The Striking Intersection between Industrial Technology and Decarbonization

Energy technology is a broad umbrella. We typically include any technology with an impact on any type of energy at any point in the value chain. But when the rest of the world speaks about energy technology, there are often varying degrees of alignment with this definition. The “older” definition of energy technology refers primarily to alternative energy technology or “green” technology. The “newer” definition of energy technology refers primarily to oil and gas digitalization, Industry 4.0 technology, and other types of industrial software technology. There seems to be a very clear separation between the industrial tech world and cleantech world in how companies market/position themselves, the groups of investors interested in funding each group, and the types of strategics that end up as ultimate acquirors.

But as we’ve discussed before, this is a gap that is far too wide and unwarranted. Industrial tech is in many ways very “clean” and “green” and a good chunk of what is clean and green technology is in many ways Industrial 4.0-produced technology. Examples of the intersection include:  

• Software that increases efficiency through modeling a more appropriate use of resources to achieve the same result
• An IIoT system that automates a process, removing the need for onsite human labor and associated energy spend required for it (e.g. heating and cooling for operator, vehicle travel, etc.)
• Incident alarm system that intervenes more quickly than humans, increasing the amount of avoided emissions or number of avoided spills
• A virtual reality system that allows remote training and maintenance, reducing travel-associated GHG emissions
• A blockchain system that tracks the supply chain of a particular product, ensuring it is meeting certain recycling and carbon footprint standards
• Building management systems that reduce energy consumption by optimizing heating and cooling temperatures
• Fuel economy or electric vehicles that decrease the resources used in transportation
• Automatic energy efficient smart lighting systems that utilize smart sensors to automatically dim or brighten lights depending on outside light

As one can see from the list, industrial technology can be impactful both from the production side and the consumption side. And while most conversations on “energy efficiency’ focus almost entirely on the consumption half of the equation, there is a wealth of technology being developed on the operational side that should be considered in equal measure.

Quantifying this impact is difficult. Reports vary in how much of an impact industrial technology can bring to our decarbonization pathways. Some cite up to a 15% impact on GHG emissions by 2030. Some talk about up to 50% impact by 2050. In fact, the number may even be higher. Historically, energy efficiency has been credited with decreasing emissions by more than 60% since 1980. One thing is clear: industrial advancement does make a meaningful and – maybe more importantly – immediate difference to our carbon footprint, and it’s a shame this solid connection does not get discussed more frequently.