Science1 publisher2 min readPublished
CMCC model: importing semi-finished materials could save Europe's green industry up to 80 billion euros a year versus going fully domestic
Alice Di Bella's team at CMCC modelled heavy industry inside Europe's whole energy system, and the cheaper climate-neutral route buys part-processed green iron abroad and finishes the product in Europe.
The Scientist · Science desk
What happened
- Cell Reports Sustainability has published work from CMCC that is among the first to model in detail whether the EU can cut industrial emissions and keep its heavy industry at the same time.
- Many existing industrial processes are incompatible with deep decarbonization, especially in iron and steel, cement, chemicals and plastics.
- The modelled pathways are technically feasible, and electrification plays the central role in them.
- International cost competitiveness is highly sensitive to policy choices in the model, and it peaks during the investment-intensive phase of the transition.
- Tavoni's recommendation is to prioritize decarbonization and keep existing capacity, with targeted, time-limited public support and green imports, instead of broad expansion of energy-intensive production.
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Why it matters
- decision Governments deciding where industrial subsidies go now have a modelled price on the gap between backing a full domestic chain and backing the final manufacturing steps.
- constraint Growing EU output in these sectors sits outside what the authors call affordable, so the industrial plans this work supports are about holding plants, not adding them.
- exposure The cheaper route depends on someone abroad building green upstream plants, so Europe's cost case rests on investment decisions made outside its own jurisdiction.
- cost Public money has to flow during the investment years, before the rebuilt plants produce anything at their new cost base.
The saving Di Bella describes comes from where the energy is bought. The modelled options include switching to electricity and green hydrogen, and moving factories to sunnier or windier parts of Europe such as Spain or the Nordic countries [9]. Importing partly processed iron applies the same logic across the EU border: run the energy-intensive first step where clean power is cheap, and keep the final manufacturing step, with its jobs and know-how, in Europe [13].
"This keeps jobs and know-how in Europe while cutting costs by up to 80 billion euros per year compared to producing everything domestically," Di Bella said [12]. The comparison is with a Europe that builds the whole green chain inside its own borders, and the figure is given as an upper bound [12]. Tavoni said of that alternative: "However, trying to rebuild a much bigger green industrial base entirely within Europe comes at an unrealistic cost." [14]
Industry's share of the problem rests on two numbers in the CMCC account: about 600 million tonnes of CO2 from the EU-27 industrial sector in 2021, and around a fifth of all EU greenhouse gas emissions [2]. Divide 600 by 0.2 and the bloc's 2021 total lands near 3,000 million tonnes [3].
Earlier work went one of two ways. It either covered the whole European energy system with little industrial detail, or took single industries in isolation with no link to that system [7]. This paper puts steel, cement, ammonia, methanol and plastics inside a model of the full European energy system [6], and tests relocation, green imports and subsidies as explicit policy options [8]. The extra electricity an electrified steel plant needs therefore has to be supplied within the same model [6].
A least-cost pathway is not a forecast of what firms will do. The CMCC summary does not give the carbon price, the output levels or the size of the public support behind these pathways [18]. Di Bella described the conflict underneath all of it: "Making factories carbon-neutral often makes their products pricier" [16].
What to watch
- Whether the paper itself reports the 80 billion euro figure as one scenario or a range across hydrogen and electricity price assumptions.
- Whether any EU support scheme is designed to be time-limited and aimed at the investment-heavy years the model flags as the most exposed.
- Whether exporters of part-processed green iron build the upstream capacity the import route assumes.