Introduction
Achieving a fair and equitable transition to low-carbon development requires widespread adoption and scaling of clean technologies. Heavy industries, such as steel and cement, contribute about a quarter of global carbon emissions and rely on technologies like hydrogen-based steelmaking and carbon capture, utilization, and storage (CCUS) for their transition to net zero. However, emerging and developing economies face significant obstacles, including high costs, policy challenges, and difficulties adapting new technologies to specific contexts. The urgency of these issues has led to a growing focus on technology diffusion in international policymaking, resulting in the establishment of dedicated climate technology support mechanisms.
Technology Co-Development Roundtable
To address these challenges, the Leadership Group for Industry Transition (LeadIT) and the Forum on Trade, Environment, and the SDGs (TESS) hosted a roundtable event. This event aimed to foster multistakeholder dialogue, bringing together views from governments, companies, and international organizations to identify challenges and potential solutions for technology transfer and co-development in heavy industry sectors.
Key Themes from the Roundtable
The hybrid roundtable gathered around 40 representatives from various economies, heavy industry sectors, and international organizations. The discussion highlighted several critical themes:
NDCs as a Catalyzer
The next round of Nationally Determined Contribution (NDC) updates, due in 2025, presents an opportunity for governments to prioritize specific technologies for their heavy industry sectors. This could signal commitment and mobilize necessary collaborations, technical assistance, and financial support. Consulting with the private sector and conducting Technology Needs Assessments (TNA) can ensure technologies fit local contexts. Support frameworks like the NDC Partnership or the Climate Technology Centre and Network (CTCN) can assist in integrating these measures into NDCs.
Capacity to Deploy and Adapt Decarbonization Technologies
Adapting decarbonization technologies to local production processes and retrofitting needs is essential. Often, a lack of capacity to adapt, handle, and maintain these technologies hinders deployment. Capacity building and skills development are crucial for technology transfer. Education systems must ensure the availability of key skills for deploying, developing, and co-developing technologies suited to local circumstances, reducing reliance on foreign assets.
Enabling Policies and Regulations: Intellectual Property Rights (IPR)
Scaling and accelerating technology transfer and co-development in heavy industry occurs within a complex policy and regulatory framework. A core challenge is creating an enabling policy environment for industrial decarbonization amidst competition and security concerns. Key policy elements include international commitments and rules on technology transfer, intellectual property, and trade in environmental goods and services. Domestic regulations related to production processes also play a significant role.
IPR Options for Technology Transfer:
- Patent Pools: Companies cross-license patents relating to a particular climate technology to one another or a third party.
- Shared IPR and Technology Partnerships: Co-owning IPR on technologies developed collaboratively, potentially making them available in developing economies.
- Off-Patent IPR: Utilizing off-patent technologies that are locally appropriate and competitive.
- Licensing IPR on Favorable Terms: Granting multiple non-exclusive licenses on favorable terms for use in developing countries.
- Waiving IP Rights: Companies or institutions could waive their rights on specific climate technologies, allowing them to enter the public domain.
Governments can support these approaches by providing technical and financial assistance necessary for co-developing or adopting relevant technologies.
Finance and Investments
Significant financing is needed for technology co-development, transfer, and adoption. More work is required to unlock public support and incentivize private sector investment, especially in developing and emerging economies. Country and business-to-business partnerships can streamline investments through concessional finance and accelerated matchmaking. Frameworks for cooperation under Article 6 of the Paris Agreement can also mobilize funding for technology development and adoption projects.
Looking to the Future
The roundtable discussions underscored the importance of dialogue among stakeholders to understand what is needed for effective technology diffusion. Facilitating technology transfer and co-development requires enabling conditions with complex policy and regulatory implications, based on specific business-to-business requirements and just transition considerations. LeadIT and TESS will continue to bring together the voices of companies, governments, and relevant organizations to co-create informed and effective solutions.
By working together, we can overcome the challenges and pave the way for a low-carbon future, ensuring that technology reaches where it is needed most.
