Decarbonizing industry: Policy approaches to eliminate hard-to-abate emissions

Edited by: BERTRAND J. NEYHOUSE1 AND LAURA SHUPP2

Heavy industry remains among the hardest sectors to decarbonize while accounting for more than a fifth of all greenhouse gas emissions in the U.S. Industrial emissions remain so challenging to mitigate largely due to the enormous scale and the diversity of production processes involved. However, just steel, cement, and major petrochemicals (ammonia, methanol, and ethylene) account for half of industrial emissions, and share similar potential decarbonization pathways. This article reviews two major classes of decarbonization: short-term drop-in technologies such as clean heating, and long-term material-specific technologies such as electrochemistry. Implementing both classes of emissions reduction approaches will require significant policy intervention at all stages of the commercialization of these new technologies. Due to recent legislation, there is a notable amount of funding for scaling these technologies, but there remains opportunity for further support via regulation and demand-side interventions.

Highlights

1. Industrial activities account for over a fifth of greenhouse gas emissions, but are notoriously difficult to decarbonize.

2. Decarbonizing the production of just five commodities —cement, steel, ammonia, methanol, and ethylene—would reduce global annual CO2 emissions by 11%.

3. In the near-term, decarbonization can be achieved by carbon capture, electrified heat, or using alternative feedstocks, while revamping conventional processes could lead to long-term decarbonization.

4. Existing policies are primarily economics-based, with a variety of financial incentives for developing and deploying novel technologies.

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