Only 14 per cent of heavy industry Paris aligned

A report from the Transition Pathway Initiative (TPI) finds that 95 of 111 (86 per cent) large publicly listed industrials, worth $856 billion, are failing to align with a pathway to 2C or below by 2050, with only Rio Tinto showing full alignment in the worst performing areas.

Companies including the likes of Arcelor Mittal and Rio Tinto from the aluminium, cement, diversified mining, steel and paper sectors are collectively deemed ‘hard to decarbonise’ as there is no straightforward low-carbon replacement technology for their products or processes.

The TPI research highlights the poor performance of the aluminium and paper sectors in particular. Only one company in both sectors (Rio Tinto – specifically for aluminium) is aligned with a 2C or below pathway by 2050. By contrast six steel companies are aligned by 2050 including the largest, Arcelor Mittal.

The research was carried out for TPI by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

The report argues that the circular economy can help address the challenges of these sectors by using new processes to design out waste and pollution and recycle more products and materials. For example, in cement production emissions-intensive clinker could be replaced by steel blast-furnace slag and coal ash. It is estimated 15-25 per cent of clinker in Europe could be replaced in this way.

Adam Matthews, co-chair of TPI and director of ethics and engagement Church of England Pensions Board said: “As we enter the transition decade these hard to abate sectors are critical to achieving net-zero goals by 2050. Whilst it is concerning that so few industrial companies are ready, it is clear that new industrial processes based on circular economy principles give us a tipping point of technically viable, economically attractive solutions.”

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