Industrial Sector Decarbonization

Industrial sector decarbonization is a critical step toward achieving a livable climate future. Industrial activities such as manufacturing and construction are responsible for roughly a third of global greenhouse gas (GHG) emissions when including emissions associated with the electricity and heat purchased by industry – more than any other sector of the economy.

Even without indirect emissions from purchased heat and electricity, industrial processes contribute approximately one fifth of global emissions. Fortunately, a combination of promising technologies and well-designed policy now make it possible to achieve a net zero industrial sector globally by 2050-2070.

Only three industries – iron and steel, chemicals and plastics, and cement – are responsible for roughly 55 percent of industrial emissions, and the top ten industries are responsible for roughly 90 percent of industrial emissions. Therefore, focusing on a limited set of product and process improvements in these industries can drive outsized results. Many of the technical solutions for these sectors, such as electrification, hydrogen, and material efficiency, can also be applied to other industries, further accelerating decarbonization strategies.

Technological innovations are only part of the picture. Strategic, well-designed policies incentivize adoption of low-carbon manufacturing technologies while making investments in cleaner processes more profitable. These include well-designed carbon pricing, support for research and development, industrial energy efficiency, industrial process emissions standards, and green government procurement programs. The right policies can even spread innovations through international supply chains, transforming production in countries that lack strong policies of their own. Smart policy is also vital for ensuring equity among workers and communities that may be impacted by the zero-carbon industry transition, and for supporting sustainable economic development.

Industry is at the core of a clean economy: It is responsible for producing technologies such as renewable electricity generation facilities, clean vehicles, and energy-efficient buildings. It is crucial to reduce industrial emissions even as industries continue to supply transformational technologies and infrastructure that advance a net zero future. Fortunately, with the right technologies and policies in place, industry can grow while reducing emissions and without compromising product quality.

Our Work

The Industry Sector Decarbonization (ISD) program provides best-in-class advice to policymakers, regulators, and those operating within industry on the most rapid and cost- effective industrial emissions reduction technologies. The ISD program also identifies the policy environment needed to accelerate deployment of these technologies and increase research and development efforts to ensure we have the technologies needed in coming decades to bring industrial emissions down to zero. As most industrial emissions come from developing countries, ISD seeks mindful recommendations that are compatible with human and economic development goals, which is crucial for uptake.

Original Analysis

ISD led development of a groundbreaking research paper, along with 30 other expert co-authors, which is an authoritative resource on industrial decarbonization. Technologies and Policies to Decarbonize Global Industry: Review and Assessment of Mitigation Drivers Through 2070 lays out the necessary technical measures and policies needed to make net zero industry a reality by 2070.

The paper’s 30 co-authors are experts on the major industrial sectors including cement and chemicals and represent countries with the largest industrial emissions including China, Germany, India, and the United States. They also comprise experts in particular policy areas, providing unparalleled resources that draw upon a wide breadth of knowledge and deep issue expertise.

The paper lays out a detailed pathway to zero industrial emissions by mid-century, demonstrating how existing technologies, along with a suite of smart policies, can rapidly reduce industrial emissions and make investing in cleaner industrial processes more profitable. Key technologies include energy and material efficiency, carbon capture, electrification, and zero-carbon hydrogen.

The paper finds high-value policies such as carbon pricing or other price signals, robust government support for research and development, as well as industrial energy efficiency and industrial process emissions standards, can speed the scale of technological deployment and accelerate decarbonization, achieving a net zero industrial sector by 2070.

Energy Innovation’s original analysis provides evidence-based research that identifies the most cost-effective strategies for addressing industrial sector decarbonization challenges. By identifying the most innovative and promising technologies and modeling the policy opportunities that scale up solutions throughout the sector, we inform smart policy design and decision-making.

Energy Innovation’s 2018 report, Cement’s Role in a Carbon Neutral Future provides a pathway for decarbonizing one of the world’s most widely-used materials in roads, bridges, and buildings. With cement manufacturing producing 5.6 percent of global carbon dioxide (CO2) emissions and production growing at a rate of 5-6 percent annually, decarbonization strategies for the sector are required to achieve a net-zero economy.

The report finds that capturing 80 percent of cement’s process emissions (and no thermal emissions) by 2050 can make cement carbon-neutral, as natural carbonation offsets remaining emissions. If thermal fuel supply were fully decarbonized by 2050, a 53 percent process emissions capture rate achieves carbon-neutral cement. Higher capture rates than these would provide net negative CO2 emissions and the possibility that simply making concrete could reduce atmospheric CO2 concentrations.

The Industrial Sector Decarbonization Team