Are national policy frameworks for the decarbonisation of energy-intensive industries fit for purpose? Lessons from 13 countries

Achieving the decarbonisation of energy-intensive industries (EIIs) by mid-century is technically possible and essential to achieve the aims of the Paris Agreement. However, decarbonising EIIs, such as steel, cement, chemicals and aluminium, faces significant economic, political and structural barriers across all levels of governance. To address these and accelerate industrial decarbonisation, far-reaching and comprehensive public policies and support are needed. Against this backdrop, this paper analyses the national policy frameworks of 13 major EII producers to assess whether they are fit for advancing the decarbonisation of EIIs by mid-century. The countries studied include major emitters such as the United States, China, India and the European Union, but also countries from the Global South such as South Africa, Nigeria and Iran. First, we identify general sectoral mitigation barriers, challenges and opportunities to the decarbonisation of EIIs and analyse how these are manifested at national level, based on country case studies conducted or reviewed by national experts. Second, we determine if national policy frameworks are fit for purpose to decarbonise EIIs by mid-century. To do so, we assess to what extent existing policies address national mitigation barriers and compare them to best-practice industrial policies identified in the literature. Our findings show that mitigation barriers differ significantly across countries, while economic (e.g. high investment costs, long investment cycles) and structural barriers (e.g. insufficient clean energy supply) are identified as the most crucial common challenges. At the same time, the analysis indicates that most major EII producers in principle have favourable framework conditions enabling a timely sectoral transformation, such as high potential for clean energy or carbon storage. To exploit this potential and accelerate the decarbonisation of EIIs comprehensive context-specific sectoral policies are needed. However, national policy frameworks vary significantly, both in terms of existing policies and approaches to industrial decarbonisation. While most countries have some form of sector specific mitigation targets and economic support measures in place, strict regulations on EII emissions remain scarce and existing policies have so far failed to trigger sustained mitigation efforts. At the same time, we observe a strong dynamic towards proactive industrial policies in industrialised countries that could potentially drive the decarbonisation of EIIs globally. However, developing and emerging economies seem to be unable to provide the needed support measures due to a lack of financial means. This risks a strong divergence in industrial decarbonisation across regions and highlights the need for international cooperation. The article concludes by providing policy recommendations to advance national climate policy frameworks, as well as general lessons learned to advance the decarbonisation of EIIs.