Cost-Driven Assessment of Technologies’ Potential to Reach Climate Neutrality in Energy-Intensive Industries

Abstract

Efforts towards climate neutrality in Europe must prioritise manufacturing industries, particularly the energy-intensive industry (EII) subsectors. This work proposes a novel approach to assessing transformation options for EII subsectors. At the center of this approach we position a potential analysis of technologies’ impact on subsector decarbonisation—an approach only known so far from the investigation of renewable energy potentials. These so-called technical climate neutrality potentials, supplemented by a set of indicators taking into account energy consumption, capital and operational expenditures, and GHG taxation programs per technology and subsector, enable cross-sector comparisons. The indicators allow the reader to compare the impact on GHG emission mitigation, energy demand, and cost for every considered technology. At the same time, we keep an open mind regarding combinations of technological solutions in the overall energy system. This ensures that the technology pathways with the greatest climate neutrality potential are easily identified. These focal points can subsequently serve in, e.g., narrative-driven scenario analyses to define comprehensive guides for action for policymakers. A case study of Austria for the proposed potential analysis demonstrates that bio-CH₄ and electrolysis-derived H₂ are the most economical green gases, but GHG certificate costs will be necessary for cost-competitiveness in high-temperature applications. Electrification offers advantages over conventional technologies and CO₂-neutral gas alternatives in low-to-mid temperature ranges. Under the given assumptions, including GHG emission certificate costs of 250 EUR/t CO₂, alternative technologies in the identified climate neutrality pathways can operate at total annual costs comparable to conventional fossil-based equivalents.

1. Introduction

Reaching European climate goals associated with the Paris Agreement needs comprehensive action in all sectors of the economy. In all efforts, measures towards climate neutrality have to be balanced with economic interests. A special focus will have to lie on the manufacturing industries as, in 2020, manufacturing industries were responsible for approximately 20% of European greenhouse gas (GHG) emissions [1]. Manufacturing industries are generally differentiated into energy-intensive and non-energy-intensive industrial subsectors. According to the well-used definition of the IEA, energy-intensive industries (EIIs) consist of the iron and steel, chemical and petrochemical, non-metallic mineral, non-ferrous metal, and pulp and paper industries. Their basic material production is one of the pillars of European welfare, and they employ more than 3.5 million people unionwide while annually generating added value of over EUR 700 billion [2,3,4].

Following the European Union’s commitment to the <2 °C target [5], EIIs are faced with fundamental changes to their production processes. Because of EIIs’ positioning in the force field between their macroeconomic importance and their heavy weight regarding climate neutrality, public support through policies and RTD programmes will be needed. Policymakers have recognized this need, which can be seen by the installation of high-level working groups on energy-intensive industries on national and supranational levels in recent years, for example, the EU High Level Expert Group on Energy-Intensive Industries [6]. The policy development process for attaining climate neutrality in an EII can be supported by studies that feature both a cross-sectoral dimension and an appropriate level of subsector detail. For their preparation, a coordinated approach must be found. Regarding the state of the literature on these climate neutrality options for EIIs, two groups of studies can be identified that usually fulfill only either one or the other criterion.

On one hand, several scientific publications have supplied subsector-overarching solutions for EIIs comprehensively, e.g., Fais et al. [7] for the UK, Nurdiawati and Urban [8] for Sweden, Gerres et al. [9] for the European Union, and Teske et al. [10] globally. These studies are generally characterised by a top-down approach in combination with scenario modelling to achieve pre-mandated climate neutrality. The deployment rate of sector-specific technologies in these scenarios over time is typically assessed by anticipated levels of technology (TRLs) and the market readiness level (MRL) and is based on predefined scenario narratives. However, such an a priori approach rules out the deployment of competing solutions, leaving an information gap on possibly relevant transformation routes when contemplating big-picture decisions. The main methods for reaching climate neutrality vary on a country-to-country and study-to-study basis, from the use of biomass to increasing electrification, the deployment of natural gas or hydrogen, or carbon capture solutions. The obtained technological solutions are further applied top-down to all subject areas. This poses the problem of not adequately taking into account subsector-specific process peculiarities, feasibilities, and costs. In addition, as Gerres et al. [9] point out, a comparison of private and public stakeholders’ studies reveals a high degree of inconsistency in expected technologies and deployed energy carriers.

On the other hand, subsector-specific bottom-up analyses with very detailed process depictions have been conducted by subsector interest and research groups on the technology or production process level. For example, the European subsector associations for iron and steel [11] and cement [12] have both published roadmaps for their respective subsectors to provide guidelines for future technology development and implementation in light of the European Green Deal. The scientific literature also provides an investigation of subsector-based climate neutrality options for the above-mentioned subsectors. Harpprecht et al. [13] and Keys et al. [14] investigate climate neutrality pathways for the iron and steel industry in Germany and the Netherlands. Options for the Dutch Polyolefins industry are explored by Negri and Ligthart [15]. For the UK, Griffin et al. [16] investigate pulp and paper production. The studies of this analysis group consider EII subsectors unique entities. They do not consider the applicability of technological solutions in other EIIs or the boundary conditions of the overall energy system and its energy availabilities. They are thus complicating the deduction of big-picture recommendations for policy action.

Necessary investment costs for total EU climate neutrality by 2050 are estimated to amount to EUR 28 trillion. Approximately 2% of these are located exclusively in the industrial sector [17]. However, studies that have investigated such transformation costs often lack comparable cost analyses of different climate neutrality options in combination with technological cost assessments. Such a data basis could significantly help with the estimation of necessary industrial expenditures and inform decision making on funding instruments and other policy tools in promoting industry transition while at the same time allowing for an open comparison between different technological pathways.

In this paper, an innovative systematic approach to assessing and standardising technological options for reaching climate neutrality per EII subsector is introduced. The approach aims to fill the following research gaps:

• The current subsector-overarching literature on industrial climate neutrality often lacks sector-specific information—we aim to provide a novel level of detail for subsectors’ processes while the ability to deduce an overarching picture for EIIs is preserved by grouping technologies into four climate neutrality pathways.
• Techno-economic analyses of technology options are mostly limited to studies that only investigate one specific subsector (e.g., iron and steel)—we aim to provide accompanying investment costs, fuel, and GHG certificate costs for technologies needed for climate neutrality in EIIs and compare them to conventional fossil-based routes.

Firstly, in Section 2, we present this paper’s fundamentals and core methodology and introduce the “technical climate neutrality potential” (TCNP) of energy-intensive industry subsectors as a way of standardising industries’ climate neutrality possibilities. Secondly, Section 3 introduces a case study in which we have applied this standardisation concept for three EII subsectors in Austria. In Section 4, we discuss the case study’s results and further challenge them by utilising a sensitivity analysis. We conclude this work in Section 5, highlighting the merits of the proposed approach to reach climate neutrality in energy-intensive industries.

2. Methodology

In this section, we explain our chosen methodology as well as the applied balance border. We employ existing techniques of calculation—especially and specifically known from the area of renewable potential research—to generate a unique set of indicators that can inform the transformation of EIIs towards climate neutrality. To preserve the ability to compare subsector results on a larger scale and deduce big-picture conclusions, it is first necessary to define pathways into which the technological options can be clustered in Section 2.1. Subsequently, the modelling approach is presented.

2.1. Clustering of Climate Neutrality Pathways; Potential and Balance Border Definitions

Based on previous works by Agora Energiewende [18] and Mobarakeh and Kienberger [19], we have identified four general technology-based pathways towards industrial climate neutrality that can be applied across all subsectors of EIIs. We have chosen these clusters, which are discussed below, to explore technology applications within industries as the primary approach to achieving climate neutrality. General efficiency measures or process optimisation, on the other hand, require a different level of investigation and are not suited for the methodology proposed below. Therefore, we have excluded these from our analysis. In Section 3.1.2, we present an overview of the deployed technologies per climate neutrality pathway in the case study.

• Electrification;
• The use of CO₂-neutral gases and biomass combustion;
• Circular economy measures;
• Carbon capture.

I. Electrification opens up significant potential for GHG emission reduction in the industrial sector [20,21]. For example, Madeddu et al. [22] identify three stages of electrification potentials for manufacturing industries (including non-energy-intensive subsectors) depending on the level of technological complexity. Within the two lower stages for process heat of up to approximately 400 °C, where already available technologies are considered, the direct electrification of up to 50% of the total useful energy demand, including feedstocks, is considered possible in all manufacturing industries. Above this temperature range, the additional potential is limited and connected with high technological uncertainties which are especially linked to the production of basic materials in energy-intensive subsectors. As one of the biggest fields of application for electrification across all subsectors, the generation of process heat up to approximately 200 °C can be provided through heat pumps, benefitting from a high exergetic efficiency and the possibility to include local waste heat potentials, among others. In order to successfully mitigate industrial activity emissions through electrification, the availability of climate-neutral or near-climate-neutral electricity—both in the amount of energy and the power level of connectivity—is essential [19,20].

II. The use of CO₂-neutral gases and biomass combustion is characterised by the combustion of energy carriers without or nearly without a negative climate effect. In this work, bio-CH₄ is used synonymously with gas from anaerobic fermentation, while bio-SNG is used for thermal gasification. Depending on its upstream production process, H₂ can be another climate-neutral gaseous energy carrier [23]. Both CH₄ as well as H₂ are especially important for high-temperature applications above 500 °C and as feedstock for specific production processes in basic industries. In both of these applications, as pointed out above, electrification is not yet fully developed or is not possible with foreseeable technologies. In addition to CO₂-neutral gases, solid biomass can also be used as a substitute for fossil energy carriers [24]. However, its temperature range for deployment is more limited as it generally can only be used for indirect heating (e.g., via steam, thermal oil, hot gas) [25]. Several industry subsectors already boast high shares of biomass use in their energy mix due to cascading use, both as feedstock and as an energy carrier (e.g., integrated pulp and paper plants) [26].

III. Circular economy measures can maximise resource efficiency in many subsectors of EII, thereby contributing to energy and resource savings and GHG emission reductions. The deployment of circular economy measures varies greatly from subsector to subsector in both the degree of application and impact [19]. Within the literature, the iron and steel, aluminium, and cement and chemical industries have been especially studied. All studies find significant potential for the use of end-of-life materials to substitute what previously needed to be made from primary resources. For the European Union, for example, Agora Industry estimates the potential of circular material flows in these subsectors to amount to up to a 24% GHG reduction until 2050 [27]. In addition to the possible GHG emission reduction, changing energy flows and energy carriers, both for pre-processing and final production due to the integration of end-of-life materials, must be considered and assessed.

IV. Carbon capture technologies generally need to be combined with a utilisation technology or storage possibility [28]. In the present paper, only the carbon sequestration step is evaluated. This technology may play an indispensable part in reaching climate neutrality in basic industries for reducing geogenous emissions (e.g., in cement or magnesia production). In these subsectors, approximately 50% of total emissions stem from the conversion of mineral compounds such as CaCO₃ or MgCO₃ into oxides (CaO and MgO) and are therefore not related to the energy carrier deployed [29]. In general, carbon capture technologies can be divided into three subcategories: post-combustion, pre-combustion, and oxyfuel combustion [30]. Within these categories, technologies’ effectiveness, maturity, and cost structure vary significantly, as reviewed by Plaza et al. [31].

The magnitude of impact per subsector and technology depends on a variety of factors, e.g., economic or legal boundary conditions [32,33,34]. In this work, we investigate climate neutrality options per pathway on the level of technical potentials, commonly known from the investigation of renewable energy sources. This can be one of several necessary building blocks used to inform stakeholders and policymakers about changes needed in regulatory or funding framework on the road to industrial climate neutrality. The core indicator of TCNP is the value of the GHG emission reduction for each technology pathway which is seen to be technically feasible within the given time frame, i.e.,until 2040, as in this paper. It is important to note that we maintain product placement within the market, manufacturing numbers, and product quality for the purposes of comparability and result relevance. In contrast to realisable or economic potentials, the profitability of deployed technologies is not accounted for as a reducing parameter of TCNP. Instead, costs are investigated as an important accompanying set of information.

Regarding the determination of technical potentials to reach climate neutrality in EIIs, the applied balance border around the industrial subsectors is of special importance.

Table 1. Description of considered energy- and process-related GHG emissions.

Type of Emissions	Description
Energy-related emissions	Emissions from the incineration of carbonaceous energy carriers; Emissions of upstream electricity (under global reporting standards [35]), herein further extended to H2 generation.
Process-related emissions	Emissions from industrial transformation (e.g., coke oven, blast furnace) or production processes (e.g., carbonaceous minerals).

offers an overview of energy- and process-related emissions considered. the energy consumption and GHG emissions of the industrial energy system are driven both by final energy consumption through end-use devices and energy transformation units such as electrolysis, coking, or blast furnace plants. Additionally, as mentioned previously, process-related emissions can also occur through the use of CO₂-containing minerals as production feedstock (e.g., CaCO₃ in the cement industry).

As previously discussed by the authors [36], state-of-the-art energy balances based on the United Nations’ International Standards of Energy Statistics [37] rely on a three-block concept consisting of the “total energy supply”, “transformation and distribution”, and “final consumption”. The first two blocks are generally referred to as energy industries, while the final consumers comprise manufacturing industries, buildings, and transport, among others. While this approach works adequately for final energy consumption, this means that industrially owned energy transformation units such as CHP plants, coke ovens, or blast furnaces are not accounted for within industrial consumption but in the energy industries. However, their operation is determined by the primary activity of their respective manufacturing industry. As we approach the transition to CO₂-neutral production in EIIs, we have seen that the examination of transition pathways usually ignores the official balancing methodology and instead opts for a balance border that integrates “industrial transformation processes and the impact of their removal or addition [on energy demand and GHG emissions] in manufacturing” [36].

For clarity and the assignability of energy consumption and GHG emissions in our present work, the industrial balance border based on the proposed improvements to energy balances illustrated in Figure 1 is employed. The applied balance border is drawn around all industrially operated units in the considered industrial subsector. However, when exploring the impact of EII climate neutrality options, the related energy consumption and GHG emissions in the upstream public energy sector should always also be taken into account to ensure a holistic interpretation of industry transformation and avoid merely shifting emissions from one sector to another.

2.2. Modelling Approach

The modelling approach illustrated in Figure 2 enables the calculation of several indicators which enable a systemic analysis of the investigated technologies across EII subsectors.

The first step, the survey of energy currently in demand and the associated energy as well as process-related CO₂ emissions, is performed based on subsector-specific information. As mentioned in the description of the applied balance border, in addition to the final energy consumption, energy transformation units and their substitutes must also be considered. We have chosen five application categories, as listed below. The chosen application categories allow for a targeted choice of technologies, especially concerning energy efficiencies and process temperature levels.

• Space heating;
• Stationary engines;
• Process heat < 200 °C;
• Process heat > 200 °C;
• Subsector-specific production processes (e.g., steelmaking or cement production).

After the identification of the necessary alternative technologies to be investigated in step 2, we apply a combined bottom-up/top-down approach for the calculation of several important indicators in steps 3 and 4 that together enable a cross-sectoral picture of the technologies’ levers of action:

• The technical climate neutrality potential (TCNP) per pathway and EII subsector in kt CO₂e/a as the core indicator identifying the technologies and applications with the greatest lever for attaining climate neutrality.
• The corresponding change in energy consumption by energy carrier in GWh/a to indicate the impact of technology options on the energy system. In addition, the energy consumption of the upstream production of required energy carriers (e.g., electricity for hydrogen electrolysis) is denoted individually.
• Corresponding capital expenditures in MEUR/a show the expectable investment costs that can be put against the regular investment costs of the reference fossil-based technology.
• Corresponding operational expenditures, including fuel and GHG certificate costs, as well as maintenance costs in MEUR/a, to visualise expenditures due to the operation of the technology.
• The resulting total annual expenditures in MEUR/a, taking into account depreciation rates, to show the total costs of technology adoption in the long term.

Using a bottom-up approach, we investigate subsector-specific breakthrough technologies (e.g., direct reduction for primary steelmaking, the avoidance of geogenous emissions in cement production through carbon capture, etc.) with their respective energy conversion efficiencies. For specific future production processes in the EII, technology parameters per output unit or treated ton of CO₂ are used. Technology-related results, R, for energy demand and emissions are calculated according to Equation (1) based on the total yearly production, N, with s signifying specific values per output unit for energy consumption by energy carrier and emissions, respectively.

$$\mathrm{R}=\mathrm{N}\times \mathrm{s}$$

(1)

Using a top-down approach, the compilation of possible substitute technologies is based on today’s useful energy consumption, which is kept constant through to 2040 for our purposes. The relevant basis for this calculation approach consists of national energy statistics and general subsector research work, especially pertaining to necessary temperature levels and useful energy consumption in manufacturing. The top-down analysis is used in all application cases in which only the form of energy provision but not the process itself needs to be changed for attaining climate neutrality. Technologies consuming final energy are calculated on specific conversion efficiencies. In accordance, GHG emissions, both energy- and process-related, are calculated based on specific emission factors in the mass of CO₂ per production output or consumed energy.

For stakeholders to be able to fully comprehend the impact of a technology or climate neutrality pathway on the energy and emission transition, cost structures are also calculated. Because we calculate costs for each technology cluster individually without any kind of pathway analysis, opportunity costs are not considered. To maintain the comparability of climate neutrality options, all investment costs covered by the balance border introduced in Figure 1 are taken into account for both conventional and alternative technologies. Annual capital expenditures, A_CAPEX, in EUR/a are calculated according to Equation (2) based on values from the literature for the CAPEX in EUR/kW and c_inst in the percentage of the CAPEX, which covers costs for building and engineering. Technology-specific average annual full load hours are used to translate the calculated energy consumption into power capacity P.

$${\mathrm{A}}_{\mathrm{C}\mathrm{A}\mathrm{P}\mathrm{E}\mathrm{X}}=\mathrm{P}\times \mathrm{C}\mathrm{A}\mathrm{P}\mathrm{E}\mathrm{X}\times (1+{\mathrm{c}}_{\mathrm{i}\mathrm{n}\mathrm{s}\mathrm{t}})\times \mathrm{a}$$

(2)

With the annuity factor a calculated as

$$\mathrm{a}=\frac{{(1+\mathrm{i})}^{\mathrm{n}}\times \mathrm{i}}{({1+\mathrm{i})}^{\mathrm{n}}-1}$$

(3)

The annual operational costs C_OPEX are divided into CAPEX-related costs c_rel in the percent of the CAPEX for maintenance, tax, etc.; fuel and feedstock-related costs c_f; and GHG certificate costs c_GHG (Equation (4)). For many technologies—especially general final-energy applications such as engines—this cost position must be estimated for the work’s purpose. However, in general, these costs can be expected to have a relatively low impact on total costs in comparison with capital investments and fuel/feedstock costs. For technologies in which this position can become of greater importance (e.g., in EAF-based crude steel production), generally applicable values from the literature are easier to find and therefore underly a smaller uncertainty. By incorporating c_GHG, the externalities associated with burning fossil fuels, whether upstream or for final energy applications, can be internalised in the economic activities of EIIs for each investigated technology.

$${\mathrm{C}}_{\mathrm{O}\mathrm{P}\mathrm{E}\mathrm{X}}={\mathrm{c}}_{\mathrm{r}\mathrm{e}\mathrm{l}}\ast \mathrm{C}\mathrm{A}\mathrm{P}\mathrm{E}\mathrm{X}+{\mathrm{c}}_{\mathrm{f}}+{\mathrm{c}}_{\mathrm{G}\mathrm{H}\mathrm{G}}$$

(4)

With absolute values for the alternative technologies’ energy consumption, greenhouse gas emissions, and costs available per subsector, the calculated emissions of the alternative technologies (GHG_alt) are subtracted from the status quo (GHG_SQ) to receive the technical climate neutrality potential (TCNP) of each technology (Equation (5)).

$$\mathrm{T}\mathrm{C}\mathrm{N}\mathrm{P}={\mathrm{G}\mathrm{H}\mathrm{G}}_{\mathrm{S}\mathrm{Q}}-{\mathrm{G}\mathrm{H}\mathrm{G}}_{\mathrm{a}\mathrm{l}\mathrm{t}}$$

(5)

Following the approach described for the climate neutrality potential, the total impact of alternative technologies on the energy balance is calculated. Therefore, the calculated values for the energy consumption of the considered alternative technologies are again subtracted from the value of the status quo of the fossil-based routes. For costs, both capital and operational expenditures, alternative pathways are compared with conventional fossil-based routes under a green-field assumption. This means that no existing infrastructure is considered.

3. Case Study for Energy-Intensive Industries in Austria

In the following case study, Austrian EIIs are investigated using the examples of iron and steel, pulp and paper, and non-metallic minerals. Their subsector-specific technical climate neutrality potentials are assessed by pathway for 2040 as it signifies the official target year for climate neutrality in Austria [39]. The remaining subsector of energy-intensive industries, the chemical and petrochemical industry, will be investigated separately in a subsequent publication based on the approach proposed herein. This case study fulfills the objective of providing a first exemplary application of the methodology described above; its results can guide additional research, especially in the fields of policy needs and transitional scenario analyses for manufacturing industries’ transition to decarbonisation.

3.1. Case Description

This section provides the necessary general information for the calculation of the subsector results and the respective references used. Both fuel and feedstock as well as investment-related costs and general technology assumptions are presented for the considered technologies in each climate neutrality pathway.

3.1.1. General Framework Conditions for 2040

To forecast 2040 costs for both fossil and non-fossil fuels and GHG certificate costs, high-level references from the European Union and the Austrian environmental agency are used. According to Commission recommendations, GHG certificate costs of 250 EUR₂₀₂₀/t CO₂ are applied to all energy- and process-related emissions [40]. For the international costs of energy carriers, the reference prices illustrated in

Table 2. Assumed reference prices 2040 in EUR₂₀₂₀/MWh.

Energy Carrier	Assumed Reference Prices in 2040 in EUR2020	Reference
Oil	58.7 EUR/MWh	[40]
Natural gas	40.7 EUR/MWh	[40]
Coal	12.0 EUR/MWh	[40]
Electricity	101.6 EUR/MWh	[41]
Electricity (spot market) a	35.0 EUR/MWh	[42]
Biomass for anaerobic fermentation	Ø32.0 EUR/MWh	[43]
Solid biomass (incl. for gasification)	55.7 EUR/MWh	[44]

^a electrolysis and pyrolysis for hydrogen production are considered part of the energy sector. A mix of wind and PV levelised cost of electricity (LCOE) values are applied. Electricity grid tariffs and charges are based on an Austrian framework from 2020 [42].

are used. The sensitivity analysis in Section 4 provides a useful tool to investigate the effect of volatile fuel prices on the total costs for each applied technology and the applicability of the chosen GHG certificate costs in relation to incentivising the transition to the assumed prices of fossil-based technologies.

3.1.2. Technology Framework

The predominant temperature levels of each sector are of special importance to the investigation of the applicability of climate neutrality pathways explained below. For the Austrian case study, we applied the shares of the temperature levels of total process heat consumed, as given by Sejkora et al. [45] and shown as an excerpt in

Table 3. Share of process temperature levels in selected industrial subsectors according to Sejkora et al. [45].

Subsector	Space Heating	<100 °C	100–200 °C	200–300 °C	300–500 °C	>500 °C
Iron and steel	0.1%	0.6%	0.9%	0.1%	0.7%	97.6%
Non-metallic minerals	0.1%	1.4%	1.2%	0.0%	0.8%	96.5%
Pulp and paper	0.6%	18.6%	45.5%	1.9%	33.3%	0.0%

, to the energy consumption provided by the Austrian statistics agency Statistics Austria [46,47]. The climate neutrality pathways as well as the conventional technologies used as a base case in each exemplary subsector refer to them accordingly.

When discussing the costs of climate-neutral or near-climate-neutral alternative technologies to decarbonise energy-intensive industries, we need conventional technologies’ values as a baseline. For this purpose,

Table 4. Considered technologies for conventional fossil-based energy applications.

	Full Load Hours	CAPEX in EUR2020	cinst in %CAPEX	crel in %CAPEX	Reference For Costs
Coal furnace	4000	147 EUR/kWth	50	1.5	[48]
Oil furnace	4000	30 EUR/kWth	70	4.0	[48]
Gas furnace	4000	250 EUR/kWth	Included in CAPEX	4.0	[48,49]
Diesel engine	4000	100 EUR/kWmech	20	4.0	Own assumptions
Gas engine	4000	100 EUR/kWmech	20	4.0	Own assumptions
Rotary kiln (cement)	-	190 EUR/tClinker	Included in CAPEX	2.0	[50]; own assumption for crel
BF/BOF (prim. steelmaking)	-	442 EUR/tCrude steel	Included in CAPEX	60.0 a	[51,52]

^a includes iron ore and fluxes.

shows an overview of the considered conventional fossil-based technologies and their typical cost parameters for industrial application. The calculation of costs follows the methodology mentioned in Section 2. In all instances, for both conventional and alternative pathways, yearly investment costs are calculated based on an assumed depreciation period of 20 years.

On the other hand, the investigated alternative technologies in the subsectors were chosen following investigations of German and Austrian manufacturing industries carried out by Agora Industry [18] and Mobarakeh and Kienberger [19]. An overview of the technologies considered for the above-mentioned industrial subsectors is discussed below and provided in

Table A1. Considered technologies by climate neutrality pathway and application case.

	Application	Full Load Hours	CAPEX in EUR2020	cinst in %CAPEX	crel in %CAPEX	Reference for Costs
Electrification
LT heat pumps (COP 3.0)	Space heating	2200	400 EUR/kWth	67	0.5	[48]; own assumption for crel
HT heat pumps (COP 2.5)	Process heat < 200 °C	4000	520 EUR/kWth	100	2.0	[48]; own assumption for crel
Electric engines	Stationary engines	4000	100 EUR/kWel	20	0.5	[70]; own assumption for cinst and crel
Use of CO2-neutral gases and biomass combustion a
Gas furnace (CH4, H2)	Space heating, process heat </> 200 °C; subsector-specific processes	4000	250 EUR/kWth	Included in CAPEX	4.0	[48,49]
Generation of bio-CH4		8000	2700 EUR/kWCH4	35	2.0	Own assumptions based on [34,71]
Generation of bio-SNG		8000	2000 EUR/kWSNG	35	2.0	[34]
Generation of H2 through electrolysis		3500	515 EUR/kWel	35	4.0	[34,61]
Generation of H2 through methane pyrolysis		3500	475 EUR/kWH2	35	4.0	[61]; own assumption for cinst and crel
Solid biomass combustion		8000	600 EUR/kWth	35	2.0	[59]; own assumption for cinst and crel
CH4-DR/EAF b	Primary steelmaking	-	400 EUR/tCS	Included in CAPEX	71.0 c	[51,52,61]
H2-DR/EAF b		-
Carbon capture
Oxyfuel combustion	Non-metallic mineral production	-	220 EUR/tCO2	40	2.0	[63]; own assumption for cinst and crel
Amine scrubbing		-	131 EUR/tCO2	25	2.0
Circular economy
Increased use of scrap metal in EAF d	Steel production	-	-	-	-	-
Recycling of concrete	Cement production	-	1 EUR/tconcrete	-	-	[61,64]

^a for the combustion of CO₂-neutral gases in this climate neutrality pathway, it is assumed that no substitution of current combustion equipment is necessary. Investment costs correspond to the costs for generating CO₂-neutral gases. ^b the use of EAF in primary steelmaking is always in combination with direct reduction using GHG-neutral gases. Below, DR/EAF-routes are therefore allocated to the climate neutrality pathway the “use of CO₂-neutral gases.” ^c includes iron ore and fluxes. ^d no additional investment costs for the increased use of scrap metal in steelmaking are assumed.

in Appendix A.

3.1.3. Electrification

It is assumed that the supply of process heat up to 200 °C by electric heat pumps will be possible by the target year 2040 [53,54]. For the electrification of space heating and process heat below 200 °C, electric low-temperature (LT) and high-temperature (HT) heat pumps are deployable [55]. The investment costs of LT heat pumps with a COP of up to 3 are taken into account, with specific costs of 400 EUR/kW_th of installed thermal power and average full load hours of 2200 h/a. Heat pumps for high temperatures up to 200 °C average 4000 full load hours per year and are calculated at 520 EUR/kW_th [56]. While the specific investment costs per kW_th are similar, calculations for high-temperature heat pumps include significantly higher installation costs [48]. Stationary engines currently supplied by fossil fuels can be completely electrified. For the calculation for necessary electric engines, 100 EUR/kW_el and 4000 full load hours are taken into account. In the iron and steel industry, electric arc furnaces (EAFs) occupy major role due to the establishment of direct reduction (DR) for primary steelmaking [57]. For this work, they are considered part of the climate neutrality pathway of using CO₂-neutral gases and are therefore discussed in the paragraph below. For all electricity-consuming technologies, indirect GHG emissions from electricity production are included. In line with the scenario MIX by the European Commission impact assessment, a specific emission factor of 56 g CO₂e/kWh of electricity is used [58].

3.1.4. Use of CO₂-Neutral Gases and Combustion of Solid Biomass

For the combustion of solid biomass for process heat up to a maximum of 500 °C, specific investment costs totalling 600 €/kW_th are assumed [59]. With iron and steel as well as non-metallic minerals, solid biomass combustion is only investigated for temperature ranges up to 200 °C due to data availability and extremely low shares of this temperature range in total process heat consumption, as shown in Table 3. CO₂-neutral gases for reaching climate neutrality in final energy applications can be used in any application in which fossil fuel is currently used. The sustainable gases differ in their chemical composition (H₂ or CH₄) and considered upstream production chains. In this case, costs for furnaces and the upstream generation of these gases are considered separately. For the generation of hydrogen, electrolysis and methane pyrolysis are considered, each with its respective required upstream energy carriers. The same applies to the generation of bio-SNG from the gasification of solid biomass. On the other hand, as bio-CH₄ predominantly requires agricultural space for its production, upstream energy inputs are not part of our analysis. In the case of all of these CO₂-neutral gases, the primary cost driver of final energy applications is not the incineration technology but the upstream generation method. For bio-CH₄ from anaerobic fermentation, the specific investment costs are assumed to amount to 2700 EUR/kW_CH4 with 8000 full load hours [60]. The CAPEX for bio-SNG from solid biomass gasification are taken into account at 2000 EUR/kW_SNG [34]. Investments for electrolysis for the production of hydrogen are assumed to cost 515 EUR/kW_el when full load hours are around 3500 h/a [34,61]. The investment costs for hydrogen production through methane pyrolysis are estimated at 475 EUR/kW in 2040 [61]. For all generation routes, additional possible revenues for excess heat or carbon are not considered within the scope of this case study.

In contrast to final energy applications for the provision of heat, new applications have to be deployed when using CO₂-neutral gases for primary steelmaking to reduce process-related emissions. Here, direct reduction in combination with the above-mentioned electric arc furnaces is considered. In primary steelmaking, direct reduction (both CH₄ and H₂-based) in combination with EAF is assumed to cost 400 EUR/t of produced crude steel (CS) [61]. Due to the chosen green-field assumption mentioned above, all auxiliary elements of crude steel production are also included in our investigations of GHG emissions, energy demand, and costs.

3.1.5. Carbon Capture

Within our case study, carbon capture technologies remain only in the non-metallic mineral subsector to mitigate the emission of geogenous emissions brought in through carbonaceous feedstock. In this subsector, carbon capture technologies are widely viewed as playing an indispensable role on the path towards climate neutrality [62]. Carbon capture for cutting emissions in steelmaking, on the other hand, was identified as not feasible for use in the present blast furnace/basic oxygen furnace route in Austria by Mobarakeh and Kienberger [19] and is therefore not considered further here. Two technologies have been investigated for use in the non-metallic mineral subsector: the use of the oxyfuel technology is calculated to cost 220 EUR/t_CO2 of treated clinker production, and amine washing costs 131 EUR/t_CO2 [63].

3.1.6. Circular Economy

In some subsectors, circular economy aspects can significantly increase energy and resource efficiency. In the iron and steel industry, the use of electric arc furnaces opens up the possibility of increasing the use of scrap metal. Assuming a maximum of 50% scrap share in EAF steelmaking, the need for H₂- or CH₄-based direct reduction can be reduced accordingly. In cement production, a significant amount of research is currently being carried out regarding the recycling of concrete. Due to the significant increase in the necessary process preparation of scrap concrete, investment costs of approximately 1 EUR/t concrete are used [64].

3.2. Iron and Steel

In the iron and steel industry, the energy demand—and consequently cost structure—is largely dominated by primary steelmaking and high-temperature process heat. The conventional technologies considered are given in

Table 5. Conventional routes in iron and steel production per application case and the respective energy demand, GHG emissions, and yearly costs.

		Energy Demand	Emissions	ACAPEX	COPEX	Total Costs
		[GWh/a]	[kt CO2e/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Space heating	Coal furnace	0.0	0.0	0.0	0.0	0.0
	Oil furnace	9.5	2.8	0.0	1.3	1.3
	Gas furnace	329.5	65.7	1.7	29.9	31.6
Stationary engines	Diesel engine	6.1	1.8	0.0	0.8	0.8
	Gas engine	87.9	17.5	0.2	8.0	8.2
Process heat < 200 °C	Coal furnace	0.0	0.0	0.0	0.0	0.0
	Oil furnace	5.4	1.6	0.0	0.7	0.7
	Gas furnace	121.6	24.2	0.6	11.0	11.6
Process heat > 200 °C	Coal furnace	1866.9	620.7	8.3	177.7	186.0
	Oil furnace	0.0	0.0	0.0	0.0	0.0
	Gas furnace	5287.1	1054.5	26.5	479.9	506.4
Primary steelmaking	BF/BOF	26,777.0	10,200.0	244.7	5808.3	6053.0

. For primary steelmaking, the blast furnace/basic oxygen furnace route (BF/BOF) is currently deployed with a total energy demand of almost 27 TWh/a, producing 6.9 Mt of crude steel [19]. An additional 5 TWh of fossil energy is used in gas furnaces for high-temperature process heat at temperatures of up to 1000 °C. With 245 MEUR/a of annual capital expenditures and a C_OPEX of 5808 MEUR/a, the BF/BOF route is also the most expensive single technology in the subsector by far.

In contrast to the conventional technologies above,

Table 6. Considered alternative technology options in iron and steel.

Climate Neutrality Pathway	Source of Emission	Technology	Application
Electrification	Energy-related	Use of heat pumps	Space heating Process heat < 200 °C
	Energy-related	Electric engines	Stationary engines
	Process-related (a)	Electric arc furnace	Primary steelmaking in combination with direct reduction
Use of CO2-neutral gases and solid biomass combustion	Process-related	Direct reduction of iron ore with gases	Primary steelmaking in combination with EAF
	Energy-related	Bio-CH4	Space heating Process heat </> 200 °C
	Energy-related	H2 from electrolysis	Space heating Process heat </> 200 °C
	Energy-related	H2 from pyrolysis	Space heating Process heat </> 200 °C
	Energy-related	Solid biomass comb.	Space heating Process heat < 200 °C
Carbon capture (b)
Circular economy	Process-related	Using EAF	Increased use of scrap metals

^(a) EAF in combination with DR considered in the use of CO₂-neutral gases.^(b) Marked grey because no technology options were investigated within this pathway and subsector.

offers an overview of investigated alternative technologies, aggregated by climate neutrality pathway. The investigated DR/EAF route uses both climate neutrality pathways, electrification and CO₂-neutral gases. Below, it is considered within the climate neutrality pathway of the “use of CO₂-neutral gases and solid biomass combustion”. As explained above, carbon capture for cutting emissions in steelmaking, on the other hand, has been identified as not feasible for use in the present BF/BOF route in Austria [19]. Therefore, its respective line is grey.

In the above table, technologies for both the mitigation of energy-related emissions and process-related emissions are considered. For the presentation of their TCNPs and accompanying indicators, we rely on two separate tables below.

Table 7. Technologies, respective TCNP values, and changes in energy consumption and cost structure for energy-related emissions in the iron and steel industry.

Technology	Application	TCNP	Energy Balance	ACAPEX	COPEX	Total Costs
		[ktCO2e/a]	[GWh/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Electrification
LT heat pumps	Space heating	−63	Fossil: −339
			Electr.: +100	7.3	11.6	18.9
HT heat pumps	Process heat < 200 °C	−23	Fossil: −127
			Electr.: +42	2.2	4.9	7.1
Electric engines	Motive power	−17	Fossil: −94
			Electr.: +44	0.1	5.1	5.2
Use of CO2-neutral gases and solid biomass combustion
Bio-CH4	Space heating	−69	Fossil: −339
			Bio-CH4: +339	12.4	11.2	25.3
				Bio-CH4
				1.7
				Furnace
	Process heat < 200 °C	−26	Fossil: −127
			Bio-CH4: +128	4.7	4.2	9.5
				Bio-CH4
				0.6
				Furnace
	Process heat > 200 °C	−1675	Fossil: −7154
			Bio-CH4: +7154	261.6	235.8	533.2
				Bio-CH4
				35.9
				Furnace
Bio-SNG	Space heating	−69	Fossil: −339
			Bio-SNG: +339	9.2	19.2	30.1
				Bio-SNG
				1.7
				Furnace
	Process heat < 200 °C	−26	Fossil: −127
			Bio-SNG: +128	3.5	7.2	11.4
				Bio-SNG
				0.6
				Furnace
	Process heat > 200 °C	−1675	Fossil: −7154
			Bio-SNG: +7154	193.7	404.9	634.6
				Bio-SNG
				35.9
				Furnace
H2 from electrolysis	Space heating	−45	Fossil: −339
			H2: +305	6.8	15.3	23.6
			Electr.: +427	H2
				1.5
				Furnace
	Process heat < 200 °C	−17	Fossil: −127
			H2: +114	2.6	5.7	8.8
			Electr.: +160	H2
				0.6
				Furnace
	Process heat > 200 °C	−1170	Fossil: −7154
			H2: +6438	143.7	322.7	498.7
			Electr.: +9014	H2
				32.3
				Furnace
H2 from methane pyrolysis	Space heating	−64	Fossil: −339
			H2: +305	4.5	26.5	32.5
			CH4: +570	H2
			Electr.: +87	1.5
				Furnace
	Process heat < 200 °C	−24	Fossil: −127
			H2: +114	1.7	9.9	12.2
			CH4: +213	H2
			Electr.: +33	0.6
				Furnace
	Process heat > 200 °C	−1572	Fossil: −7154
			H2: +6438	94.6	559.3	686.3
			CH4: +12,040	H2
			Electr.:+1837	32.3
				Furnace
Solid biomass	Space heating	−68	Fossil:−339
			Biomass:+339	2.0	18.9	21.0
	Process heat < 200 °C	−25	Fossil:−127
			Biomass:+127	0.8	7.1	7.9

presents the results for the mitigation of energy-related emissions, while

Table 8. Technologies, respective TCNP values, and changes in energy consumption and cost structure for process-related emissions in the iron and steel industry.

Technology	Application	TCNP	Energy Balance	ACAPEX	COPEX	Total Costs
		[ktCO2e]	[GWh/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Use of CO2-neutral gases and solid biomass combustion
Bio-CH4-DR/EAF	Primary steelmaking incl. EAF	−9977	Fossil: −26,777
			Bio-CH4: +21,900	221.5	3127.7	4149.9
			Electr.: +3983	DR-CS
				800.7
				Bio-SNG
Bio-SNG-DR/EAF	Primary steelmaking incl. EAF	−9977	Fossil: −26,777
			Bio-SNG: +21,900	221.5	3646.8	4461.3
			Electr.:+3983	DR-CS
				593.1
				Bio-CH4
H2-DR/EAF (electrolysis)	Primary steelmaking incl. EAF	−8547	Fossil: −26,777
			H2: +18,235	221.5	3623.4	4251.8
			Electr.: +25,530	DR-CS
			Bio-CH4/SNG: +3726
			Electr.: +3985	406.9
				Electrolysis
H2-DR/EAF (pyrolysis)	Primary steelmaking incl. EAF	−9686	Fossil: −26,777
			H2: +18,235	221.5	4298.9	4788.5
			CH4: +34,100	DR-CS
			Electr.: +5197
			Bio-CH4/SNG: +3726	268.1Pyrolysis
			Electr.: +3985
Circular economy
EAF	50% scrap metal input in steelmaking	−9977	Fossil: −26,777
			Bio-CH4: +10,950	110.7	1794.1	2305.2
Reducing need for Bio-CH4-DR			Electr.: +3983	DR-CS
				400.3
				Bio-CH4
EAF	50% scrap metal input in steelmaking	−9977	Fossil: −26,777
			Bio-SNG: +10,950	110.7	2053.6	2460.9
Reducing need for Bio-SNG-DR			Electr.: +3983	DR-CS
				296.5
				Bio-SNG
EAF	50% scrap metal input in steelmaking	−9233	Fossil: −26,777
			H2: +9118	110.7	2101.4	2415.7
Reducing need for H2-DR (electrolysis)			Electr.: +12,765	DR-CS
			Bio-CH4/SNG: +1863
			Electr.: +4499	203.5
				Electrolysis
EAF	50% scrap metal input in steelmaking	−9803	Fossil: −26,777
			H2: +9118	110.7	2439.2	2684.0
Reducing need for H2-DR (pyrolysis)			CH4: +17,050	DR-CS
			Electr.: +2599
			Bio-CH4/SNG: +1863	134.0Pyrolysis
			Electr.: +4499

shows results for the mitigation of process-related emissions in iron and steel. TCNP values by climate neutrality pathway and technology are shown next to the respective resulting change in energy balance and the technologies’ annual capital and operational expenditures as well as their annual sum. For capital expenditures in the case of CO₂-neutral gases, we differentiate between expenditures for upstream gas generation on one hand and investments for the installation of furnaces and direct reduction plants on the other hand.

3.2.1. Energy-Related Emissions

Electrification: Supplying space heating and process heat below 200 °C through heat pumps can contribute to only a minor GHG reduction of up to 86 kt CO₂e. The largest share of electrification costs is accounted for by the adoption of heat pumps for space heating (a total of 18.9 MEUR). With GHG certificate costs taken into account, all electrification options feature cost leadership over their respective conventional fossil-based counterparts (cf. Table 5). Electrified space heating exhibits the greatest gap in comparison to the respective conventional route with savings of 14 MEUR/a.

CO₂-neutral gases and biomass combustion: For process heat above 200 °C, CO₂-neutral gases or biomass combustion are necessary, but they can also be applied for lower temperature ranges. Because of the small share of energy consumption in the iron and steel industry in lower temperature ranges, the TCNP of biomass combustion is limited to just 93 kt CO₂e. On the other hand, depending on the upstream chain used, emission savings of up to 1770 kt CO₂e (in the case of bio-CH₄ and bio-SNG) could be realised through CO₂-neutral gases. These biobased gases differ significantly in their cost structures; in the case of bio-CH₄, annual capital and operational expenditures are approximately even and sum up to 568 MEUR/a, while the C_OPEX values for bio-SNG are double the amount of necessary investment costs due to the more expensive feedstock (totalling 676 MEUR/a). Hydrogen from electrolysis, on the other hand, shows similar costs to bio-CH₄, with its TCNP reduced to 1232 kt CO₂e due to the assumed emission intensity of electricity and the large amounts of electrical energy necessary. With total annual costs of 531 MEUR, it features the lowest annual costs of all four investigated gaseous energy carriers. H₂ from pyrolysis, on the other hand, offers only small electricity-related TCNP reductions (−110 kt in comparison to biobased gases) but is found to be the most costly option of employing CO₂-neutral gases for reducing energy-related emissions in iron and steel. This results in annual costs of 731 MEUR, the only technology in this climate neutrality pathway above the costs for conventional technologies, which are calculated at 706 MEUR/a for the application cases of space heating and process heat. In both hydrogen cases, the necessary upstream energy provision in the form of CH₄ and electricity is presented in italics.

3.2.2. Process-Related Emissions

CO₂-neutral gases: In the iron and steel industry, the use of CO₂-neutral gases is especially important in the future mitigation of process-related emissions currently resulting from primary steelmaking via the BF/BOF route. As shown in Table 8, due to the high shares of primary metallurgy in Austrian steelmaking, substituting the BF/BOF-route with a DR/EAF-route can reduce emissions by up to almost 10 Mt of CO₂e (in the case of bio-CH₄ and bio-SNG)—approximately 13% of Austria’s overall CO₂ emissions per annum [65]. Due to the specific GHG emission of upstream electricity production of 56 g CO₂/kWh, the mitigation potential of electrolysis-derived H₂ is reduced by approximately 1430 kt CO₂e to 8547 kt, while using pyrolysis reduces the potential due to the lower electricity share in this channel by ~300 kt to 9686 kt CO₂e. On the other hand, annual costs for direct reduction based on electrolysis-derived hydrogen lead pyrolysis-derived hydrogen by savings of 537 MEUR/a, with a total of 4251.8 MEUR/a. With annual costs of 4150 MEUR/a for direct reduction based on bio-CH₄ and 4461 MEUR/a for direct reduction based on bio-SNG, these options show a cost range comparable to the electrolysis-based option. All four investigated options lie well below the projected costs of 6053 MEUR/a for conventional coal-based primary steelmaking via BF/BOF. Further analysis shows that a GHG certificate price of approximately 100 EUR/t CO₂ suffices for alternative technologies to be more economical for primary steelmaking.

Circular economy: For circular economy measures, the use of scrap metal in newly built EAFs allows for the minimisation of energy-intensive primary steelmaking from iron ore. While the TCNP remains unchanged in comparison to biobased direct reduction technologies using CH₄, important effects can be generated in all investigated pathways regarding resource efficiency, energy demand, and costs. Using bio-CH₄ as an example, energy demand can be reduced by 11 TWh/a. For CO₂-neutral gases with more elaborated upstream generation processes and transformation losses, most notably hydrogen, energy savings increase to more than 14 TWh in the case of electrolysis and to 21 TWh in the case of pyrolysis annually. Based on these energy savings, increasing the circular economy also offers significant monetary rewards, as all four cases (bio-CH₄ and SNG, hydrogen from electrolysis, and pyrolysis) offer annual cost reductions of approximately 1800 to 2100 MEUR/a in comparison to steelmaking with a current primary production output via above-described DR/EAF route.

3.3. Non-Metallic Minerals

Similar to the subsector above, in the non-metallic mineral subsector, energy demand—and consequently also cost structure—is largely dominated by high-temperature process heat. In addition, process-related emissions stemming from the extraction of geogenous CO₂ during calcination present a large source of hard-to-abate GHG emissions. The conventional technologies used in this subsector are given in

Table 9. Conventional routes in non-metallic minerals per application case and their respective energy demand, GHG emission, and yearly cost values.

		Energy Demand	Emissions	ACAPEX	COPEX	Total Costs
		[GWh/a]	[ktCO2e/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Space heating	Coal furnace	0.0	0.0	0.0	0.0	0.0
	Oil furnace	26.9	7.9	0.0	3.6	3.6
	Gas furnace	319.1	63.6	1.6	29.0	30.6
Stationary engines	Diesel engine	46.4	13.6	0.1	6.1	6.3
	Gas engine	0.6	0.1	0.0	0.1	0.1
Process heat < 200 °C	Coal furnace	0.0	0.0	0.0	0.0	0.0
	Oil furnace	0.7	0.2	0.0	0.1	0.1
	Gas furnace	208.3	41.54	1.0	18.9	20.0
Process heat > 200 °C	Rotary kiln	3321.0	972.9	73.2	722.5	795.7
	Coal furnace	215.7	71.7	1.0	20.5	21.5
	Oil furnace	94.5	27.7	0.1	12.5	12.6
	Gas furnace	3181.8	634.6	16.0	288.8	304.8

. For processes above 200 °C, the rotary kiln used in the cement industry is listed as a separate technology along with fossil-based furnaces. Cement production is the largest subsection of the non-metallic mineral subsector, both in terms of energy demand and GHG emissions, in Austria as well as globally [19]. Therefore, it is investigated more closely than other subsections in this work. For approximately 5.5 Mt of cement, 3.5 Mt of clinker is produced annually in Austria [19]. In total, high-temperature process heat that is also used for other minerals, such as lime, magnesia, and glass, consumes approximately 6.5 TWh/a of fossil energy, while process heat below 200 °C, space heating, and stationary engines are calculated to consume approximately 600 GWh/a. The total yearly costs of the investigated conventional technologies are most strongly influenced by the above-mentioned process-related emissions, adding approximately 1800 kt CO₂e and 460 MEUR/a in projected GHG certificate costs to the total yearly cost of the rotary kiln. Their mitigation cannot be achieved through the substitution of fossil energy carriers with CO₂-neutral alternatives.

As

Table 10. Considered alternative technology options in non-metallic minerals.

Climate Neutrality Pathway	Source of Emission	Technology	Application
Electrification	Energy-related	Use of heat pumps	Space heating Process heat < 200 °C
		Electric engines	Stationary engines
Use of CO2-neutral gases and biomass combustion	Energy-related	Bio-CH4	Space heating Process heat </> 200 °C
		H2 from electrolysis	Space heating Process heat </> 200 °C
		H2 from pyrolysis	Space heating Process heat </> 200 °C
		Solid biomass comb.	Space heating Process heat < 200 °C
Carbon capture	Process-related	Oxyfuel-combustion	Production
		Amine scrubbing
Circular economy	Process-related	Concrete recycling

visualises, carbon capture and circular economy measures are additionally investigated to attain far-reaching climate neutrality in the subsector. Carbon capture is necessary to reduce the number of geogenous emissions stemming from CO₂-containing minerals that are necessary to produce cement or magnesia. A circular economy allows for increases in the resource efficiency of already produced concrete for cement production, thereby lowering the process-related emissions of primary cement production.

Table 11. Technologies and respective TCNP, change in energy consumption, and cost structure values for energy-related emissions in non-metallic minerals.

Technology	Application	TCNP	Energy Balance	ACAPEX	COPEX	Total Costs
		[ktCO2e]	[GWh/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Electrification
LT heat pumps	Space heating	−66	Fossil: −346
			Electr.: +102	7.5	11.8	19.3
HT heat pumps	Process heat < 200 °C	−38	Fossil: −209
			Electr.: +69	3.6	8.0	11.6
Electric engines	Motive power	−13	Fossil: −47
			Electr.: +22	0.1	2.5	2.6
Use of CO2-neutral gases and solid biomass combustion
Bio-CH4	Space heating	−72	Fossil: −346
			Bio-CH4: +346	12.6	11.4	25.8
				Bio-CH4
				1.7
				Furnace
	Process heat < 200 °C	−42	Fossil: −209
			Bio-CH4: +209	7.6	6.9	15.6
				Bio-CH4
				1.0
				Furnace
	Process heat > 200 °C	−1672	Fossil: −6813
			Bio-CH4: +6813	249.1	224.5	507.8
				Bio-CH4
				34.2
				Furnace
Bio-SNG	Space heating	−72	Fossil: −346
			Bio-SNG: +346	9.4	19.6	30.7
				Bio-SNG
				1.7
				Furnace
	Process heat < 200 °C	−42	Fossil: −209
			Bio-SNG: +209	5.7	11.8	18.5
				Bio-SNG
				1.0
				Furnace
	Process heat > 200 °C	−1672	Fossil: −6813
			Bio-SNG: +6813	184.5	385.6	604.3
				Bio-SNG
				34.2
				Furnace
H2 from electrolysis	Space heating	−47	Fossil: −346
			H2: +311	6.9	15.6	24.1
			Electr.: +436	H2
				1.6
				Furnace
	Process heat < 200 °C	−27	Fossil: −209
			H2: +188	4.2	9.4	14.5
			Electr.: +263	H2
				0.9
				Furnace
	Process heat > 200 °C	−1192	Fossil: −6813
			H2: +6131	136.8	307.3	474.9
			Electr.: +8584	H2
				30.7
				Furnace
H2 from pyrolysis	Space heating	−67	Fossil: −346
			H2: +312	4.6	27.0	33.2
			CH4: +582	H2
			Electr.: +89	1.6
				Furnace
	Process heat < 200 °C	−39	Fossil: −209
			H2: +188	2.8	16.4	20.1
			CH4: +352	H2
			Electr.: +54	0.9
				Furnace
	Process heat > 200 °C	−1574	Fossil: −6813
			H2: +6131	90.1	532.6	653.5
			CH4: +11,466	H2
			Electr.: +1749	30.7
				Furnace
Solid biomass	Space heating	−72	Fossil: −346
			Biomass: +346	2.1	19.3	21.4
	Process heat < 200 °C	−42	Fossil: −209
			Biomass: +209	1.3	11.7	12.9

and

Table 12. Technologies and respective TCNP, change in energy consumption, and cost structure values for process-related emissions in non-metallic minerals.

Technology	Application	TCNP	Energy Balance	ACAPEX	COPEX	Total Costs
		[ktCO2e]	[GWh/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Carbon Capture
Oxyfuel-combustion	Sector-spec. processes	−2771	Electr.: +676	70.4	78.1	148.6
Amine scrubbing	Sector-spec. processes	−2729	Electr.: +1421	37.5	164.3	201.8
Circular economy
Bio-CH4	Recycling of concrete	−827	Bio-CH4: +1466	56.4	46.9	110.7
				Bio-CH4
				7.4
				Furnace
Bio-SNG	Recycling of concrete	−827	Bio-SNG: +1466	42.5	81.7	131.5
				Bio-SNG
				7.4
				Furnace
H2 from electrolysis	Recycling of concrete	−712	H2: +1466	35.5	71.8	114.7
				H2
				7.4
			Electr.: +2052	Furnace
H2 from pyrolysis	Recycling of concrete	−804	H2: +1466	24.4	126.1	157.8
			CH4: +2741	H2
			Electr.: +418	7.4
				Furnace

below present results for the mitigation of energy-related and process-related emissions in non-metallic minerals. Their format follows the above-described subsector of iron and steel.

3.3.1. Energy-Related Emissions

Electrification: The supply of space heating and process heat below 200 °C through heat pumps can contribute to a GHG reduction of approximately 100 kt CO₂e. Due to the small shares of space heating and low-temperature process heat necessary in the subsector, this consequently corresponds to only a small share of total emissions. The technical climate neutrality potential attainable through the electrification of stationary engines, on the other hand, amounts to even less—13 kt CO₂e/a. In comparison to the above-described conventional fossil-based technologies, the electrical alternatives provide total yearly cost advantages of ~27 MEUR. The highest relative savings can be generated within applications for space heating (56%) and process heat below 200 °C (58%).

CO₂-neutral gases and biomass combustion: With 97% of process heat above 500 °C, biomass combustion only shows a TCNP of 114 kt CO₂e/a. On the other hand, the TCNP for energy-related emissions of CO₂-neutral gases can reach up to 1786 kt CO₂e/a, as shown for the cases of bio-CH₄ and bio-SNG due to the higher available temperature ranges in the case of gaseous energy carriers. The cost structure of these CO₂-neutral gases mirrors the discussion presented for iron and steel; in the case of bio-CH₄, the A_CAPEX and C_OPEX are approximately evenly distributed and sum up to 550 MEUR/a, while the C_OPEX for bio-SNG are double the amount of necessary capital expenditures due to the more expensive feedstock (totalling 654 MEUR/a). The costs for electrolysis-derived hydrogen range below all other gaseous energy carriers at approximately 514 MEUR/a. Due to the upstream electricity demand and its underlying CO₂ intensity, the TCNP is reduced to 1266 kt/a. H₂ from pyrolysis, on the other hand, causes only small electricity-related TCNP reductions (−106 kt in comparison to biobased gases to a total of 1680 kt CO₂e/a) but is found to be the most costly option of employing CO₂-neutral gases for reducing energy-related emissions in the non-metallic mineral subsector. Pyrolysis-derived hydrogen exhibits projected costs of 707 MEUR/a. Still, even as the most expensive technology in this climate neutrality pathway, it stays slightly below the projected costs for conventional technologies, which are calculated to amount to 728 MEUR/a for the application cases of space heating and process heat below and above 200 °C when costs for process-related geogenous emissions are not considered.

3.3.2. Process-Related Emissions

Carbon capture: At up to 654 MEUR/a, the above-described annual costs for the abatement of energy-related emissions for temperature levels above 200 °C surpass the projected annual costs for carbon capture technologies for the mitigation of geogenous process emissions shown in Table 12 (a maximum of 202 MEUR/a in the case of oxyfuel). However, in the non-metallic mineral subsector, the use of such technologies exhibits by far the biggest TCNP of a single technology, with more than 2700 kt CO₂e/a. Most carbon capture technologies feature sequestration rates of 90 to 95%, with the ability to include energy-related emissions in the sequestration process [66]. More relevant differences exist in system integration and energy intensities, among others. For example, end-of-pipe amine scrubbing requires more than twice the amount of electrical energy than oxyfuel technology, which offers additional efficiency options regarding oxygen production on site. Because of this gap, the resulting TCNP is reduced by approximately 40 kt when using amine scrubbing. While it exhibits advantages in the A_CAPEX of approximately 30 MEUR/a, operational expenditures are much higher than for carbon capture with oxyfuel. Annually, ~50 MEUR will be saved by 2040 when deploying oxyfuel carbon capture instead of amine scrubbing.

Circular economy: In contrast to the iron and steel industry, the deployment of an increasing circular economy using waste concrete offers both primary resource savings and GHG reductions. Studies on the availability of waste concrete in 2040 suggest the use of primary cement can be reduced by up to 28% [64]. Additional energy is needed, especially for the pre-processing of recycled concrete before admixture in cement production. By using sustainable gases for the energy-intensive treatment of waste concrete, savings of up to 827 kt CO₂e in the case of bio-CH₄ and bio-SNG can be realised. The relation between technology-specific A_CAPEX and C_OPEX follows already identified trends. While for bio-CH₄, this relation is very even and the technology is the cheapest (111 MEUR/a), together with hydrogen from electrolysis (115 MEUR/a), pyrolysis-derived hydrogen in particular is very C_OPEX-intensive and costly. Costs for bio-SNG range above electrolysis-derived hydrogen and bio-CH₄ but are considerably lower than hydrogen from methane pyrolysis at approximately 132 MEUR/a.

3.4. Pulp and Paper

In the pulp and paper industry, the energy demand is dominated by medium temperature levels ranging between 100 °C and 500 °C [26]. The conventional technologies used are given in

Table 13. Conventional routes in the pulp and paper industry per application case and the respective energy demand, GHG emission, and yearly cost values.

		Energy Demand	Emissions	ACAPEX	COPEX	Total Costs
		[GWh/a]	[kt CO2e/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Space heating	Coal furnace	0.0	0.0	0.0	0.0	0.0
	Oil furnace	18.8	5.5	0.0	2.5	2.5
	Gas furnace	393.2	78.4	2.0	35.7	37.7
Stationary engines	Diesel engine	0.0	0.0	0.0	0.0	0.0
	Gas engine	363.0	72.4	0.9	32.9	33.8
Process heat < 200 °C	Coal furnace	475.0	158.0	2.1	45.2	47.3
	Oil furnace	22.4	6.6	0.0	3.0	3.0
	Gas furnace	3467.6	691.6	17.4	314.7	332.1
Process heat > 200 °C	Coal furnace	0.0	0.0	0.0	0.0	0.0
	Oil furnace	3.9	1.1	0.0	0.5	0.5
	Gas furnace	7184.1	1432.8	36.0	652.1	688.1

. In the fossil-based route, process heat is mostly supplied by gas furnaces with a total of approximately 10 TWh/a of energy demand and annual costs of ~1000 MEUR. In comparison, the energy demand and costs for space heating and stationary engines are relatively minor, with a total of approximately 770 GWh/a and costs amounting to ~75 MEUR/a.

In the pulp and paper industry, no process-related emissions are relevant. Therefore, the investigation of the TCNP must be focused on the abatement of energy-related GHG emissions (

Table 14. Considered alternative technology options in pulp and paper.

Climate Neutrality Pathway	Source of Emission	Technology	Application
Electrification	Energy-related	Use of heat pumps	Space heating Process heat < 200 °C
	Energy-related	Electric engines	Stationary engines
Use of CO2-neutral gases and solid biomass combustion	Energy-related	Bio-CH4	Space heating Process heat </> 200 °C
	Energy-related	H2 from electrolysis	Space heating Process heat </> 200 °C
	Energy-related	H2 from pyrolysis	Space heating Process heat </> 200 °C
	Energy-related	Solid biomass comb.	Space heating Process heat </> 200 °C
Carbon capture
Circular economy

). Because of the dispersed GHG sources in the Austrian case study, carbon capture technologies were excluded from further consideration. A total of 2 Mt of virgin pulp and approximately 5 Mt of paper in a multitude of qualities are produced annually [26]. With a recycling rate of more than 77%, the Austrian paper industry’s use of secondary fibre in paper production is considered to range close to technical limitations for the current product portfolio [67]. Therefore, we also consider no further expansion of circular economy measures in this work.

Energy-Related Emissions

Table 15. Technologies and the respective TCNP, change in energy consumption, and cost structure values for energy-related emissions in pulp and paper.

Technology	Application	TCNP	Energy Balance	ACAPEX	COPEX	Total Costs
		[ktCO2e]	[GWh/a]	[MEUR/a]	[MEUR/a]	[MEUR/a]
Electrification
LT heat pumps	Space heating	−75	Fossil: −412
			Electr.: +122	8.9	14.1	23.1
HT heat pumps	Process heat < 200 °C	−789	Fossil: −3965
			Electr.: +123	68.3	154.1	222.3
Electric engines	Motive power	−62	Fossil: −363
			Electr.: +171	0.0	19.8	19.8
Use of CO2-neutral gases and solid biomass combustion
Bio-CH4	Space heating	−82	Fossil: −412
			Bio-CH4: +412	15.1	13.6	30.7
				Bio-CH4
				2.1
				Furnace
	Process heat < 200 °C	−863	Fossil: −3965
			Bio-CH4: +3965	145.0	130.7	295.5
				Bio-CH4
				19.9
				Furnace
	Process heat > 200 °C	−1523	Fossil: −7188
			Bio-CH4: +7188	262.8	236.9	535.7
				Bio-CH4
				36.0
				Furnace
Bio-SNG	Space heating	−82	Fossil: −412
			Bio-SNG: +412	11.2	23.3	36.5
				Bio-SNG
				2.1
				Furnace
	Process heat < 200 °C	−863	Fossil: −3965
			Bio-SNG: +3965	107.4	224.4	351.7
				Bio-SNG
				19.9
				Furnace
	Process heat > 200 °C	−1523	Fossil: −7188
			Bio-SNG: +7188	194.7	406.9	637.6
				Bio-SNG
				36.0
				Furnace
H2 from electrolysis	Space heating	−82	Fossil: −412
			H2: +372	8.3	18.6	28.8
			Electr.: +520	H2
				1.9
				Furnace
	Process heat < 200 °C	−583	Fossil: −3965
			H2: +3569	79.6	178.8	276.4
			Electr.: +4996	H2
				17.9
				Furnace
	Process heat > 200 °C	−1005	Fossil: −7188
			H2: +7188	160.4	360.1	553.0
			Electr.: +10,063	H2
				32.5
				Furnace
H2 from pyrolysis			Fossil: −412
	Space heating	−73	H2: +372	5.5	32.2	39.6
			CH4: +694	H2
			Electr.: +106	1.9
				Furnace
			Fossil: −3965
	Process heat < 200 °C	−778	H2: +3569	52.5	310.0	380.4
			CH4: +6674	H2
			Electr.: +1018	17.9
				Furnace
			Fossil: −7188
	Process heat > 200 °C	−1377	H2: +5170	95.4	623.9	751.9
			CH4: +13,443	H2
			Electr.: +2051	32.5
				Furnace
Solid biomass	Space heating	−82	Fossil: −412
			Biomass: +412	2.5	23.0	25.5
	Process heat < 200 °C	−863	Fossil: −3965
			Biomass: +3965	23.9	221.3	245.2
	Process heat > 200 °C	−1523	Fossil: −7188
			Biomass: +7188	43.3	401.2	444.5

below presents the results for the mitigation of energy-related emissions in the pulp and paper industry. It follows the established format used for the previous subsectors.

Electrification: The electrification of space heating and stationary engines offers a TCNP of approximately 60 to 70 kt CO₂e/a each. While investment costs for engines are negligible due to small volumes, the total annual costs for the aforementioned applications are similar at approximately 20 MEUR/a. In contrast, the use of high-temperature heat pumps up to 200 °C provides a TCNP of close to 800 kt CO₂e/a at an annual cost of 222 MEUR. Due to the distribution of different temperature levels, this technology pathway offers greater TCNP and cost advantages in comparison to the two subsectors above. In contrast to conventional fossil-based technologies, the electrical alternatives in pulp and paper provide a total yearly cost advantage of ~190 MEUR/a. Due to the higher shares of medium-temperature process heat application, the climate neutrality impact and cost reduction are also considerably higher. The relative savings per application category in relation to conventional technologies reach 40 to 43% per technology.

CO₂-neutral gases and biomass combustion: In the pulp and paper industry, the highest TCNP can also be found in the provision of process heat above 200 °C, especially in the form of steam. For the temperature range between 200 and 500 °C, only CO₂-neutral gases and solid biomass are considered. In contrast to the iron and steel and the non-metallic mineral industries, biomass combustion in the pulp and paper industry shows a TCNP of 2468 kt CO₂e/a, 61% of which is with regards to the provision of process heat and steam between 200 and 500 °C. The total costs for all temperature levels in this case reach 715 MEUR/a, the majority of which stems from operational expenditures, mainly fuel costs. The investigated biobased gases match this TCNP; however, they do so at considerably higher costs. Exhibiting higher shares of annual C_OPEX, bio-SNG has annual costs of 1026 MEUR. Lower costs are calculated for the deployment of the more capital-intensive bio-CH₄ route, but with 862 MEUR/a, it is still roughly 150 MEUR/a more expensive than the combustion of solid biomass. Costs for electrolysis-derived hydrogen are approximately even with bio-CH₄ with 858 MEUR/a, but this route provides a lower TCNP due to indirect emissions from the electricity supply (1670 kt CO₂e/a). H₂ from methane pyrolysis, on the other hand, offers a TCNP of 2228 kt CO₂e/a but exhibits the highest annual costs by far at 1172 MEUR/a—a cost difference to the cheapest option of solid biomass of roughly 460 MEUR/a. In comparison to the investigated conventional routes outlined above, the most expensive alternative pathway with a very high TCNP—pyrolysis-derived hydrogen—exhibits approximately the same annual costs (1144 MEUR/a in the case of conventional technologies).

4. Discussion

Given the current exceptionally high uncertainty in international energy markets, the global economic outlook, and geopolitical developments, the discussion of the results is accompanied by a sensitivity analysis of the impact of fuel and feedstock costs, respectively, on total annual technology deployment costs. In Section 4.1, an exemplary sensitivity analysis for space heating, process heat below and above 200 °C, and primary steel production for changes in fuel and feedstock costs is presented. Thereafter, the results of the case study and sensitivity analysis are further discussed in Section 4.2.

4.1. Sensitivity Analysis

Following above methodology, for this analysis, annual costs of deployment are calculated, taking into account GHG certificate costs, fuel, and—in the case of CO₂-neutral gases—feedstock costs, as well as a 20-year depreciation period for investments. In each figure below, the cost of conventional fossil technologies for each of the given applications is compared to the costs of alternative technologies. The total annual costs of conventional technologies are visualised with and without GHG certificate costs. Thereby, we can visualise the impact of the chosen cost of 250 EUR/t CO₂ and assess its leverage on the annual costs of conventional and alternative technologies. Some alternative technologies are already cost-comparative with conventional technologies, while others need at least the chosen certificate price to incentivise their uptake through competitive annual costs of deployment. Electricity-based technologies—most notably electrification through heat pumps and hydrogen—also exhibit significant GHG certificate costs due to the consideration of upstream emissions from electricity generation. These costs are included in the shown graphs. The x-axis shows the underlying assumed difference in fuel costs, while all other cost factors, e.g., capital expenditures and GHG certificate costs, are kept constant. On the y-axis, the resulting total annual costs are plotted.

Figure 3 illustrates the results of the sensitivity analysis of fuel costs for space heating. Except for pyrolysis-derived hydrogen, all investigated pathways stay robustly below the costs of current fossil technologies. Due to the necessary upstream investment for the generation of CO₂-neutral gases, bio-SNG can only sustain fuel cost increases of approximately 20 to 30% before reaching cost parity with the base case of conventional technology. Solid biomass and pyrolysis-derived hydrogen react very strongly to fuel cost increases due to unfavorable energy conversion rates, with the former starting from a relatively low cost level in the base case. Solid biomass, bio-CH₄, and electrolysis-derived hydrogen reach annual costs of the conventional base case at an increase in fuel price of approximately 60 to 70%. On the other hand, for electric heat pumps, this point occurs at over 150%. Conventional technologies exhibit the lowest costs only if no GHG certificate costs are considered, highlighting the large steering effect of GHG taxation. When GHG certificate costs are considered, the sensitivity to changes in fuel costs is reduced accordingly, and the curve flattens.

Figure 4 presents a sensitivity analysis for fuel costs in applications of process heat below 200 °C. The trend identified in Figure 3 above is confirmed for the higher temperature range. Keeping fuel prices constant for the current production route, only the combustion of hydrogen from methane pyrolysis for process heat below 200 °C reaches fossil reference costs in the base case. Feedstock prices for the use of bio-CH₄ and electrolysis-derived hydrogen could rise by 70% before reaching cost parity with the conventional base case, while heat pumps can sustain an increase in electricity cost of more than 130%. On the other hand, the use of bio-SNG can only withstand price increases of 20% to 30%. Due to the large lever of assumed GHG certificate costs and the resulting flat development curve of conventional technologies, fossil costs would need to reduce by approximately 50% to lie below the base case of bio-SNG. The base case costs of the remaining technologies—heat pumps, biomass, bio-CH₄, and H₂ from electrolysis generation—could only be reached with an even greater than 50% decrease in fuel costs. Without GHG certificate costs, however, in this application category as well, no alternative technology exhibits cost leadership over the conventional base case.

Figure 5 presents a sensitivity analysis for fuel costs in applications of process heat above 200 °C. In contrast to the previously discussed diagrams, the gap between costs for conventional and alternative technologies in this application case is smaller. Only CO₂-neutral gases can be applied over the full temperature range above 200 °C, which is the reason why the combustion of solid biomass and electrification is not visualised in the figure. Again, keeping fuel prices constant for conventional technologies, only the combustion of hydrogen from pyrolysis for process heat is above fossil reference costs in the base case. The price of feedstock for bio-SNG can sustain an increase of approximately 15%. Of the four investigated gaseous energy carriers, bio-CH₄ is the most robust against feedstock cost increases—breaking even with the conventional base case at a relative feedstock cost increase of approximately 60%, similar to electrolysis-derived hydrogen. A 50% fuel price decrease in the fossil fuel reference case, including GHG certificate costs, would not bring cost advantages over the two most economical CO₂-neutral gas options, bio-CH₄ and electrolysis-derived H₂. Taking no GHG certificate costs into account for conventional technologies, on the other hand, fossil fuel prices can experience an increase of up to 150% before matching the assumed annual base case costs of alternative technologies for process heat above 200 °C.

While the above figures depict sensitivity analyses for final-energy-consuming applications and therefore the mitigation of energy-related emissions, Figure 6 investigates fuel and feedstock price sensitivity for the mitigation of process-related emissions in primary steelmaking. In general, all four investigated technologies, bio-CH₄, SNG, and hydrogen from electrolysis and pyrolysis, lie below the conventional fossil base case of primary steel production via the BF/BOF route when considering GHG certificate costs and can therefore be considered cost-competitive. Assuming constant prices for fossil energy carriers, the production of bio-CH₄ reaches cost equality only after a 160% price increase in feedstock. On the other hand, this does not apply in the same order of magnitude for bio-SNG and electrolysis-derived hydrogen, whose graphs exhibit greater feedstock cost sensitivity. DR/EAF using H₂ from pyrolysis, as the most expensive alternative option, still sustains a 50% increase in feedstock costs in comparison to the conventional base case. Investigating the impact of decreasing fuel costs, it can be observed that while the reference fossil route is relatively constant, small relative decreases in fuel costs for the alternative technologies already exhibit great absolute savings. If no GHG certificate costs are considered for BF/BOF, alternative technologies would have to find a decrease in feedstock costs of approximately 50% to become cost-competitive, again emphasising the lever of emission taxation for the success of the energy transition identified above.

4.2. Discussion of Case Study Results

In total, the subsectors considered in the case study currently emit approximately 19 Mt CO₂e/a via energy- and process-related emissions through several different energy application cases. Figure 7 illustrates the investigated technical climate neutrality potential per climate neutrality pathway. Horizontally, on the bottom, all investigated application cases and applicable alternative technology pathways as well as their respective conventional fossil routes are shown. Moving from top to bottom, the total annual GHG emissions of all investigated subsectors are shown on the left, next to the primary y-axis. For each alternative technology pathway and application case, the respective TCNP is shown. From bottom to top, associated costs, both operational and capital expenditures, are presented and assessed on the secondary y-axis on the right. For each pathway, the technology with the best ratio of TCNP to total annual costs is presented. As evident, thorough climate neutrality can only be attained by attending to all energy applications and making use of a combination of available climate neutrality pathways. As shown in the case study, a wide range of potential annual costs and TCNP values for these alternatives can be expected.

For space heating and process heat below 200 °C, especially electrification through heat pumps but also the use of solid biomass and bio-CH₄, costs lie well below the prices of their conventional fossil-based counterparts when taking into account GHG certificate costs—even in consideration of significant fuel price increases. However, relative to the other discussed application cases, both their costs and absolute TCNP values are low in the investigated EIIs.

The electrification of motive power applications may be relatively easy to realise and offers cost advantages over conventional technologies. However, only a marginal TCNP of less than 100 kt CO₂e/a across all discussed subsectors can be attained.

Due to its limited temperature range [25], biomass combustion can only be deployed for parts of process heat ranging up to 500 °C;—among the investigated subsectors of energy-intensive industries, this is a temperature range only widely used in the pulp and paper industry. The total TCNP of biomass combustion in the example subsectors amounts to 2675 kt CO₂e/a. Going down further in applicable temperature ranges, the electrification of the heat supply via the use of heat pumps can mitigate approximately 1054 kt CO₂e/a.

For high-temperature applications, in addition to bio-CH₄, bio-SNG and H₂ from electrolysis are also in a cost-competitive range. On the other hand, the use of pyrolysis to produce sustainable hydrogen is faced with large investment as well as feedstock costs that approximately match the costs of conventional technologies under the assumed boundary conditions. By using bio-CH₄—a CO₂-neutral gas with the highest TCNP-to-cost ratio—up to 4870 kt CO₂e/a can be mitigated, resulting in yearly costs of 1576 MEUR. Thereby, the annual costs lie well below the projected fuel and GHG costs of the conventional fossil-based route (2056 MEUR/a). This discrepancy is especially driven by assumed GHG certificate costs of 1204 MEUR/a, without which fossil technologies would result in significantly lower annual costs than their sustainable counterparts.

For the mitigation of process-related emissions in the non-metallic mineral subsector, carbon capture technologies are necessary to reduce geogenous emissions. The considered technologies can attain a sequestration efficiency of approximately 90% but vary greatly in their energy efficiency and cost structure. Because of the significantly higher electricity demand for amine scrubbing, approximately 700 kt of CO₂ emissions can be reduced by this technology in comparison to the alternative oxyfuel route due to the assumed GHG intensity of electricity consumption. While exhibiting considerable advantages in capital expenditures, this also drives fuel and GHG costs to 202 MEUR/a (in comparison to 146 MEUR/a for oxyfuel). The implementation of carbon capture enables additional emission mitigation through the sequestration of energy-related emissions from the calcinator as a side effect of the mitigation of process-related emissions. Approximately half of all energy-related emissions from the subsector could be sequestrated. In comparison to CO₂-neutral gases, carbon capture measures provide a significantly advantageous TCNP-to-cost ratio. In addition, a combination of the two climate neutrality pathways could enable significant opportunities for the realisation of negative emissions. The integration of circular economy aspects reduces resource depletion and mitigates geogenous emissions. While additional energy is needed for pre-processing, the associated benefits regarding the previously mentioned geogenous emission mitigation of approximately 800 kt in cement production alone prove to outweigh the costs. Therefore, a circular economy can provide a meaningful supplement to carbon capture measures for non-metallic minerals.

The already significant impact of the use of CO₂-neutral gases in GHG mitigation for high-temperature process heat is even surpassed by their use in steelmaking via the DR/EAF route. The costs of all four investigated gases lie well below the conventional technology of BF/BOF (6053 MEUR/a), as visualised with 4149 MEUR/a for bio-CH₄. They promise a TCNP between 86% in the case of electrolysis-derived hydrogen and 98% in the case of bio-CH₄ and bio-SNG. The use of a circular economy in steel production can reduce the need for geogenous resources as well as energy. However, the additional effect on the TCNP is negligible in comparison to the investigated DR/EAF-route. Most importantly, both sustainable primary steel production and increasing shares of secondary metallurgy rely on newly built electric arc furnaces.

In total, CO₂-neutral gases can achieve a TCNP of up to 16 Mt CO₂e/a thanks to their broad area-of-application possibilities for both process-related and energy-related emission mitigation. Among these energy carriers, bio-CH₄ can be considered the most economical and efficient under the given assumptions. While bio-CH₄ shows a cost structure balanced between capital and operational expenditures, bio-SNG and the similarly cost-intensive electrolysis-derived hydrogen are more susceptible to high fuel and feedstock costs. The most expensive gaseous energy carrier, pyrolysis-derived hydrogen, follows this trend but suffers from poor energy conversion factors and therefore even higher C_OPEX rates.

5. Conclusions

In conclusion, the successful mitigation of greenhouse gas emissions in energy-intensive industries will have to rely on a mix of technological measures. We summarised in our introduction from the existing literature that until now, studies on EIIs’ transition to climate neutrality have lacked a sector-comprehensive yet detailed outline of available options per industrial subsector in the context of their conventional fossil-based counterparts. This work, therefore, moves into this gap by presenting a set of indicators that allows the reader to compare—subsector by subsector and application by application—the impact on GHG emission mitigation, energy demand, and costs of every considered technology. Thereby, it bundles efforts across industrial subsectors as greater overarching complexities of the energy system are kept within sight from an energetic point of view but also with regards to ecology and economy. Furthermore, clustering along four climate neutrality pathways enables us to compare general angles of approach to climate neutrality across subsector boundaries that can directly inform researchers and decision makers when contemplating focal points regarding the transition phase for EIIs. The focus on the maximum attainable CO₂-mitigation impact for each technology also sets our proposed approach apart from common scenario analyses as we do not investigate transitional pathways. Rather, progressing from the level of technologies up to subsectors and climate neutrality pathways, we investigate each route by itself at maximum possible applicability without interference from another technology option. In turn, however, at the initial stage of the process of scenario development, the methodology presented herein allows for an insightful pre-examination of the maximum deployment states of the technology pathways.

The presented case study of three energy-intensive subsectors of Austrian manufacturing industries allows the following exemplary conclusions to be reached by applying the proposed approach. In further planning the energy transition for EIIs in Austria, these conclusions can constitute cornerstones of future research on the period of transition to climate neutrality and policy development. Due to the low requirements regarding necessary energy statistics, similar analyses can be extended to other national and international entities, using or even expanding the economic parameters compiled in this work or making use of collections of application-oriented energy and emission balances (e.g., Guminski et al. [68]).

• The use of CO₂-neutral gases can provide significant GHG reductions over a wide variety of applications and features the most significant total technical climate neutrality potential. Due to energy-intensive production routes for H₂, significantly more energy is needed than when considering current fossil-based industrial processes or the alternative bio-CH₄ route.
• At lower temperature levels (up to 200 °C), electrification through heat pumps can positively impact absolute energy efficiency and provides a sustainable setup that is robust against volatile energy prices.
• The impact of intensified circular economy measures is most notable regarding energy and resource efficiency. In the case of steel production, only the already sustainable but energy-intensive EAF-based production route allows for additional recycling capacities. Similarly, in cement production, circular economy measures reduce the especially hard-to-abate geogenous emissions.
• Several technologies for the successful sequestration of CO₂ exist. However, they differ significantly in energy intensity as well as investment requirements. For example, end-of-pipe solutions like the investigated amine scrubber feature easy application and comparatively low capital expenditures but show significant drawbacks regarding energy efficiency, operational expenditures, and price robustness. Oxyfuel carbon capture requires larger capital expenditures but provides significantly lower total costs of deployment annually—an already existing advantage that may well increase in consideration of expectable learning curves for this technology.
• Prices of GHG certificates are shown to constitute the most essential leveliser of the costs of fossil fuels when comparing conventional fossil-based annual costs for 2040 with those of alternative technologies. For necessary steering effects to take place across all investigated application cases, their prices should lie between 200 and 300 EUR/t CO₂. This resulting span corresponds to price ranges identified in a study by the German climate neutrality research initiative ARIADNE, which investigated necessary CO₂ certificate costs for reaching the 2030 GHG reduction goals of the “Fit for 55” policy programme [69].
• Our exemplary case study in Austria shows that alternative technologies in four main climate neutrality pathways can operate at total annual costs comparable to their conventional fossil-based equivalents. Their implementation timeline will be guided by the timeline of decisions for future replacement investments, which has to be an essential focal point for future studies.