After years of stagnation, the two most polluting sectors of the Greek industry (cement production and refineries) are aiming to reduce their carbon footprint, in line with the NECP and EU priorities, despite concerns about their competitiveness.
Following the significant progress made in the electricity production sector, the decarbonization of industry is a central issue in the next phase of the European Green Deal. Already in recent years, with a number of legislative initiatives such as the revised Emissions Trading System (ETS), the Carbon Border Adjustment Mechanism (CBAM) as well as the Green Deal Industrial Plan, the EU has been attempting to address the almost stagnant carbon footprint of its industries. At the same time, the delicate balance between decarbonizing European industry and preserving its competitiveness has emerged as a priority in the new EU institutional cycle.
In light of these developments, the report entitled “The Decarbonization of Greek Industry: Plans, Challenges & Prospects” attempts to investigate the current situation, the plans of industries and the State, as well as the perceptions of the stakeholders that will determine the future of the decarbonization of the Greek industry. The analysis focuses on the two most polluting sectors, cement production and oil refining, which account for more than 80% of total industrial emissions over the last decade. Moreover, in collaboration with a social research company, the report records the relevant positions of representatives of the State, Greek industry and civil society on the forthcoming changes.
The current situation
The carbon footprint of the two most polluting sectors of the Greek industry remained at high levels throughout the period 2013-2023. In particular:
- In the Greek cement industry, a trend of slight emissions reduction is observed. However, Greece has the highest carbon intensity (800 kg CO2/tn clinker) compared to the European countries with the highest cement production (Germany, Spain, Italy).
- In refineries, the stagnation of the carbon footprint between 2013 and 2020 was followed by a significant increase in the last three years (2021-2023). On the other hand, the carbon intensity of refineries in Greece follows approximately the EU-27 average, while in 2022, with 190 kg CO2/tn of product, it was lower than the EU-27 average (200 kg CO2/tn of product).
- Cumulatively for the same period and in the context of protecting European industries from the risk of carbon leakage, the Greek cement industry received 68.5 million free emission allowances from the ETS with an estimated value of €1.66 billion, while Greek refineries received 46.5 million free emission allowances with an estimated value of €1.25 billion.
The views of stakeholders
- All parties recognize the necessity of decarbonization. However, some industry representatives view the EU’s climate targets as overly ambitious and believe the pace of the industrial sector’s green transformation is too rapid. On the other hand, other industry representatives, along with members of civil society, argue that climate mitigation action should accelerate even further.
- Reservations were expressed by industry representatives about the potential and cost of Carbon Capture, Use and Storage (CCUS) technologies, and about the adequacy of the Carbon Border Adjustment Mechanism (CCM) to safeguard the competitiveness of European industries vis-à-vis competitors from third countries.
- It is crucial to review the EU’s financial instruments in order to strengthen support for green investments and ensure parity between industries in Member States with different finacial capabilities.
The plans of industries and the State
Despite their reservations and concerns, the Greek cement industries and refineries are showing quick reflexes in the face of the new landscape that is taking shape. In particular:
- They are planning and have already started to implement projects that will drastically reduce their carbon footprint by 2030, in alignment with the targets and provisions for reducing industrial emissions set by the NECP.
- The largest emission reduction will occur from 2028 onwards, when the major CCUS projects are expected to come on stream. In particular, the set of measures that Greek cement companies plan to implement, including CCS, is estimated to lead to a 73.3% reduction in emissions from industrial processes (Scope 1) in 2030 compared to 2022, while the corresponding reduction in refineries is estimated to be 26.8%.
“Greece’s major industries seem to understand that in this new international landscape, their competitiveness is directly linked to the green transformation of their processes. The State should further strengthen this effort by facilitating the electrification of industrial processes, by developing an appropriate institutional framework for carbon capture, storage and use technologies (CCUS) and by promoting a centralized EU-level financing mechanism to support green investments in industry”, said Nikos Mantzaris, policy analyst at Τhe Green Tank.
Notes for editors:
- You can read the full report titled “The Decarbonization of Greek Industry: Plans, Challenges & Prospects” here.
- For the analysis of the carbon footprint of the cement industry and refineries, data from the EU ETS Registry was used.
- The recording of stakeholders’ views was carried out in cooperation with the social and market research company qed and was based on a semi-structured “discussion guide”. A series of one-on-one, online interviews was planned with representatives of four industry sectors (cement, refineries, aluminium, steel), as well as members from civil society and the State, including the two main ministries influencing the country’s industrial policy (Development and Environment & Energy).
