The UK and German Low-Carbon Industry Transitions from a Sectoral Innovation and System Failures Perspective

Abstract

Industrial processes are associated with high amounts of energy consumed and greenhouse gases emitted, stressing the urgent need for low-carbon sectoral transitions. This research reviews the energy-intensive iron and steel, cement and chemicals industries of Germany and the United Kingdom, two major emitting countries with significant activity, yet with different recent orientation. Our socio-technical analysis, based on the Sectoral Innovation Systems and the Systems Failure framework, aims to capture existing and potential drivers of or barriers to diffusion of sustainable industrial technologies and extract implications for policy. Results indicate that actor structures and inconsistent policies have limited low-carbon innovation. A critical factor for the successful decarbonisation of German industry lies in overcoming lobbying and resistance to technological innovation caused by strong networks. By contrast, a key to UK industrial decarbonisation is to drive innovation and investment in the context of an industry in decline and in light of Brexit-related uncertainty.