Net-zero emissions in the energy-intensive industrial sector by 2040: Insights from a country with ambitious national renewable policies

This study identifies the cost-optimal transition technologies and energy carrier choices for achieving net-zero carbon emissions by 2040 in Austria’s energy-intensive industrial sectors: iron and steel, pulp and paper, and cement. We propose a novel techno-economic optimization model that calculates bottom-up investment decisions at the industrial site level while integrating key principles of energy system modeling. These include minimizing total system costs, maintaining energy balance constraints, and accounting for the technical characteristics of transition technologies. The analysis focuses on the impact of three national policies, such as the targeted decarbonization of the Austrian power and gas sectors, and the role of carbon capture technologies, which are widely and controversially debated. The results emphasize the importance of biomethane, electrification, and efficiency measures while underscoring the pivotal role of national targets supporting these renewable energy carriers in achieving net-zero emissions. Additionally, the findings underline the necessity of a policy framework that addresses carbon management and navigates the trade-offs between zero-emission hydrogen technologies and carbon capture solutions. • Cost-optimal transition technologies and energy carrier choices determined. • A MILP that incorporates principles of energy system models is proposed. • Austrian iron and steel, pulp and paper, and cement sectors studied. • National policies regarding the power, natural gas, and hydrogen sectors analyzed. • Biomethane, electrification, efficiency measures, and carbon capture are used.