Barriers to Industrial Transformation: Identifying Action Areas and Developing Solutions
Industrial transformation is often not hindered by a lack of available technologies. Rather, economic uncertainties, regulatory ambiguities, limited infrastructure capacities, and practical implementation barriers prevent the realization of many decarbonization measures. Within the Cooperation Forum “Industrial Electrification”, we highlight the most significant obstacles and identify priority areas for action from an industrial perspective.
Industrial transformation requires not only the technical availability of electrification and fuel-switching technologies, but also economically viable, regulatory reliable, and practically implementable solutions.
Discussions within the Cooperation Forum Industry show that many CO₂ reduction measures are fundamentally market-ready and well understood. However, their implementation is often hindered by a lack of viable business cases, uncertain or unsuitable regulatory frameworks, limited grid connection capacities, or site-specific constraints. The objective must therefore be to address barriers in an integrated manner, considering technical, economic, and organizational requirements together. This will enable companies to develop robust transformation pathways and invest in a future-proof industrial sector.
- Technical Gaps: Electrification is a key building block for competitiveness and greenhouse gas reduction, but it is not sufficient for all industrial applications.
Technically feasible solutions already exist for many applications. Challenges remain particularly where high temperatures, large production volumes, and significant power requirements coincide with strict demands for process stability and product quality. For these applications, widely scalable electric solutions are still limited, creating a need for further development, testing, and adaptation. - Fuel Switching: A complementary option with its own uncertainties.
The use of biogenic fuels, biomethane, or, in the future, hydrogen can be an important complement where full electrification is not feasible or not optimal in the short to medium term. At the same time, uncertainties remain regarding availability, energy carrier costs, infrastructure, sustainability requirements, and regulatory classification. Fuel switching and hybrid concepts can reduce transformation risks, increase flexibility, and enhance resilience, but they cannot replace the need for clear and reliable framework conditions. - Economic Viability: Technical availability does not create a business case.
Many technically available measures are not implemented because the economic conditions are insufficient or too uncertain. High electricity prices and grid charges, levies that remain significant despite relief measures, volatile energy markets, short internal payback requirements, difficult-to-quantify flexibility revenues, and additional investments in infrastructure and auxiliary systems all complicate investment decisions. Practical funding instruments and robust assessment methodologies can help accelerate the implementation of economically viable projects. - Regulation and Policy Must Provide Planning Certainty and Strategic Direction.
Unclear or repeatedly changing political and regulatory frameworks delay investments. Current examples include unresolved questions regarding electricity prices and grid charges, hydrogen and battery storage regulation, CO₂ price signals, biomass utilization, and planning and permitting procedures. Companies require reliable, transparent, and long-term framework conditions in order to strategically plan and internally justify transformation measures. - Implementation is always linked to site-specific conditions and often requires overcoming internal barriers.
Even technically and economically sound measures can fail due to practical constraints at individual sites. Legacy plant structures, limited space availability, scheduled maintenance cycles, insufficient grid connection capacity, workforce constraints, and acceptance-related issues can significantly affect feasibility. Therefore, site-specific transformation pathways, early coordination with grid operators and local stakeholders, and internal decision-making frameworks that jointly consider technical, economic, and organizational requirements are essential. In addition, building internal expertise and maintaining openness to new methods, assessment approaches, and forms of cooperation strengthen an organization’s ability to implement transformation successfully.
