Decarbonization is at the heart of environmental and energy policies. It represents a set of actions aimed at reducing carbon emissions, mainly in the form of carbon dioxide (CO₂), to mitigate climate change. In this article, we will explore in depth what decarbonisation is, why it is crucial for businesses and what solutions are available to them. To find out more about how to decarbonise your business, please contact us.
Climate change is now unequivocally attributed to human activity. According to the IPCC, greenhouse gas (GHG) emissions particularly carbon dioxide (CO₂) are the main drivers of this disruption. Fossil fuels alone account for nearly 75% of global GHG emissions and 90% of human-related CO₂ emissions (industry, transport, agriculture, buildings, energy, etc.).
Decarbonization refers to the set of transformations implemented to sustainably reduce these emissions. It requires a profound transition in production systems, the energy mix, and consumption patterns, with the aim of drastically limiting reliance on fossil fuels. The objective is twofold: to build a low-carbon economy and prepare the conditions for carbon neutrality that is, the balance between residual emissions and the planet’s capacity to absorb them (through natural sinks or technological solutions such as carbon capture and storage). In other words, carbon neutrality cannot be achieved without prior decarbonization.
Scientific data is unequivocal. According to the IPCC, to keep global warming below +1.5 °C, worldwide emissions must fall by 45% by 2030 (compared to 2010) and reach net zero by 2050. Yet, according to the International Energy Agency, global CO₂ emissions from energy still reached 37.4 gigatonnes in 2023 a record high. Without massive reductions, the consequences will be severe: droughts, floods, wildfires, agricultural losses, and health crises. The 2015 Paris Agreement, signed by 195 countries, requires governments to regularly strengthen their climate policies and action plans. In France, this ambition is embodied in the National Low-Carbon Strategy (SNBC).
Decarbonization is no longer optional it has become a strategic and regulatory imperative for organizations. It drives:
Competitiveness and economic performance: lower energy costs, easier access to sustainable financing (green bonds, green loans), and anticipation of rising carbon prices.
Reputation and client relations: international supply chains now impose low-carbon requirements on their partners.
Talent attractiveness: 70% of Generation Z want to work for companies committed to ESG issues (BCG study, 2023).
Market access and resilience: under the Carbon Border Adjustment Mechanism (CBAM), carbon-intensive products are increasingly penalized.
Environmental and resource preservation: limiting air pollution, ocean acidification, water stress, and ecosystem degradation.
This transformation is supported by a clear regulatory framework:
Fit for 55: the EU aims to cut GHG emissions by 55% by 2030.
SNBC (National Low-Carbon Strategy): France’s roadmap to achieve carbon neutrality by 2050, with carbon budgets by sector.
CORSIA: mandatory offsetting mechanism for international aviation emissions.
EU ETS (Emissions Trading System): the most polluting companies must purchase emission allowances.
EU Taxonomy and CSRD: obligations for large companies to measure and disclose their environmental impacts.
Ultimately, every company will be assessed on its ability to align with a low-carbon pathway. Decarbonization has therefore become an essential lever to anticipate regulatory risks and safeguard business continuity.
To meet the climate targets set by the Paris Agreement and European regulations, the industrial sector must fundamentally transform its processes and energy mix. Responsible for around 20% of global energy-related CO₂ emissions (IEA, 2023), industry is a top priority in the low-carbon transition. Several technical levers can be activated:
Energy audit and optimization of production processes:
The first step is to conduct a comprehensive energy audit to accurately measure consumption and identify losses. Based on this, targeted actions can be implemented: upgrading equipment, improving production line efficiency, recovering and reusing waste heat, or integrating eco-design. These measures are already effective: for instance, Michelin’s Cholet plant reduced its energy use by 20% through heat recovery and smart machine control.
Switching to renewable energy (solar, wind, biomass):
Gradually replacing fossil fuels with renewable energy is a central lever. Companies can generate or purchase electricity from solar or wind power, use biomass or biogas for heat and electricity, or tap into geothermal energy and low-carbon heating networks. In 2023, L’Oréal announced that all its European sites would be powered 100% by renewable electricity through power purchase agreements (PPAs).
Carbon capture, storage, and utilization (CCS/CCU):
Some heavy industries (steel, cement, chemicals) cannot fully eliminate their emissions. CCS technologies capture CO₂ at source and inject it into geological formations for long-term storage. CCU takes a complementary approach by reusing captured CO₂ to produce methanol, synthetic fuels, or recycled materials. Notable projects include Northern Lights in Norway, which plans to store several million tonnes of CO₂ under the North Sea starting in 2025, and ArcelorMittal’s pilot in Dunkirk.
Low-carbon hydrogen (green electrolysis, gas system pathways):
Hydrogen is a key lever for hard to electrify sectors. Green hydrogen, produced by electrolysis from renewable electricity, and low-carbon hydrogen, derived from industrial processes combined with CO₂ capture, will progressively replace coal, natural gas, and some chemical processes. France plans to invest €6.5 billion by 2030 to develop “hydrogen valleys” and build the sector.
Digitalization and predictive maintenance to reduce waste:
Digitalizing industrial processes offers significant efficiency gains. Connected sensors, artificial intelligence, and digital twins (virtual models that replicate a physical object or process in real time to optimize use, maintenance, or performance) allow real-time monitoring of consumption, simulation of optimizations, and predictive maintenance. According to McKinsey (2023), these technologies can reduce factory energy use by up to 15% by limiting unplanned downtime and waste.
CCS (Carbon Capture and Storage) encompasses all the steps involved in intercepting carbon dioxide (CO₂) emitted by industrial facilities or power plants before it is released into the atmosphere. Recognized by the International Energy Agency as an essential lever for meeting climate targets, this technology is particularly suited to sectors where emissions are difficult to eliminate (steel, cement, chemicals, fossil-fuel-based power generation).
Principle and operation of CCS facilities
The process is based on three main steps:
Capture: during combustion, CO₂ represents only 5 to 15% of emitted gases. It must therefore be separated and concentrated. Three approaches exist:
Post-combustion: extraction of CO₂ directly from flue gases using chemical solvents (amines), membranes, or cryogenic processes. This method can capture up to 90% of CO₂.
Pre-combustion: transformation of fossil fuel into synthesis gas (mixture of CO + H₂); CO is then converted into CO₂ and separated, while the hydrogen produced can be used as a clean fuel.
Oxy-combustion: combustion carried out in pure oxygen. The resulting flue gases are very rich in CO₂ and therefore easier to capture.
Transport: once captured and purified, CO₂ is compressed and transported via high-pressure pipelines (the most common solution) or, depending on requirements, by specialized ships and trucks.
Geological storage: CO₂ is injected at depths greater than 800 meters, in supercritical form, into depleted oil/gas reservoirs, deep saline aquifers, or unmined coal seams. These sites are subject to long-term monitoring to ensure sealing integrity.
When CO₂ is reused rather than stored, this is referred to as CCU (Carbon Capture and Utilization). This pathway aims to transform CO₂ into useful products such as methanol, e-fuels, construction materials, or chemical feedstocks.
Examples of industrial projects in France and Europe
Northern Lights (Norway): led by Equinor, TotalEnergies, and Shell, this project plans, starting in 2025, to transport and store several million tonnes of CO₂ under the North Sea through an infrastructure open to European industries.
Porthos (Netherlands): located in Rotterdam, it will store 2.5 million tonnes of CO₂ per year from 2026 in former offshore gas fields, benefiting refineries and hydrogen producers.
ArcelorMittal – Dunkirk (France): pilot project on a blast furnace, transforming CO₂ into synthetic fuels. Supported by ADEME and France 2030.
Sleipner (Norway): since 1996, about 1 Mt of CO₂ has been injected each year into a deep saline aquifer, with no leakage detected to date. A global benchmark for secure storage.
Lacq Project (France): pilot led by Total between 2010 and 2013, with 51,000 tonnes of CO₂ injected at a depth of 4,500 m, reinforcing French expertise in CCS.
Technical challenges, costs, and local acceptance
Despite its potential, the CCS/CCU sector still faces several obstacles:
Costly technologies to industrialize: capture accounts for up to 70% of a project’s cost, and integrating it into existing sites is complex.
High costs: the IEA estimates between €80 and €150 per tonne of CO₂ avoided, making projects dependent on public funding and support mechanisms (CCfD, Innovation Fund).
The challenge of scaling up: pilot projects such as Sleipner and Snøhvit have proven feasibility but remain limited in scale. The challenge is to manage hundreds of millions of tonnes over several decades, with strong safety guarantees.
Fragile social acceptance: some projects have been cancelled due to a lack of public consultation. Transparency, monitoring, and local stakeholder involvement are essential.
A regulatory and financial framework to be strengthened: the sector requires a stable and predictable environment, supported by incentives (CBAM, CO₂ certificates, just transition funds).
CO₂ utilization (methanol, e-fuels)
Beyond storage, CO₂ utilization paves the way for a circular carbon economy. Captured CO₂ can be combined with low-carbon hydrogen to produce methanol, used as fuel or chemical feedstock, or e-fuels (e-kerosene, e-diesel) for hard-to-electrify sectors such as aviation and shipping.
Haru Oni project in Chile (Siemens Energy and Porsche) aims to produce 130,000 liters of e-fuel per year starting in 2026.
Kopernikus P2X program in Germany explores the industrial production of methanol and e-fuels from recycled CO₂.
These solutions remain constrained by high costs, low energy efficiency (strong demand for renewable electricity), and variable impacts depending on the final use (CO₂ may be re-emitted). However, they represent a strategic complement to storage and an innovation driver to achieve net-zero pathways.
Decarbonizing businesses and the economy as a whole relies on a series of strategic and operational levers. To succeed in this transformation, it is not enough to reduce direct emissions alone: the entire value chain must be engaged, appropriate financing mobilized, and transparency of commitments strengthened.
CSR communication and low-carbon labels (ISO 14064, Science Based Targets):
In a context where investors, consumers, and regulators demand greater transparency, climate strategies must be measurable, verifiable, and aligned with recognized standards. Key frameworks include the GHG Protocol and France’s regulatory BEGES. The ISO 14064 standard provides a robust system for quantification, monitoring, and verification. The SBTi initiative allows companies to set science-based targets aligned with a 1.5°C trajectory, enhancing international credibility.
In parallel, the French Low-Carbon Label recognizes local projects (agriculture, forestry, energy) that demonstrate their ability to reduce or sequester CO₂ in an additional and verifiable manner. A structured CSR communication strategy built around these frameworks strengthens stakeholder trust and provides a real competitive advantage.
The decarbonization of businesses is governed by a set of legal requirements, financing mechanisms, and specific deadlines, designed to accelerate the transition while supporting economic stakeholders.
According to Article L.229-25 of the Environmental Code, companies with more than 500 employees must carry out a GHG inventory, while municipalities with more than 50,000 inhabitants, public institutions with more than 250 staff, and state services must comply every three years.
Some companies are also concerned through the Non-Financial Performance Statement (DPEF), mandatory for those exceeding two of the following thresholds: €20M in total assets, €40M in net turnover, or 500 employees. This reporting must include environmental impacts, climate risks, and reduction measures. Highly emitting sectors (heavy industry, energy, construction, transport, agriculture) are also subject to the EU ETS (emissions trading system). Finally, the CSRD directive, applicable from 2025, will extend these obligations to more than 50,000 European companies, including subcontracting or exporting SMEs.
To support the transition, several public programs exist. ADEME offers diagnostics, sectoral tools, and financing through calls for projects (“Booster for the ecological transition,” “Industrial decarbonization”).
The France 2030 plan, endowed with €54 billion, allocates more than €5 billion to industrial decarbonization: electrification of processes, low-carbon hydrogen, biomass, CO₂ capture and storage, and energy optimization. Funding is mainly provided through Bpifrance and ADEME. At the European level, the Innovation Fund finances large-scale projects (CCS/CCU, renewables, alternative fuels), while programs such as Horizon Europe, the Green Deal, and the Connecting Europe Facility complement this support.
The inventory must be carried out using methods recognized by the Ministry of Ecological Transition (regulatory BEGES method or Bilan Carbone® by ADEME). It must cover at least Scopes 1 and 2 (direct emissions and energy-related emissions) and increasingly Scope 3 (supply chain, product use, transportation).
Since 2023, inventories must be published on the platform bilans-ges.ademe.fr, accompanied by a transition plan detailing reduction actions. This plan is now mandatory and constitutes a key strategic tool for alignment with 2050 carbon neutrality objectives. In case of non-compliance, companies face an administrative fine of up to €7,500.
European instruments are key levers to accelerate decarbonization, by imposing a carbon price on both EU-based companies and non-EU importers.
Operation of the EU Emissions Trading System (EU ETS):
Introduced in 2005, the EU ETS is the first transnational carbon market and remains the largest in the world. It is based on the cap-and-trade principle: an overall emissions cap is set for covered sectors (electricity production, heavy industry, refining, chemicals, intra-European aviation, and soon maritime transport). This cap decreases each year to align with EU climate objectives.
Companies receive or purchase carbon allowances (EUAs – European Union Allowances), each corresponding to the right to emit one tonne of CO₂. Facilities emitting less than their quota can sell the surplus; those exceeding it must buy additional allowances or face penalties. This mechanism creates a direct economic incentive to reduce emissions and invest in low-carbon solutions.
With the Fit for 55 package, the ETS was strengthened:
Annual cap reduction of 4.3% between 2024 and 2027, then 4.4% from 2028 onwards;
Inclusion of maritime transport starting in 2024;
Creation of an ETS 2 for fuels used in buildings and road transport starting in 2027.
The price of a tonne of CO₂ rose from about €5 in 2017 to over €80 by the end of 2023, making emission reduction unavoidable for covered sectors.
Impact of the CBAM on carbon-intensive imports:
The CBAM (Carbon Border Adjustment Mechanism) is a flagship tool of the European Green Deal. It aims to prevent carbon leakage (relocation of activities to countries with less stringent standards) and to ensure fair competition with producers subject to the EU ETS.
In its first phase, it covers six high-emission sectors: steel, aluminium, cement, fertilizers, electricity, and hydrogen. Importers must declare the direct emissions associated with imported products and acquire CBAM certificates equivalent to the price of ETS allowances.
Implementation is progressive:
2023–2025: transition phase with reporting obligations only;
January 2026: full entry into force, with mandatory purchase of certificates.
CBAM is a strategic lever to encourage non-EU producers to decarbonize their processes, strengthen carbon traceability in global supply chains, and protect European industry. In the long term, it could be extended to other sectors depending on international negotiations and the EU’s climate ambition.