Industry Decarbonization
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Fast Facts About
Industry Decarbonization
Industry, which includes large-scale manufacturing and production processes to make products such as steel, cement, and chemicals, is a significant source of greenhouse gas emissions. Reducing emissions from heavy industry is challenging. Unlike the electricity sector, which already has economically viable solutions like wind and solar, the industry sector is still developing the technologies needed for cost-effective and scalable decarbonization.
Industry uses fossil fuels for two primary purposes:
- Energy - generating heat for industrial processes through combustion, which emits CO2 and air pollution
- Feedstocks - the raw materials that produce products like steel, fertilizer, chemicals, and plastics
To decarbonize industry, it is essential to eliminate the use of fossil fuels for energy production. Fossil fuel combustion is a mature technology that achieves the high temperatures often required by industrial processes, making fossil fuels difficult to replace. However, certain electrical technologies can generate the same high temperatures and be powered by carbon-free electricity sources. The main challenges are the higher cost of electricity versus natural gas or coal, and up-front costs to retool factories, such as by increasing electrical capacity or installing electrified industrial machinery. That said, electricity is used more efficiently than fossil fuels and can be cost effective with the right policy support or with technological means of reducing electricity costs, such as by relying on the exceptionally high efficiency of industrial heat pumps or by using thermal energy storage to enable industrial facilities to buy electricity only in the hours of the day when it is cheapest.
Government policies and market incentives can help facilitate the transition to decarbonized industry. In the U.S., the Inflation Reduction Act and the Bipartisan Infrastructure Law include industrial decarbonization incentives, but more are needed.
Significance
Share of GHG Emissions from Industry
World 33% ๐
U.S. 30% ๐บ๐ธ
of global GHG emissions come from industry
When purchased electricity is not included, these percentages are 24% for the world and 23% for the U.S. Purchased electricity is relatively easy to decarbonize, but the remaining portion is more difficult.
Share of Energy Used for Industry
World 37% ๐
U.S. 35% ๐บ๐ธ
of energy use is accounted for in the industrial sector
Share of Final Energy Used in Industry From Renewable Resources
World 17% ๐
U.S. 9% ๐บ๐ธ
of energy used in industry comes from renewable resources
World
Highest Annual GHG Emissions from Industry
China* 45% ๐จ๐ณ
U.S. 7% ๐บ๐ธ
India 7% ๐ฎ๐ณ
of global annual industrial GHG emissions
Highest Energy Use for Industry
China 29% ๐จ๐ณ
U.S. 7% ๐บ๐ธ
India 7% ๐ฎ๐ณ
of global annual industrial final energy consumption
* Though China has the highest annual industrial emissions, much of the production from the emissions is exported. For example, in 2021 China was the largest exporter of metal, iron, and steel with almost 3x more exports than the next exporter (Italy) and over 7x more than the U.S.
Decarbonization of Industrial Heat
Technology | Description | Efficiency | Temperature Range |
---|---|---|---|
Heat pump | Transfers heat from one location to another using a refrigeration cycle and minimal external energy inputs Uses: drying processes, steam supply | Very high, can be over 300% | Low temperature (up to 165โ) |
Electrical resistance heating | Electrical current runs through a resistor converting energy to heat Uses: plastic welding, drying and cutting, rubber processes, semiconductor manufacturing | Near 100% | Medium temperature (165โ - 1000โ) |
Induction | Heats a conductive material by subjecting it to a magnetic field that induces currents within the material, generating heat. Uses: welding, melting, tempering metals (only heats electrically conductive materials) | 90% | High temperature (> 1000โ) |
Electric arcs | Electricity is run from an electrode through conductive material to another electrode Uses: steelmaking, welding, plasma cutting | 40- 75% | High temperature (> 1000โ) |
Dielectric heating | Rapidly oscillating electric field that makes polar molecules vibrate, creating thermal energy Uses: food processing, textile drying (things that need to be heated fast) | 70% | Medium temperature (165โ - 1000โ) |
Infrared heating | Contains an emitter that is heated and projects infrared radiation Uses: drying paint/coatings, warming heat sensitive materials | 85-95% | Low - medium temperature (up to 500 โ) |
Lasers | Concentrated light energy to rapidly and precisely heat materials Uses: cutting materials, welding, drilling | Up to 50% depending on type | High temperature (> 1000โ) |
Electron beams | Streams of high-energy electrons used to heat materials. Generated by accelerating electrons and focusing them onto a target material. Uses: welding, additive manufacturing | > 95% | High temperature (> 1000โ) |
Decarbonized hydrogen combustion | Green hydrogen (using electrolysis) or blue hydrogen (using carbon capture) can be burned to generate immense amounts of heat without carbon emissions Uses: steel production, chemical manufacturing, refining | 16% for green hydrogen (without waste heat recovery, at 1340โ) | High temperature (> 1000โ) |
Thermal batteries | Type of heat storage that can be activated anytime; stores heat in a heat-absorbing material in an insulated case. Can be connected to the grid or independent. Uses: metal processing, glass, chemical processing, oil refining | 95% round trip efficiency | Medium - high temperature (up to 1500โ) |
Policy and Economics
Policy mechanisms are essential to initiating industry decarbonization because they provide a regulatory framework and incentives that drive companies to adopt cleaner technologies and practices. Without such policies, market forces alone may be insufficient to overcome the high initial costs and risks associated with transitioning to low-carbon operations in industry.
Examples of Policy Mechanisms and U.S. Policies That Support Industry Decarbonization
Policy Mechanism | U.S. Example |
---|---|
Emissions standards on industrial boilers and other industrial equipment | National Emission Standards for Hazardous Air Pollutants from the Environmental Protection Agency (EPA) related to institutional boilers and process heaters |
Efficiency standards for industrial equipment | Appliance and Equipment Standards Program from the Department of Energy (DOE) sets minimum energy efficiency standards |
Green government procurement | Environmentally Preferable Purchasing Program from the EPA encourages the U.S. government to purchase products that meet certain standards and ecolabels. In 2022, the U.S. government purchased more than 8 million registered products |
Financing policies such as green bank, rebates for electrified industrial equipment, subsidies for clean production | In the Inflation Reduction Act, the Section 45X Advanced Manufacturing Production Tax Credit incentivizes certain technologies for clean industrial production. The DOE Loan Programs Office aims to support and grow new technologies that havenโt found a commercial market |
R&D support policies | The U.S. Department of Energy Industrial Efficiency and Decarbonization Office provides investment across areas related to industrial decarbonization such as direct funding, support of national labs, conferences, etc. |
Carbon pricing | The U.S. does not have a federal carbon tax, but there are programs such as Californiaโs cap-and-trade system, which apply to industry. Several East Coast states formed the Regional Greenhouse Gas Initiative (RGGI) to price carbon, although currently only the electricity sector, not the industry sector, is included in RGGI |
Visit our Energy Policy page for more information.
Drivers
- Need for carbon reduction to address climate change
- Many technologies have been developed for decarbonization
- Government regulatory pressures such as emissions or efficiency standards
- Government financial incentives such as those offered under the Inflation Reduction Act
- Increasing demand for green products by businesses and consumers
Barriers
- Lack of requirement to decarbonize; in many places, there is no penalty for emitting CO2
- Electricity is more expensive per unit energy than natural gas, even after adjusting for the fact that electricity is used more efficiently (with the exception of select technologies such as industrial heat pumps and thermal batteries)
- Upfront capital costs to change technologies / swap out equipment
- Technology is still being developed for some high heat processes
Climate Impact: High

- High emissions of CO2 and other GHGs from industrial processes
Environmental Impact: High

- Air pollution: NOx, SOx, VOCs
- Water pollution, land degradation
Featured Lecture on
Decarbonizing the Industrial Sector
This is our Stanford Energy Seminar lecture on decarbonizing industry. We strongly encourage you to watch the full lecture to understand the importance of decarbonizing the industrial sector and opportunities that exist for reducing greenhouse gas emissions from major subsectors like iron and steel, chemicals, and cement. We also encourage you to review the readings and videos listed in the next section to help contextualize the lecture content.

Presented by: Jeffrey Rissman, Senior Director, Industry at Energy Innovation; Author of Zero-Carbon Industry: Transformative Technologies and Policies to Achieve Sustainable Prosperity
Recorded: February 26, 2024 Duration: 55 minutes
Readings and Videos on
Industry Decarbonization
For a complete learning experience, we strongly encourage you to review the readings and videos below in addition to watching the Decarbonizing the Industrial Sector lecture.
General
- How Heavy Industries Contribute to Climate Change and What Can Be Done to Cut Emissions. PBS NewsHour. March 29, 2024. (6 min)
A brief explanation of why heavy industry has been slow to decarbonize and projects that are being funded by recent White House pledges to spur a green revolution in industry. - Rebecca Dell on Decarbonizing Heavy Industry. Volts Podcast. February 11, 2022. (92 minutes)
A comprehensive overview of the problems of industrial decarbonization, promising technological solutions, and the kinds of policies that could accelerate progress. - Heavy Industry and Global Greenhouse Gas Emissions - What Does the Future Hold?. DW Documentary. September 19, 2023. (28 min)
Explores the challenges and presents glimmers of hope on the path to eco-friendly heavy industry. - Biden Admin Plans Historic $6 Billion Industrial Carbon Offensive. Axios. March 25, 2024. (1 page)
The Energy Department plans to award up to $6 billion across 33 projects to wring carbon dioxide from heavy industries like metals, chemicals, and cement. - Chart: Which Sectors Are the Biggest Industrial Emitters in the US?. Canary Media. May 24, 2024. (1 page)
Chart showing direct industrial emissions by subsector in the US and brief explanation of the implications. - Electric Reactor Could Cut Industrial Emissions. StanfordReport. August 19, 2024 (2 pages)
Researchers at Stanford have developed a new thermochemical reactor that can use electricity to generate the immense heat needed for industrial processes. - Bronze Age Technology Could Aid Switch to Clean Energy. Stanford Doerr School of Sustainability. August 1, 2024. (2 pages)
Stanford research finds potentially significant benefits to using "firebricks" for storing heat that can be used for industrial processes. - Can Antora Energy Solve Green Energy Challenge For Industry?. Forbes. May 21, 2024. (3 pages)
An introduction to Antora Energy, a start up that developed a thermal battery with the potential to help decarbonize industry.
Steel
- How Steel Might Finally Kick Its Coal Habit. Wired. February 6, 2021. (2 pages)
Describes the approach Boston Metal is working on that has the potential to decarbonize steelmaking. - Making Carbon-Free Steel With Clean Electricity. Volts Podcast. May 29, 2024. (51 minutes)
The CEO of Boston Metal explains "molten oxide electrolysis" and its potential to transform the steel production industry.
Chemicals
- Living With Chemistry. Voyager. March 29, 2024. (4 pages)
Explores the challenges to decarbonizing chemicals production and promising approaches that are emerging.
Cement
- The โโClean Cementโ Projects Getting $1.5b in Biden Admin Funds. Canary Media. March 27, 2024. (3 pages)
A breakdown of cement decarbonization projects that won awards and the technology pathways they are exploring. - Here's 3 Ways to Cut the Carbon Out of Cement Right Now. Forbes. February 7, 2023. (1 page)
Describes three groups of solutions for decarbonizing the cement industry.
Additional Resources About
Industry Decarbonization
Stanford University
- Stanford Precourt Institute
- Stanford Strategic Energy Alliance
- Civil and Environmental Engineering Department
- Kyle Douglas - Sustainable concrete, energy efficient buildings
- Electrical Engineering Department
- Jonathan Fan - Using electricity to decarbonize the production of industrial chemicals
- Mechanical Engineering Department
- Arun Majumdar - Nanoscale materials and devices for energy conversion, transport, and storage; energy's impacts on climate change
Industry Organizations
- Alliance for Industry Decarbonization
- United States Climate Alliance Enabling Industrial Decarbonization: A Policy Guidebook for US States
Fast Facts Sources
- Share of Global GHG Emissions from Industry (2016): Our World in Data. Sector by Sector: Where Do Global Greenhouse Gas Emissions Come From?. September 18, 2020.
- Share of U.S. GHG Emissions from Industry (2022): U.S. Environmental Protection Agency (EPA). Sources of Greenhouse Gas Emissions | US EPA. October, 2024.
- Share of GHG Emissions from Industry by Country (2020): Our World in Data. Breakdown of Carbon Dioxide, Methane and Nitrous Oxide Emissions by Sector. January 2024.
- Share of Global Energy Used for Industry (2022): International Energy Agency (IEA). Energy System: Industry. 2024.
- Share of U.S. Energy Used for Industry (2023): U.S. Energy Information Administration (EIA). Monthly Energy Review. U.S. Energy Consumption By Source and Sector. April 2024.
- Share of Global Energy Used in Industry From Renewable Resources (2021): REN21. Renewables 2024 Global Status Report โ Renewables in Energy Demand. 2024.
- Share of U.S. Energy Used in Industry From Renewable Resources (2022): U.S. Energy Information Administration (EIA). Use of energy in industry. 2023.
- China Exporting of Metals (2021): World Bank. Expanded metal, iron or steel exports by country. 2021.
- Thermal Battery Efficiency (2023): Energy Innovation. Industrial Thermal Batteries. 2023.
- Blue Hydrogen Efficiency (2024): ScienceDirect. Jan Rosenow. A meta-review of 54 studies on hydrogen heating. 2024.
- Green Hydrogen Efficiency (2024): ScienceDirect. Jan Rosenow. A meta-review of 54 studies on hydrogen heating. 2024.
- Laser Efficiency (2024): Fiber vs. Nd:YAG Lasers in Manufacturing
- Electric Arc Efficiency (2009): ScienceDirect. Energy efficiency and the influence of gas burners to the energy related carbon dioxide emissions of electric arc furnaces in steel industry. 2009.
- National Emission Standards for Hazardous Air Pollutants (2022): U.S. Environmental Protection Agency (EPA). Industrial, Commercial, and Institutional Boilers and Process Heaters: National Emission Standards for Hazardous Air Pollutants (NESHAP) for Major Sources. 2024.
- Appliance and Equipment Standards Program: U.S. Department of Energy (DOE). About the Appliance and Equipment Standards Program
* Rest of information is from the lecture video
More details available on request.
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