International organizations are increasingly recognizing Industry 4.0 technologies for their potential role in industrial decarbonization. Yet, their contribution to climate change mitigation within the manufacturing industry is uncertain and access is highly uneven globally. This section sheds light on Industry 4.0 progress, beyond the superlatives.

Proven technologies  

Frontier technologies  

Horizon technologies  

Innovation examples

What is Industry 4.0?

Industry 4.0 – or the fourth industrial revolution – is a recently introduced term for the current digital transformation of the industrial sector. It is a continuation of the first industrial revolution that brought steam, the second,…
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What is Industry 4.0?

Industry 4.0 – or the fourth industrial revolution – is a recently introduced term for the current digital transformation of the industrial sector. It is a continuation of the first industrial revolution that brought steam, the second, electricity, and the third of the early 1970s that brought digital technologies, electronics and factory floor automation. Today’s technologies have evolved into so-called cyber-physical systems centered on connectivity. Thanks to its active promotion by organizations such as the World Economic Forum, Industry 4.0 as a term has gained popularity and is typically associated with anything linking industrial processes to advanced computing and modelling, internet of things (IoT), artificial intelligence (AI), robots, additive manufacturing, blockchain and so on.
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Transforming sustainable manufacturing through technology integration

The technologies enable communication between industrial machines and systems (the physical world) and external systems (the cyber world). This means industrial parts can perform tasks with little human intervention, thereby increasing…
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Transforming sustainable manufacturing through technology integration

The technologies enable communication between industrial machines and systems (the physical world) and external systems (the cyber world). This means industrial parts can perform tasks with little human intervention, thereby increasing efficiency. The integration of such connections has so far been expensive and complex, but new standards and a rapid price drop for technologies such as sensors now enables smaller companies to access “plug and play” integration for their IT systems.[142] In short, Industry 4.0 has the ability to enable predictive and preventive maintenance, optimize supply chains, enhance customization and personalization, and can adapt quickly to changing market demands.

Some technologies have seen a higher rate of uptake among manufacturing industries. They include cloud computing, horizontal and vertical data integration, IoT and big data analytics. Others – among them additive manufacturing, virtual/augmented reality and AI – are being adopted at a slower rate, particularly among small and medium-sized enterprises.[143] Of course, the picture varies from sector to sector, and applications for technologies such as AI are developing rapidly.
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Does Industry 4.0 contribute to industrial decarbonization today?

The narrative around Industry 4.0 and its contribution to decarbonizing manufacturing industries lacks consensus. The contribution of digital technologies to climate change mitigation in relation to sectors such as transport, buildings, media…
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Does Industry 4.0 contribute to industrial decarbonization today?

The narrative around Industry 4.0 and its contribution to decarbonizing manufacturing industries lacks consensus. The contribution of digital technologies to climate change mitigation in relation to sectors such as transport, buildings, media and agriculture is better understood. Empirical assessment of the manufacturing industry has been less comprehensive in comparison, other than in relation to smart grids. This may be owing to the relatively low digital penetration in this sector. Research also tends to focus on measuring Industry 4.0’s impact on a firm’s productivity rather than its decarbonization potential.

Research also tends to focus on measuring Industry 4.0’s impact on a firm’s productivity rather than its decarbonization potential

In general, gray literature dominates current research with sparse empirical data on implementation.[144] For instance, Fritzsche, Niehoff [145] analyzed documents from various intergovernmental organizations (IGOs) such as the International Energy Agency (IEA) and the United Nations Industrial Development Organization (UNIDO) on Industry 4.0’s role in climate change. They all strongly associated Industry 4.0 with climate change mitigation. Moreover, the technologies were viewed as enablers for increasing energy and resource efficiency within industrial production. They note that:

Modern digital technologies are viewed – by IGOs – as enablers for clean industrial development, but again concrete figures or case studies regarding Industry 4.0 and climate change mitigation are lacking.[146]

Industry reports also provide a positive outlook on the mitigation potential of digital technologies. A lot of data are emerging from companies themselves, such as Ericsson and Swisscom, on the enabling impact of digital technologies in relation to climate change.[147] However, assessment of their impact on industrial decarbonization has been less systematic than for other sectors.

Furthermore, research on possible negative environmental impacts from improving manufacturing productivity through digitalization is missing.[148][149] Data on the net climate impact of digital technologies is also sparse. This is important considering the substantial energy demand of digital technologies themselves. In total, the information and communications technology (ICT) sector’s carbon footprint has been estimated to be anything between 1.5–4 percent of the global total. But similar sector-wide data on Industry 4.0's GHG emissions abatement potential are less robust and there is no internationally agreed method of measurement.[150]
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Positive view of Industry 4.0 often based on predictions of the future

More work is required to gather empirical evidence on Industry 4.0’s GHG abatement impact. Meanwhile, countries’ industrial decarbonization plans increasingly include digital transformation elements. Furthermore, there is no shortage of reports…
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Positive view of Industry 4.0 often based on predictions of the future

More work is required to gather empirical evidence on Industry 4.0’s GHG abatement impact. Meanwhile, countries’ industrial decarbonization plans increasingly include digital transformation elements. Furthermore, there is no shortage of reports linking Industry 4.0 and climate change based on scenarios and assumptions about potential future impact on carbon, energy and materials savings. The IEA estimates digitalization of industrial processes could produce energy savings of up to 30 percent globally.[151] Consultancy company Accenture and World Economic Forum analyses estimate that digital technologies – if scaled across all of heavy industry – could reduce emissions by 20 percent by 2050.[152] For the material manufacturing sector specifically, they estimate that technologies like big data analytics and cloud or edge computing (i.e., distributed computing frameworks) could reduce emissions by 7 percent by 2050. Furthermore, the Association of German Engineers states that digitalization might lead to a 25 percent greater resource efficiency and a 20 percent reduction in carbon emission.[153]

Meanwhile, organizations such as the Global e-Sustainability Initiative have explored digital case examples and assessed digital technologies’ overall climate abatement potential for the manufacturing and construction sectors. Their prediction is that data-driven, AI-powered, networked smart factories and supply chains could save 171–495 MtCO2eq across seven major country studies.[154] On a global level, they predict that smart manufacturing could abate 22 percent (or 2.71 GtCO2eq) in these two sectors by 2030 (although that figure may require updating).[155] Again, these are predictive assessments and, as such, not based on empirical evidence.
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Industry 4.0 does not guarantee climate mitigation

There are optimistic expectations for the digital transformation of the manufacturing industry. However, industry’s willingness to collect data via Industry 4.0 technologies does not automatically translate into climate change mitigation…
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Industry 4.0 does not guarantee climate mitigation

There are optimistic expectations for the digital transformation of the manufacturing industry. However, industry’s willingness to collect data via Industry 4.0 technologies does not automatically translate into climate change mitigation efforts, or even productivity growth. A study by IBM suggests that 90 percent of all data stored is never utilized.[156] Industry 4.0’s potential contribution to manufacturing industry decarbonization therefore also depends on the ability of users to translate data into action.

90 percent of all data stored is never utilized. Industry 4.0’s potential contribution to manufacturing industry decarbonization therefore also depends on the ability of users to translate data into action

Environmental benefits from new technologies are not guaranteed. An example from the steel sector is additive manufacturing (AM). According to one claim by the IEA, steel sector material losses could be reduced through improved manufacturing techniques, including AM. In this scenario, AM would enable complex shape formation and high-added-value products to be made from recycled powders, potentially reducing emissions and minimizing material loss.[157] However, there is no consensus on the sustainability of AM in the academic literature.
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At worst, Industry 4.0 technologies could increase emissions

Additive manufacturing has been shown to have a larger carbon footprint compared to conventional steel manufacturing for each kilogram of material processed. This is owing to its high electrical energy intensity and low productivity.…
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At worst, Industry 4.0 technologies could increase emissions

Additive manufacturing has been shown to have a larger carbon footprint compared to conventional steel manufacturing for each kilogram of material processed. This is owing to its high electrical energy intensity and low productivity.[158][159][160] Moreover, Dusík et al.[161] assessed the best and worst-case environmental impacts of technologies, such as IoT, AM and AI, and found they could all increase GHG emissions if not managed properly.

The productivity gains for manufacturing industries expected from Industry 4.0 may lower product prices and stimulate higher consumption. 

Potential risk factors include higher energy consumption and greater energy intensity, as well as over-consumption and a change in business models. Difficult  to measure and subject to much uncertainty, rebound effects deserve more attention.[162] The productivity gains for manufacturing industries expected from Industry 4.0 may lower product prices and stimulate higher consumption.[163] Ultimately this could offset or even reverse any energy and material savings achieved by applying Industry 4.0 technologies in the first place. This underscores the need to better understand the impact of these technologies before integrating them into decarbonization plans.
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Slow rate of adoption

Industry itself appears cautious with regard to seizing Industry 4.0’s potential for climate change mitigation. Among energy-intensive industries in Sweden (steel, pulp-and-paper, chemicals) energy efficiency is considered a positive side-effect…
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Slow rate of adoption

Industry itself appears cautious with regard to seizing Industry 4.0’s potential for climate change mitigation. Among energy-intensive industries in Sweden (steel, pulp-and-paper, chemicals) energy efficiency is considered a positive side-effect of digital technologies, but not the main driver.[164] Indeed, a survey conducted among manufacturing industries in Italy reveals potential economic gain to be the key driver, while few associated Industry 4.0 with beneficial environmental impacts.[165]

Barriers to adopting Industry 4.0 technologies within the manufacturing industry typically include poor value-chain integration, cyber-security challenges, uncertainty about economic benefits, the workforce lacking necessary skills, high up-front costs, a lack of infrastructure and so on.[166]

Many developing countries are exploring digital technologies. But their readiness for implementing Industry 4.0 technologies is modest and the sustainability adoption rate in the manufacturing industry low compared to developed nations.[167] A total of 2.7 billion people globally continue to be offline.[168] Therefore inadequate or lacking digital infrastructure is an important barrier to adoption. That said, the high level of investment required for manufacturing industries to adopt Industry 4.0 is likely to be the most critical hurdle for companies in the developing world, along with the lack of a qualified workforce.[169]
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Cases of Industry 4.0 use in manufacturing industry

Despite a need for a better understanding of Industry 4.0 impacts, there are plenty of cases of existing and potential use. While adoption rates within manufacturing industry are lower than for other sectors, digital frontrunners have adopted…
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Cases of Industry 4.0 use in manufacturing industry

Despite a need for a better understanding of Industry 4.0 impacts, there are plenty of cases of existing and potential use. While adoption rates within manufacturing industry are lower than for other sectors, digital frontrunners have adopted several of the technologies. Table 4.1 lists prevailing Industry 4.0 technologies alongside their potential application for climate change mitigation within manufacturing industry. Industry 4.0 technologies may have high or higher mitigation potential in other sectors, particularly the energy sector, which have not been included in this review.  

Table 4.1 Potential cases for Industry 4.0 technology use for industrial decarbonization within manufacturing industry [170][171][172][173][174]

Industry 4.0 technology Applications for climate change mitigation within manufacturing industry
Additive manufacturing and 3D printing
  • Producing lightweight parts and products to reduce material consumption
  • Reducing energy use through optimized design and lower production runs
  • Waste as raw material
  • Customizing production to reduce process waste
  • Enabling local and on-site production to reduce transportation emissions
  • Enabling manufacturing to use fewer combinations of materials for easier material collection, sorting and recycling into manufacturing process
Advanced robotics and automation
  • Streamlining manufacturing processes and reducing material loss
  • Smart sorting of industrial waste fractions for enhanced reuse and recycling
  • Optimizing inventory management, warehouse operations and transportation in manufacturing facilities
  • Reducing energy consumption in logistics and decarbonizing supply chains
Artificial intelligence
  • Predictive maintenance to replace only required parts in a timely manner so as to extend machinery lifespan
  • Optimizing energy use through smart grid integration and energy management systems
  • Improving supply chain efficiency to reduce waste and emissions and optimize transport routes
Augmented reality
  • Providing remote assistance to reduce travel and transportation emissions
  • Training employees in sustainable practices
Big data analytics
  • Identifying energy and resource efficiency opportunities
  • Optimizing system and supply chain management
  • Analyzing climate impact of products throughout their life-cycle
Distributed ledger technology/blockchain
  • Ensuring transparency and accountability in supply chain management and for carbon tracking
  • Digital material passports for identifying different material types and grades during disassembly to allow reuse and recycling into manufacturing process
  • Internet of materials accessing information on quality, availability and location of secondary materials for reintegration into manufacturing process
Cloud computing
  • Hosting and scaling energy management and other related software
Cyber-physical systems
  • Optimizing fuel consumption and material handling
  • Flexible design configuration
  • Making available reliable data and life cycle assessment data collection
Digital twin
  • Simulating manufacturing processes in order to identify and optimize energy and resource use
  • Enabling predictive maintenance to replace only the required parts in a timely manner so as to extend machinery lifespan
Drone technology
  • Monitoring machinery and production line temperature using infrared and thermal technology
  • Detecting gas leaks
Internet of things
  • Real-time monitoring and control of energy usage and emissions 
  • Monitoring of waste generated during remanufacturing
  • Transparency and tracking of resource consumption in manufacturing processes and supply chains
  • Optimizing transport routes and logistics
Radio-frequency identification (RFID) and real-time
locating system (RTLS)
  • Optimizing material flow and the supply chain
  • Optimizing production inventory and storage space to avoid overstocking
  • Optimizing transport route

 

In addition to optimizing processes to reduce material and energy usage, digital technologies can be applied to monitoring emissions, such as those through leaks, or supply chain carbon tracking. This is particularly important in the context of Scope 3 emissions (see box 4.6) for which manufacturing industry is increasingly accountable in terms of measuring and then addressing. Scope 3 emissions are those beyond a plant’s immediate control, but which may cause significant climate impact. One example is the shipping or transportation of a final product from plant to consumer.

In this regard, digital technologies such as IoT and distributed ledger technology may enable better supply chain control and carbon tracking to optimize shipping routes. While cement sector emissions fall mainly within Scopes 1 and 2, 29 percent of steel sector emissions originate from Scope 3 supply chain emissions.[175]

Box 4.6 Greenhouse gas Scope 3 emissions

Digital technologies can play a key role in improving the monitoring of emissions from the manufacturing industry. This may be particularly relevant for tracking and reporting according to emission standards such as the GHG Protocol Corporate Accounting and Reporting Standard. This standard classifies a company’s GHG emissions according to three “scopes.” Scope 1 emissions are direct emissions from owned or controlled sources; for example, emissions associated with fuel combustion in boilers and furnaces. Scope 2 emissions are indirect emissions from the generation of purchased energy. Scope 3 emissions are all indirect emissions that occur within the reporting company’s value chain, including both upstream and downstream emissions. Notably, digital technologies can help overcome the challenge of emissions double-counting by two or more organizations.[176]

 
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Industry 4.0 in steel and cement sectors

This chapter of the Green Technology Book is focused on the steel and cement sectors. This section on Industry 4.0 explores the range of digital technologies relevant to these two sectors. Industry 4.0 implementation within the steel…
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Industry 4.0 in steel and cement sectors

This chapter of the Green Technology Book is focused on the steel and cement sectors. This section on Industry 4.0 explores the range of digital technologies relevant to these two sectors. Industry 4.0 implementation within the steel and cement sectors has been slow. The metal industry in general is lagging behind other industries when it comes to digital technology deployment.[177] However, there is some movement. A survey of the European steel sector reveals a majority of respondents strongly intend to invest in almost every Industry 4.0 technology, with a priority focus on cyber security and analytics, followed by IoT and virtual simulations. It is notable that the main expected benefit was reduced production costs (81 percent), whereas reduced CO2 emissions were expected by little more than half (56 percent).[178]

Digital technologies are already used by the steel and cement sectors to monitor energy-related process parameters. Beyond that, such innovations can enable manufacturing plants to take a holistic look at fuel consumption and emissions from both upstream and downstream processes.
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Steel and cement: from digital twins to material databases

The steel and cement sectors are now experimenting with the use of digital twins to simulate production processes and save on energy usage and resources, but it is still early days. Advanced diagnostics software is another key component. AI and…
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Steel and cement: from digital twins to material databases

The steel and cement sectors are now experimenting with the use of digital twins to simulate production processes and save on energy usage and resources, but it is still early days. Advanced diagnostics software is another key component. AI and machine learning tools are allowing real-time tracking in a way not previously possible. Material databases are another active field of research. Such databases are already common within the electronics manufacturing industry, with the EU and various standardization organizations working on developing Digital Product Passes.

The steel and cement sectors are now experimenting with the use of digital twins to simulate production processes and save on energy usage and resources, but it is still early days

The key economic driver behind these technologies is greater production flexibility.[179] But there are often clear dual benefits for cost and energy savings, for example for energy management systems or advanced automation processes. In related sectors, for example, the construction sector, connectivity, remote monitoring, 3D printing and predictive analysis are already transforming parts of traditional supply chains.[180] The technology solutions described provide an overview of the current state of Industry 4.0 technologies within the steel and cement sectors, ranging from proven to horizon stage.
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