FIT FOR NET-ZERO: 55 Tech Quests to accelerate Europe’s recovery and pave the way to climate neutrality 2 ACKNOWLEDGEMENTS
This report was prepared by Capgemini Invent in co-operation with Breakthrough Energy. Special thanks go to Peter Sweatman, CEO of Climate Strategy, who provided valuable input and guidance throughout the duration of the project. The analysis and findings in this report draw on information and views provided by over 100 experts, innovators and entrepreneurs across Europe. They were asked to share their thoughts on how Europe can accelerate clean technology innovation and scale-up. Their comments and suggestions were of great value. They include:
Audun Abelsnes, Techstar Roland Le Roux, Citae Magali Anderson, LafargeHolcim Thierry Lepercq, Soladvent Pablo Araya Kroff, Suez Michael Liebreich, Liebreich & Associates Christian Askvik-Hansen, BKK James Macdonald, Urban Crop Solutions Telmo Baltazar, European Commission Luis Manuel, EDP George Beers, Wageningen University Research Jaime Martín Juez, Repsol Sonja Berlijn, Statnett Marco Martinelli, Solvay Edelio Bermejo, LafargeHolcim Kevin Massy, Equinor Serge Besanger, European Institute of Innovation & Alain Mathuren, Fuelseurope Technology / Cleantech Business Angels Cédric Meston, Les nouveaux fermiers Philippo Bettini, Pirelli Ingrid Milcent, Tenerrdis Marc Oliver Bettzüge, EWI, University of Cologne Vincent Minier, Schneider Marcel Beukeboom, Climate Envoy for the Kingdom of the Jens Nielsen, World Climate Netherlands Thomas Nowak, EHPA (European Heat Pump Association) Christian Boissavy, French Geothermal Association Stefano Passerini, Karlsruhe Institute of Technology Gaëtan Bonhomme, Breakthrough Energy Ventures - Europe Diego Pavia, InnoEnergy Alexandraa Br nd, Syngenta Volkmar Pflug, Siemens Florian Brunet-Lecomte, FEMAT Bertrand Piccard, SolarI Mpulse Marc Bussieras, EDF Markus Pieper, European Parliament Jesús Chapado, Naturgy Jean-Michel Reynaud, Engie Pascal Chazal, Campus Hors-site Stephen Richardson, World Green Building Council Koen Coppenholle, Cembureau Michael Ritter Christiansen, Maersk Danny C roon, European Steel Association (EUROFER) Artur Runge-Metzger, European Commission Stephane Cueille, Safran Diederik Samsom, European Commission Guillaume de Smedt, Air Liquide Carine Saüt, Capgemini Agustín Delgado, Iberdrola Laurent Schmitt, ENTSOE María del Valle Higueras, Naturgy Eric Scotto, Akuo Energy Jean-Baptiste Dollé, IDELE Jean-Michel Servant, Société Forestière Roch Drozdowski, IPVF Nathalie Simmenauer, Air France Arnaud Duvielguerbigny, PU Europe Bernt Skeie, Prototech Cato Espero, Wartsila Mathieu Soulas, Total Pascal Eveillard, Saint-Gobain François Stérin, OVH Jorge Miguel Fernandes, Galp Daniel Suchet, Polytechnique lab Gabrielle Gauthey, Total Ramya Swaminathan, Malta Inc Jonah Goldman, Gates Ventures Pierre-Guy Therrond, EDF RE Stefano Grassi, European Commission Eric Toone, Breakthrough Energy Caroline Guinot, Interbev Dirk Van den Bosh, European Parliament Aude Guo, Innovafeed Luc Van den Hove, IMEC Saetness Henrik Nissen, Statkraft Marc Van den Neste, AGC Glass Europe Claude Heller, Air Liquide Mart Van der Meijden, TenneT Eric Hoa, EIT Climate KIC Nico Van Dooren, Port of Rotterdam David Hone, Shell Noë Van Hulst, Hydrogen Envoy at the Ministry of Economic Frode Hvattum, Ruter Affairs & Climate Policy, Kingdom of the Netherlands Paul Kenny, Tipperary Energy Agency Cathie Vix, Total Csilla Kohalmi Monfils, Engie Hans-Jörn Weddige, ThyssenKrupp Servan Lacire, Bouygues Energy & Services Michal Wendolowski, Fertilizers Europe Patrick Laugier, Engie Christian Zinglersen, Agency for the Cooperation of Energy Regulators (ACER)
3 TABLE OF CONTENTS
1. Foreword ...... 5
2. Executive Summary ...... 6
3. Methodology ...... 9
4. Net-Zero Europe: critical priorities to deliver a sustainable recovery ...... 12
5. Expert conclusions: aligned EU policies are key to accelerating the
development & deployment of clean technologies ...... 18
Conclusion ...... 21
Bibliography...... 22
55 Tech quests to accelerate Europe’s recovery and pave the way to climate neutrality ...... 24
Energy ...... 27
Industry ...... 57
Buildings ...... 87
Transport ...... 103
Food and Land Use ...... 141
Appendix ...... 156
4 1. FOREWORD
This study describes how investments in next-generation clean technologies can accelerate Europe’s economic recovery and transformation from the bottom-up. It is a practical action plan and investment guide for policymakers and investors to stimulate an economic recovery at the speed and scale needed, and set the EU on track to deliver on its vision of a climate-neutral economy by 2050 that is prosperous, modern, secure and competitive.
We illustrate this with 55 European Technology Quests that are ripe for financial support, offering attractive long-term returns and, together, help form a roadmap to climate- neutrality. Our work shows how these 55 Quests can deliver emissions reductions in line with increased EU ambitions of at least 55% by 2030 and a net-zero trajectory by 2050. The 55 Technology Quests can stimulate new markets worth some €13 trillion over two decades, and secure up to 12.7 million jobs by 2030 – both by creating new jobs, and by transforming existing jobs.
Our results confirm that Europe’s clean tech revolution can be as significant as the digital revolution and plays to Europe’s core industrial strengths and leadership. We believe that a climate-neutral, competitive, and dynamic Europe, driven through our six identified clusters (hydrogen, gigafactories, electrification, smart grids, bioeconomy, and carbon capture utilization and storage) can set a standard for others and help lead our planet to climate safety and economic sustainability.
This project and its recommendations have benefitted from expert inputs from many eminent innovators, entrepreneurs, corporate strategists, and policymakers, whom we sincerely thank for their invaluable contributions. There has also been no better fit for our teams than to work with Breakthrough Energy – an organization founded by Bill Gates whose mission is to lead the world to net-zero greenhouse gas emissions – to address how Europe seizes this unprecedented moment to boost clean energy investment and innovation to deliver a net-zero future.
Capgemini Invent was founded around a desire to find ground-breaking, transformational solutions to answer the challenges of our time – and to help build those solutions. Europe must work toward the delivery of these 55 clean Technology Quests. The clock starts now.
Paris, October 2020 Cyril Garcia, CEO of Capgemini Invent Capgemini Group Executive Board Member in charge of Corporate Social Responsibility October 2020
5 In July 2020, European leaders launched Next Generation EU, a €750 billion 2. EXECUTIVE EU recovery fund consisting of grants and loans. This is on top of a €1.074 trillion Multiannual Financial Framework package, the EU’s long-term budget SUMMARY covering the years 2021-2027. Of this combined €1.826 trillion, some €550 billion, or 30% of the full recovery-plus-budget package, is earmarked for climate objectives. Now, Member States are beginning to present their own national recovery and resilience plans. As they do, they should be asking a few key questions.
Do the national recovery plans align with the EU’s climate law and net-zero emissions target for 2050? How about the 55% emission-reduction target by 2030, which President of the European Commission Ursula von der Leyen proposed in her September 2020 State of the European Union Address? How can we ensure another von der Leyen proposal – that 37% of Next Generation EU funds be directly spent on European Green Deal objectives – is fulfilled?
“I will insist that recovery On a more fundamental level, do national plans contain enough detail to plans don’t just bring us out turn political aspirations into real-world projects that ensure emissions reductions are on the trajectory we know we need to beat climate change? If of the crisis but also help us not, what can be done to ensure the plans achieve maximum impact for the propel Europe forward to the economic recovery and the climate? world of tomorrow.” To answer these questions, Breakthrough Energy commissioned Capgemini Invent and its in-house teams to identify from the bottom up 55 high-impact Ursula von der Leyen, climate Technology Quests. The selection process was based on a rigorous President of the European methodology and a comprehensive review of more than 200 state-of-the- art clean tech projects. Over 100 leading European experts from the private Commission, State of the sector, government, NGOs and academia provided valuable input. European Union Address, At a time when people are facing the most acute financial uncertainty September 2020 in generations, investing in these Technology Quests will help put the continent’s economy on a much firmer footing. They can create sizable and dynamic global markets for clean energy and other fast-growing industries, create millions of good jobs and dramatically improve Europe’s ability to address the central challenge that humanity is facing – climate change. The clean technologies identified are at different stages of maturity – some are being researched in labs, while others are already in a demonstration phase or are even deployed in EU Member States. Each and every one is currently being supported by existing ecosystems of European researchers, entrepreneurs, investors and corporations.
Figure 1 - Europe's emissions reduction pathway
Net GHG emissions reduction compared to 1 0 Enabled istorical emissions by 55 techs 0 Business as usual, e.g. e pansion of onshore ind, etc. - 20
-23%
Current trajectory - 40 40% - EC’s prediction
-55% - 60 60% Target trajectory - Gap
- 0
-100% ET E O - 100
1 0 2000 2010 2020 2030 2040 2050
¹Depending on the technology, accounted emissions can be expressed in real physical CO₂ emissions, or CO₂ equivalent emissions if other of the six greenhouses gas emissions are involved, such as methane or refrigerants.
6 To help unleash these technologies and make them more cost-competitive with high-emission alternatives, the usual 25-year innovation cycle must be compressed and accelerated. This won’t be easy – more substantive work and more public support is urgently required – but there is no mistaking: Europe is in pole position to become the global leader in dozens of new climate technologies that are in critical stages of their development. Key conclusions from this research include:
1. Dramatic emission reductions are possible in the five key economic areas: The emissions reductions delivered by these 55 European Technology Quests can help Europe achieve 55% CO₂e1 reductions below 1990 levels by 2030 and deliver a climate-neutral economy by 2050, across five economic areas (Energy, Industry, Buildings, Transport, Food and Land Use).
2. More innovation investments mean better jobs: The 55 Technology Quests will require around €144 billion of public and private investment annually and will support 12.7 million high-quality and resilient jobs. EU and Member State recovery funds can be directed toward accelerating these Quests to make Europe more competitive as the current economic crisis abates. Several recovery plans – including France’s and Germany’s – suggest that developing new, clean technologies like green hydrogen are now overriding political and investment priorities, which can help spur additional job opportunities.
Figure 2 - Emissions reduction by 2050 per economic area, compared to the current emissions
2, 0 ,5 5 -54% Supply side Energy
Demand side ,20 0 -59% Industry