EPC World, 27 Dec, 2024

As the world moves towards a sustainable future, heavy industries sectors like steel, cement, chemicals, and refineries are the largest emitters of greenhouse gases (GHGs). Decarbonising these industries is important to reach the global climate targets, and Engineering, Procurement, and Construction (EPC) firms are at the forefront of this shift.

The global push for decarbonisation

Governments and businesses worldwide are realising how urgently heavy industries need to decarbonise. According to the International Energy Agency (IEA), the industrial sector is responsible for 20 percent of CO2 emissions and roughly 40 percent of the world's energy demand. To reach the goal of the Paris Agreement, which is to restrict global temperature increases to below 2 °C, a shift from fossil fuels to renewable energy, electrification, and cleaner production practices is imperative.

• European Union: The European Union has made aggressive promises while committing to the Green Deal. It aims to reduce emissions by 55 percent in this decade with a target of net - zero emissions by 2050. Policies like the Carbon Border Adjustment Mechanism compel the industrial sectors to take cleaner practices. Heavy industries are encouraged to invest in renewable energies and carbon capture technologies and stay at par with one another.
• United States: The US Biden administration will heavily invest in decarbonising industries through decarbonizing efforts, with renewable hydrogen and carbon capture and storage (CCS). Heavy industries such as in the steel and cement production sectors are targeted to cut down their carbon footprint using clean hydrogen, now that it is a strategically viable renewable energy alternative.
• China and India: Despite being the world's two largest industrial producers of CO2, China and India, have both presented their decarbonisation plans. While China's 14th Five - Year Plan explicitly mentions its need for light industries and heavy industries to transition into renewable energy sources, electrification, and CCUS technologies, India's push for clean industry, particularly through the National Hydrogen Mission, is likely to drive much-needed decarbonisation.

The role of EPC in decarbonisation

EPC companies also played an important role in this transition by bringing the latest infrastructural and technological developments together to support the use of renewable energy solutions for businesses. Along with conceptual design and detailed engineering, they are responsible for building, commissioning, and maintaining systems of renewable energy.

• Renewable energy projects implementation: EPCs or energy - efficient construction firms are helping to mainstream heavy industries by incorporating into their energy - intensive activities solar, wind, and hydropower. For example, they will establish a renewable energy plant in the steel production industry so that this sector does not depend much on natural gas and coal.
• Production of green hydrogen: The production of green hydrogen is being increasingly deemed an important fuel source in the decarbonisation of sectors like steel, chemicals, and fertilizers. EPCs, however, are vital in providing the infrastructure required for the same: erecting electrolysis facilities to produce hydrogen from renewable energy sources.
• EPC companies are leading the growth of CCUS technology: These are the technologies that capture industrial process CO2 emissions by either burying them underground or utilizing them in other applications. In business, especially in cement, it's quite important to have this tool for a company like this that cannot be reduced directly through abatement.
• Industrial process electrification: The greatest contribution of EPCs is the electrification of industrial processes. It can easily significantly decrease the emissions through the substitution of machinery dependent on fossil fuel with electrical ones, as long as electricity from renewable sources of energy. The EPC companies work on facility modernization and integration of such renewable energy systems as geothermal, solar and wind power.

Driving decarbonisation in heavy sectors like steel, cement, and chemicals, Nuberg EPC is a major force in the Engineering, Procurement, and Construction (EPC) industry. The business is assisting in the reduction of CO2 emissions and the shift of businesses to sustainable energy sources through carbon capture, utilization, and storage (CCUS) programs, green hydrogen generation, and renewable energy projects. To further reduce carbon footprints, Nuberg EPC also concentrates on electrifying industrial processes.

Nuberg EPC is well-positioned to handle issues like high costs and technology breakthroughs, guaranteeing a sustainable industrial future, with the backing of India's National Hydrogen Mission and other green initiatives.

Government of India's take on decarbonising heavy industries

The Government of India has taken progressive steps toward the decarbonisation of heavy industries, aligning with its commitment to reducing carbon intensity by 45 percent by 2030 as part of its Nationally Determined Contributions (NDCs) under the Paris Agreement. This encompasses the gradual measures adopted by the Government of India toward decarbonisation in heavy industries, which suits the pledge to reduce carbon intensity.

• National Hydrogen Mission: In 2021, India launched the National Hydrogen Mission, to make the country one of the top producers of green hydrogen worldwide, but it is crucial for the industries that have so much to do with decarbonisation, namely steel, ammonia, and refineries.
• Driving the Integrate Renewable Energy:  India has committed itself to a capacity of 500 GW non - fossil source by 2030. This has positioned the government to push forward the development of solar, wind, and hybrid energy projects for power - heavy industries. These firms would be quite significant in the design and execution of renewable energy projects for such industries.
• Industrial Policies and Tax Incentives: Under policy PLI, government has motivated various industry boards to implement energy - efficient technologies through schemes and incentives of adoption of renewable energy. It is with the help of these incentives that the renewable projects by EPC are expanding in heavy industries.
• Initiatives for Green Steel: Ministries of steel have been pushing the industry, one of the biggest polluters through the industrial sector, to produce green steel with clean energy sources and green hydrogen, it is putting EPC companies at the very centre as they would be setting up the necessary infrastructure for this transition.

Challenges and opportunities

While the decarbonisation of heavy industries presents numerous opportunities for EPC companies, it is not without its challenges. Some of the key barriers include:

• High initial investment: Decarbonisation of industrial processes through the use of green hydrogen or renewable energy holds strong financial investment at the very start. The EPC must determine how to reduce costs through advanced technology and project execution optimization.
• Technological maturity: Many of the decarbonisation technologies are still quite immature, such as CCUS and hydrogen fuel. Scalable and commercially viable technologies are highly important for EPCs to include in their projects.
• Policy support and regulation: The success of the EPC - led decarbonisation projects must have strongly supportive governmental support, clearly defined well - established policy frameworks, cash incentives, and carbon pricing mechanisms. Policy uncertainty may retard the execution of the projects.

But these difficulties are greatly outweighed by the opportunities. EPC companies will expand significantly if they incorporate renewable solutions into industrial decarbonisation in order to respond to the changing energy landscape. To quicken the shift, there is also a chance for cross - sector cooperation between technology companies, industries, and energy suppliers.

The Global outlook on decarbonising heavy industries

There is increasingly growing momentum in decarbonising heavy industry globally. The major economies have encouraged the adoption of renewable energy solutions, and EPC companies are mainly leading this transformation. International partnerships, such as Mission Innovation, which accelerates the pace of innovation in clean energy, open doors for industries to move away from carbon - intensive practices.

The biggest challenge for overcoming this critical frontier in the global war on climate change is the decarbonisation of heavy industries. Steel and cement, two greenhouse gas - emitting heavy industries, will have to transform significantly to keep abreast of their own sustainability goals. Engineering, Procurement, and Construction companies are uniquely placed in this transformation process, acting as the quintessential intermediary between technological innovations and industrial applications.

Decarbonising heavy industries will pose a significant challenge, as many of the technologies involved will have high capital costs, be at a very early stage of development, and require even stronger regional regulatory frameworks in some areas. Continued investment, innovation, and collaboration, however will help EPC - led initiatives shape a sustainable industrial future, but more generally a low carbon economy.

© This article was first published in EPC World, 27 Dec, 2024.

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