Move towards a circular economy and a low-carbon industry - A model comparison approach

The circular economy has been gaining traction as an effective means to decarbonise the European industrial sector by reducing material demand, especially in the material- and waste-intensive building construction segment. We compare the results of the integrated assessment model IMAGE and the industry sector simulation model FORECAST to analyse the potential contribution of a circular economy in building construction to industry decarbonisation in the European Union until 2050. Both models consistently show that the circular economy can lead to a reduction of final energy demand between 19% and 47% depending on the model and the sub-sector considered. While both models emphasize the role of electrification and hydrogen for a low-carbon industry, they differ regarding the use of bio-based processes: IMAGE favours bio-based processes with carbon capture, where FORECAST prioritizes electrification and hydrogen. Such different routes have profound implications for the development of the energy supply sector. The high uncertainty surrounding industrial decarbonisation scenarios highlights the importance of comparing vastly different models in context of alternative future possibilities and policymaking to improve the understanding of complex systems and prevent overreliance on partial views.