As the climate crisis intensifies with more rigorous heatwaves and extreme weather affairs, it has become increasingly evident that immediate action should be a priority.
As the climate crisis intensifies with more rigorous heatwaves and extreme weather affairs, it has become increasingly evident that immediate action should be a priority.
Establishing net-zero targets and concentrated mitigation strategy entailing clear roadmaps for de-fossilization by utilizing cleaner renewable energy sources and innovative technologies to expedite energy transition. Hard-to-abate sectors such as industries contribute to 30 per cent of the global GHG emissions. Industrial processes, known for their high energy intensity, also account for 38 per cent of the world's final energy consumption in terms of electricity.
The decarbonizing industry is pivotal for achieving net-zero goals. It involves deploying solutions such as renewable electrolysis (green hydrogen) and Carbon Capture, Usage, and Storage (CCUS), alongside enhancing energy efficiency and resource management at industrial sites. Critical technologies such as electrolyzers for renewable hydrogen and Carbon Capture And Storage (CCS) will see substantial demand by 2030 to meet global net-zero goals.
Establishing a net-zero economy through industrial decarbonization will require extensive implementation of regulatory carbon tariffs on emissions from industrial products. Mechanisms like the Carbon Border Adjustment Mechanism (CBAM), set to be established in European markets by 2026, will play a significant role in establishing a regulated decarbonized economy. At the same time, the introduction of carbon tariffs will encourage global collaboration to increase the demand for low-carbon industrial products. This decade's efforts are crucial to ensure that industry can transition to a net-zero emissions future without merely relocating pollution and businesses.
The escalating global momentum to decarbonize economic growth in alignment with SDGs demands enhanced international cooperation. Most developing countries such as Pakistan are primarily dependent on imported fossil fuels, with limited or decreasing domestic reserves, which poses a risk to both energy and economic security. In most scenarios, political and economic challenges often take precedence over addressing climate action.
Pakistan’s industries are focused on cotton-based textile manufacturing, positioning it among the top five global cotton producers and contributing 10 per cent of the world’s cotton supply. This focus on textiles underpins a textiles-led industrialization strategy, with textile manufacturing representing 54 per cent of national exports, 38 per cent of industrial employment, and nearly 9.0 per cent of GDP.
Given the export focus of the textile industry, efforts are already underway to decarbonize the textile segment in Pakistan. Initiatives like Net-Zero Pakistan have been established to support textile manufacturers to adhere to Net-Zero compliance set by international standards and certification schemes. This collaborative platform involves government, private sector, and sectoral experts, aiming to assist the private sector in achieving its net-zero goals by 2050.
To address major challenges, the federal and provincial governments remain crucial in promoting industrial decarbonization through implementable policies and regulations. Measures such as carbon pricing, emissions trading schemes, subsidizing mechanisms for innovative technologies, and stringent emissions standards can motivate industries to lower their carbon emissions.
To support the climate mitigation efforts, it is essential to formalize an implementable and realistic industrial decarbonization framework. Inconsistent policy measures in climate mitigation space can hinder long-term investments. Certainty of regulatory frameworks are necessary to give industries the confidence to invest in their decarbonization ventures.
The cost of implementing decarbonization technologies remains a critical parameter along with the technological limitations associated with emerging technologies. Industries may be reluctant to bear these costs at this stage without clear economic turnover or regulatory mandates. Also, the competitive nature of global markets can make it challenging for individual companies to invest in low-carbon technologies without risking their market position.
This requires coordinated efforts and supportive policies to even out the market positioning of these technologies since the cost associated with greening translates directly toward consumers. To address this financial instruments such as green bonds, climate funds, Voluntary Carbon Market (VCM), and private investments can provide the necessary capital for industries to invest in decarbonization and energy efficiency measures.
Other opportunities are available in terms of tapping climate and carbon finance for deploying innovative technologies, but this requires a clear and well-defined regulatory framework. Countries with strong regulatory frameworks, comprehensive policies, and legal certainty are better positioned to attract Foreign Direct Investment (FDI) and private capital, ensuring greater certainty in long-term investments.
Establishing a tailored policy framework requires targeted regulations, incentives, and support mechanisms to reduce emissions across key industrial sectors. Financial incentives, including grants, subsidies, and tax exemptions could be significant to drive investments in decarbonization.
In the context of a developing country like Pakistan, accelerating industrial decarbonization is essential for sustainable economic growth, environmental protection, and social uplifting. This is only possible when a clear industrial decarbonization strategy and roadmap are placed.
A successful strategy would require a multistakeholder approach and coordination which can be supported by the government under its net-zero ambitions in collaboration with industrial partners. This coordinated effort could help to ensure that industries are actively engaged in the transition process, sharing a strategic goal towards zero.
The writer is a renewable energy professional committed to just energy transition and net-zero goals.
