Role of the circular economy as a contributor to industry decarbonisation beyond 2030

Today, industry accounts for about 25% of EU final energy demand and about 20% of GHG emissions, which is mainly due to key energy-intensive industries, products, and processes, such as steel, cement and ethylene production. The decarbonisation of these industries is therefore critical for the achievement of European climate targets. While many studies deal with the role of CO2-neutral processes and energy sources, the specific role of a material efficient circular economy has not been systematically researched within energy system models. This report contains a detailed modelling analysis of transition pathways towards a 95% reduction target by 2050 compared to 1990 for energy-intensive industrial sectors. This analysis covers current and future perspective on the impacts of circular economy measures on GHG emissions and energy demand for EU industry. The bottom-up industry model FORECAST is used for the analysis. The model has a high technology and process resolution, which can track technical change on a sub-sector and process level. At the same time, it contains the complete energy demand and GHG emissions of EU industry on a country level.