Industrial Decarbonisation Transforms Energy Across Sectors
The urgent need to decarbonise, although a challenge, presents a wealth of opportunity.
One area in particular that proves to be difficult? Industry.
The transition from carbon-intensive processes to sustainable practices requires innovative strategies, particularly when it comes to energy consumption and the emissions that come with energy consumption.
Despite the challenges presented, significant strides have been made worldwide toward industrial decarbonisation. For example, in the UK, CO₂ emissions currently stand at that of emissions in 1990 thanks to major investments in renewable energy, reducing reliance on coal-fired power stations and encouraging adoption of energy-efficient appliances and EVs.
In Latin America and the Caribbean, The International Energy Agency (IEA) suggests that countries could meet all new energy demand with renewables before the end of the decade if they follow through on their climate pledges.
With industrial processes accounting for a significant portion of global carbon emissions, decarbonisation in this area is essential for meeting international climate goals.
Industrial decarbonisation: A mammoth challenge?
Diego Hernandez Diaz, a Partner at McKinsey & Co, leads the consultancy’s Clean Energy Transformation Service Line, which is focused on industrial decarbonisation. No stranger to the complexity of the industrial decarbonisation challenge, he says while energy efficiency is crucial, it must be paired with comprehensive strategies to reduce overall carbon footprints.
“The cheapest megawatt-hour is the one that is never consumed,” he says. “It’s complex as energy efficiency and decarbonisation are not one and the same and need to be paired. Ensuring an entire plant is properly turned off when it is not operating — you’d be surprised at entire units, cooling systems, drives not being shut down when not in use — all the way to shifting hours to operate during lower-priced hours is essential.
“Near term, there are things that can be done to drive down consumption that are behavioural — ‘remember to turn off the lights’ — and there are some that will require investment, like swapping out LEDs for traditional lights or even motion sensors. There are also those that will take an existing process and completely reshape it to fit the pattern of energy consumption.”
Tackling industrial decarbonisation is not a task carried out in vain, however. Diego shares how electric arc furnaces (EAF) in steel, for example, have been transformed to not only move away from fossil fuel-reliant processes, but do so while continuing operations as normal.
“Switching a traditional heavy carbon-fueled effort with an electricity process that is sourced from renewable sources can enhance sustainability,” he states. “This can help decarbonise steel significantly, but it obviously has implications on electricity demand and management — buying electricity to that extreme requires being well connected to the grid and managing costs.”
Fabian Ziegler, CEO of DCC Energy is pursuing a multifaceted and customer-centric approach to industrial decarbonisation. DCC Energy, which has more than 1.7 million customers, is actively transitioning from reliance on fossil fuels to a more sustainable energy portfolio, with a strong focus combining traditional fuels with renewable energy sources for a cleaner, greener future.
DCC is at the forefront of industrial decarbonisation by integrating green molecules, expanding renewable energy solutions and fostering collaborative relationships across the energy ecosystem. This comprehensive approach not only supports its own sustainability goals, but enables its industrial customers to reduce their carbon footprint and transition to a more sustainable way of operating.
DCC’s energy transition offering centres on reducing fossil fuel use by advancing green molecules like hydrotreated vegetable oil (HVO) and waste-based fuels. It also invests in decentralised energy systems, solar installations and energy management services, aiming to lead in sustainable, customer-centric energy solutions across molecules and electrons.
“Our ambition is to be the leader in HVO, which does the same job as low heating oil, but with 90% fewer CO₂ emissions,” Fabian says. “We are also looking at supplying waste-based fuels and we want to have a leading position there, too.”
Industrial decarbonisation cannot be achieved alone
Working toward lofty environmentally-driven goals – whether industrial decarbonisation or otherwise – cannot be a lone pursuit. For example, Icelandic data centre operator atNorth contributes to industrial decarbonisation by providing sustainable, power-efficient data centre hosting facilities and high-performance computing services that are deeply integrated with low carbon and renewable energy sources.
The company leverages the Nordic region’s favourable climate and abundant renewable energy options —including hydro, geothermal, wind and solar power — to power its data centres, turning facilities that are often power-hungry beasts into energy-efficient powerhouses thanks to clever heat reuse technology.
By capturing excess heat generated from data centre cooling processes, atNorth recycles it to provide heating for local communities and agricultural applications. This approach not only improves energy efficiency but also aligns with the circular economy principles that are widely accepted in the Nordic region. By incorporating heat reuse into all new data centres and retrofitting older ones, atNorth ensures that its operations remain environmentally responsible and contribute to the reduction of carbon emissions.
“Our data centres are located throughout the Nordic region, which benefits from a cool and consistent climate and an abundant range of low carbon and renewable energy sources, such as hydro, solar, geothermal and wind power,” Erling Guðmundsson, Chief Operating Officer at atNorth, explains.
“Data centres are an integral part of society in the Nordics and this means that the concept of heat reuse is widely accepted and encouraged as part of the region’s circular economy principles - many energy providers are open to this process.
“The ability to recycle waste heat from the data centre cooling process not only makes our data centre sites highly energy efficient but also enables clients to decarbonise their digital Infrastructure.”
Emphasising that decarbonisation is a key part of atNorth’s mission, Erling shares how atNorth can significantly contribute to industrial decarbonisation thanks to the business’s sustainable data centre solutions and services. These include:
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Renewable energy use: atNorth's data centres run entirely on renewable energy sources. Because they are located in Nordic countries with abundant low-carbon and renewable energy, all operations use only renewable energy, reducing overall carbon footprint
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Energy efficient design: The company employs innovative design and operational practices to maximise energy efficiency, with strategic locations chosen to enable more efficient cooling and state-of-the-art infrastructure and cooling technologies leveraged to minimise energy consumption
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Heat reuse technology: This further reduces waste and supports circular economy principles as excess heat is captured and recycled for district heating, providing heat and hot water to local communities
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Decarbonisation platform for clients: atNorth provides a pathway to low-carbon IT operations for organisations and helps clients meet their sustainability and ESG targets
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For example, one client, Shearwater Geoservices, achieved a 92% reduction in CO₂ output and an 85% reduction in costs by moving its computing infrastructure to atNorth's Icelandic data centre
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Industry commitments: atNorth is actively involved in industry-wide sustainability initiatives and is a Member of the iMasons Climate Accord, committed to reducing carbon in digital infrastructure, as well as a Partner in the Climate Neutral Data Center Pact, working towards making Europe climate neutral by 2050.
By providing these sustainable, energy-efficient data centre solutions and subsequent sustainability, atNorth enables businesses across various industries to reduce their carbon footprint while meeting their high-performance computing needs, thus contributing significantly to industrial decarbonisation efforts.
Fabian echoes this sentiment, adding: “This is all about collaboration. We'll always need outstanding relationships with those who make our products — we used to have quite transactional relationships, but we want to move to long-term relationships.
“We want to move to co-investments, we want to move to co-branding. We need, of course, phenomenal collaboration with regulators. Collaboration is the name of the game.”
Fabian agrees that being part of the wider decarbonisation ecosystem is not only for the benefit of all businesses and operations but also the planet at large.
“We believe the world needs different responses to the energy system,” he adds. “The notion of being different and to seek out the next level of differentiation is a very important thing.”
If there’s an organisation to support and help drive industrial decarbonisation, it’s Schneider Electric.
The French multinational is focused on promoting decarbonisation and sustainability, through initiatives such as its Materialize programme, which aims to collaborate with the mining and minerals sector to accelerate decarbonisation. As well as this, Schendier has a digital transformation team that helps clients digitise their operations while considering efficiency and sustainability.
Nathalie Marcotte leads Schneider’s Process Automation business globally and believes that, by combining energy and automation, industrial decarbonisation can be drastically enhanced.
“Sustainability and decarbonisation have been part of our mission for a long time,” she explains. “The industrial sector contributes a large amount of carbon emissions, so we contribute by providing industrial automation. We’re working with our end user — including Scope 3 — to develop a lot of the technology that combines power, process and digital, helping our clients in efficiency.
“We realise the benefit of combining power, process and digital technologies, making us more powerful in helping our clients on their journey to efficiency and sustainability.”
For example, Schneider works with the steel industry to aid its decarbonisation journey. A process expected to cost around €4.4tn (US$4.9tn), industrial decarbonisation here is not only costly, but complex. Schneider’s Materialize programme provides a framework for companies — particularly across heavy-polluting industries — allowing them to partner with suppliers and other manufacturers to build a comprehensive carbon emissions database. This further drives decarbonisation efforts as well as providing opportunities to engage with renewables, clean energy initiatives and circularity planning.
A lot of Schneider’s approaches to helping others decarbonise come from looking internally and streamlining its own industrial processes to cut down on its environmental impact. The lessons learned here have then been passed on to its client for them to apply to their own decarbonisation journeys.
“Partnerships are part of Schneider’s DNA,” Nathalie says. “Our solutions act almost as a request for others to collaborate with us, especially when it comes to decarbonising heavy sectors. This mainly comes as digital transformation.
“We’re really proud to be one of the world’s most sustainable companies and we like to make sure that benefits our clients. We realised via digital transformation — because you cannot improve what you cannot measure — that this really is the right lever to help our clients.”
The journey towards industrial decarbonisation demands innovative approaches that break away from the traditional silos. It is a critical component of the global strategy to combat climate change and achieve sustainability.
However, the challenge here is not just about adopting new technologies — it’s about transforming how industries operate at a fundamental level. Significant leaps are being taken — by unifying power and automation systems alongside leveraging advanced simulation technologies, industries are not only working toward becoming more efficient but are also far less carbon-intensive as a result.
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