Greenhouse gas emissions from Europe’s energy-intensive industries have fallen significantly over the past two decades, but the pace of progress is slowing.
A new press conference from the European Environment Agency (EEA) warns that without more ambitious structural reforms and full implementation of existing EU rules, further gains may be difficult to achieve.
This report examines how the heavy industry sector has evolved in terms of greenhouse gas and air pollutant emissions. Looking to the future, it also charts a realistic path to accelerate decarbonization while strengthening Europe’s industrial base.
20 years of emissions reduction
Since the early 2000s, emissions from Europe’s most energy-intensive manufacturing sector have fallen sharply.
Greenhouse gas emissions will be reduced by approximately 42%. Air pollutants such as nitrogen oxides (NOx), sulfur oxides (SOx), dioxins, and heavy metals such as nickel were also significantly reduced.
These cuts span industries that form the backbone of European manufacturing, including steel, cement and lime, aluminium, pulp and paper, glass and ceramics, and chemicals.
Together, these sectors account for more than a quarter of the EU’s total industrial greenhouse gas emissions and more than 60% of manufacturing energy consumption.
Importantly, the economic output of these industries, measured in gross value added (GVA), remained roughly stable throughout most of this period.
This suggests that initial emissions reductions were primarily achieved through cleaner technologies, stricter standards, and increased efficiency rather than economic contraction.
Shifts beyond 2020 raise questions
But the more dramatic emissions reductions seen since 2020 tell a more complex story. The EEA notes that this sharp decline is consistent with a decline in industrial production.
This indicates that structural economic changes are playing a larger role. Lower production, energy price shocks and weak demand, particularly in sectors such as steel, which faces global overcapacity, have all contributed.
In other words, some of the recent emissions declines may reflect a slowdown in industrial activity rather than permanent transformation.
That distinction is important. If emissions decline primarily due to lower factory output, the reductions may not be sustainable once demand recovers.
High energy costs add pressure
Europe’s energy crisis is exacerbating challenges for energy-intensive industries.
These sectors are highly dependent on electricity and fuel, and electricity prices in Europe remain significantly higher than prices in major trading partners, often two to four times more expensive. This gap weighs on competitiveness. Companies that have already weathered global competition, volatile demand, and pressures to decarbonize now face structurally higher operating costs.
For policymakers, the balance between reducing emissions without alienating industry is clear.
The hidden costs of pollution
Despite progress, pollution from energy-intensive industries continues to take a heavy toll. The EEA estimates that health and environmental damage related to air pollution from these sectors costs society approximately €73 billion annually.
These so-called external costs include respiratory and cardiovascular diseases, environmental degradation, and premature mortality. Further reductions in pollution would not only reduce emissions, but also provide tangible benefits to public health and reduce pressure on health systems.
Lower social costs could also strengthen Europe’s long-term economic resilience.
what needs to happen next
The report argues that incremental improvements are not enough. Achieving deeper emissions reductions will require full implementation of existing EU climate and environmental legislation, alongside more fundamental changes to the way materials are produced.
This transformation is within the broader context of the European Union Clean Industries Agreement, which aims to combine industrial competitiveness and climate neutrality.
The main pathways identified include the electrification of industrial processes, switching to alternative raw materials, increasing the use of secondary raw materials and incorporating circular economy principles.
These approaches simultaneously reduce greenhouse gas emissions, reduce air pollution, and reduce resource dependence.
However, the briefing cautions that not all solutions are universally beneficial. Some technologies may reduce carbon emissions while increasing other environmental pressures, and vice versa.
This means that policies need to be tailored sectorally, taking into account trade-offs between climate, air quality, and resource efficiency goals.
Smarter policy and investment decisions
An integrated perspective is essential when designing financing mechanisms, updating permitting frameworks, and setting sustainability standards. For example, public procurement policies could play a stronger role in supporting low-emission products such as green steel.
For Europe’s energy-intensive industries, the message is clear. The past two decades have shown that emissions can be reduced without hollowing out economic value. But the easier returns were greater.
Real progress from here will depend on accelerating technological change, adjusting policy instruments and ensuring that decarbonization strengthens rather than undermines Europe’s industrial future.
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