Decarbonizing industry is difficult but possible

Industry is the backbone of the U.S. economy: it provides and transforms raw materials, goods and chemicals needed for civilization, including the energy transition. Yet, it is also responsible for a third of global greenhouse gas (GHG) emissions and 30% of U.S. GHG emissions .

Industrial GHGs include direct (combustion of fossil fuels, leaks and byproducts) and indirect emissions (the purchase of electricity and heat). Even if we reduce indirect emissions through electrification and clean energy, uncontrolled direct emissions from industry would still be responsible for at least 20% of GHG emissions both globally and in the US. Heavy industry, which creates products like cement, iron and steel, chemicals and plastics is particularly carbon intensive, which is why we should invest in ways to mitigate its large direct emissions of CO2.

Why decarbonizing heavy industry is a challenge

Decarbonizing heavy industry is difficult, because its direct emissions are the byproducts of chemical reactions or related to processes that require very high heat or fossil fuels as feedstocks. And because industry uses fossil fuels like coal as feedstock, manufacturing processes often rely on them for heat as well, making it more challenging to reduce industrial fossil fuel consumption. Moreover, there are other obstacles to rapid decarbonization, such as the long lifetimes of industrial facilities (possibly 30+ years) and their high capital intensity. This makes it difficult—but also necessary—to retire or retrofit them on a timeline consistent with limiting warming to 2 degrees Celsius or less.

Another constraint: industrial products must often meet precise quality criteria to comply with safety regulations. In other words, lowering the carbon content of steel or cement manufacturing could impact the quality of the material outputs. Hence, if the characteristics  of carbon-intensive industrial products change, the specifications associated with  building codes and standards may need to change as well, especially if changes imply a modification of the physical properties of common building materials. Finally, geographical limitations like the local availability of renewable energy, key energy feedstocks and infrastructure as well as carbon storage capability may dictate the possibility of decarbonizing heavy industry or not.

That’s why we need to move forward with developing technology and processes that can decarbonize direct emissions from heavy industry. Luckily, several options are available.

Reducing CO2 emissions from high temperature industrial processes 

For industrial heat, there are temperature, quality and flow rate constraints on viable options that stand in contrast to electricity and residential heat (the temperatures required in heavy industry varies from 200°C to 2,000°C). The Columbia Center on Global Energy Policy identified hydrogen (blue, from natural gas or green, from renewable feedstocks), biomass and biofuels, electricity (resistance and microwave), nuclear (conventional and advanced), concentrated solar energy, and carbon capture utilization and storage (CCUS) as options for tackling decarbonization of industrial heat. Each has technical and economical tradeoffs:

  • Biodiesel and hydrogen have the highest heat potential, while conventional nuclear the lowest.
  • Nuclear is the least expensive option, while Green Hydrogen the costliest. They estimate CCUS adding up to 50% cost to the fossil fuel.
  • Green Hydrogen and nuclear have the lowest carbon footprint, while blue hydrogen the highest.
  • Biofuels and Hydrogen are the most feasible, while Nuclear is the most challenging to implement or build.
  • Considering indirect costs and quality of heat needed, these options could increase wholesale costs of production between 10 to 200 percent depending on the sector and specific application.
  • Many options are not cost competitive with retrofitting existing fossil fuels plants with CCUS, and low carbon hydrogen seems the most viable option in the future due to both costs and feasibility.

Cutting process CO2 emissions

The other major source of direct emissions, process emissions, represent an even greater challenge. This is where the rest of direct emissions fits: leaks, fossil fuels as feedstock for chemical reactions and GHG emissions as byproducts of chemical reactions. Rissman et al. (2020) identified the following options:

  • On the producer side: CCUS, use of new materials, energy efficiency, new chemical reactions, leak repairs.
  • On the consumer side: circular economy; 3D printing; reduced material use: longevity, intensity and material efficiency; alternate materials.

The role for policy 

Incentivizing industry decarbonization will require collaborating with industry and engaging policy makers. There are several ways policy can mobilize development and deployment of new processes and technologies in heavy industry, including:

  • Carbon pricing, which increases the costs of using fossil fuels in industrial processes. To ensure domestic producers are not put at a disadvantage in the global market and that there is no emissions “leakage” overseas, the carbon price should include a border adjustment on imported products and materials from heavy industry in other countries.
  • Energy efficiency and/or emission standards to drive deployment of low-carbon technologies.
  • Federally funded research, development, and deployment (RD&D) as well as robust financial incentives to spur private RD&D.
  • Procurement standards and government-sponsored pilot projects to help address the financial risks facing entrepreneurs and early movers.

New initiatives show promise

IEA has noted that in order to get to net zero emissions by 2050, it is important to avoid locked-in emissions from investment in the industry sector, especially considering investment cycles beginning around 2030 will endure for 25 years. By boosting spending on research and development, low carbon technology for the Industry sector might be mature enough to be marketable by the time new investments are done.

While there is still a long way to go, some companies are already exploring ways to deploy decarbonizing technology. The Hybrit initiative, backed by Swedish and Finnish state owned companies LKAB, SSAB and Vattenfall,  is preparing the construction of a demonstration plant to produce low carbon steel with hydrogen by 2035. Canadian Carbon Cure is already mixing recycled CO2 into cement reducing the carbon footprint of their production process. Massachusetts-based Boston Metal is already producing steel with molten oxide electrolysis, a process that removes the need to use coal as feedstock and therefore has no CO2 emissions. Archer Daniels Midland Company (ADM) has deployed a commercial scale Carbon Capture and Storage ethanol refinery plant in Illinois.

These examples highlight some of the strategies and tools that can be used to allow heavy industry to continue to provide the goods and materials we rely on – and the emerging technologies necessary for a clean economy – while decarbonizing. But it will take robust policy support and a significant increase in RD&D funding to reduce direct and indirect industrial emissions at the speed and scale science demands.


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