How Can We Cut Industrial Emissions?

The Environmental and Energy Study Institute (EESI) held a briefing about pathways for industrial decarbonization. Materials like steel, iron, and cement form the backbone of U.S. industry, and have long been a symbol of U.S. innovation and prosperity. The production of these materials, as well as chemicals and plastics, often requires extremely high temperatures typically achieved by burning fossil fuels. The industrial sector is the second-largest greenhouse gas emitter, representing 30% of all U.S. greenhouse gas emissions, and is projected to be the largest by 2035.

This briefing identified opportunities for industrial emissions reductions—such as electrification and material reuse. Panelists also highlighted how key players from the federal government and private sector come together to advance deployable innovations like green steel and carbon-negative concrete. Attendees left with an understanding of industrial decarbonization efforts that also boost American competitiveness and create a more resilient economy and climate.

Highlights

KEY TAKEAWAYS

There are more than 2,500 industrial facilities in the United States that each emit at least 25,000 tons of carbon dioxide equivalent a year.
The Department of Energy has a five-category framework to asses industrial decarbonization technologies’ readiness for deployment. There are readily deployable technologies, including energy efficiency measures, raw material substitution, and carbon capture and storage.
The federal government can encourage private investment in industrial decarbonization through incentivizing supply through providing grants, creating demand especially through government procurement, and implementing regulations like those that would set greenhouse gas emissions limits.
The European Union Carbon Border Adjustment Mechanism may encourage investments in industrial decarbonization in the United States and elsewhere.

Angela Anderson, Director of Industrial Innovation, World Resources Institute

Industrial activities like manufacturing, mining, construction, and waste processing are responsible for 21% of direct greenhouse gas emissions globally.
Making chemicals for plastics, fertilizers, cosmetics, and other consumer products produces over 27% of direct U.S. greenhouse gas emissions in the industrial sector.
The Clean Air Act and other environmental policies in the 1960s and 1970s created market mechanisms to help finance a transition to cleaner manufacturing.
Today, the United States is well-positioned to decarbonized “hard-to-abate” sectors like industry. The global drive toward lower-carbon products is creating an opportunity for U.S. companies to modernize and deliver benefits to communities and the environment.
Policy tools to reduce industrial greenhouse gas emissions include international carbon tariffs that levy fees on imports that exceed an emissions threshold and domestic actions like carbon markets in China and Vietnam.
The technologies needed for this transition are within reach. Some of the technologies and practices that can decarbonize industry include capturing carbon and electrifying industrial processes.
It will take both public policy and private sector action to enable U.S. companies to compete and win in the global market. The United States government has invested in and incentivized decarbonization technologies to encourage companies to adopt them at scale, though further developments in data collection, transparency, and standards are needed for success.
It is critical for companies to work with communities from the beginning to build project support and avoid costly delays, ultimately making the energy transition smoother.
The energy transition is underway and is an opportunity to modernize aging factories, reduce emissions, improve air quality, and bring prosperity to the United States.

Katheryn Scott Pavao, Founder, KLSP Consulting

In 2023, the Department of Energy’s (DOE’s) Office of Technology Commercialization released Pathways to Commercial Liftoff reports to accelerate the deployment of clean energy technologies.
The Pathways to Commercial Liftoff report for industrial decarbonization identifies more than 2,500 industrial facilities in the United States that each emit at least 25,000 tons of carbon-dioxide-equivalent a year.
There are readily deployable industrial decarbonization technologies, including energy efficiency measures, raw material substitution, and carbon capture and storage.
DOE created a five-category framework to asses a technology’s readiness for deployment: value proposition, resource maturity, market acceptance, community perception, and market-ready technology.
DOE’s Industrial Demonstrations Program received $6 billion to help fund 33 industrial decarbonization projects, planned to bring in about $14 billion of additional private sector funding, and projected it would lead to tens of thousands of jobs.
The Trump Administration is ramping down these programs, and has canceled funding for 23 of the 33 industrial decarbonization projects. The 10 projects that have kept their federal funding include two in chemicals and refining, two in iron and steel, one cement project, and five in aluminum and metals. Geographically, the canceled projects are spread across facilities in 16 states.
Despite the federal government stepping back, partnerships are continuing between hyperscalers (whose data centers require industrial materials), nonprofits, and industry. Several U.S. companies are seeking to accelerate the adoption of low-carbon building materials. Philanthropic organizations are working together with industry to create and underwrite insurance products for first-of-a-kind projects.

Abigail Regitsky, Program Director, Blue Horizons Foundation

Abundant, affordable, and clean industrial goods are essential to everyday life and global infrastructure development in emerging economies. The world is going to need more factories that can produce all of the materials needed.
The Rhodium Group’s global greenhouse gas emission projections, modeled using current policies, show steadily increasing industrial emissions with an uptick around 2060 due to accelerated growth in emerging economies.
Innovation in all stages of technology development needs investment and supportive policies so that decarbonization technologies can become cheaper and spread worldwide.
Technologies developed in industrialized countries can be transferred to developing countries to support their sustainable development. U.S. industrial innovations can lead to emission reductions worldwide, making the United States more competitive, resilient, and secure.
The federal government can encourage private investment in industrial decarbonization through incentivizing supply through providing grants, creating demand especially through government procurement, and implementing regulations like those that would set emissions limits.
Technology development happens in stages. In the early stages, the federal government plays an important role in funding the innovation cycle because there is no clear return on investment. The middle stage is when technology is scaled up and attracts private investment to launch commercially, which leads to the last stages of deployment and market transformation. Federal government involvement—in terms of financial support and through regulation—is needed for the deployment of emerging technologies.
Electrification is a crosscutting decarbonization technology that needs abundant and affordable clean electricity. This will require siting and permitting reform to make way for transmission upgrades.
Carbon capture and storage and green hydrogen are also cross-cutting decarbonization technologies, and both require large infrastructure investments.
Updating codes and standards is important for decarbonization in the cement and concrete sector. At present, companies follow particular recipes to adhere to prescriptive specifications. There is an effort now to move to performance specifications to allow for more innovation with new materials.
Industrial decarbonization requires an overall policy and business environment that encourages global and domestic investment.
The European Union Carbon Border Adjustment Mechanism (CBAM) may encourage worldwide investments in industrial decarbonization, including in the United States.
Companies are increasingly turning to data modeling and analysis tools to inform decisions on what investments to make and how to comply with policies like CBAM or the U.S. 45Q tax credit for carbon capture.

Q&A

Q: What overarching themes can policymakers be thinking about when it comes to industrial decarbonization?

Anderson

Clean and firm power needs to be available to industry across all sizes and types of facilities.

Scott Pavao

The aluminum sector is an example of an industry in the United States declining because facilities have lost access to affordable and reliable hydropower. Lack of access to low-cost power and long-term power agreements means only five aluminum plants operate in the United States today.
Electrification technologies like heat pumps and electric boilers have become popular in the food and beverage industry because their installation and maintenance are easily replicable across facilities. These technologies also rely on access to low-cost electricity.
Projects can always be assessed from a thermodynamics perspective. If the energy required by a process is going down or is being used more efficiency, the new process will be cheaper in the long run.

Regitsky

Thermal energy storage technologies can reduce emissions by taking electricity, heating up a storage medium to a high temperature, and then delivering heat to a process, which can replace the role of a natural gas boiler.
In October 2025, Rondo Energy announced the first commercial operation of its heat battery in California.

Q: How does international competitiveness intersect with industrial decarbonization?

Scott Pavao

It is critical to fund research and development for the next generation of technologies and pair this with supporting commercialization.
China has a long-running policy of providing government funding to lots of companies, for example in electric vehicles, and the government does lose money in order to eventually become the global leader when some of the companies succeed.

Anderson

The world continues to move forward with decarbonization. Globally, industries continue to produce their own roadmaps for how they plan to decarbonize. For the United States to remain competitive, it will need to keep up with its counterparts.

Regitsky