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European Union Sectors

What is the European Unionʼs pathway to limit global warming to 1.5°C?

How to citeLast update: August 2022

The emissions from the EU manufacturing sector fell by 37% between 1990 and 2017. Noticeably, process emissions, which in 1990 contributed a third of total GHG emissions, decreased much slower (-22%) than emissions from energy consumption in the industry sector (-45%). The 1.5°C compatible scenarios show a wide range of decarbonisation pathways for the sector. According to the scenarios with high reliance on carbon dioxide removal (CDR), process emissions will decrease much faster than emissions from energy consumption – by 78% and 19% respectively. Most of the remaining scenarios, e.g. high energy demand, low CDR, see slightly faster reduction in emissions from energy consumption (around 30%) than process emissions (19%). Almost all scenarios analysed in this project show a significant reduction in total emissions from the industry sector in the subsequent decades, with close to full decarbonisation of energy demand reached between 2040 and 2048. The analysed 1.5°C pathways show an almost doubling of electrification rate of EU’s industry sector, from 33% in 2019 to at least 63% in 2050. In May 2021, the EU published an updated industrial strategy however not providing concrete measures which would lead to higher electrification but rather ‘designing’ transition pathways for the sector.

In the EU, the industry sector is covered by the Emissions Trading System (EU ETS), however, the sectors that could potentially be affected by carbon leakage receive a portion of their emissions allowances for free. The implementation of a Carbon Border Adjustment Mechanism, as recently suggested by the European Commission, if implemented, would result in a steady removal of free allowances. When combined with the funding for deployment of low carbon technologies in the framework of the Innovation Fund, removing the free allowances may result in a significant reduction in emissions from this sector in this decade.

While technologies to almost completely decarbonise some of the most carbon intensive sectors exist, such as steel production using green hydrogen, the speed of their deployment is uncertain, despite some positive developments.19

1 Agora Energiewende and Ember. The European Power Sector in 2020: Up-to-Date Analysis on the Electricity Transition. Agora Energiewende and Ember. (2021).

2 European Commission. EU Climate Action Progress Report 2020. (2020).

3 IEA. Global Energy Review: CO2 Emissions in 2020. IEA (2021).

4 European Council. European Council meeting (12 December 2019) – Conclusions. (2019).

5 European Commission. A Clean Planet for all. A European long-term strategic vision for a prosperous , modern , competitive and climate neutral economy. (2018).

6 European Parliament and the Council of the European Union. Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018. Off. J. Eur. Union 328, 1–77 (2018).

7 Council of the European Union. EU energy efficiency rules adapted in view of Brexit. (2019).

8 European Parliament. Directive (EU) 2018/2001 of the European Parliament and of the Council on the promotion of the use of energy from renewable sources. Off. J. Eur. Union 2018, 82–209 (2018).

9 European Parliament. Directive (EU) 2018/410 of the European Parliament and of the Council of 14 March 2018 amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments, and Decision (EU) 2015/1814. Off. J. Eur. Union L76, 3–27 (2018).

10 EU. Regulation (EU) 2019/1242 of the European Parliament and of the Council of 20 June 2019 Setting CO2 emission performance standards for new heavy-duty vehicles and amending Regulations (EC) No 595/2009 and (EU) 2018/956 of the European Parliament. Off. J. Eur. Union L 198, 202–240 (2019).

11 Regulation (EU) 2019/631. Regulation (EU) 2019/631 of the European Parliament and of the Council of 17 April 2019 setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles, and repealing Regulations (EC) No 443/2009 and (EU) No 510/201. Off. J. Eur. Union 62, 13–53 (2019).

12 European Parliament. Regulation (EU) 2018/842. Off. J. Eur. Union 2018, 26–42 (2018).

13 European Commission. Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation. Off. J. Eur. Union 19, 1–25 (2018).

14 Considering LULUCF sink projected by the Commission at 472 MtCO₂ (Scenario 1.5LIFE). Excluding LULUCF net-zero GHG would be brought twenty years later.

15 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches which developed countries will need to implement in order to counterbalance their remaining emissions and reach net zero GHG are not considered here due to data availability.

16 In analysed global-least cost pathways assessed by the IPCC Special Report 1.5°C, the energy sector assumes already a certain amount of carbon dioxide removal technologies, in this case bioenergy carbon capture and storage (BECCS).

17 European Commision’s Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new passenger cars and new light commercial vehicles in line with the Union’s increased climate ambition.

18 EEA. Trends and projections in Europe 2021.

19 Example of steel production using green hydrogen and recent developments.

20 Own calculations based on ACEA data.

the European Unionʼs energy mix in the industry sector

petajoule per year

SSP1 Low CDR reliance
201920302040205010 00015 000
SSP1 High CDR reliance
201920302040205010 00015 000
Low energy demand
201920302040205010 00015 000
High energy demand - Low CDR reliance
201920302040205010 00015 000
  • Natural gas
  • Coal
  • Oil and e-fuels
  • Biomass
  • Biogas
  • Biofuel
  • Electricity
  • Heat
  • Hydrogen

the European Unionʼs industry sector direct CO₂ emissions (of energy demand)


  • Historical emissions
  • High energy demand - Low CDR reliance
  • SSP1 High CDR reliance
  • Low energy demand

the European Unionʼs GHG emissions from industrial processes


  • SSP1 Low CDR reliance
  • SSP1 High CDR reliance
  • Low energy demand
  • High energy demand - Low CDR reliance
  • Historical emissions

1.5°C compatible industry sector benchmarks

Direct CO₂ emissions, direct electrification rates, and combined shares of electricity, hydrogen and biomass from illustrative 1.5°C pathways for the European Union

Decarbonised industry sector by
Direct CO₂ emissions
215 to 240
65 to 92
17 to 20
2040 to 2048
Relative to reference year in %
−57 to −52%
−87 to −82%
−97 to −96%
Share of electricity
40 to 42
54 to 58
63 to 64
Share of electricity, hydrogren and biomass
50 to 59
59 to 81
69 to 81