Pilot, Industrial technology prospect report : R&I evidence on EU development of low-carbon industrial technologies.
Date: 2021-06-17
Institutions: Directorate-General for Research and Innovation
Subjects: EU industrial policy, EU research policy, clean technology, climate change policy, digital technology, energy efficiency, innovation, investment, patent, prospective technological studies, reduction of gas emissions, report, research and development

Pilot
Industrial
technology prospect

report:

R&I evidence on EU 
development of low-carbon 
industrial technologies

Pilot - Industrial technology prospect report: R&I evidence on EU development of low-carbon industrial technologies

European Commission
Directorate-General for Research and Innovation
Directorate E — Prosperity
Unit E.1 — Industrial Research, Innovation & Investment Agendas

Joint Research Centre (JRC)
Directorates B – Growth & Innovation and Directorate C – Energy, Transport & Climate
Unit B3 – Territorial Development and Unit C7 - Knowledge for the Energy Union

Contact   Doris Schröcker

Email  

Angelo Wille
Pauline Sentis
doris.schroecker@ec.europa.eu (functional e-mail if existing, and)
angelo.wille@ec.europa.eu 
Pauline.sentis@ec.europa.eu

              RTD-PUBLICATIONS@ec.europa.eu

European Commission
B-1049 Brussels

Manuscript completed in May 2021. 
1st edition.

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EUROPEAN COMMISSION

Pilot  
Industrial technology 
prospect report: 
R&I evidence on EU development  
of low-carbon industrial technologies

DG RTD.E.1 & JRC.B.3, JRC.C.7

Directorate-General for Research and Innovation
Directorate Prosperity

2021

Joint Research Centre
Directorates B – Growth & Innovation and Directorate C – Energy, Transport & Climate

TABLE OF CONTENTS 

1  Introduction ............................................................................................................... 3 
2  Relevant key technologies ............................................................................................ 6 

Technological readiness levels and CO2 reduction potential: technology groups 

2.1  Key  determinants  for  relevance  of  R&I  action  to  develop  low-carbon  technologies: 
technological-readiness and GHG reduction potential 
2.2 
2.3  European  Innovation  Council:  identifying  breakthrough  technology  and  bringing  it  from 
inception to deployment 
2.4  Decarbonisation scenarios 
2.5  Sustainable Process Industry through Resource and Energy Efficiency (SPIRE) partnership

10 
11 

7 
8 

12 

3.1 

In-depth  analysis  of  relevant  private-sector  R&D  investments:  companies  from  energy-

Production costs and breakthrough technologies 

Public R&I investment in energy efficiency in industry 

Private R&I investment in energy efficiency in industry 

2.6  Research Fund for Coal and Steel (RFCS) 

13 
3  EU worldwide productivity and cost efficiency through R&I ............................................... 15 
16 
4  R&I investments and patenting ..................................................................................... 19 
19 
20 

4.1 
4.2 
4.3 
intensive sectors in the EU Industrial R&D Investment Scoreboard 
4.4  Other aspects of R&I activity: start-ups and venture capital 
4.5 
4.6 
4.7 
4.8 

21 
28 
Patents for climate change mitigation technologies in goods production or processing 31 
32 
Patents for climate change mitigation technologies in metal processing 
33 
35 
5  Maturity of innovation ecosystems for low-carbon technologies ......................................... 37 
37 
38 
39 
42 
43 
6  Conclusions ................................................................................................................ 45 

5.1  R&I base - scientific publications 
5.2 
5.3 
5.4 
5.5  Capacity-building and place-based governance for the green economy 

Patents for climate change mitigation technologies in the chemicals industry 

The funding landscape for low carbon technologies and the role of places 

Patents for climate change mitigation technologies in cement production 

Innovation ecosystems for low-carbon industries 

Landscape of technological capacity hotspots 

2 

 
 
 
 
 
 
 
INTRODUCTION 

As a cornerstone of the European Green Deal1, the EU Climate Law2 sets in legislation the 
EU’s  objective  of  climate  neutrality  by  2050.  This  is  in  line  with  scientific  findings 
reported  by  the  Intergovernmental  Panel  on  Climate  Change  (IPCC)  and  the 
Intergovernmental  Science-Policy  Platform  on  Biodiversity  and  Ecosystem  Services 
(IPBES)  and  contributes  to  the  implementation  of  the  Paris  Agreement  on  climate 
change. 

The EU Climate Law takes on board the  European Council’s3 emphasis of the key role of 
forward-looking  research,  development  and  innovation  (RD&I)  in  achieving  climate 
neutrality.  To  help  implement  the  Green  Deal’s  growth  agenda,  the  EU’s  industrial 
strategy  20204  announced  a  New  European  Research  Area  (ERA)  to  map  out  a  new 
approach  to  innovation  and  ensure  the  EU  budget  is  used  with  maximum  impact.  The 
ERA  will  involve  the  development  of  common  EU  technology  roadmaps  implementing  a 
joint  vision  for  the  development  of  industrial  technologies  based  on  research  and 
innovation  (R&I)  in  a  ‘renewed  partnership’  with  industry  and  national/regional 
stakeholders. Through the industrial strategy and the new ERA, the EU will be able to use 
its excellent R&I results and cooperation more effectively, to push innovation as a basis 
for strengthening its industrial alliances and ecosystems. 

The  European  Commission  has  carried  out  in-depth  analysis  exploring  how  climate 
neutrality can be achieved across the key economic sectors, including energy, transport, 
industry  and  agriculture.  This  has  shown  that  R&I  will  determine  the  speed  at  which 
decarbonisation can take place, at what costs and with what co-benefits. Without further 
major steps in industrial innovation for low-carbon technologies, the  EU will not be able 
to reach its climate goals5.  

Energy-intensive industries accounted for roughly 15% of the EU’s total greenhouse gas 
(GHG)  emissions  in  2015  (18.4%  in  1990)6.  Among  the  energy-intensive  sectors,  steel, 
chemicals  and  cement  account  together  for  more  than  two-thirds  of  all  industrial  CO2 
emissions in the EU, while directly employing nearly 2 million workers and generating an 
annual  turnover  of  about  €750  billion7.  To  address  this  state  of  affairs,  the  Commission 
announced the establishment of a low-carbon industrial alliance in the industrial strategy.   

The  Commission’s  work  with  industry  experts  has  identified  a  number  of  specific 
technologies  that  are  expected  to  have  a  particularly  high  potential  to  lower  EU  carbon 
emissions in energy-intensive industries8. These technologies also play a key role in the 
scenarios for GHG-reduction referred to in the EU’s first Strategic foresight report9. 

The  Commission’s  analysis  shows  that  new  and  promising  low-carbon  technologies  will 
need  to  be  developed  further  if  EU  industry  is  to  achieve  the  required  emissions 
reductions.  Existing  technology  will  not  deliver  the  full  reductions  required  to  achieve 
EU’s  climate  objectives  and  new  technologies  should  ideally  be  brought  to  market  by 

1   COM/2019/640 final, 11.12.2019. 
2   Provisional  agreement  between  the  Council  and  the  European  Parliament  from  21  April  2021  on  the 
Commission  proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  establishing  the 
framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (COM/2020/80 final). 

3   EUCO Conclusions 12 December 2019. 
4   COM(2020) 102 final, 10.3.2020. 
5   A clean planet for all, staff working document accompanying COM(2018) 773 (in-depth analysis serving as 

impact assessment for the 2020 Climate Law), p. 243. 

6   This  excludes  land  use,  land-use  change  and  forestry  (LULUCF);  see  High-Level  Group  report,  Masterplan 
for  a  competitive  transformation  of  EU  energy-intensive  industries  enabling  a  climate-neutral,  circular 
economy by 2050. 

7   Report from the Strategic Forum for Important Projects of Common European Interest; 

https://ec.europa.eu/docsroom/documents/37824  

8   Masterplan  for  energy-intensive  industries  (see  above);  Commission  report  on  progress  of  clean  energy 

competitiveness (COM(2020) 953 final, adopted 14 October 2020). 

9   https://ec.europa.eu/info/sites/info/files/strategic_foresight_report_2020_1.pdf 

3 

 
                                                 
 
2030,  to  allow  for  scaling-up  and  deployment  across  the  EU  by  205010.  In  the  case  of 
more mature technologies, the necessary investment into large-scale demonstration and 
deployment will require increased pooling of resources11.  

Technologies  are  currently  at  very  different  levels  of  market  readiness,  often  lagging 
behind  what  is  required  to  contribute  to  decarbonisation  pathways.  However,  it  is 
important to assess and mitigate risks before large-scale deployment12. To avoid risks of 
technological  lock-in  and  stranded  technologies,  thorough  consideration  of  R&I  results 
plays a crucial role in enabling efficient investment in future technologies. Therefore, the 
development and implementation of a common EU vision for R&I action and investment 
in  EU  technology  roadmaps  established  with industry  and  other  stakeholders  are  key  to 
achieving EU policy objectives13. 

World-leading  research  on  low-carbon  industrial  technologies  is  being  conducted  at  EU 
level  and  at  national  or  regional  levels  within  the  EU.  The  Horizon  2020  and  Horizon 
Europe programmes are funding cutting-edge R&I in these areas, including partnerships 
with industry, and producing a wealth of evidence on the state of play and the industrial 
potential of innovative low-carbon technologies. The Commission’s Joint Research Centre 
(JRC)  and  Directorate-General  for  Research  and  Innovation  (DG R&I)  regularly  collect 
and assess the evidence. They manage complementary monitoring tools such as the EU 
Industrial  R&D  Investment  Scoreboard14,  the  Strategic  Energy  Technologies  Information 
System  (SETIS)15,  the  Science,  research  and  innovation  performance  of  the  EU,  2020 
report16,  the  Innovation  Radar17,  the  GLORIA  project18,  the  projects  for  policy 
mechanism19  etc.  They  continuously  improve  their  monitoring  and  assessment  work 
including  on  breakthrough  industrial  technologies  and  innovation  ecosystems  under  the 
European Innovation Council (EIC). 

This first pilot ‘industrial technology prospect  report’ aims to provide  an insight into the 
state  of  play  on  R&I  in  low-carbon  industry  technologies,  which  are  key  for  emissions 
reductions  in  energy-intensive  industries,  such  as  steel,  cement  and  chemicals,  covered 
by  the  upcoming  EU  low-carbon  industrial  alliance20.  It  concentrates  on  the  maturity  of 
relevant technologies and their potential to help industry reach the EU climate targets. It 
provides  an  overview  of  relevant  production  costs  in  industrial  sectors,  potential  cost 
reductions  through  new  technology  and  insights  into  current  public  and  private  sector 
R&D  investment  and  related  patenting  developments.  The  report  also  provides  a 
snapshot of green R&I development and patents in EU regions.  

This  report  is  the  outcome  of  a  model  of  cooperation  between  services  that  will  help  to 
provide  a  strong  evidence  base  to  inform  future  roadmaps  supporting  R&I  in  industrial 
ecosystems and alliances. The approach will be further developed in other areas through 
the  exploitation  of  existing  analytical  capacities,  targeted  use  of  Horizon  Europe  results 

10   Clean  Planet  for  All,  SWD  In-depth  analysis,  page  157  and  SRIP  Report  2020,  p.  38.  See  also  industry 

priorities in Masterplan for a Competitive Transformation of EU energy-intensive industries, page 25. 

11   The EU hydrogen strategy for a climate-neutral Europe aims for 40 GW of renewable hydrogen electrolysers 
and significant production of renewable hydrogen in the EU energy system by 2030, with direct investment 
of €24-42 billion; https://ec.europa.eu/energy/sites/ener/files/hydrogen_strategy.pdf  

12   A clean planet for all, p. 243. 
13   European  Parliament,  Study  on  energy-intensive  industries  (July  2020);  Communication  A  new  ERA  for 
research and innovation (COM(2020) 628 final); see also successful examples under the energy union SET 
plan. 

14   https://ec.europa.eu/info/news/2019-eu-industrial-rd-investment-scoreboard-report-2019-dec-18_en  
15   Strategic Energy Technologies Information System (SETIS) https://setis.ec.europa.eu/index_en  
16   SRIP 

https://ec.europa.eu/info/research-and-innovation/strategy/support-policy-

report 

2020; 

making/support-national-research-and-innovation-policy-making/srip-report_en#srip2020  

17   https://www.innoradar.eu/faq 
18  https://cordis.europa.eu/project/id/811163 
19 

https://ec.europa.eu/info/research-and-innovation/strategy/support-policy-making/scientific-support-eu-

policies/p4p_en; 
20   Future  areas  could 
pharmaceuticals. 

include  resilient  manufacturing,  bioeconomy  and  bio-based 

industries,  and 

4 

 
                                                 
and greater involvement of the European Institute for Innovation and Technology (EIT) in 
analysing the territorial dimension of R&I. 

5 

 
 
1 

Relevant Key Technologies 

In order to gauge the state of play in R&I that can help industry to develop and deploy 
technologies  enabling  achievement  of  the  EU’s  climate  objectives,  we  need  to 
understand: 

  which technologies can best address the key factors driving emissions in a sector; 

 

 

their potential in reducing those emissions; and  

their level of development.  

This part of the report gives an overview of available or future technologies that can help 
to  reduce  GHG  emissions  in the  main  energy-intensive  industries.  The  results  also  form 
the  basis  for  the  analysis  of  investment  and  patenting  activity  and  for  the  data  mining 
across Horizon 2020 projects in subsequent chapters. 

Table 1  is  based  on  the  scientific  study  underpinning  the  ‘masterplan  for  a  competitive 
transformation  of  EU  energy-intensive  industries  enabling  a  climate-neutral,  circular 
economy  by  2050’.  The  technologies  are  classified  by  category  and  by  the  sector(s)  for 
which  they  are  relevant.  Some  play  a  cross-cutting  role  for  all  three  main  (and  other) 
energy-intensive industries, while others are used in a more specific context. 

Table 1:  

Overview of relevant key technologies by industry and category 

Industry 

Category 

Cement 

Chemicals 

Steel 

Electrification 

Cement kiln 
electrification 

  Electrochemical 

processes 
  Ultrasounds 
  Steam cracker 
electrification 

  Electric  arc  furnace 
(EAF)  in  combination 
with  hydrogen  — 
direct  reduced  iron 
(H-DRI) 

  Iron ore electrolysis 

Use of green 
hydrogen 

Use of hydrogen and 
biomass fuel mix as a 
replacement for fossil 
fuels 

Use of low-CO2 
hydrogen  for chemical 
production (ammonia, 
methanol) 

  Hydrogen 

as 

a 

reducing agent in DRI 

  Hydrogen-plasma 

smelting processes 

  Alkaline electrolysis hydrogen 
  Polymer electrolyte membrane (PEM) electrolysis hydrogen 
  Methane pyrolysis 

Carbon capture 
and storage 
(CCS) 

  Post-combustion 

technologies 

  Oxyfuel 

Capture of CO2 (amine 
based, adsorption, 
physical absorption)  

combustion 
  Calcium-looping 
  Direct 

separation 

technology 

Carbonation  of  solid 
raw material 

Carbon capture 
and utilisation 
(CCU) 

  Generation  of  CO2-rich 
waste  gas  to  facilitate 
carbon capture 

  DRI + carbon capture 
  HIsarna 
process 

steelmaking 

Use of CO2 as carbon 
feedstock for many 
base chemicals 
(alcohols, polymers, 
acids…) 

Valorisation of waste 
gases from the blast 
furnace (e.g. to produce 
chemical raw materials) 

CO2 separation and purification technologies 

6 

 
Biomass and 
other biofuels 

  Use  of  biomass  as  a 

raw material 

  Bio-ethanol  for  high 
added 
value 
chemicals value chain 

Torrefied biomass 
partially replacing 
injected coal 

  Use of biomass as an energy source 
  Production of biofuels 

Recycling 

Recycling and re-use of 
concrete 

  Conversion  of  mixed 
into 

plastic  wastes 
synthetic fuels 

  Chemical  recycling  of 
plastics as feedstock 

  Recycling  of  process 

gases 

  Recycling  high-quality 
steel  /  separation  of 
contaminants 
from 
scrap 

  Valorisation  of  scrap 

metal 

Valorisation of waste streams 

Alternatives 

Industrial 
symbiosis 

  Clinker substitutes 
  New  cements  with 
low clinker content 

  Alternative binders 
  Improving 
mix design 

concrete 

  Advanced 

grinding 

technologies 
(contact-free grinding 
systems,  ultrasonic-
comminution, 
high-voltage  power-
pulse  fragmentation, 
low 
temperature 
comminution) 

Recycling and 
recovering waste and 
by-products from other  
energy-intensive 
industries, such as 
steel slag 

Membrane reactor 
technologies 

Avoidance of 
intermediate process 
steps 

Enhanced digitalisation 

Waste gases from primary steel production can 
become the feedstock for the production of high 
added value chemicals 

Delivering granulated 
blast furnace slag for 
the cement industry 

Delivering waste heat to other industries 

Adapted  from:  VUB-IES,  Industrial  value  chain:  A  bridge  towards  a  carbon-neutral  Europe  —  Europe’s  energy-intensive 
industries’ contribution to the EU strategy for long-term EU greenhouse gas emissions reductions (2018). 

2.1  Key  determinants  for  relevance  of  R&I  action  to  develop  low-carbon  technologies: 

technological-readiness and GHG reduction potential 

Experts consider the low-carbon technologies in the table above as particularly relevant, 
either  because  of  their  advanced  level  of  development  or  because  of  their  high 
emissions-reduction  potential,  or  both.  Mature  low-carbon  technologies  can  unfold  their 
positive impact on EU industry where R&I action helps to bring them to the market, e.g. 
through large-scale demonstration and deployment. Lower technological readiness levels 
(TRLs)  mean  that  further  R&I  action  is  required  to  push  the  technologies  closer  to 

7 

 
 
 
 
 
 
widespread  application  in  the  market.  Understanding  the  technological  readiness  of 
relevant technologies and assessing their potential contribution to emissions reductions is 
key to designing effective R&I policies to drive industrial innovation. 

For instance, hydrogen-based technologies (a key route to lower emissions in the EU) 
are  supported  by  the  July  2020  EU  hydrogen  strategy,  national  strategies  in  countries 
such  as  France  and  Germany,  and  the  launch  of  an  EU  Clean  Hydrogen  Alliance.  New 
steelmaking  technologies  aim  to  replace  the  natural  gas  currently  used  in  the  direct 
reduction  of  iron  by  green  hydrogen.  If  renewable  electricity  is  used  both  by  the 
hydrogen  plant  and  the  electric  arc  furnace  (which  further  processes  the  iron  to  steel), 
CO2 emissions could be cut by up to 95%. The Commission aims to facilitate large-scale 
demonstration  of  the  relevant  technologies  in  the  context  of  the  Clean  Hydrogen 
Alliance21. 

The direct electrolysis of iron ore (‘electrowinning’) to produce raw steel is still at an early 
stage  of development and has been proven at  laboratory scale only.  However, by using 
solely  renewable  electricity,  steel  production  could  emit  up  to  87%  less  CO2  than  the 
current  integrated  route22.  Evidence  and  experience  as  to  how  R&I  can  help  with  the 
further development of such technologies is therefore equally important. 

2.2  Technological readiness levels and CO2 reduction potential: technology groups 

This section groups the current main technologies according to their TRLs, with reference 
to  their  perceived  potential  for  reducing  CO2  emissions  in  the  cement,  steel  and 
chemicals industries. 

TRLs are a widely used indicator of the maturity of a technology from inception (TRL 1) 
to deployment (TRL 9)23. Although the TRL scale is a very valuable tool in that respect, it 
cannot always capture the precise state of development of a technology. It is sometimes 
difficult  to  assign  an  overall  TRL  index  to  complex  technologies  made  up  of  many 
different  components.  This  is  often  the  case,  for  example,  with  wider  technological 
approaches 
industries  (e.g. overall  control  systems,  process 
optimisation  and  integration,  catalysis,  etc.).  In  this  context,  when  using  TRLs  to 
estimate the readiness for deployment of a certain ‘technology’, factors other than purely 
technical/technological  considerations,  such  as  scale,  requirement  for  concomitant 
technologies, investments, existing technologies, investments, existing technologies etc. 
play a particularly important role24. 

in  energy-intensive 

21   EU hydrogen strategy, 8 July 2020. 
22   European  Commission,  Strengthening  strategic  value  chains  for  a  future-ready  EU  industry  (2019),  Annex 

II.  

23   Description of levels:    

TRL 1: basic principles observed; 
TRL 2: technology concept formulated; 
TRL 3: experimental proof of concept; 
TRL 4: technology validated in laboratory; 
TRL  5:  technology  validated  in  relevant  environment  (industrially  relevant  environment  in  the  case  of  key 
enabling technologies (KETs));   
TRL 6:  technology  demonstrated  in relevant environment  (industrially  relevant  environment  in  the  case  of 
KETs); 
TRL 7: system prototype demonstration in operational environment; 
TRL 8: system complete and qualified; 
TRL 9: actual system proven in operational environment (competitive manufacturing in the case of KETs; or 
in 
space). 
Source: European Commission, Horizon 2020 — work programme 2018-2020, general annexes. 

24   The Innovation Radar introduces complementary indicators to gauge technological maturity; 

https://ec.europa.eu/jrc/sites/jrcsh/files/booklet-a4_innovation_radar.pdf 

8 

 
 
 
                                                 
 
 
 
 
 
 
 
 
Low TRL (1-4): 

  In the steel industry,  iron ore electrolysis  could emit up to 87% less CO2 than the 
current integrated route (if electricity is fully decarbonised), but it has been proven at 
laboratory scale only (TRL 4).  

  In  the  cement  industry,  technologies  for  providing  decarbonised  heat  —  such  as 
substituting  fossil  fuels  fully  with  biomass  (possibly  mixed  with  hydrogen)  or 
electrification of heat via plasma generators — can reduce GHG emissions by up 
to  35%  (without  addressing  the  process  emissions  of  clinker  making).  These 
technologies have not been proven outside the laboratory (TRL 3). 

  Hydrogen plasma reduction (Susteel project) is at TRL 4-5 and aimed at zero CO2 

emissions25. 

  Also in the cement industry, kiln electrification (CemZero project) is at TRL 3-4; the 

project aims to achieve zero emissions. 

  In  the  chemicals  industry,  steam  cracker  electrification  (‘cracker  of  the  future’ 
project)  is  at  TRL 3.  One  of  the  project  participants,  BASF,  envisions  cutting  CO2 
emissions per cracker by 90% (i.e. by 750 000 tonnes annually across the company). 

Medium TRL (5-7): 

  In the steel industry, hydrogen steelmaking (currently at TRL 5-7) could emit up to 
95% less CO2 than the current integrated route (if electricity is fully decarbonised). 

  The  new  ‘HIsarna’  smelting  technology  (new  ironmaking  concept  that  uses  fine 
coals and fine ores directly without any preparation) could reduce emissions by up to 
35%  and  is  at  TRL 7.  Due  to  the  high  CO2  concentration  of  the  waste  gases,  this 
technology  is  particularly  suited  to  being  combined  with  carbon  capture  and  storage 
(CCS), in which case emissions could be reduced by up to 80%. 

  In  the  cement  industry,  several  carbon  capture  technologies  are  being  explored. 
They  can  capture  95%  of  total  (process  +  fuel)  CO2  emissions  when  fossil  fuels  are 
still used for heat (oxyfuel or calcium-looping technology), or can be combined with a 
zero-CO2  heat  process  to  capture  95%  of  process  emissions  (post-combustion  or 
direct-separation technology). These CCS technologies are currently at TRL 6. 

  There  is  considerable  ongoing  research  on  alternative  clinkers  and  low-carbon 
cements using alternative cement binders at a wide range of TRLs (5-7), which could 
achieve around 30% CO2 reduction versus ordinary Portland cement. 

High TRL (8-9): 

  In  the  steel  industry,  carbon  capture  and  re-use  technologies  (valorising  the 
waste  gases  of  blast  furnaces)  can  reduce  emissions  by  up  to  65%  if  fully  deployed 
(the  CO2  reductions  also  depend  on  the  full  lifecycle  of  the  resulting  chemical 
products).  Several  are  at  a  more  advanced  stage  of  development  —  the  Steelanol 
demonstration  plant  (currently  under  construction  —  TRL  9)  uses  waste  gas  to 
produce bio-ethanol and the Carbon2Chem project (TRL 7-8) aims to use waste gas as 
a raw material for chemicals. 

  In the chemicals industry, the use of membrane reactor technologies could reduce 
emissions  significantly  by  enhancing  process  efficiency.  For  example,  the  H2020 
‘reactor  optimisation  by  membrane  enhanced  operation’  (ROMEO)  project  aims  to 

25   https://www.k1-met.com/en/research_programme/susteel/  

9 

 
                                                 
reduce  energy  consumption  by  up  to  80%  and  emissions  by  up  to  90%  in  industrial 
catalytic  gas-phase  reactions.  Currently,  work  is  focusing  on  demonstrating  the 
technical feasibility of this approach. 

2.3  European  Innovation  Council:  identifying  breakthrough  technology  and  bringing  it 

from inception to deployment 

Since  its  inception  in late  2018  and  now  in  the  context  of  the  Green  Deal,  the  EIC  has 
funded  promising  technological  breakthroughs  contributing  to  the  decarbonisation  of 
energy-intensive industries.  

The  EIC  Pathfinder  supports  low-TRL  research  projects.  Building  on  the  ‘future  and 
emerging  technologies’  (FET)  programme  for  inter-disciplinary,  cross-border  advanced 
research,  it  has  been  supporting  a  number  of  consortia-led  projects  developing 
breakthrough  innovation.  Although  not  specifically  targeting  the  cement,  chemical  and 
steel  industries,  these  projects  might  have  a  significant  impact  in  terms  of  their 
decarbonisation: 

  AMADEUS  (TRL  1  to  3)  is  developing  novel  materials  and  devices  that  enable 
storage of any kind of energy (waste heat,  sunlight) in the form of  latent heat, and 
conversion  to  electricity  on  demand.  Possible  future  applications  are  in  the  field  of 
photovoltaics, thermal storage, silicon casting and metallurgy disciplines; 

  HARVESTORE (TRL 1 to 3-4) is developing a new family of nano-enabled miniaturised 
energy sources able to harvest and store energy from heat and light sources in 
a  single  device.  This  new  paradigm  is  based  on  intelligent  materials  able  to  harvest 
and  store  ambient  energy  (thermal  gradient  or  light)  and  smartly  release  it  when 
needed. The project includes an application scenario on industrial and energy-network 
monitoring  covering  tests  in  exhaust  gas  chimneys  and  gas-management  networks 
with  harsh  conditions  and  temperatures  of  up  to  350 °C.  This  could  enable  the 
deployment of ‘internet of things’ technologies in these sectors; 

  UncorrelaTEd  (TRL  1-2)  is  testing  the  application  in  materials  for  thermoelectric 
devices  of  a  new  paradigm  in  thermoelectricity,  capable  of  significantly  improving 
overall thermoelectric efficiency. The project is important inter alia for applications 
in the metals sector, e.g. the steel industry; 

  MAGENTA  (TRL  1  to  3)  is  developing  magneto-thermoelectric  materials  and 
devices  based  on  ionic  ferrofluids  for  the  waste-heat  recovery  industries.  The 
technology  is  potentially  scalable  to  specific  industrial  sectors  using  waste  heat 
energy; 

  TPX-Power  (TRL  1  to  3)  is  developing  a  new  heat  engine  technology  for  thermal 
energy  recovery  allowing  high  power  density  and  competitive  energy-harvesting 
efficiency even for low-temperature energy streams; 

  112CO2  (TRL  1  to  4)  aims  to  develop  new  material  for  a  methane  decomposition 

reactor for COx-hydrogen free production; 

  DIACAT665085  (TRL  1  to  3)  is  developing  a  new  technology  for  the  direct 
photocatalytic conversion of CO2 into fine chemicals and fuels using visible light 
and  the  unique  properties  of  man-made  diamond.  The  chemicals  industry  could  use 
the  technology  for  the  direct  transformation  of  CO2  into  organic  chemicals  using 
illumination with light; and 

  FuturoLEAF  (TRL  1  to  3)  involves  a  new  generation  of  photosynthetic  cell  factory 
for chemical industries, with a tailored solid-state biocatalyst architecture for efficient 
biological  carbon  capture  and  sustainable  bio-production  of  a  wide  spectrum  of 
chemicals,  from  active  pharmaceutical  ingredients  and  fine/special  chemicals  to 
commodity chemicals and biofuels. 

10 

 
 
The EIC Accelerator supports the scale-up of innovative start-ups and SMEs, along with 
the  market  uptake  of  higher-TRL  transformative  technologies.  As  the  successor  to  the 
SME  Instrument,  it  funds  projects  involving  promising  technologies  that  address  key 
issues in the decarbonisation of heavy industry: 

  CemShale CemTower (TRL 5/6-8) involves reducing the carbon footprint of the cement 
industry  by  using  ‘supplementary  cementitious  materials’  based  on  pre-calcined 
shale  granule  material,  and  vertically  integrated  equipment  (preheater,  kiln  and 
cooler) for optimised treatment of the material. The combination of new materials and 
equipment 
fully 
implemented  across  the  cement  industry)  could  lower  worldwide  CO2  emission  by 
nearly 5%; 

improves  process  efficiency  and  substitution  rates,  and  (if 

  CRCP  (TRL  6-8)  is  the  first  liquid-tolerant  ‘centric  reciprocating  compressor 
enabled  to  pump’  (CRCP)  allowing  for  the  energy-  and  cost-efficient  compression 
and large-scale deployment of ‘wet gas’ across several industries. It promises energy 
savings  of  at  least  30%  and  an  almost  45%  reduction  in  CO2  emissions,  thus 
contributing an estimated GHG emissions reduction of 4 million tonnes CO2-equivalent 
by 2030; 

  Sens  (TRL  5/6-8)  involves  smart,  sensor-with-radar  waste  management 
technology  that  can  detect  methane  emission  and  contribute  an  overall  60% 
reduction  in  CO2  emissions  from  waste  treatment.  The  project  relies  on  ‘internet  of 
things’  technologies  to  deliver  a  solution  that,  while  primarily  targeting  cities  and 
urban spaces, could be adopted by heavy-polluting industries; and 

  Proton  (TRL  7  to  8)  is  bringing  circularity  to  industries  through  the  recycling  of 
industrial CO2 and its conversion into proteins for animal feed. The technology 
is based on gas fermentation that, when scaled up, can turn large volumes of CO2 into 
single-cell  proteins.  As  part  of  its  business  and  commercialisation  plan,  the  SME 
carrying  out  the  project  intends  to  establish  a  joint  venture  with  a  carbon-intensive 
industrial company. 

2.4  Decarbonisation scenarios  

Box 1: Decarbonising the steel sector26 

  The  steel  sector  accounts  for  4%  of  all  EU  emissions  and  is  one  of  the  hardest 

industrial sectors to decarbonise. 

  Currently, the recycled  steel route emits around 80% less CO2 than the integrated 
route (emissions would be close to zero if electricity were to be fully decarbonised), 
but is limited by the availability of high-quality scrap. 

An  analysis  of  2050  decarbonisation  scenarios  published  by  various  sources27  shows 
that: 

  most  scenarios  that  achieve  deep  decarbonisation  of  the  sector  use  new 
steelmaking  processes  based  on  hydrogen  reduction  or  direct  electrolysis  of 
iron; 

26 JRC, Decarbonisation of industrial heat: The iron and steel sector, 2020. 
27 For this analysis the JRC has analysed eight scenarios from four publications:  

European Commission, A Clean Planet for all -A European long-term strategic vision for a prosperous, 
modern, competitive and climateneutral economy, 2018;  
Material economics, Industrial Transformation 2050 -Pathways to Net-Zero Emissions from EU Heavy 
Industry, 2019; 
ICF & Fraunhofer ISI, Industrial Innovation: Pathways to deep decarbonisation of Industry, 2018; 
International Energy Agency, Energy Technology Perspectives 2017, 2017. 

11 

 
                                                 
  carbon  capture  and  storage/utilisation  are  heavily  deployed  in  carbon  capture 
scenarios,  by  valorising  waste  gases  from  the  current  integrated  route  to  produce 
chemical  raw  materials,  or  associated  with  new  technologies  (smelting  or  top  gas 
recycling); 

 

 

including  the  production  of  hydrogen,  the  sector’s  annual  electricity  demand  could 
grow  by  up  to  three  times  the  current  demand  in  the  Commission’s  1.5 °C 
scenarios; and 

the  proportion  of  recycled  steelmaking  (currently  40%)  could  increase  by 
improving the quality of scrap; for instance, the downstream recycling process or 
the upstream design of products could be optimised to allow better disassembly and 
re-use of materials. 

Box 2: Decarbonising the cement sector28 

  The cement sector accounts for about 4% of all EU emissions. 

  The combustion of fuels to heat cement kilns is responsible for about 35% of the 
sector’s  carbon  footprint.  The  other  65%  are  process  emissions,  released  during 
the calcination reaction involved in the production of clinker. 

An  analysis  of  2050  decarbonisation  scenarios  published  by  various  sources29  shows 
that: 

  all scenarios achieving deep decarbonisation include some form of carbon capture 
technology  (post-combustion,  oxyfuel  combustion,  calcium-looping,  direct-
separation); 

  greater  use  of  sustainable  biomass  (and  possible  negative  emissions  when 
combined with CCS) is proposed as a measure to reduce GHG emissions in several 
scenarios,  including  as  a  bridging  measure  until  breakthrough  technologies  are 
ready to be deployed. However, its role is  uncertain due to increased competing 
demand for biomass from other sectors; 

  electrification  of  cement  production  (electrification  of  heat)  is  deployed  in 

high-electrification/low-CCS scenarios; and 

  clinker  substitutes  (supplementary  cementitious  materials)  and  new  cements 

are deployed to varying degrees. 

2.5  Sustainable  Process  Industry  through  Resource  and  Energy  Efficiency  (SPIRE) 

partnership 

Under Horizon 2020, the EU supports the SPIRE R&I partnership with industry, which 
was launched in December 2013. SPIRE supports R&I in the field of sustainable process 
industries  through  resource  and  energy  efficiency.  It  brings  together  companies,  world-
leading  universities  and  research  organisations,  and  other  stakeholders  in  the  cement, 
ceramics,  chemicals,  engineering,  minerals  &  ores,  non-ferrous  metals,  steel  and  water 
sectors.  It  helps  to  integrate,  demonstrate  and  validate  systems  and  technologies  to 
achieve  reductions  of  up  to  30%  in  fossil-energy  intensity  and  up  to  20%  in  non-
renewable  and  primary  raw  material  intensity.  The  aim  is  a  drastic  overall  efficiency 
improvement of up to 40% in CO2-eq. footprints. 

28 JRC, Deep decarbonisation of industry: The cement sector, 2020. 
29 Ibid 26 

12 

 
 
 
                                                 
In  terms  of  technological  capacity  to  reduce  GHG  emissions,  SPIRE  projects  reported  in 
2019  that  their  innovations  could  make  significant  improvements  in  energy  and  raw 
materials  efficiency  in  line  with  SPIRE’s  contractual  targets,  including  a  reduction  of 
28.53% CO2-eq. (‘up to 40%’ target). 

The significant innovations concern three main areas at all TRLs:  

  efficient processes; 

  sustainability and circular economy; and  

  enabling sustainable industry development.  

The relevant projects have achieved: 

  38% reduction of dependency on fossil fuels; 

  31% reduction of dependency on non-renewable, primary resources; and  

  29% reduction of emissions.  

Projects reported that participants planned to invest in taking almost 54% of innovations 
up to a higher TRL after the end of the project, which exceeds the 2014 baseline value in 
this area by almost 25 percentage points. While contractually SPIRE concerns innovations 
up to TRL 7, the fact that some projects have managed to go beyond this level shows the 
stakeholders’ commitment and the innovation potential in the process industries. 

The  partnership  has  achieved  a  private  investment  leverage  factor  of  8.5,  with  total 
investment  by  private  companies  of  €4.52 billion.  SME  members  have  seen  a  40% 
growth in turnover (double the EU average). 

2.6  Research Fund for Coal and Steel (RFCS) 

The  European  Research  Fund  for  Coal  and  Steel  (RFCS)  supports  the  development  of 
technologies to reduce emissions in the steel industry. In order to pave the way for future 
applications,  several  research  activities  have  focused  on  the  development  of  alternative 
carbon carriers originating from renewable sources and new breakthrough processes for iron 
ore reduction and smelting. 

Under RFCS-supported projects30: 

  tests  on  top  gas  recycling  in  blast  furnaces  have  shown  that  it is  possible  to  operate 
the  process  and  the  gas  separation  plant  in  a  closed  loop,  with  a  25%  reduction  in 
carbon consumption; 

  trials  on  HIsarna  have  demonstrated  that  the  process  works  effectively  and  has  now 

reached TRL 7 (see above); 

  a  study  on  the  use  of  electricity  to  directly  decompose  iron  oxide  into  metal  and 
oxygen  by  electrolysis  of  iron  ores  has  demonstrated  a  very  high  capacity  for  CO2 
mitigation; 

  material tests and pilot trials on the substitution of carbon and oxygen with industrial 
and/or municipal waste have shown that the liquid steel quality can be preserved and 
the environmental footprint kept low; and 

30   RFCS monitoring and assessment report (2011-2017). 

13 

 
                                                 
  a thermoelectric power generation system has been used for the first time to convert 
exhaust heat above 550 °C into electricity, and its feasibility has been demonstrated. 
The potential energy savings of direct use are 0.6-2.8% of total energy input. 

To  date,  the  EU  has  funded  16  relevant  projects,  with  a  total  budget  of  €24  million,  to 
which the EU contributed €16 million. 

It has funded an additional  42 relevant projects, with a total budget  of €331 million,  to 
which the EU contributed €268 million. 

14 

 
 
 
2 

EU worldwide productivity and cost efficiency through R&I 

R&I  is  crucial  for  the  EU’s  productivity.  It  can  increase  firms’  efficiency  through  process 
innovation  and  improve  the  goods  and  services  they  produce,  thus  raising  demand  and 
reducing production costs. Also, firms that innovate are also likely to grow more and new 
entrants with better products should displace inefficient firms. Overall, this contributes to 
higher aggregate productivity: new ideas help to generate greater (or the same) output 
with  the  same  (or  less)  input,  for  companies  and  the  whole  economy.  This,  in  turn, 
should  positively  affect  wages  and  business  profitability.  A  significant  proportion  of 
productivity performance can be ascribed to R&I and intangible investments (see patent 
section below)31. 

Production  costs  are  a  key  factor  in  industrial  companies’  decision-making  about  the 
application  of  new  low-carbon  technologies.  While  the  technologies  require  investment, 
they  can  also  reduce  production  costs  compared  to  a  baseline  scenario  in  which 
industries  have  to  reach  their  climate  objectives  without  the  technology.  In  order  to 
gauge  the  crucial  (potential)  interest  of  industry  in  the  development  of  new  low-carbon 
technologies through R&I, it is useful to look  at production cost patterns in key  energy-
intensive industries in the EU and competing regions. 

Figure 1  shows  the  cost  components  in  the  production  of  steel  (hot-rolled  coil)  through 
the  blast  furnace-basic  oxygen  furnace  (BF-BOF)  route  (the  most  carbon-intensive 
production method, as used for 60% of steel in the EU)32. 

Figure 1: Hot-rolled coil production costs in the BF-BOF process in 2019 

Source: JRC 

The  ‘credit’  cost  element  shows  cost  savings  generated  by  efficiency  measures,  notably 
the recycling of waste gases for power self-generation. These represent the accumulated 
effect  of  investments  in  R&I  in  the  sector,  for  technologies  that  have  now  achieved 
commercial  maturity.  The  figure  shows  that  the  EU  is  among  the  world  leaders  (with 
South Korea and Japan) in this respect, thus improving its global competitiveness. 

31   SRIP report 2020, pp. 97 & 105. 
32   Medarac,  H.,  Moya,  J.A.  and Somers,  J.,  Production  costs from  iron  and  steel  industry  in  the  EU  and  third 
countries  (Publications  Office,  Luxembourg,  2020;  ISBN  978-92-76-20887-7;  doi:10.2760/145957, 
JRC121276). 

15 

 
 
                                                 
2.1  Production costs and breakthrough technologies 

The  Climate  Law  will  enshrine  the  2050  climate-neutrality  objective  in  EU  law.  Against 
this backdrop, the energy-intensive industries are faced with the formidable challenge of 
decarbonising within 30 years. However, they are already working at virtually maximum 
energy efficiency and further incremental improvements will not allow them to meet the 
EU’s climate and energy targets. In the steel industry, for instance, current best available 
technologies  promise  further  CO2  emissions  reductions  of  only  10%  at  most%33,  while 
65%  of  emissions  in  the  cement  industry  are  due  to  reactions  that  are  inherent  and 
unavoidable in the current production process. If the EU is to meet its ambitious climate 
targets  while  maintaining  its  industrial  capacity,  it  will  need  to  deploy  breakthrough 
climate-neutral technologies enabled by a coordinated RD&I effort. 

Three  recent  studies  by  the  International  Energy  Agency  (IEA)34,  Material  Economics35 
(ME)  and  Agora  Energiewende  /  Wuppertal  Institut36  (A-EW  &  WUI)  have  estimated 
production  costs  with  breakthrough  technologies  in  the  steel,  cement  and  chemicals 
industries by 2050 (see Table 2): 

Table  2:  Estimates  of  production  costs  with  breakthrough  technologies  in  the 
steel, cement and chemicals industries by 2050 

Technology 

IEA (USD/t)* 

A-EW & WUI (€/t) 

ME (€/t) 

Steel 

Current BF-BOF route 

330-450 

391 

371 

Hydrogen direct reduction 

500-850 

532-630 

403-470 

Iron ore electrolysis 

645-828 

Smelting reduction + CCS 

350-500 

427-454 

427 

Blast furnace + CCU (waste 
gas valorisation) 

637-858 

Gas-based DRI-EAF with 
CCUS 

420-620 

Avg.  cost  increase  of  low-
CO2 tech. 

Cement 

+10% to +50% 

+10% to +112% 

Up to +20% 

Current cement production 

50 

CCUS - oxyfuel 

46 

82-94 

51 

88 

33   JRC, Decarbonisation of industrial heat: The iron and steel sector;    

https://setis.ec.europa.eu/publications/relevant-reports/decarbonisation-of-industrial-heat-iron-and-steel-
sector  

34   International Energy Agency (2020), Energy technology perspectives; 
https://www.iea.org/reports/energy-technology-perspectives-2020  

35   Material  Economics  (2019),  Industrial  transformation  2050  —  pathways  to  net-zero  emissions  from  EU 

heavy industry. 

36   Agora  Energiewende  and  Wuppertal  Institut  (2019),  Klimaneutrale  Industrie:  Schlüsseltechnologien  und 

Politikoptionen für Stahl, Chemie und Zement (Berlin, November 2019). 

16 

 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
CCUS – direct separation + 
electrification 

80-101 

94-109 

Low-cost CCUS  

± 100 

High-cost CCUS 

± 110-140 

Avg. cost increase of low-
CO2 tech. 

+60% in 2070 

+74% to +105% 

+70% to +115% 

Chemicals 

Plastics 

Current steam cracking 

842 

842 

Steam cracker electrification 

968-993 

Steam cracker electrification 
+ EoL CCS 

1253 

Chemical recycling 

890-1050 

1320 

Alternative routes (green 
methanol) 

Avg. cost increase of low-
CO2 tech. 

Ammonia  

Current steam methane 
reforming 

Steam methane reforming 
with CCS 

1223-3176 

+6% to +277% 

+20% to +45% 

±260 

1.8€/kg H2 

354 

± 350-600 

418-553 

Water electrolysis 

± 350-600 

2.8-5€/kg H2 

553-747 

Avg. cost increase of low-
CO2 tech. 

+20% to +230% 

+56% to +178% 

+15% to +111% 

Source: JRC (IEA, ME, A-EW & WUI) *Estimates 

The  studies  show  that  production  costs  of  low-CO2  technologies  are  highly  uncertain. 
While continued R&I plays a role in making them more competitive in the future, they are 
currently  more  expensive  than  fossil-fuel  based  production  pathways.  The  renewable 
electricity  price  is  a  determining  factor  for  technologies  relying  on  direct  electrification, 
but  it  is  also  the  major  cost  component  of  green  hydrogen  production.  The  price  of 
biomass  is  a  determining  input  for  a  fuel  switch  route  in  the  cement  sector  and  new 
feedstock  routes  in  the  chemicals  sector.  The  capital-intensive  carbon  capture 
technologies and the cost of CO2 transport and storage determine the competitiveness of 
CCS routes in all sectors. 

17 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Box 3: Electrolysis 

Water  electrolysis  for  the  production  of  green  hydrogen  is  a  key  horizontal 
technology for greening energy-intensive industries such as the chemicals and steel 
sectors, and enabling the deployment of a fully renewables-based energy system37. 
Currently,  several  water  and  steam  electrolysis  demonstration  projects  are 
operational  for  alkaline  electrolyser  (AEL),  proton  exchange  membrane  electrolyser 
(PEMEL) and solid oxide electrolyser (OEL) technologies up to 10 MW. Projects on a 
scale of 20 to > 100 MW are under development.  

Electrolysis is currently more expensive than other methods of producing hydrogen 
—  due  to  the  capital  costs  and  dependence  on  electricity  costs.  The  costs  (€5-
8/kg H2)  are  well  above  those  for  the  commercially  established  technologies 
(e.g. small modular reactor), i.e. less than €2/kg H2.The key steps needed to realise 
the  2030  vision  are  reducing  electrolyser  cost  and  improving  efficiency,  with  high 
durability  and  reliability,  by  increasing  the  scale  of  deployments  or  through 
production in series, for both water and steam electrolysis.  

The  capital  and  fixed  operational  costs  of  electrolysers  have  been  reduced 
considerably since 2012, but additional improvements are needed38. Especially when 
electrolysers  are  operated  exclusively  on  renewable  electricity,  their  limited  use 
increases  the  impact  of  these  two  cost  factors  on  commercial  viability.  A  second 
objective  is  to  improve  the  efficiency  of  electrolyser  systems  so  as  to  reduce  the 
cost  of  hydrogen  production.  The  aim  should  be  to  install  40  GW  of  electrolysis  in 
the EU by the end of 2030. Together with improvements in efficiency, the resulting 
cost  reductions  should  mean  that  the  cost  of  electrolyser-produced  net-zero 
hydrogen can be kept below €3/kg. This will be the focus of the new R&I partnership 
on hydrogen under Horizon Europe39. 

Under Horizon 2020, the ‘Fuel Cell and Hydrogen’ R&I partnership (FCH2 joint 
undertaking)  is  supporting  a  series  of  projects  to  increase  the  efficiency  of 
electrolysis40. 

37   See also EU hydrogen strategy, 8 July 2020. 
38   IEA; 

https://www.iea.org/data-and-statistics/charts/hydrogen-production-costs-using-natural-gas-in-

selected-regions-2018-2 

39   Draft  strategic  research  and  innovation  agenda  for  upcoming  Horizon  Europe  ‘Clean  Hydrogen  for  Europe’ 

R&I partnership. 

40   DJEWELS, a 20 MW AEL to be installed at Nouryon’s Delfzijl (Netherlands) site, to produce green methanol; 
REFHYNE,  a  10 MW  PEMEL  to  be  installed  at  Shell’s  Cologne  refinery;  MULTIPLHY,  a  2.6  MW  SOEL  to  be 
installed at NESTE’s Rotterdam biorefinery; DEMO4GRID (4MW AEL) and HYBALANCE (1.25 MW PEMEL) for 
grid balancing. 

18 

 
 
 
 
                                                 
3 

R&I investments and patenting 

As  the  Commission  has  pointed  out  in  its  communication  A  clean  planet  for  all41, 
further  developing  the  most  relevant  technologies  to  reduce  carbon  emissions  from 
energy-intensive industries, so as to allow their deployment, will require significant public 
and private investments in R&I at both EU and national levels. 

The  Commission’s  recent  Report  on  progress  of  clean  energy  competitiveness42 
found that, in recent years, an average of nearly €20 billion a year has been invested in 
clean  energy  R&I  in  the  EU43,44.  Of  this,  EU  funds  have  contributed  6%,  national 
governments 17% and businesses around 77%. 

3.1  Public R&I investment in energy efficiency in industry45 

In  2014-2018,  Member  States  invested  €360  million  a  year  on  average  (10%  of  their 
budgets for energy union R&I priorities) in areas relating to energy efficiency in industry. 
This  is  higher  than  the  amounts  reported  for  other  major  economies,  such  as  Japan 
(€290  million)  and  the  United  States  (€165  million).  The  major  public  investors  among 
the Member States are Germany (30% of the total), Finland (11%), Italy (10%), France 
and  the  Netherlands  (both  9%).  EU  funds  contributed  another  €200 million  a  year  on 
average. 

The  R&I  budget  allocated  to  energy  overall  in  the  EU-27  represents  4.7%  of  total  R&I 
expenditure46. In absolute terms, however, Member States have decreased their national 
R&I budgets for clean energy (see Error! Reference source not found.); in 2018, the 
EU-27 spent around €0.5 billion less than in 2010 (in line with the global trend). 

Figure 2: Public R&I financing - energy union R&I priorities47 

41   COMMUNICATION  FROM  THE  COMMISSION  TO  THE  EUROPEAN  PARLIAMENT,  THE  EUROPEAN  COUNCIL, 
THE  COUNCIL,  THE  EUROPEAN  ECONOMIC  AND  SOCIAL  COMMITTEE,  THE  COMMITTEE  OF  THE  REGIONS 
AND THE EUROPEAN INVESTMENT BANK A Clean Planet for all A European strategic long-term vision for a 
prosperous, modern, competitive and climate neutral economy. COM/2018/773 final 

42   COM(2020)953 final and accompanying SWD, 14 October 2020. 
43   COM(2015) 80;  renewables,  smart  systems,  efficient  systems,  sustainable  transport,  CCUS  and  nuclear 

safety. 

44   JRC SETIS; https://setis.ec.europa.eu/publications/setis-research-innovation-data 

(2018),  SETIS 

JRC112127 Pasimeni, F.; Fiorini, A.; Georgakaki, A.; Marmier, A.; Jimenez Navarro, J. P.; Asensio Bermejo, 
[Dataset]  PID: 
J.  M. 
http://data.europa.eu/89h/jrc-10115-10001, according to: 
JRC105642  Fiorini,  A.,  Georgakaki,  A.,  Pasimeni,  F.  and  Tzimas,  E.,  Monitoring  R&I  in  low-carbon  energy 
technologies (Publications Office, Luxembourg, 2017); 
JRC117092  Pasimeni,  F.,  Letout,  S.,  Fiorini,  A.,  Georgakaki,  A.,  Monitoring  R&I  in  low-carbon  energy 
technologies – revised methodology and additional indicators, 2020 (forthcoming). 

country  dashboards 

research  & 

innovation 

(JRC) 

45   Ibid. 
46   Eurostat,  Total  GBAORD  by  NABS  2007  socio-economic  objectives  [gba_nabsfin07].  The  Energy  socio-
economic objective includes conventional energy R&I; the Energy Union R&I priorities would also fall under 
other the socioeconomic objectives  

47   Excludes EU funds. 

19 

 
 
                                                 
 
 
 
This  trend  is  the  opposite  of  what  is  needed  if  the  EU  is  to  finance  the  R&I  required  to 
support  the  development  of  the  key  low-carbon  technologies  that  will  help  industry 
achieve the EU’s climate objectives. The EU (and others) needs to invest more in R&I on 
clean  technologies  if  it  is  to  meet  its  decarbonisation  commitments.  Today,  among  the 
major  global  economies,  the  EU  has  the  lowest  investment  when  measured  as  a 
proportion of GDP (Error! Reference source not found.). EU research funds have been 
contributing  a  larger  proportion  of  the  public  funding  and  have  been  essential  in 
maintaining R&I investment levels over the last 4 years. 

3.2  Private R&I investment in energy efficiency in industry48 

According  to  the  Commission’s  report,  only  a  small  share  of  private  sector  revenues  is 
currently  being  spent  on  R&I  in  the  sectors  that  need  to  adopt  low-carbon  technologies 
on a large scale49. Estimated EU-27 private investment in the energy union R&I priorities 
has  been  decreasing  and  now  amounts  to  around  10%  of  companies’  total  R&I 
expenditure50. This is higher than the USA’s figure and comparable to Japan’s, but lower 
than China’s and South Korea’s. 

The  financial  sector  plays  a  critical  role  in  enabling  the  decarbonisation  transition  and 
funding the appropriate types of investment at the scale required. Fulfilling this role will 
require  a  transformation  of  the  sector  itself51.  The  necessary  adaptations  will  be 
facilitated by the implementation of the EU’s sustainable finance legislation, including the 
recent Sustainable Finance Taxonomy Regulation52. 

On average, major listed companies and their subsidiaries make up 20-25% of the main 
R&I investors, but account for 60-70% of patenting activity and investments. In the EU, 
the  automotive  sector  is  the  biggest  investor  in  absolute  terms,  followed  by 
biotechnology and pharmaceuticals. Among the energy industries, the oil & gas sector is 
the  largest  investor  in  R&I.  Other  energy  sectors,  such  as  electricity  and  alternative 
energy  companies,  have  much  lower  R&I  budgets,  although  they  spend  more  of  it  on 
clean energy.  It is  estimated that  oil & gas producers, the construction & materials and 
the industrial metals & mining sectors invest a fifth to a quarter of their budget in clean 
R&I. The figure is just under one sixth for the chemicals sector. 

The  EU  and  Japan  lead  the  international  competition  in  high-value  patents53  in  clean 
energy technologies. Clean energy patents account for 6% of all high-value inventions in 
the EU; this share is similar to Japan’s and higher than China’s (4%), the USA’s and rest 
of  the  world’s  (5%),  and  second  only  to  South  Korea’s  (7%)  among  the  competing 
economies. The EU is host to a quarter of the top 100 companies in terms of high-value 
patents in clean energy. 

The  majority  of  inventions  funded  by  multinational  firms  headquartered  in  the  EU  are 
produced in Europe and, for the most part, by subsidiaries located in the same country.54 
The  main  intellectual  property  offices  (IPOs)  —  and,  by  extension,  markets  —  targeted 
for the protection of EU inventions are in the USA and China. 

48   JRC SETIS; https://setis.ec.europa.eu/publications/setis-research-innovation-data  
(JRC112127) SETIS research & Innovation country dashboards, according to: 
(JRC105642)  Monitoring  R&I  in  low-carbon  energy  technologies  and  (JRC117092)  Monitoring  R&I  in  low-
carbon energy technologies – revised methodology and additional indicators, 2020 (forthcoming). 

49 IEA, Energy Technology Perspectives, https://www.iea.org/reports/clean-energy-innovation/global-status-of-

clean-energy-innovation-in-2020#government-rd-funding  

50   Contrasted  with  BERD  statistics  (Eurostat/OECD,  Business  expenditure  on  R&D  (BERD)  by  NACE  Rev.  2 
activity and source of funds [rd_e_berdfundr2]). The utilities sector includes water collection treatment and 
supply services. Data not available for all countries. 

51   A clean planet for all, p. 235. 
52   Regulation  (EU)  2020/852  of  the  European  Parliament  and  of  the  Council  of  18  June  2020  on  the 
establishment  of  a  framework  to  facilitate  sustainable  investment,  and  amending  Regulation  (EU) 
2019/2088 (OJ L 198, 22.6.2020, p. 13). 

53   High-value patent families (inventions) are those containing applications to more than one IPO, i.e. seeking 

protection in more than one country/market. 

54   Incentives, language and geographical proximity explain the major exceptions. 

20 

 
                                                 
 
 
Figure 3: Estimated private R&I financing in the energy union R&I priorities 

Notes: BERD stands for Business enterprise expenditure on R&D. Estimates for China are particularly challenging and uncertain, 
given the differences in Intellectual Property protection (see also https://chinapower.csis.org/patents/), and the difficulty in 
mapping the company structure (e.g. state backed companies) and financial reporting. 

Average private sector spending on energy efficiency in industry is estimated at €3 billion 
a year55, which is comparable with estimates for Japan and the United States, and twice 
as much as that for South Korea56.  Almost half comes from companies headquartered in 
Germany  (49%),  followed  by  companies  headquartered  in  the  Netherlands  (11%), 
France (10%), Italy, Denmark and Finland (all 5%). 

Of  the  actions  in  the  strategic  energy  technology  (SET)  plan,  ‘making  EU  industry  less 
energy-intensive  and  more  competitive’  accounts  for  the  highest  number  of  inventions. 
Nonetheless,  the  EU  overall  does  not  display  ‘specialisation’  in  this  subject  area  (i.e. its 
share in total patenting activity) compared with the rest of the world. 

3.3 

In-depth  analysis  of  relevant  private-sector  R&D  investments:  companies  from 
energy-intensive sectors in the EU Industrial R&D Investment Scoreboard57 

Progress  in  the  development  of  low-carbon  technologies  in  the  EU  depends  largely  on 
investment  in  relevant  R&D  by  industry  itself.  On  the  basis  of  the  EU  Industrial  R&D 
Investment Scoreboard, this part of the report looks at patterns of investment and green 
patent  activity  by  the  main  global  companies58  investing  in  R&D  in  the  energy-
intensive industries59.  

In 2018, the 2 500 Scoreboard companies in all sectors invested a total of €823 billion 
in  R&D,  8.9%  more  than  in  2017.  In  the  energy-intensive  industries,  the  total  (€61 
billion)  grew  at  a  similar  rate  (8.7%).  However,  global  R&D  of  the  top  2 500  was 
driven  by  other  sectors:  ICT  services  (€127 billion/17%),  ICT  producers  (€192 
billion/8.2%) and health (€170 billion/7.6%).  

The Scoreboard shows an intensifying race for global technological leadership over 
the past decade: 

  EU  companies  are  still  in  the  lead  in  sectors  such  as  automobiles,  traditional 
health  and  aerospace  &  defence,  but  losing  ground  in  ICT  industries  and  biotech 
health; 

  US  companies  have  bolstered  their  position  in  high-tech  sectors,  especially  ICT 

services and health; 

55   Data available for 2014-2016. 
56   China also invests significantly in this area, especially in ‘clean coal’ technologies. 
57   https://ec.europa.eu/info/news/2019-eu-industrial-rd-investment-scoreboard-report-2019-dec-18_en    
58   For  this  purpose,  a  subset  of  276  companies  closely  associated  with  the  chemicals,  metals  and  energy 

sectors was selected from the 2 500 Scoreboard companies. 

59   There is often no exact overlap of sector definitions and actual company activities, which may relate to very 

different industrial sectors and change over time. 

21 

 
 
                                                 
 

Japanese  companies  have  proportionally  even  more  of  their  R&D 
in 
medium/high-tech sectors and less in high-tech than companies in the EU (where 
the medium/high-tech group has grown significantly, but the size of the high-tech 
group has barely changed); and 

  Chinese  companies’  global  shares  in  ICT  industries  and  low-tech  sectors  have 

increased substantially, albeit from a lower base.  

A  Scoreboard  subsample  covering  energy-intensive  industries  shows  specific  R&D 
investment dynamics and relative trends (see Table 3). 

Table 3: R&D investment, capital expenditure (capex) and patents by sector and 
main region (2018) 

Region 

No. of 
companies 

R&D 
(€bn) 

Capex 
(€bn) 

Net 
sales 
(€bn) 

R&D 
intensity 
(%) 

Capex 
intensity 
(%) 

Share of 
green 
patents (%) 

Share of 
Y02P60 
patents (%) 

Chemicals 

EU 

USA 

Japan 

China 

RoW 

32 

37 

36 

19 

28 

11.0 

18.6 

330.8 

3.3 

4.0 

8.5 

147.5 

2.7 

8.0 

15.0 

216.3 

3.7 

5.6 

5.8 

6.9 

1.3 

8.9 

53.1 

2.4 

16.8 

11.6 

6.6 

8.5 

9.9 

5.0 

25.3 

332.4 

1.5 

7.6 

20.3 

Metals & related companies 

EU 

USA 

Japan 

China 

RoW 

14 

1.7 

15.0 

254.2 

1 

8 

15 

6 

0.1 

1.4 

0.7 

12.2 

8.7 

124.9 

2.2 

6.5 

110.0 

1.0 

11.0 

145.5 

0.7 

0.7 

1.1 

2.0 

0.7 

5.9 

5.5 

6.9 

5.9 

7.5 

13.8 

15.2 

8.7 

9.5 

14.3 

Energy related companies 

3.9 

2.7 

3.3 

7.2 

5.3 

6.3 

15.2 

4.5 

6.5 

8.0 

EU 

29 

10.8 

112.1 

1458.5 

0.7 

7.7 

20.2 

6.1 

60 The Y02 scheme of the Cooperative Patent Classification (CPC) regroups the following subcategories related 

to climate change mitigation technologies (CCMTs): 
Y02A: Technologies for adaptation to climate change: 
Y02B: CCMTs related to buildings 
Y02C: Carbon capture storage (CCS), sequestration or disposal of greenhouse gases 
Y02D: CCMTs related to information and communication technology (ICT) 
Y02E: Reduction of greenhouse gas emissions, related to energy generation, transmission or  distribution 
Y02P: CCMTs in the production or processing of goods 
Y02T: CCMTs related to transportation 
Y02W: CCMTs related to wastewater treatment or waste management 

22 

 
                                                 
 
US 

Japan 

China 

RoW 

10 

14 

15 

10 

6.5 

46.9 

580.0 

1.2 

24.3 

330.0 

4.8 

62.8 

797.9 

1.7 

39.3 

378.8 

1.1 

0.4 

0.6 

0.4 

8.1 

7.4 

7.9 

10.4 

17.0 

17.2 

11.8 

27.2 

3.8 

6.1 

5.1 

4.5 

Note: Patent shares refer to annual averages for 2010-2016. Data on patents available for 223 of the 274 companies in the 
sample, representing 94.9% of total R&D in the sample. 
Source: JRC 

Among  the  Scoreboard  companies  and  the  274  companies  covered  here,  those  in  the 
chemicals  sector  show  the  highest  R&D  intensity  (2-4%  of  net  sales),  followed  by 
metals  and  energy.  EU,  US  and  Japanese  companies’  capital  expenditure  (capex) 
intensity is about five times greater than their R&D intensity. For companies from China 
and the rest of the world (RoW),  it is almost 10 times greater. This may be because 
these companies invest more in capital goods, as infrastructure still needs to be built up. 
However, it might also be triggered by policy initiatives in the countries in question that 
incentivise  participation  in  infrastructure  investment.  For  the  Scoreboard  companies, 
analysis  of  corporate  accounting  indicators  at  firm  level  does  not  suggest  substitution 
between R&D and capex, but a positive effect of R&D on subsequent capex61.   

The  EU  chemicals  companies  in  the  subset  of  energy-intensive  industries  have 
the  second  highest  overall  R&D  intensity  (after  Japan,  but  ahead  of  the  USA). 
Overall, chemicals R&D investment is concentrated in EU, US, Japanese and RoW (Swiss) 
companies  constituting  several  dimensions  that  of  their  Chinese  counterparts.  Chinese 
chemicals companies also stand out in terms of capex investment (Figure 6), with 
more than twice the capex intensity of their competitors. This is the result of a sustained 
increase  in  capex  by  Chinese  companies  in  the  subsample  in  2010-2018  (from 
€1.3 billion  to  €8.9 billion),  with  substantial  variation  across  individual  companies.  For 
the  EU  sample,  the  R&D  performance  of  the  largest  R&D  investor,  BASF  (-11.6%  in 
financial  year  2018)  had  a  big  impact.  These  examples  underline  the  importance  of  the 
investment  dynamics  of  individual  top  companies  for  innovation,  even  in  large 
geographical areas. 

R&D  investment  by  the  top  EU  metals  companies62  was  similar  to  that  of  their 
Japanese  counterparts  (almost  €1.5 billion)  but  less  than  the  Chinese  figure 
(almost €2.1 billion) in 2018. In terms of capex and net sales, EU metals companies are 
ahead  of  their  peers.  Chinese  companies  have  relatively  low  capex,  leading  to  a  high 
R&D/capex  ratio  overall.  This  appears  to  be  the  opposite  of  the  picture  in  the 
chemicals sector, where Chinese companies focus more on capex than R&D. 

Based  on  the  current  sample,  it  remains  unclear  at  this  stage  whether  it  is  due  to 
individual  companies’  specificities  or  to  a  strategic  choice  that  Chinese  chemicals  and 
metals  companies’  approach  to  R&D  and  capex  differs  from  that  of  their  peers  in  the 
Scoreboard. 

Energy-related  companies63  in  the  EU  are  ahead  of  their  peers  from  the  other 
regions in R&D investment, capex and net sales. The overall low R&D intensity of the 

61   Coad, A. and Grassano, N., Disentangling the processes of firm growth and R&D investment, JRC Policy Brief 

JRC103175 (November 2016);   
https://iri.jrc.ec.europa.eu/sites/default/files/contentype//publication//policybriefs//1568801206//Disentang
ling%20the%20processes%20of%20firm%20growth.pdf 

62   Metals companies’ business is more capital- than R&D-intensive, so they are not as well represented in the 

subsample as chemicals companies. 

63   Due to the more capital- than R&D-intensive nature of the energy business, ‘pure’ energy companies are not 
well represented in the Scoreboard, so the subsample was enriched with a few companies with substantial 
energy activities. 

23 

 
 
                                                 
subsample’s  energy  companies  is  due  to  very  high  net  sales,  especially  for  oil-related 
companies. Also, among the three subsectors considered here, energy is the sector with 
the highest capex intensity. Other parts of this report offer further insight into the energy 
sector (see Section 4). 

Figure 4:  Average R&D intensity, by selected sectors and main regions (2016) 

4,0%

3,5%

3,0%

2,5%

2,0%

1,5%

1,0%

0,5%

0,0%

EU

US

Japan

China

RoW

Chemicals

Energy

Metals

Source: The 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

Figure 5:  Average R&D intensity in selected sectors- trends 

3,5%

3,0%

2,5%

2,0%

1,5%

1,0%

0,5%

0,0%

2010

2011

2012

2013

2014

2015

2016

2017

2018

Chemicals

Energy

Metals

Note: Trend data on patents available for 232 of the 274 companies in the sample, representing 92.9% of total R&D in 2018 in 
the sample. 
Source: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

Figure 6:   Average  capex  intensity,  by  selected  sectors  and  main  regions 
(2016) 

18,0%

16,0%

14,0%

12,0%

10,0%

8,0%

6,0%

4,0%

2,0%

0,0%

EU

US

Chemicals

Japan
Energy Metals

China

RoW

Source: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

24 

 
 
 
 
 
 
 
Figure 7: Average capex intensity of selected sectors — trends 

12,0%

10,0%

8,0%

6,0%

4,0%

2,0%

0,0%

2010

2011

2012

2013

2014

2015

Chemicals

Energy

2016

Metals

2017

2018

Note: Trend data on patents available for 232 of the 274 companies in the sample, representing 92.9% of total R&D in 2018 in 
the sample.  
Source: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

Figure 8: R&D/capex ratio, by selected sectors and main regions (2016) 

70,0%

60,0%

50,0%

40,0%

30,0%

20,0%

10,0%

0,0%

EU

US

Chemicals

Japan
Energy Metals

China

RoW

Source: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

Figure 9: R&D/capex ratio of selected sectors — trends 

60,0%

50,0%

40,0%

30,0%

20,0%

10,0%

0,0%

2010

2011

2012

2013

2014

2015

2016

2017

2018

Chemicals

Energy

Metals

Note: Trend data on patents available for 232 of the 274 companies in the sample, representing 92.9% of total R&D in 2018 in 
the sample. 
Source: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

25 

 
 
 
 
 
 
 
As regards the patenting activity of the subsample of energy-intensive industries from 
the  Scoreboard64,  4.7%  of  all  patent  applications  relate  to  green  technologies  (patent 
subclass YP02). The region with the lowest percentage of green patent applications is the 
USA  (3.6%),  while  that  with  the  highest  is  ‘RoW’  (6.0%).  The  EU  is  above  the  overall 
average  (5.1%  of  YP02  applications)  and  has  the  highest  absolute  number  of  green 
applications  per  year  over  the  period.  There  are  two  EU  companies  in  the  top 5 
companies in terms of share of green patents in the chemicals sector, three in the metals 
sector  and  four  in  the  energy-related  sectors65.  More  detailed  analyses  on  green 
patenting activities are presented in other parts of this report (see Section 4). 

Patenting activity in the Scoreboard top 2 500 sample of all sectors shows that patents in 
the  global  automotive  sector,  which  accounts  for  13%  of  the  total,  are  mostly  in 
current  automotive  technologies.  However,  an  increasing  proportion  relate  to  green 
technologies, including electric and autonomous vehicles and newer components such as 
novel batteries and fuel cells. EU companies hold around a third of these patents, which 
includes around a quarter of green patents, and appear highly diversified and competitive 
in  most  technological  fields.  However,  in  green  technologies  relating  to  hybrid  cars, 
batteries and fuel cells, their Japanese counterparts are leading the race. The automotive 
sector is being joined in patent filing  by software, technology hardware,  electronics and 
chemicals.  This  is  challenging  EU  companies,  whose  lead  in  the  automotive  sector  may 
be  eroded  as  digital  technologies  take  a  higher  proportion  of  the  added  value  in  the 
automotive  sector,  with  new  developments  such  as  electric  self-driving  cars  fitted  with 
more electronics and communications accessories. 

Figure 10:   Share  of  Y02P  patents,  by  selected  sectors  and  main  regions 
(average 2010-2018) 

16,0%

14,0%

12,0%

10,0%

8,0%

6,0%

4,0%

2,0%

0,0%

EU

US

Japan

China

RoW

Chemicals

Energy

Metals

Note:  Patent  shares  refers  to  annual  averages  for  the  period  2010-2016.  Data  on  patents  available  for  223  out  of  the  274  companies  in  the  sample, 
representing 94.9% of the total R&D in 2018 in the sample. The data for US metals sectors refer to the one company for which patent data are available  
Sources: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

64   See JRC patent analyses based on JRC SETIS methodology; 

https://setis.ec.europa.eu/publications/setis-research-innovation-data  
https://ec.europa.eu/jrc/en/publication/eur-scientific-and-technical-research-reports/monitoring-ri-low-
carbon-energy-technologies  
https://ec.europa.eu/jrc/en/publication/assessing-private-rd-spending-europe-climate-change-mitigation-
technologies-patent-data  

65   Three of these companies are based in the UK. 

26 

 
 
 
 
 
                                                 
 
 
 
Table  4:  Top  5  companies  (in  terms  of  share  of  YP02  patent  applications),  by 
sector  

Company 

Country 

R&D-
2018  
(€ m) 

Capex-
2018 (€ m) 

Net sales 
2018 (€ m) 

Green inventions 
share – avg 2010-
2016 (%) 

YP02 inventions 
share – avg  
2010-2016 (%) 

US 

56.3 

1 369.8 

7 799.3 

30.0 

13.3 

Chemicals 

AIR PRODUCTS 
AND CHEMICALS 

SAUDI BASIC 
INDUSTRIES 

SA 

271.0 

3 299.0 

39 389.4 

14.4 

LINDE 

DE 

113.0 

n.a. 

13 370.3 

21.8 

ASAHI GLASS 

JP 

360.6 

1 665.6 

12 000.8 

13.9 

JOHNSON MATTHEY 

UK 

195.1 

238.4 

11 913.8 

40.4 

Metals 

HERAEUS 

POSCO 

UMICORE 

JFE 

DE 

153.9 

n.a. 

20 295.1 

19.4 

KR 

412.2 

2 022.1 

50 864.1 

14.6 

BE 

196.4 

466.0 

13 716.7 

38.7 

JP 

293.7 

2 463.2 

30 525.2 

9.9 

THYSSENKRUPP 

DE 

416.0 

801.0 

42 745.0 

10.8 

Energy 

FIRST SOLAR 

VESTAS WIND 
SYSTEMS 

NORDEX 

ROYAL DUTCH 
SHELL 

US 

73.8 

646.1 

1 959.9 

70.4 

DK 

325.0 

312.0 

10 134.0 

89.0 

DE 

56.7 

113.7 

2 459.1 

91.3 

UK 

861.1 

20 096.9 

339 195.5 

25.7 

BP 

UK 

374.7 

14 591.3 

260 922.1 

32.2 

9.9 

9.1 

8.3 

7.7 

8.2 

8.1 

8.1 

6.3 

5.4 

24.8 

22.7 

21.4 

20.7 

12.7 

Note: Data refer to applications belonging to IP5 families for 2010-2016. Only companies with an average of at least 10 green patent applications per year were 
considered.   
Sources: 2019 EU R&D Investment Scoreboard and JRC patent analyses. 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.4  Other aspects of R&I activity: start-ups and venture capital 

Start-up  formation  can  be  used  as  an  indicator  of  innovation,  future  technologies  and 
competitiveness66.  Start-ups  are  mostly  in  digital  technologies  and  are  less  common  in 
more  capital-intensive  industrial  sectors  such  as  steel,  chemicals  and  energy.  Those 
sectors require high up-front capital investment, while in the start-up business model in 
other  sectors  (such  as  software-based  businesses),  knowledge  and  human  capital  are 
leveraged  to  take  on  larger  and  more  established  incumbents  (or  carve  out  a  market 
niche).  However,  steel,  chemicals  and  energy  start-ups  are  a  critical  ingredient  of 
innovation  and  help  us  to  understand  the  digitalisation  of  business  models.  The  EIC  is 
supporting  and  monitoring  such  start-ups  and  the  development  of  their  innovation 
ecosystems67. 

Although  they  account  for  a  small  percentage  of  all  new  businesses,  start-ups  in  the 
chemical, steel and energy-related sectors represent a significant area of innovation that 
is  worth  exploring,  e.g. by  drawing  country  comparisons  and  assessing  how  the  EU  is 
performing. 

It seems that the steel and chemicals sectors are less suitable for the  start-up business 
model,  accounting  for  fewer  than  one  in  a  thousand  start-ups  (the  United  Nations 
Industrial  Development  Organization  (UNIDO)  database  has  figures  of  3.3%  for 
chemicals  and  1.7%  for  metals,  although  its  ‘metals’  category  covers  more  than  just 
steel68). On the other hand, 3% of start-ups are in energy, which may reflect the sector’s 
greater  amenability  to  the  start-up  model.  This  is  much  more  than  the  share  of 
energy-related  establishments/firms  in  UNIDO,  which  may  reflect  Dealroom’s  broader 
definition of the sector. 

Table 5: Sector shares in UNIDO and Dealroom 

Sector 

No. of 
establishments/ 
firms (UNIDO) 

Share 

No. of start-ups 
(Dealroom) 

Share 

Share 
ratio 

Chemicals 

21 575 

3.25% 

81 

0.01% 

0.004 

Energy 

2 727 

0.41% 

17 200 

2.99% 

7.28 

Steel 

11 119 

1.67% 

65 

0.01% 

0.006 

Others 

628 841 

94.67% 

558 193 

96.98% 

1.02 

Totals 

664 262 

100.00% 

575 587 

100.00% 

1 

Steel and chemicals 

The EU has the same number of start-ups in chemicals as the USA, and a third fewer in 
steel. As regards value (funding for start-ups), the EU is behind the USA and, in the case 
of steel, also China, which has very few highly valued start-ups. 

The EU has only 0.3% of start-ups in steel and 16% in chemicals. The latter figure, while 
small in absolute terms, is relatively large compared with the proportion in core start-up 
sectors such as robotics and artificial intelligence (around 8% in both cases). 

66   This section uses the Dealroom dataset of global start-up activity; https://dealroom.co/  
67   See section 2.3  
68   More  details  about  the  UNIDO  methodology  available  at:  https://stat.unido.org/pdf/Inst32-online-

UserGuide_2402619451797638449.pdf  

28 

 
 
                                                 
Table 6: Start-ups in steel, chemicals and energy sectors 

Region 

No. of start-ups 

Share 

Funding (€ m) 

Share 

Steel 

EU 

US 

Japan 

China 

RoW 

Totals 

Chemicals 

EU 

US 

Japan 

China 

RoW 

Totals 

Energy 

EU 

US 

Japan 

China 

RoW 

18 

27 

0 

3 

17 

65 

24 

24 

1 

2 

28 

79 

27.69% 

2.42 

0.29% 

41.54% 

116.55 

13.92% 

0.00% 

0 

0.00% 

4.62% 

716.24 

85.53% 

26.15% 

2.18 

0.26% 

100.00% 

837.39 

100.00% 

30.38% 

281.83 

16.24% 

30.38% 

1 244.4 

71.72% 

1.27% 

2.53% 

8.83 

12.73 

0.51% 

0.73% 

35.44% 

187.24 

10.79% 

100.00% 

1735.03 

100.00% 

4 698 

7 594 

43 

287 

27.31% 

7 460.73 

8.15% 

44.15% 

57 750.2 

63.05% 

0.25% 

8.83 

0.01% 

1.67% 

12 737.36 

13.91% 

4578 

26.62% 

13 634.61 

14.89% 

Totals 

17 200 

100.00% 

91 591.7 

100.00% 

Energy 

While there is no shortage of innovative ideas in the EU (there are almost as many start-
ups as in the USA), EU start-ups lack  risk capital  – the EU is lagging behind as regards 
the proportion of total funding made up of  venture  capital. In the  EU, Germany, France 
and Sweden account for the biggest proportions of the funding (Table 7). 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table 7: EU energy start-ups, by Member State 

Country 

Germany 

France 

Netherlands 

Spain 

Italy 

Sweden 

Ireland 

Denmark 

Finland 

Belgium 

Poland 

Portugal 

Austria 

Lithuania 

Estonia  

Slovenia 

Greece 

Czechia 

Hungary 

Romania 

Slovakia 

Latvia 

Croatia 

Bulgaria 

Luxembourg 

Malta 

Cyprus 

No. of start-ups 
in energy 

Start-up funding 
>€1 m 

Start-up value 
€200–800 m 

Start-up value 
>€800 m 

Total funding 
(€ m) 

771 

753 

704 

399 

310 

276 

228 

206 

206 

155 

97 

93 

84 

58 

49 

44 

41 

39 

39 

34 

25 

23 

15 

12 

11 

9 

7 

89 

116 

67 

43 

36 

66 

25 

27 

38 

23 

6 

13 

9 

1 

3 

4 

1 

1 

4 

0 

4 

3 

3 

0 

3 

1 

0 

7 

7 

4 

2 

0 

1 

3 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

1 

0 

0 

0 

1 

0 

0 

1 

1 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

1 413.67 

1 494.16 

968.26 

259.71 

380.62 

1 511.17 

430.89 

209.84 

275.24 

108.96 

58.68 

27.04 

53.85 

5.99 

56.65 

12.85 

5.34 

6.9 

11.17 

1.06 

19.74 

14.06 

4.81 

0.77 

129.1 

0.05 

0.15 

EU 

4 688 

586 

25 

3 

7 460.73 

30 

 
3.5  Patents  for  climate  change  mitigation  technologies  in  goods  production  or 

processing 

As  part  of  the  picture  on  progress  in  R&I  on  low-carbon  industrial  technologies, 
developments  regarding  patents69  provide  information  on  technological  inventiveness, 
based on an established methodology70. 

Clean energy technologies account for a higher share of overall patenting activity in the 
EU  than  in  other  major  economies.  Just  over  20%  of  all  inventions  in  climate  change 
mitigation  technologies  (CCMTs)  relate  to  goods  production  or  processing.  As  regards 
CCMTs in these areas71, the EU has a relative advantage72 in the fields of oil refining and 
petrochemicals,  overall  enabling  technologies  and  metal  processing  (although  this  is 
declining). We also see a slight increase in specialisation in the chemicals industry and in 
production processes. 

Asian economies have the lead in terms of absolute numbers of patent filings. However, 
EU  and  US  companies  protect  a  larger  share  of  their  inventions  outside  their  home  IPO 
territories and markets. 

Due  to  its  different  patenting  procedures73,74,  China  is  the  dominant  actor  when  patent 
families  protected  in  only  one  country  are  included  in  the  analysis,  with  an  exponential 
increase  of  patenting  activity  in  clean  energy  technologies  (predominantly  protected  in 
the  Chinese  market).  To  eliminate  this  effect,  we  look  at  ‘high-value’  patents75  as  an 
alternative indicator of activity in the main economies. 

The EU is in the lead, along with Japan, on high-value inventions. EU companies have a 
good  presence  in  patenting  activity  relating to  low-carbon  technologies,  with  companies 
such  as  BASF,  Siemens,  ThyssenKrupp,  Shell  and  L’Air  Liquide  prominent  in  more  than 
one  area.  This  shows  the  determination  of  major  EU  companies  to  develop  relevant 
technology  and  demonstrates  that  their  R&I  activity  reaches  beyond  the  boundaries  of 
their  sector  and  is  relevant  across  a  number  of  energy-intensive  industries.  This  is 
especially  apparent  in  the  chemicals  and  petrochemicals  sectors,  both  of  which  feature 
major  oil  and  gas  companies,  due  perhaps  to  the  proximity  of  technologies  and 
processes. 

69   Papers  on  JRC  SETIS  methodology;  https://setis.ec.europa.eu/publications/setis-research-innovation-data 

(JRC105642) Monitoring R&I in low-carbon energy technologies ;    
Pasimeni F., et al., Assessing private R&D spending in Europe for climate change mitigation technologies via 
patent data (WPI, 2019); 
Pasimeni F., SQL query to increase data accuracy and completeness in PatStat (WPI, 2019). 

70   Patent families are used as proxy of inventions. Patent applicants are considered, being the owners of the 
patent and thus those directly investing and financing R&D activities. The data source is PatStat, processed 
to  increase  accuracy  and  completeness  of  the  dataset.  The  analysis  concentrates  on  CCMTs  identified 
through the Y02 and Y04 schemes of the cooperative patent classification (CPC). Applications to all offices 
are retrieved and fractional counting is used to assign an equal share to all combinations of CPC codes and 
patent applications protecting the invention, thus preventing multiple counting. 

71   CPC Y02P section (CCMTs in goods production or processing). 
72   Expressed as the share of this topic in total activity in the area of CCMTs in goods production or processing. 
73   Preziosi, N., et al. (2019), China — challenges and prospects from an industrial and innovation powerhouse 
(EUR 29737  EN,  Publications  Office,  Luxembourg,  2019,  ISBN  978-92-76-02997-7,  doi:10.2760/445820, 
JRC116516). 

74   China  Power  Team,  Are  patents  indicative  of  Chinese  innovation?  (15  February  2016;  updated  26  August 

2020; accessed 11 September 2020); https://chinapower.csis.org/patents/ 

75   High-value patent families (inventions) are those containing applications to more than one IPO, i.e. seeking 
protection  in  more  than  one  country/market.  This  entails  longer  processes  and  higher  costs  and  thus 
indicates a higher expectation of prospects in international markets. 
Dechezleprêtre,  A.,  et  al.  (2011),  ‘Invention  and  transfer  of  climate  change–mitigation  technologies:  a 
global analysis’, Review of environmental economics and policy 5, pp. 109-130; 
Dechezleprêtre, A., et al. (2015), ‘Invention and international diffusion of water conservation and availability 
technologies’, OECD Environment Working Papers, No 82 (OECD Publishing, Paris). 

31 

 
                                                 
 
 
 
EU  Industrial  R&D  Investment  Scoreboard  companies  and  their  subsidiaries  account  for 
around  a  third  of  the  patenting  entities  in  the  EU.  Major  actors  account  for  up  to  three 
quarters  of  inventions,  depending  on  the  technological  area.  The  EU  top  10  account  for 
up to half the patenting activity. 

In  order  to  gauge  relevant  activity  on  the  low-carbon  industrial  technologies  set  out  in 
Section A,  our  analysis  focuses  on  patent  classification  for  technologies  relating  to  the 
metal processing, chemical, petrochemicals and cement industries. 

3.6  Patents for climate change mitigation technologies in metal processing76 

EU companies lead in several sub-areas of patenting activity that are directly relevant to 
the development of the low carbon technologies as set out in Section 1. 

Error!  Reference  source  not  found.  shows  the  top  10  entities  in  patent  filings77  for 
CCMTs  relating  to  metal  processing,  by  total  and  high-value  patents.  The  list  is 
dominated by EU and US firms, which tend to have an outward focus, protecting a larger 
share  of  their  inventions  in  foreign  markets  and  targeting  each  other’s  markets  for 
protection.  The  top  3  (General  Electric  (US),  Siemens  (EU)  and  United  Technologies 
(US)) have seen constant growth in their high-value patent portfolio since 2012 and are 
much more active than the rest. 

The  differences  suggest  that  Asian  companies  have  a  strong  inward  focus  in  their 
patenting  strategies,  protecting  a  number  of  inventions  only  in  one  (their  own)  market. 
Metallurgical  of  China  ranks  101st  in  high-value  patents,  while  the  top-ranked  Chinese 
firm is BOE Technology Group (52nd). The same trend is clear (to a much lesser extent) 
for Japan and South Korea. 

In  the  EU,  around  740  distinct  entities  filed  for  at  least  one  patent  in  2010-2016.  Just 
over a third of these were Scoreboard companies and subsidiaries, but the latter account 
for  three  quarters  of  the  patenting  activity.  The  top  10  account  for  almost  half  of  the 
inventive  activity.  There  are  three  EU  companies  in  the  top  10  for  high-value  patents 
(Figure  ),  but  only  Siemens  has  a  portfolio  comparable  with  that  of  the  leading  actor, 
General Electric. 

Relevant patents are much more prominent in Asian companies’ overall patent portfolios 
than in EU firms’ portfolios. 

Figure 11: Top 10 patenting entities in CCMTs in metal processing  – cumulative 
inventions grouped by parent company (2010-2016) 

Source: JRC SETIS data 

76   Y02P 10 Technologies relating to metal processing. 
77   PatStat data, JRC. 

32 

 
 
 
 
                                                 
Figure 12: EU companies in top 50 of  patenting corporations in technologies in 
metal processing  (high-value patents grouped by  parent company), 2010-2016 
– position and performance compared to the global leader General Electric (US) 

Source JRC SETIS data. 

Going into more detail, EU companies lead when it comes to increasing process efficiency 
by reducing waste and recovering material streams. The top EU firms are Outotec, 
Siemens,  SMS  Holdings  and  Heraeus.  Japan  is  close  behind,  with  firms  such  as  JXTG, 
JFE, Hitachi and Nippon Steel. 

Siemens  leads  on  cumulative  inventions  relating  to  carbon  capture,  utilisation  and 
storage (CCUS) technologies for metal processing, followed by Kobe Steel, Mitsubishi 
Heavy Industries, Danieli and Linde. The EU has a strong position in this area, although 
Siemens submitted most of its patent filings between 2010 and 2013 (Linde and Danieli 
have made more recent filings). Filings from Japanese companies in this area continue to 
increase.   

As regards the horizontally important development of hydrogen technologies, POSCO and 
Kobe  Steel  are  the  clear  leaders  in  the  area  of  CO2  avoidance  by  using  hydrogen. 
Siemens and Danieli are the only EU companies that feature in that area. 

Patenting activity on  electrolysis is very low  globally. The main actor is Hitachi, but of 
the EU companies, Salzgitter, Voest-Alpine and Outotec have submitted filings. 

The EU, again followed by Japan, leads in patenting to increase the efficiency of electric 
conversion  processes.  ThyssenKrupp,  Siemens  and  Skf  are  prominent  for  the  EU. 
Nippon  Steel,  Ntn  and  Jfe  lead  for  Japan,  while  Hyundai  (KR)  and  General  Electric  (US) 
are also in the top 10. 

General Electric, Mitsubishi, Linde, L’Air Liquide, Siemens and POSCO are the only groups 
patenting  technologies  for  renewable  energy  sources  or  cogeneration  with  other 
industries. 

3.7  Patents for climate change mitigation technologies in cement production78 

EU  firms79  are  the  global  leaders  in  CCMT  patenting  in  cement  production.  However, 
there  is  little  relevant  patenting  activity  in  the  sector,  suggesting  that  technology 

78   Y02P  40  Technologies  relating  to  the  processing  of  minerals,  excluding  Y02P  40/50  Glass  production  and 

Y02P 40/60. Production of ceramic materials or ceramic elements. 

79   N.b.: production takes place mostly outside the EU. 

33 

 
 
 
                                                 
development  plays  a  minor  role  in  its  low-carbon  strategy.  The  technological  areas 
receiving  most  attention  are  geopolymers,  belite  cements  and  CCS,  the  latter  being 
the area with the most high-value patents. 

In the EU, ThyssenKrupp, HeidelbergCement and Fives are the most active companies in 
energy efficiency measures, but their portfolios are smaller than those of the leading 
Japanese companies. The same actors, joined by Areva and Lafarge, feature in terms of 
integrated production plants, an area dominated by EU interests. 

ThyssenKrupp, Lafarge and Linde are also looking into fuels from biomass and waste, 
but activity levels are very low compared to other areas. 

With  regard  to  CCS,  the  EU  leaders  are  ThyssenKrupp,  Vinci,  Lafarge,  L’Air  Liquide, 
BASF,  Stora  Enso  and  HeidelbergCement,  with  the  EU  having  a  very  strong  position 
overall. 

Error! Reference source not found. shows the top 10 in patent filings for technologies 
relating  to  cement  production.  As  in  the  case  of  metal  processing,  there  is  a  clear 
difference of focus, in terms of the protection of inventions, between Asian firms on the 
one  hand  and  EU  and  US  companies  on  the  other.  In  addition,  a  smaller  share  of 
inventions in these technologies seems to be protected in more than one IPO. The Swiss 
company  HOLCIM  features,  along  with  those  from  the  major  economies.  The 
best-ranking  Chinese  companies  for  high-value  inventions  are  BAOSHAN  Iron  &  Steel 
(59th)  and  BOE  Technology  Group  (61st),  both  with  very  small  counts.  The  top  3  from 
both  EU  and  Japan  display  sustained  patenting  activity  in  these  technologies,  albeit  at 
fairly low levels. 

Error!  Reference  source  not  found.  shows  other  prominent  EU  companies.  Around 
150 distinct EU entities filed for at least one patent in 2010-2016, almost 30% of which 
were Scoreboard companies and subsidiaries. However, the latter accounted for just over 
60% of the patenting activity. The top 10 accounted for 50% of the inventive activity. 

As  the  focus  is  on  the  cement  sector,  the  above  analysis  has  excluded  other  areas  of 
minerals processing, such as glass and ceramics production. Of these, glass production is 
the  most  prominent  area,  with  higher  activity  levels  than  cement.  It  is  dominated  by 
Japanese  companies,  with  the  exception  of  Corning  (US),  which  is  at  the  top  of 
high-value inventions along with Asahi Glass (JP). EU companies Saint Gobain (9th) and 
L’Air Liquide (10th) make the top 10, but their portfolio is 10 times smaller than the two 
leaders’. 

Figure  13:  Top  10  patenting  entities  in  CCMTs  for  cement  production; 
cumulative inventions grouped by parent company (2010-2016) 

34 

 
 
 
Source: JRC SETIS data 

Figure 14: EU companies in top 50 of  patenting corporations in technologies in 
cement (high-value patents grouped by parent company), 2010-2016 – position 
and performance compared to global leader Heidelberg Cement 

Source: JRC SETIS data. 

3.8  Patents for climate change mitigation technologies in the chemicals industry80 

The EU and USA are in the lead in terms of cumulative high-value filings for CCMTs in the 
chemicals  industry.  Since  2014,  the  EU  has  overtaken  the  USA  in  annual  high-value 
filings,  but  numbers  for  both  are  decreasing.  British  BP  and  Saudi  Basic  Industries  also 
feature  in  the  top  10.  Activity  is  more  even  across  the  top  actors  in  these  technologies 
and sustained throughout recent years. 

In the EU, around 930 distinct entities filed for at least one patent in 2010-2016. About 
30% of these are Scoreboard companies and subsidiaries, with the latter accounting for 
70%  of  patenting  activity.  The  top 10  account  for  almost  half  of  the  inventive  activity. 
Relevant  patents  by  EU  companies  represent  a  rather  insignificant  part  of  their  patent 
portfolios, putting into question the extent to which their low-carbon business strategies 
involve technology development. 
Figure 15 shows a good example of the effect of IP policies and practices in China. China 
Petroleum  &  Chemicals  is  ranked  21st  in  terms  of  high-value  inventions,  as  it  seeks 
protection outside China for only a very small share (1.5%) of its patent portfolio. Petro 
China and ZTE are outside the top 150. 

80   Y02P 20 Technologies relating to the chemicals industry. 

35 

 
 
 
 
 
                                                 
Figure 15:   Top  10  patenting  entities  in  CCMTs  for  the  chemicals  industry; 
cumulative inventions grouped by parent company (2010-2016) 

Source JRC SETIS data. 

Figure 16: EU companies in top 50 of  patenting corporations in technologies in 
chemicals  (high-value  patents  grouped  by  parent  company),  2010-2016  – 
position and performance compared to Honeywell (US) 

Source JRC SETIS data 

In a further breakdown of activities:  

  Shell,  Dupont  and  BASF  are  the  EU  companies  prominent  in  energy  efficiency 

measures; 

  Siemens,  L’Air  Liquide,  ThyssenKrupp,  STMicroelectronics  and  Linde  all  feature  with 
patents  addressing  technologies  for  energy  recovery  (another  key  area  of  position 
and interest for the EU); 

  Siemens  is  the  strongest  EU  firm  in  patent  developments  on  renewable  energy 
sources, along with Toshiba (JP); its portfolio in high-value patents is three times the 
size of the other EU top 10 companies’; and 

  Linde  is  the  top  EU  company  (along  with  Mitsubishi  and  Fujifilm  (JP))  in  patenting 
activity  concerning  the  reduction  of  GHG  emissions,  with  L’Air  Liquide  and  Shell 
also featuring in the top 10.  

36 

 
 
 
 
 
4  Maturity of innovation ecosystems for low-carbon technologies 

4.1  R&I base - scientific publications  

The  EU  and  China  are  the  global  leaders  in  terms  of  scientific  output,  while  the  United 
States retains its lead in terms of scientific quality. Output from Chinese researchers has 
risen exponentially in the last two decades to almost match the EU’s. In the EU, research 
intensity  varies  and  there  is  a  positive  correlation  between  scientific  quality  and 
investment  in  most  countries.  More  than  70%  of  European  Research  Council  projects 
assessed  in  an  independent  study  made  scientific  breakthroughs  or  major  advances, 
while around 25% made incremental contributions81. 

Figure  17:  Shares  (%)  of  top  10  %  of  scientific  publications  on  climate  and 
environment, 2006 (interior) and 2016 (exterior) 

Source: European Commission, Science, research and innovation performance of the EU 2020. Note: (1)Data produced by 
Science-Metrix based on Scopus database. Stat.link: https://ec.europa.eu/info/sites/info/files/srip/2020/parti/chapter61/figure-
61-17.xlsx  

In  terms  of  high-quality  scientific  publications,  China  increased  its  shares  exponentially 
across all societal challenges82 between 2006 and 2016, while the USA lost its leadership 
across  the  board83.  Against  its  major  competitors  (the  USA,  China  and  Japan),  the  EU 
leads  in  scientific  publications  relating  to  food  &  bioeconomy  and  climate  & 
environment.  Its  overall  share  remained  stable,  except  on  energy,  where  it  dropped 
from  24%  to  18%.  China  took  second  place  in  climate  &  environment  (22%  in  2016), 
behind  the  EU  (25%).  Many  of  the  lagging  regions  (mostly  in  eastern  and  southern 
Europe) performed better on scientific output, which indicates improved returns on  R&D 
investment84. 

The EU contributed only 17% of the scientific articles relating to the low-carbon energy 
sector85 that were published in 2019. The leading countries in this more specific field of 
science  were  China,  the  USA  and  India.  In  2015-2019,  there  were  25 507  publications 
addressing energy efficiency in industry, which represents 3.4% of all low-carbon energy 
sector publications. EU publications per GDP increased only marginally, in contrast to the 
global 6% annual increase driven by countries such as China, Brazil and India. However, 
the EU was still above the global average in this respect (0.07 vs 0.04 per USD billion); 
the only other major economy above the median was South Korea. 

81   SRIP report 2020, Section 6.1. 
82  The  concept of  "Grand Challenges" was  suggested by  the  ERA  Expert Group  (European  Commission  (2008) 
Challenging Europe’s Research: Rationales for the European Research Area (ERA)-Report of the ERA Expert 
Group) as a rationale upon which to build the European Research Area.  

83   SRIP report 2020, p. 381. 
84   Ibid., p. 233. 
85   European  Commission  (2020),  Publications  as  a  measure  of  innovation  performance:  Selection  and 
assessment of publication indicators. Report in progress under tendered study 2018/RTD/g1/OP/PP-07481-
2018 authored by Provencal, S; Khayat, P., and Campbell, D., Science Metrix.The study focused on SET Plan 
key  actions:  No  1  in  Renewables,  Smart  Solutions  for  Consumers,  Smart,  Resilient  and  Secure  Energy 
System,  Energy  Efficiency  in  Buildings,  Energy  Efficiency  in  Industry,  Batteries  and  e-Mobility,  Renewable 
Fuels and Bioenergy, Carbon Capture Utilisation and Storage, Nuclear Safety. 

37 

 
 
                                                 
The EU’s specialisation score for clean energy fell between 2015 and 2019 to 0.8586. The 
EU  specialises  in  fields  such  as  psychology  and  cognitive  sciences,  economics  and 
business,  and  clinical  medicine,  at  the  expense  of  other  fields,  such  as  information  and 
communication technologies, and engineering, which are the focus of much of the clean 
energy research. However, the EU did show specialisation in the areas of new materials & 
technologies  for  buildings,  and  in  energy  efficiency  in  industry.  Other  major  economies, 
such as the USA, Japan and China, were below the median. 

The  EU’s  share  of  international  co-publications  in  low-carbon  energy  is  above  the  world 
average  and  this  also  holds  for  publications  in  energy  efficiency  in  industry.  The 
best-performing  EU  countries  were  Estonia,  the  Netherlands  and  Belgium.  The  EU  also 
has more open-access publications, both overall and on this specific topic, than the world 
average. Other major economies scored below the median on both indicators. 

The  number  and  share  of  public/private  co-publications  in  energy  efficiency  in  industry 
also  increased,  in  line  with  the  EU’s  strong  performance  in  all  low-carbon  energy 
publications.  The  best-performing  EU  countries  were  Austria,  Germany,  Sweden, 
Denmark and Finland. The best performers from the rest of the world were Japan and the 
United States. China and South Korea were below the median. 

The EU’s collective impact was slightly below the world average, as measured by share of 
highly  cited  publications  (among  the  10%  most  cited).  However,  the  EU  scored  slightly 
above  the  world  average  in  energy  efficiency  in  industry,  with  the  best-performing  EU 
countries  being  Denmark,  Italy  and  Belgium.  China  and  the  USA  also  performed  well, 
while Japan and South Korea were below the median. 

R&I partnerships such as SPIRE play a crucial role in the dissemination of knowledge on 
low-carbon  industry  technological  development.  In  2019,  53%  of  surveyed  projects 
reported  plans  to  publish  results,  75%  reported  that  their  results  were  broadly 
transferable to other sectors and 39% were contributing to European standards, with 16 
contributing  to  standardisation  documents,  10  making  proposals  for  standards  to  an 
existing group and 3 setting up a new standardisation group. 

4.2 

Innovation ecosystems for low-carbon industries  

The  EU  landscape  of  relevant  actors  and  activity  in  R&I  on  low-carbon  technologies  is 
rather  fragmented.  A  number  of  regions  make  considerable  efforts  and  investments  to 
cooperate  with  other  parts  of  the  EU  in  making  industry  more  sustainable,  digital  and 
resilient87,  and  the  Commission  is  monitoring  relevant  progress88.  Relevant  action  by 
Member  States  and  regions  will  increase  considerably  with  the  implementation  of 
NextGenerationEU,  guided  by  cross-cutting  principles  and  national  recovery  and 
resilience  plans.  Horizon  Europe  will  bring  targeted  monitoring  and  assessment  of  R&I 
development in Member States and regions to the next level, facilitating the development 
of EU technology roadmaps through action in the relevant EU industrial ecosystems89. 

Current  support  for  R&I  on  low-carbon  technologies  largely  depends  on  the  available 
green funding opportunities. This analysis therefore looks at the green funding and green 

86   Scores  below  1  indicate  lack  of  specialisation,  i.e. the  share  of  publications  in  the  field  is  lower  than  that 

observed globally. 

87   The 

Smart 

transformation 
(https://s3platform.jrc.ec.europa.eu/)  and  the  R&I  strategies  for  smart  specialisation  are  central  elements 
of this work. 

Specialisation 

industrial 

Platform, 

including 

on 

88   The  Horizon2020  Policy  Support  Facility  (PSF)  offered  practical  support  to  national  and  regional 
administrations  to  design,  implement  and  evaluate  reforms  that  enhance  the  quality  of  their  R&I 
investments, policies and systems. 

89   DG  R&I  and  the  JRC  aim  to  further  improve  the  PSF  under  Horizon  Europe  to  help  Member  States  and 
regions  play  their  role  in  developing  industrial  R&I.  As  part  of  Horizon  Europe  (Pillar III),  the  EIC  is 
developing analytical capacities to monitor and assess relevant developments in EU innovation ecosystems. 

38 

 
 
 
 
                                                 
patent landscapes, and sets out a way forward to maximise efficiency and the impact of 
investments; this is based on: 

  a better mapping of actors, places and networks; and  

  a  better  understanding  of  models  for  coordination,  governance  and  increased 

collaboration between them. 

4.3  The funding landscape for low carbon technologies and the role of places 

The  EU  industrial  strategy  highlights  the  importance  of  a  renewed  partnership, 
including regions, to drive the green and digital transitions with industry. In this context, 
it also suggests encouraging ‘place-based’ innovation and experimentation90. 

Figure 18:  EU  regions  investing  in  Horizon  2020  low-carbon  R&I  projects 
(October 2019) 

Source: Horizon 2020 Cordis dataset, DG R&I (October 2019) 

Under Horizon 2020, the take-up of funding under the three ‘grand societal challenges’ 
relating  to  low-carbon  technologies  (energy,  transport  and  climate)  is  unevenly 
distributed geographically. Figure 18 shows strong differences at regional level (based on 
aggregation  of  project-level  data)  and  a  significant  imbalance  between  east  and  west, 
but  less  so  between  north  and  south.  As  of  October  2019,  €6.7 billion  of  a  total  of 

90   EU industrial strategy, p. 10. 

39 

 
 
                                                 
€47.14 billion  had  been  allocated  to  collaborative  R&I  projects  in  the  areas  of  energy, 
transport  and  climate.  Figure 18  also  shows  that  the  disparities  are  much  greater  at 
regional  level  than  at  national  level.  This  is  also  the  case  when  considering  overall 
Horizon 2020 funding for all technologies. 

This  imbalance  is  partially  compensated  by  the  geographical  spread  of  similar 
investments  under  the  European  Regional  Development  Fund  (ERDF),  estimates  of 
which  are  shown  in  Figure 18  (based  on  aggregation  of  project-level  data  selected 
through text analysis91). 

Figure 19:  EU regions investing in ERDF low-carbon R&I projects (June 2020) 

Source: ERDF grants dataset (JRC 2020). Projects identified as covering multiple low-carbon domains (energy, transport and 
climate) are duplicated. The total amount per region may not correspond to the actual ERDF amount allocated. 

Under  regional  innovation  and  smart  specialisation  strategies  (RIS3s),  the  EU’s  current 
cohesion  policy  encourages  regions  and  Member  States  to  join  forces  in  interregional 
partnerships, aiming to develop coalitions supporting the creation of new European value 
chains  in  areas  associated  with  strategic  growth.  The  RIS3  partnerships  are  grouped 
around  three  thematic  smart  specialisation  platforms  (industrial  modernisation,  energy 
and  agri-food).  The  partnerships  relevant  for  low-carbon  technologies  in  steel,  cement 
and  chemicals  include  partnerships  on  chemicals,  sustainable  buildings,  advanced 
manufacturing  for  energy  applications,  advanced  materials  for  batteries,  efficient  and 

91   Operations  relating  to  low-carbon  technologies  co-funded  by  the  ERDF  have  been  identified  through  text 
analysis  among  the  projects  funded  under  European  Structural  and  Investment  Fund  (ESIF)  thematic 
objective 1 (R&I). The source of the information is a dataset gathering all ERDF operations at EU level as of 
June  2020.  The  text  analysis  gives  only  a  rough  estimate  and  a  comparison  with  H2020  figures  would 
require further work. 

40 

 
 
                                                 
sustainable  manufacturing,  European  hydrogen  valleys,  mining  industry,  bio-energy, 
solar energy, smart grids and geo-thermal energy.   

Other relevant EU R&I networks in this context include: 

  EIT  knowledge  and  innovation  communities  (EIT  Climate  KIC,  EIT  Raw  Materials 

KIC, EIT Innoenergy and EIT Manufacturing); and 

  Horizon  R&I  partnerships  (SPIRE,  Factories  of  the  Future  and  Energy-Efficient 
Buildings) with strategic innovation agendas providing important direction for R&I 
action at EU level. 

Figure 20:   Regions involved in the RIS3 partnership on chemicals 

For  the  time  being,  a  more  detailed  overview  of  networks,  places  and  actors  along 
specific  value  chains  is  still  lacking.  This  makes  it  harder  to  align  regional  and  national 
R&I  agendas  as  part  of  EU  technology  roadmaps  and  increase  the  impact  of  relevant 
investments. 

Box 4: Connecting actors and places in the area of smart energy systems 

The  JRC  has  been  supporting  the  efforts  of  national/regional  authorities  and  key 
stakeholders  across  the  EU  to  plan  the  allocation  of  their  EU  funds  to  support 
investment in smart-grid R&I and deployment in the 2021-2027 programming period, 
so as to align their regional strategies with those of major EU R&I networks on smart 
energy  systems.  The  JRC  organised  an  initial  meeting  and  the  PAN  European 
Technology Energy Research Approach (PANTERA) is working on further networking to 
connect  public  authorities  involved  in  R&I  strategies  with  relevant  EU-level  R&I 
networks92. 

92   e.g. BRIDGE  —  Cooperation  group  of  Smart  Grids  and  Energy  Storage  H2020  projects;  www.h2020-

bridge.eu  
European  Innovation  Partnership  on  Smart  Cities  and  Communities  (EIP-SCC);  https://eu-smartcities.eu  
Joint  Programming  Platform  (JPP)  ERA-Net  Smart  Energy  Systems  (ERA-Net  SES);  https://www.eranet-
smartenergysystems.eu/  

41 

 
 
                                                 
 
 
4.4  Landscape of technological capacity hotspots 

Figure 21  shows  the  geographical  spread  of  green  patents  by  NUTS2  region.  As  with 
Figure 18  (low-carbon  H2020  funding),  the  ‘centre  of  gravity’  is  in  western  Europe. 
Again, regional differences are also quite prominent. 

Combining  funding  maps  with  the  territorial  spread  of  patents  and  future  spending 
intentions can provide  a good illustration of  current and potential places  of involvement 
in low-carbon R&I. 

A  mapping  of  the  updated  RIS3  priorities  will  be  very  helpful  in  providing  an  updated 
picture  of  R&I  development  in  low-carbon  and  other  industrial  technologies,  including 
national and regional priorities in the implementation of NextGenerationEU. 

Updated  data  on  spending  intentions  at  regional  level  will  become  available  when  the 
RIS3s  have  been  updated  and  the  operational  programmes  to  implement  them  have 
been approved. 

Figure 21:  Number  of  green  patents  by  EU  region,  NUTS2  level  (based  on 
inventor residence) 

As an example, Figure 22 shows the regions that considered a focus in one of their RIS3 
priorities on biomass for the 2014-2020 programming period. 

Electronic Components and Systems for European Leadership (ECSEL); https://www.ecsel.eu/  
InnoEnergy KIC; www.innoenergy.com  

42 

 
 
 
 
 
 
 
                                                                                                                                                         
 
Figure 22:  Regions  with  an  RIS3  priority  that  includes  biomass,  2014-2020 
programming period 

.

Source: Eye@RIS3 

4.5  Capacity-building and place-based governance for the green economy 

In  line  with  the  call  in  the  EU  industrial  strategy  for  a  renewed  partnership  between 
Member  States,  regions  and  industry  to  drive  industrial  innovation,  the  potential  for  a 
successful Green Deal and decarbonisation will depend on the EU’s ability to build on its 
territorial  and  cultural  diversity  and  to  involve  local  stakeholders  and  communities. 
Experimentation  with  place-based  solutions,  in  order  to  diffuse  knowledge  and  align 
incentives,  is  important  for  successful  implementation.  This  requires  collaboration 
between actors and governance levels. 

Regions  face  challenges  with  regard  to  quality  of  governance,  skills  and  administrative 
capacities,  coordination  and  involvement  of  stakeholders  to  better  develop  or  use 
these  better,  EU  policy 
relevant 
recommendations  and  support  mechanisms  can  have  greater  impact  in  strengthening 
innovation  ecosystems.  This  capacity-building  is  particularly  relevant  in  countries  with 
more moderate innovation performance93. 

technologies.  By  understanding 

industrial 

As  an  illustration,  Box 5  describes  the  governance  model  applied  for  decarbonising 
Slovenia,  building  on  five  strategic  priorities,  including  manufacturing  and  the  built 
environment. We need  a better understanding of the strengths and weaknesses  of  such 
collaborative  models,  in  order  to  optimise  the  role  of  R&I  in  industrial  transformation 
towards more sustainability. 

93 https://ec.europa.eu/growth/industry/policy/innovation/scoreboards_en  

43 

 
 
 
 
 
                                                 
Box 5: Decarbonising Slovenia – a governance model for a circular, 
regenerative and low-carbon economy 

The  JRC,  two  EIT  KICs  and  the  Slovenian  government  are  working  together  on  the 
country’s transition towards a circular economy for sustainable, competitive and green 
economic growth. Nine government ministries are involved. Smart specialisation has a 
central  role  in  aligning  different  strategies  and  allocating  the  requisite  resources, 
accessing global value chains and establishing collaborative government with all actors 
(national  authorities,  EU  institutions,  universities,  NGOs,  business,  etc.).  The 
collaboration  involves  a  massive  financial  commitment  and  a  huge  coordination 
exercise to align all investments to achieve a common goal. 

Comprehensive approach with nine groups of activities in five key sectors with emphasis on three pillars addressing different 
socio-economic and policy domains 

44 

 
 
 
 
 
 
 
5 

Conclusions 

  A  significant  number  of  low-carbon  technologies  under  development  in  the  EU  have 
high  potential  to  reduce  greenhouse  gas  emissions  in  energy-intensive  industries. 
These  technologies  are  at  very  different  levels  of  technological  maturity.  EU  projects 
and  partnerships  have  invested  considerable  resources  to  help  them  mature  further, 
but it is difficult to gauge the broader impact of this investment. 

  Many  production  pathways 

in  energy-intensive 

industries  are  already  highly 
streamlined  and  the  incremental  energy-efficiency  improvements  that  are  currently 
possible  will  not  allow  industry  to  meet  the  EU’s  climate  and  energy  targets.  Fully 
decarbonised solutions are expensive and R&I results show projected cost increases of 
around  20%  for  some  breakthrough  technologies  compared  to  current  production  in 
steel  and  chemicals  (while  world  market  prices  are  strongly  influenced  by  non-EU 
competitors often subsidising non-decarbonised solutions). 

  Public 

investment 

(average 
€360 million/year)  is  higher  in  the  EU  than  in other  major  economies,  such  as  Japan 
(€290 million/year)  and  the  United  States  (€165 million).  However,  Member  States 
have recently reduced their funding for R&I on clean energy. 

energy-efficiency 

technologies 

in  R&I 

on 

  In the private sector, only a small (and shrinking) share of revenues is being spent on 
R&I in sectors in which low-carbon technologies need to be adopted on a large scale. 
Relevant  percentages  of  overall  business  investment  in the  EU  are  higher  than  those 
in the USA and comparable to those in Japan, but lower than those in China and South 
Korea. 

  The EU and Japan are ahead of their international competitors in high-value patents in 
clean  energy  technologies.  The  EU  is  host  to  a  quarter  of  the  top  100  companies  in 
this area. 

  However,  only  EU  companies  in  energy-related  sectors  lead  (with  Japan)  on  patents 
on  climate  change  mitigation  technologies.  EU  chemicals  companies  are  trailing  their 
Chinese counterparts and EU metals and related companies are still lagging behind the 
USA and China. 

  EU patenting activity in relevant categories is dominated by a handful of companies in 

each sector. 

  EU  companies  can  be  regarded  as  world  leaders  in  particular  sub-categories  of 
technologies that help climate mitigation, such as process efficiency through reducing 
waste and recovering material streams, carbon capture, utilisation and storage (CCUS) 
technologies,  electric  conversion  processes,  energy  recovery  and  renewable  energy 
sources. 

  The  main  EU  companies’  R&D  intensity  is  solid  but  decreasing  in  the  chemicals  and 
energy-related  sectors,  and  low  but  stable  in  the  metals  and  related  sector.  In  the 
chemicals  sector,  the  R&D  performance  of  just  one  company  (BASF:  -11.6%  in  the 
2018 financial year) has had a major impact. 

  Value in metals and related start-ups is created mainly in China (followed by the USA), 
in  chemicals  in  the  USA  (followed  by  the  EU)  and  in  energy-related  start-ups  in  the 
USA (followed by China). 

  More  mature,  well-known  technologies  (e.g. hydrogen-based  steelmaking,  carbon 
capture  technologies  and  novel  cements)  often  require  significant  investment  for 
large-scale demonstration projects. 

45 

 
  Against  a  background  of  moderate  public  R&I  investment  and  ailing  private 
investment,  an  investment  gap  may  open  up  in  the  EU  for  large-scale  innovation 
projects. 

  Past and current investment has led to ‘business as usual’ incremental improvements, 
but  determined  support  for  new  technologies  and  massive  investment  in  the  large-
scale  demonstration  of  breakthrough  technologies  will  be  required  if  the  EU  is  to 
achieve its climate and energy objectives. 

  Connections  between  actors  in  value  chains  around  breakthrough  technologies  are 

often weak and innovation ecosystems under-developed. 

46 

 
 
 
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The updated Industrial Strategy94 announces the co-creation of transition 
pathways for industrial ecosystems with industry, public authorities and other 
stakeholders to accompany the twin transition. Such pathways shall lead to an 
actionable plan which will take into account inputs from Industrial technology 
roadmaps launched by New European Research Area95. Research and innovation 
results for new green and digital technologies are often scattered and not 
sufficiently transferred into the economy. Industrial technology prospect reports 
pull together valuable evidence for ERA Industrial technology roadmaps to 
underpin coordinated investment agendas from basic research to deployment. 
Building upon Horizon Europe partnerships with the private sector and considering 
breakthrough technologies supported by the European Innovation Council 
and other schemes at European and national level, they pave the first mile of 
pathways to strengthen EU industrial ecosystems.

Research and Innovation policy

94 COM(2021)350.
95 COM(2020)628, action 5.