If we are to limit global warming to 2 °C, all sectors in all countries must reduce their emissions of GHGs to zero not later than 2060–2080. Zero-emission options have been less explored and are less developed in the energy-intensive basic materials industries than in other sectors. Current climate policies have not yet motivated major efforts to decarbonize this sector, and it has been largely protected from climate policy due to the perceived risks of carbon leakage and a focus on short-term reduction targets to 2020. We argue that the future global climate policy regime must develop along three interlinked and strategic lines to facilitate a deep decarbonization of energy-intensive industries. First, the principle of common but differentiated responsibility must be reinterpreted to allow for a dialogue on fairness and the right to development in relation to industry. Second, a greater focus on the development, deployment and transfer of technology in this sector is called for. Third, the potential conflicts between current free trade regimes and motivated industrial policies for deep decarbonization must be resolved. One way forward is to revisit the idea of sectoral approaches with a broader scope, including not only emission reductions, but recognizing the full complexity of low-carbon transitions in energy-intensive industries. A new approach could engage industrial stakeholders, support technology research, development and demonstration and facilitate deployment through reducing the risk for investors. The Paris Agreement allows the idea of sectoral approaches to be revisited in the interests of reaching our common climate goals. Policy relevance Deep decarbonization of energy-intensive industries will be necessary to meet the 2 °C target. This requires major innovation efforts over a long period. Energy-intensive industries face unique challenges from both innovation and technical perspectives due to the large scale of facilities, the character of their global markets and the potentially high mitigation costs. This article addresses these challenges and discusses ways in which the global climate policy framework should be developed after the Paris Agreement to better support transformative change in the energy-intensive industries.

The target of zero emissions sets a new standard for industry and industrial policy. Industrial policy in the twenty-first century must aim to achieve zero emissions in the energy and emissions intensive industries. Sectors such as steel, cement, and chemicals have so far largely been sheltered from the effects of climate policy. A major shift is needed, from contemporary industrial policy that mainly protects industry to policy strategies that transform the industry. For this purpose, we draw on a wide range of literatures including engineering, economics, policy, governance, and innovation studies to propose a comprehensive industrial policy framework. The policy framework relies on six pillars: directionality, knowledge creation and innovation, creating and reshaping markets, building capacity for governance and change, international coherence, and sensitivity to socio-economic implications of phase-outs. Complementary solutions relying on technological, organizational, and behavioural change must be pursued in parallel and throughout whole value chains. Current policy is limited to supporting mainly some options, e.g. energy efficiency and recycling, with some regions also adopting carbon pricing, although most often exempting the energy and emissions intensive industries. An extended range of options, such as demand management, materials efficiency, and electrification, must also be pursued to reach zero emissions. New policy research and evaluation approaches are needed to support and assess progress as these industries have hitherto largely been overlooked in domestic climate policy as well as international negotiations. Key policy insights

End-use efficiency, demand response and coupling of different energy vectors are important aspects of future renewable energy systems. Growth in the number of data centres is leading to an increase in electricity demand and the emergence of a new electricity-intensive industry. Studies on data centres and energy use have so far focused mainly on energy efficiency. This paper contributes with an assessment of the potential for energy system integration of data centres via demand response and waste heat utilization, and with a review of EU policies relevant to this. Waste heat utilization is mainly an option for data centres that are close to district heating systems. Flexible electricity demand can be achieved through temporal and spatial scheduling of data centre operations. This could provide more than 10 GW of demand response in the European electricity system in 2030. Most data centres also have auxiliary power systems employing batteries and stand-by diesel generators, which could potentially be used in power system balancing. These potentials have received little attention so far and have not yet been considered in policies concerning energy or data centres. Policies are needed to capture the potential societal benefits of energy system integration of data centres. In the EU, such policies are in their nascent phase and mainly focused on energy efficiency through the voluntary Code of Conduct and criteria under the EU Ecodesign Directive. Some research and development in the field of energy efficiency and integration is also supported through the EU Horizon 2020 programme. Our analysis shows that there is considerable potential for demand response and energy system integration. This motivates greater efforts in developing future policies, policy coordination, and changes in regulation, taxation and electricity market design.