The European Green Deal – Why Engineers Should Care
SCROLL DOWN TO READ
Published on: 10/2020
Author
Pierre Sabrowski
Approximate time of reading
15 minutes
Why engineers will be affected
12 years of political milestones for climate and energy

On 13 April 2016, scientists published a paper about the consensus on consensus for human-caused global warming. Six independent studies were presented to show that 90%-100% of publishing climate scientists agree that humans are responsible for the recent global warming. This is in very good agreement with the more popular 97% statement1 from 2013 that people often refer.

This should give an undeniable statement on the causes of climate change. But why should engineers care? Because recent political measures will affect the technological journey that lies ahead of us and engineers are going to play a major role in that story.2

Before we dive into the details: Let’s have look at the most important political milestones so far:

The very foundation of all upcoming political steps is the Paris Agreement on 12 December 2015. The UNFCCC agreed to limit global warming well below 2°C compared to pre-industrial levels and to increase efforts to keep it below 1.5°C. To put that in perspective, we are standing at 1°C above pre-industrial levels with an increase of 0.2°C per decade.3


Now, this is the time to talk about greenhouse gas (GHG) reduction goals.

Until 2009, the European Council had already set three major goals for 2020 and 2050:4,5

  • 20% energy shares from renewable sources by 2020,
  • 20% reduction in GHG emission compared below 1990 levels by 2020 and
  • 80%-95% reduction in GHG emission compared below 1990 levels by 2050.
On 22 January 2014, the policy framework for climate and energy was presented. The policy’s centerpiece are the intermediate targets for 2030:
  • 40% reduction in GHG emission compared below 1990 levels and
  • 27% energy shares from renewable sources.6
But that was not enough. On 28 November 2018, the European Commission defined its vision for a climate neutral economy under the title: A Clean Planet for all. It was officially submitted to the UNFCCC in March 2020 and it states that the EU strives for
  • 32% energy shares from renewable sources by 2030 and
  • net-zero GHG emissions by 2050.7
So this is where we were standing in 2019. But obviously, this article would lose its charm if the story ended here.
Facing Reality in 2019
In October 2019, the EEA published trends and projections in Europe to give context to current developments. Here, we want to emphasize on three major datasets:
  • The developments of renewable energy shares in the EU from 2005 to 2017 and respective projections to 2050,
  • The GHG emissions in the EU from 1990 to 2017 and respective projections to 2050,
  • The energy consumption by sectors from 1990 to 2018.
These graphs will give us a basic understanding to interpret the latest developments in 2019 and 2020 regarding climate and energy politics. They also reference to the exact targets that were described so far. Let’s have a deeper look.

Figure 1 shows the current developments of renewable energy in gross consumption percentages. With a share of 17.5% in 2017, the target of 20% in 2020 was still within reach. But the report also states that a slightly faster pace in 2019 and 2020 is still necessary.

Figure 1 Share of energy from renewable energy sources in the EU’s gross final energy consumption, 2005-2017, 2020 and 2030 targets and 2050 scenario for reaching carbon neutrality, under the EU’s long-term vision8

Figure 1 Share of energy from renewable energy sources in the EU’s gross final energy consumption, 2005-2017, 2020 and 2030 targets and 2050 scenario for reaching carbon neutrality, under the EU’s long-term vision8

The report also analyzed the progress in greenhouse gas emissions which are shown in Figure 2. Here, the trajectory shows a positive projection to meet the criteria for 2020 but the estimations after 2020 are too slow to reach a decrease in GHG emissions of 40% in 2030.

Figure 2 Greenhouse gas emission trends, projections and targets in the EU9

Figure 2 Greenhouse gas emission trends, projections and targets in the EU9

But how is this going to affect us as engineers?

Based on data of the EEA, Figure 3 shows the development of CO2 emission equivalents without LULUCF (Land Use, Land Use Change and Forestry which has a general positive impact on the numbers) by major sources. If we look at the three major CO2 sources, we find energy supply (2018: 2907 Mt) with more than 75% to be by far the major source of GHG emission.

If energy, which is mainly rooted back to fuel combustion activities, is such a large factor, then maybe we should dig a little deeper to understand what exactly is causing the emission. Figure 4 shows the distribution of some more detailed emission categories. Here we see that the whole energy sector can be split into four more informative categories:
  • Energy industries
  • Manufacturing industries and construction
  • Residential households or commercial and institutional buildings
  • Transport10
Striking but not surprising, the emissions of energy industries and transport are defining a major block within the energy sector. I thought that at this point of course everybody wants to know what share car traffic has in general transport emissions. Therefore, I carved out that piece and as you can see, cars are responsible for more than 50% of transport emissions in 2018. If we add heavy duty trucks and buses to the equation, we are already gathering more than 75% of general transport shares.

I hope that at this point, the picture gets clearer. The technologies and infrastructures which need to be developed and built within the next 30 years to achieve international CO2 emission goals, are heavily driven by engineering companies. Therefore, the impact to the life of every engineer will be tremendous. It can thus be understood as a common lifetime achievement to share among all engineers in the world.

Figure 3 Greenhouse gas emissions in the EU by sector from 1990 to 201811

Figure 3 Greenhouse gas emissions in the EU by sector from 1990 to 201811

Figure 4 Distribution of emission by categories with a focus on transport-related sources in 2018 based on EEA Data12

Figure 4 Distribution of emission by categories with a focus on transport-related sources in 2018 based on EEA Data12

The European Green Deal
Now it’s time to have a look at the namesake of this article: The European Green Deal.

„I want Europe to become the first climate-neutral continent in the world by 2050.”

- Ursula von der Leyen, President of the European commission, 16 July 201913

That statement is a key pillar of Ursula von der Leyen’s candidacy speech on 16 July 2019 who became President of the European Commission the same day.

So obviously the EU wants to get serious and the key tool to success is going to be…
the European Green Deal.
The European Green Deal which was presented on 11 December 2019 is the EU growth strategy that aims for a resource-efficient economy. Generally speaking, the European Green Deal plans to push the key activities that are shown in Figure 5.

Figure 5 The key elements of the European Green Deal14

Figure 5 The key elements of the European Green Deal14

The EU wants to become a role model for climate change activities. This should not only show how climate change can actively be pushed without compromising on economical growth (at least that’s the hope) but it will also give the EU the First Movers Advantage in technological evolution. This way, the EU fights for the industrial leadership in green technologies.

Since I don’t want to go too much into the details of every single activity, let’s at least scratch the surface of three larger initiatives under the European Green Deal that were kicked off so far:
  • Key part of the European Green Deal is the European Climate Law which was proposed on 4 March 2020. It should write the goal to become climate-neutral by 2050 into European law. It also addresses the irreversibility of climate neutrality.
  • To drive the upcoming industrial transformation, A New European Industrial Strategy for Europe was adopted on 10 March 2020. Among general activities to support European industrial ecosystems towards their target of climate neutrality it also states to build four industrial alliances for clean hydrogen, low-carbon industries, industrial clouds and platforms and raw materials.
  • On 17 September 2020, the 2030 Climate Target Plan was presented. It proposes a more ambitious roadmap to become climate neutral until 2050. At its core: The decrease of GHG emissions to a minimum of 55% by 2030 (from 1990 levels) which is a large step compared to the previous 40% decrease target.

It’s going to be very interesting to see how industries are going to react to the 55% proposal while facing their COVID-19 survival plans. They are obviously not going to like it as you can already see in German newspapers.15

But there we have it again. Ambitious goals enforce change and change causes fear as well as it creates opportunities. Let’s see how economical and political debates will create the roadmap we need to tackle these ambitious environmental goals.
Talking about Opportunities
Mechanical Engineering Industries

At this point, I want to focus shortly on opportunities for engineering industries based on a German study that was presented by the VDMA and the Boston Consulting Group in 2020.16

The study differentiates between five categories to reduce GHG emissions starting with measures (1) that can already be taken today and blending to measures (5) that are brought by upcoming technologies:
Category name
Examples
1. Low CO2 energy production
  • Solar / photovoltaic plants
  • Wind turbines
  • Hydropower plants
2. Economically viable technologies
  • Heat system optimization and recovery for buildings e.g. via heat exchangers
  • Improving electrical and mechanical efficiency e.g. via speed-variable electric engines
3. Uneconomic but potential future technologies
  • Methane capture in coal mining and farming
  • Conversion to electric vehicles
4. Eco-friendly fuels
  • Green hydrogen
  • Biofuels and synthetic fuels
  • Other Power-to-X (P2X) fuels
5. Carbon capture, utilization and storage (CCUS)
  • Capture unavoidable carbon in industrial processes e.g. in cement, steel or biogas production
  • Power-to-Gas/Fuel technologies
  • Carbon mineralization
In 2017 humans were responsible for 51 Gt of estimated GHG emissions worldwide. 35Gt of these can be traced back to its sector quiet well. Figure 6 shows potential GHG emission savings until 2030 based on the data which was presented within that study. The savings are related to the international GHG emission data that gathers detailed sector information. Here, the OECD and BRIC countries excluding Mexico and South Korea were chosen.

The study indicated that 5 Gt of GHG could be saved until 2030 just by increasing the renewable energy share (category 1) in energy production to 49% e.g. via wind and solar energy plants. As a comparison, Germany has already reached a 52% renewable energy share17 in 2020. This would demand an increase of 800% in solar and 400% in wind energy plants until 2030. This would cause investments of 2.3 trillion euro.

In category 2, investments of 580 billion EUR in heat systems and recovery, 1.1 trillion EUR in building automation systems and 290 billion EUR in recycling among others are necessary to implement already existing energy efficient technologies.

Furthermore, investments of 2.1 trillion EUR are expected in the field of alternative fuels e.g. synfuels and hydrogen or other P2X technologies (category 4). The construction of electrolysis plants alone is going to demand about 410 billion EUR of invest.

Figure 6 Worldwide emissions and potential savings18

Figure 6 Worldwide emissions and potential savings18

So far we talked about investment from a global perspective. A study of the BCG took a closer look to the potential abatement cost and showed that many measures can be taken that do not only reduce GHG but at the same time lower cost. These opportunities are mainly driven by on-site solar plants, renewable energy purchase agreements and an overall increase in efficiency e.g. of heat systems.

Figure 7 Reducing Carbon Can Lead to Reduced Costs19

Figure 7 Reducing Carbon Can Lead to Reduced Costs19

Let’s put it into simple words: There are some amazing business opportunities coming up on the horizon that are not only interesting from a growth perspective - they will also be essential building blocks to save our human existence. To me as an engineer, this feels like being worth to strive for.
Outlook and COVID-19 pandemic influences
The latter BCG study heavily focused on the influence of recent COVID-19 pandemic developments. During the COVID-19 pandemic, we witnessed (and we still do witness) dramatic interventions in everybody’s life. This of course does not only have tremendous effects on our day-to-day life but also on the global economy. Adding these up, a GHG emission drop of 5% to 10% for 2020 is expected (see Figure 7). To put this again in perspective: We need to keep up a 5% GHG emission drop to realize the targets of the Paris Agreement.

But here comes the bad news. The latest developments are not expected to be sustainable because they correlate a lot with our still carbon-dependent limping economy. The worst part: Urgently needed investments into green technologies are at risk due to enormous investment demands caused by the pandemic. Furthermore, the price of gas and coal is dropping which makes it very hard to build a business case on green energy. Eventually, the awareness of climate change competes against breaking news on COVID-19.

In short terms: Recent global developments are going to backfire when it comes to our climate targets and it’s going to be a huge challenge to catch up with the initial plans – not that we had a choice.

Figure 8 COVID-19 has triggered the largest emissions drop since World War II20

Figure 8 COVID-19 has triggered the largest emissions drop since World War II20

LET'S GET IN TOUCH

What are you looking for?

Contact Us