The impact of industrial policymaking on the economics of low-emission technologies: the TRANSid model

Abstract

Basic materials like steel, cement, aluminium and (petro)chemicals are the building blocks of our industrialised societies, but today their production is highly energy and emission-intensive. Hence, these industries need to decarbonise over the next decades to keep global warming at least below 2°C. However, low-emission industrial-scale production processes are not commercially available to date for any of these basic materials and require policy support to ensure their large-scale diffusion over the upcoming decades. This paper introduces the novel TRANSid (Transition to industry decarbonisation) model to study the framework conditions that enable large-scale investment decisions in climate-friendly basic material options. We use a simplified case study of the cement sector to show how the model optimises investment and operational cost until 2050 by opting for the installation of carbon capture technology. Furthermore, we demonstrate how an extension of the model to other sectors allows us to study industry and sector-specific policy options.