Decarbonizing Heavy Industry: Hydrogen, CCS, and the New Industrial Playbook

Decarbonizing Heavy Industry: Hydrogen, CCS, and the New Industrial Playbook

Decarbonizing heavy industry is now a strategic imperative for climate and competitiveness, and decarbonizing heavy industry demands rapid scale‑up of proven technologies alongside policy that rewards low‑carbon production. 

Energy‑intensive sectors—cement, steel, and petrochemicals—are responsible for a large share of emissions due to high‑temperature heat and process chemistry. The International Energy Agency (IEA) estimates industry accounts for roughly 30% of global CO₂, with steel and cement each contributing several percentage points on their own. Decarbonization pathways hinge on efficiency, fuel‑switching, electrification, carbon capture, and circularity. 

Hydrogen is a leading option for replacing coal in ironmaking. Sweden’s HYBRIT initiative—backed by SSAB, LKAB, and Vattenfall—has produced pilot fossil‑free sponge iron using renewable hydrogen, with plans to scale and commercialize green steel. Other steelmakers, including ArcelorMittal, are testing direct‑reduced iron (DRI) with hydrogen and natural gas blends as an interim step. 

For cement, process emissions from calcination are unavoidable without capture or alternative chemistries. Projects by Heidelberg Materials and Holcim are advancing full‑scale carbon capture at kilns, while low‑clinker cements and supplementary cementitious materials (SCMs) can cut emissions 20–40%. On the capture side, solution providers like Carbon Clean and Climeworks are developing modular systems and CO₂ utilization routes. 

Petrochemicals face both energy and feedstock emissions. Electrification of crackers, bio‑based and circular feedstocks, and advanced recycling are being piloted by firms such as BASF and SABIC. Digital energy management systems, heat integration, and waste‑heat recovery can deliver double‑digit energy savings today. 

Policy is the catalyst that closes cost gaps and de‑risks first‑of‑a‑kind plants. In the EU, the EU ETS and Carbon Border Adjustment Mechanism (CBAM) create a market signal for low‑carbon materials. In the United States, the DOE Industrial Demonstrations Program and the Inflation Reduction Act incentives support clean hydrogen, CCS, and electrification. Global coalitions like the Mission Possible Partnership publish sectoral roadmaps and buyer clubs to accelerate demand for low‑carbon steel and cement. 

Economics are moving fast. As electrolyser costs decline and renewable power expands, green hydrogen for DRI becomes more competitive, while falling battery and renewable costs reduce electricity price volatility.

Standardized measurement, reporting, and verification—guided by the GHG Protocol and Science Based Targets initiative—enables credible material passports and green‑premium contracts. 

A practical playbook for industrial leaders includes: 1) efficiency first—heat recovery, electrification of drives, and advanced controls; 2) fuel and feedstock shifts—renewable hydrogen, biomass, and recycled content; 3) capture where necessary—post‑combustion, oxy‑fuel, or process‑integrated CCS; 4) circularity—design for low‑clinker cement and higher scrap use; and 5) offtake—green procurement with automotive, construction, and public buyers. 

With innovation, policy alignment, and robust capital frameworks, heavy industry can reach deep emissions cuts while safeguarding competitiveness. The result is a resilient industrial base that delivers low‑carbon materials at scale and supports net‑zero supply chains. 

Decarbonizing heavy industry: from pilots to scaled deployment

Clear standards, bankable offtakes, and shared infrastructure for hydrogen and CO₂ transport will turn today’s pilots into multi‑million‑ton annual production.