentrating solar power plants and carbon capture, use and storage are all innovations driving new opportunities as well. Any technology may require additional capital expenditure and equipment, but in addition to cost, it’s important to consider emissions abated and how it will support overall Net Zero goals.
Most of these solutions are not economically viable as of now—unless there is some specific technological acceleration soon—but there are pilot projects that can already be implemented, subsidies available, and opportunities to prepare for future scaling across manufacturing sites.
When it comes to rolling out your strategy, there are a few key factors to have in place:
1. Proof of concept: Before scaling across multiple sites, pilot sites can be used to test new technologies and develop learnings specific to your organization.
2. Lead by example: More than just a testing ground for ideas, pilot programs and pilot sites create ambassadors and leaders, tangible examples and passionate people.
3. Prioritization: Different sites may provide different benefits as part of the pilot program, so it is beneficial to understand its emission reduction potential, the cost solution, readiness, regional implications, local subsidies that may be available, and potential replicability.
4. Investment: Capital expenditure is not the only financial implication to consider. Analyze your decarbonization investments not only from a return-on-investment perspective but from a total-cost-of-ownership perspective as well, considering the lifetime of the assets and potential evolutions of the future commodity price.
While you’ll certainly be making decisions based on what's possible today, you also need to be aware of what's coming in the future. Heat decarbonization is a challenging area, but there is movement across the manufacturing industry—organizations establishing pilots and leading the way. Options for accelerating our decarbonization efforts are available; developing a robust strategy and finding the right balance are the first steps on the sustainability journey.
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