Industry

Tracking Clean Energy Progress

More efforts needed

Direct industrial CO2 emissions rose 0.3% to reach 8.5 GtCO2 in 2017 (24% of global emissions), a rebound from the 1.5% annual decline during 2014‑16. To align with the SDS, emissions must peak prior to 2025 and decline to 8.3 GtCO2 by 2030 – despite expected industrial production growth. Increasing energy efficiency, the uptake of renewable fuels, and research and deployment of low-carbon process routes – such as CCUS and hydrogen-based production – are all critical. Governments can accelerate progress by providing innovation funding and adopting mandatory CO2 emissions reduction and energy efficiency policies.

Araceli Fernandez-Pales, Peter Levi, Tiffany Vass
Lead author
Contributors: Andreas Schroeder, Adam Baylin-Stern, Tae-Yoon Kim, Pharoah Le Feuvre, Heymi Bahar, Joe Ritchie

Industry direct CO2 emissions

	Industry total	Other industry	Aluminium	Pulp and paper	Chemical and petrochemical	Cement	Iron and steel
2000	5.126	1.800	0.110	0.219	0.794	1.204	0.999
2001	5.183	1.857	0.109	0.214	0.777	1.247	0.978
2002	5.251	1.873	0.116	0.217	0.755	1.300	0.991
2003	5.519	1.919	0.123	0.221	0.769	1.396	1.091
2004	6.052	2.139	0.129	0.233	0.874	1.478	1.199
2005	6.496	2.307	0.139	0.237	0.925	1.562	1.326
2006	6.929	2.496	0.159	0.233	0.952	1.684	1.405
2007	7.314	2.589	0.176	0.229	1.004	1.778	1.539
2008	7.484	2.644	0.185	0.226	1.020	1.773	1.636
2009	7.456	2.582	0.171	0.223	1.008	1.800	1.672
2010	8.039	2.725	0.188	0.234	1.118	1.885	1.890
2011	8.470	2.790	0.203	0.220	1.166	2.057	2.034
2012	8.494	2.795	0.216	0.206	1.137	2.074	2.067
2013	8.604	2.797	0.226	0.197	1.159	2.141	2.083
2014	8.688	2.768	0.231	0.183	1.166	2.211	2.129
2015	8.592	2.729	0.239	0.177	1.210	2.181	2.056
2016	8.429	2.612	0.240	0.174	1.224	2.205	1.974
2017	8.458	2.549	0.252	0.173	1.249	2.219	2.015
2018	8.647						
2019	8.762						
2020	8.785						
2021	8.766						
2022	8.758						
2023	8.737						
2024	8.706						
2025	8.666						
2026	8.628						
2027	8.573						
2028	8.504						
2029	8.424						
2030	8.325						
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Note: Direct CO2 emissions include energy and process emissions1.

Back to TCEP overview 🕐 Last updated Friday, May 24, 2019

Tracking progress


Demand for industrial products has grown considerably in recent years, along with energy consumption and CO2 emissions.

Some modest improvements have been made in industrial productivity and in renewable heat uptake, and some positive policy and innovation steps have also been taken. Nonetheless, progress is far too slow. Accelerated efforts on all fronts will be needed to get industry on track with the Sustainable Development Scenario (SDS).

Energy consumption and fuel shares

The industry sector accounted for 37% (156 EJ) of total global final energy use in 2017. This represents a 1% annual increase in energy consumption since 2010, with 1.7% growth in 2017 following much slower growth of 0.1% the previous year.

Growth in energy consumption has been driven largely by an ongoing long-term trend of rising production in energy-intensive industry subsectors (i.e. chemicals, iron and steel, cement, pulp and paper and aluminium).

India saw the highest rate of industrial energy consumption growth in 2010‑17 (3.9% annual growth), while China had the largest absolute increase, accounting for 60% of the total net increase. Meanwhile, industrial energy use declined slightly in Europe and the Americas.

The industry sector energy mix has remained relatively unchanged overall since 2010. While solar thermal and geothermal final energy use expanded the most quickly, more than doubling from 2010 to 2017, they accounted for less than 0.05% of total final industrial energy use in 2017.

The fossil fuel contribution to the energy mix decreased from 73% to 70%, while electricity rose from 18% to 21%, largely owing to an increasing electricity share in non-energy-intensive industry.

In the SDS, growth in energy use needs to be limited to 0.8% per year to 2030, despite expected growth in production.

Energy mix changes – particularly a shift away from coal and towards natural gas, bioenergy and electricity – contributes to a fall in the CO2 emissions intensity of industrial energy use.

While solar thermal and geothermal energy continue to expand, they cannot provide high enough temperatures for medium- and high-temperature heat processes, and therefore are unable to replace a large portion of process heat.


Final energy consumption and fuel shares

Energy consumption by industry grew 1% each year on average between 2010 and 2017.

	Other Renewables	Bioenergy	Heat	Electricity	Gas	Oil	Coal
2010	0.020	7.68	5.20	26.67	26.09	30.54	48.94
2011	0.024	7.80	5.41	28.23	27.33	28.76	51.84
2012	0.030	7.85	5.59	28.91	27.61	28.18	52.23
2013	0.031	8.12	5.29	29.85	27.73	28.43	52.65
2014	0.033	8.07	5.16	30.53	27.98	28.58	53.10
2015	0.036	8.17	5.19	30.65	27.50	29.09	52.73
2016	0.038	8.34	5.69	31.15	28.37	29.62	50.29
2017	0.043	8.56	5.88	32.20	29.59	30.34	49.45
2018	0.061	8.94	5.93	33.04	30.69	30.92	50.66
2019	0.081	9.17	6.06	33.82	31.82	31.91	50.81
2020	0.105	9.30	6.10	34.47	32.50	32.92	50.31
2021	0.133	9.48	6.08	34.92	32.99	33.04	49.90
2022	0.170	9.66	6.06	35.38	33.60	33.27	49.57
2023	0.216	9.84	6.03	35.79	34.29	33.48	49.22
2024	0.273	10.02	5.98	36.20	34.88	33.67	48.87
2025	0.343	10.20	5.92	36.55	35.44	33.84	48.48
2026	0.419	10.38	5.85	36.86	35.94	33.98	48.04
2027	0.501	10.55	5.77	37.11	36.39	34.08	47.55
2028	0.591	10.71	5.68	37.31	36.80	34.20	47.02
2029	0.688	10.86	5.58	37.46	37.18	34.30	46.47
2030	0.790	11.02	5.50	37.58	37.58	34.39	45.75
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Note: Final energy consumption includes process energy used in manufacturing industries (including blast furnaces and coke ovens) and feedstock.


Energy productivity

Industrial energy productivity (industrial value added per unit of energy used) has risen in most regions since 2000.

Key contributors to the increase are the deployment of state-of-the-art technologies, operational adjustments leading to more efficient equipment use, and a structural shift away from energy-intensive industry (e.g. steel and cement) and towards a larger share of added value from higher value-added sectors (e.g. automotive manufacturing, food and beverages, and textiles).

Historically, the greatest improvements in energy productivity have been in developed countries, which tend to focus on higher-value industrial products, while countries in which industrialisation is more recent have shown relatively little progress.

Middle Eastern industrial productivity has declined as a result of strong development in energy-intensive manufacturing subsectors between 2004 and 2010, particularly in the cement subsector, which offset the deployment of best available technologies in several expanding industries.

In China, industrial productivity changed very little or even fell between 2000 and 2006, but has since risen. Improvements resulted from China starting to diversify industrial activities away from energy-intensive steel and cement production and towards high-value industries such as machinery and chemicals. Implementation of mandatory energy efficiency policies (the Top 1000 and Top 10 000 programmes) also helped.

Energy productivity is closely connected with energy efficiency. In 2018, investment in industrial energy efficiency was less than USD 40 billion. Although total investment in industrial energy efficiency has been relatively constant since 2015, the market composition has shifted: China represented 37% of the total in 2018 (up from a quarter in 2015), whereas North America’s share dropped from 17% in 2015 to below one tenth in 2018.

At just over 45%, the heavy industry share of total global industrial energy efficiency investment is lower than in 2015, when it was nearly half. This largely reflects the continuing slowdown in construction of new energy-intensive industrial facilities in China, which is the result of ongoing structural change in the Chinese economy as well as in Europe and North America.

In the Asia Pacific region, India is an emerging source of industrial energy efficiency investment, with an increase of nearly 5%. Modernisation of industrial facilities, coupled with the strong government mandates of the Perform, Achieve, Trade (PAT) Scheme, stimulated higher levels of investment.

Despite these positive developments, this indicator is off track. Global industrial productivity needs to increase 2.3% per year to 2030 to get on track with the SDS – an acceleration from the 1.9% annual growth of 2010‑17.


Industrial energy productivity by region

Global industrial energy productivity has increased in recent years, but this trend needs to accelerate to get on track with the SDS.

	Global	Europe	North America	Central & South America	Africa	Middle East	Eurasia	China	India	Other Asia Pacific
2000	134.7881191	199.3127035	168.6257484	143.144041	134.1659426	168.3598313	41.05014681	58.62597634	47.50320135	138.5103556
2001	135.2372448	203.1382813	174.6842543	141.3553876	134.5209771	157.6588301	43.29219206	60.07723455	49.5159684	135.8269159
2002	136.1320762	204.897536	183.7803524	137.8701026	129.2427649	152.8693886	46.51916391	62.12902122	50.43619783	134.8733603
2003	135.2786455	202.2579721	187.457548	137.7537344	135.2144955	169.5575515	50.00834887	59.88982361	54.79761401	135.4808997
2004	132.9846308	206.2621892	187.771709	143.1362962	140.6709631	173.9123236	54.16056198	54.01933029	56.36698781	136.8906435
2005	131.1327838	211.7439059	199.8971295	145.976561	140.2093605	166.849873	57.98336544	49.34190758	58.49716948	140.4065338
2006	131.2750221	221.5751605	200.6380111	146.9365732	142.2632642	160.8623963	61.84794654	50.62813464	59.96693413	139.1391474
2007	132.432377	226.203363	206.4825021	155.2064927	143.522801	144.1895399	64.81819903	53.32761018	62.58011475	142.5647603
2008	132.9594443	233.8830342	206.4856869	155.1871941	146.8389468	137.7417478	66.28665733	56.13563269	60.10829837	148.9403839
2009	128.1169271	243.7913661	212.3119245	155.058601	141.1631829	126.762935	61.35633753	57.52620276	60.32818237	141.130994
2010	126.4702265	237.5987715	202.9118414	151.3187219	146.2864378	117.0462831	57.71443237	59.78534896	60.2197167	147.7601105
2011	127.3507606	245.60032	213.515338	158.237597	136.6017426	118.9507236	59.09635366	61.49902875	60.69284074	148.7099087
2012	129.6208111	243.1438383	232.0915197	163.8817557	149.7173378	110.7083868	59.15810822	64.91044361	62.39180259	151.9697053
2013	131.9319387	246.152846	240.5855085	166.9045026	142.8351714	112.3751732	63.01293738	68.35930212	61.74095573	152.8829863
2014	134.9804985	256.3791291	249.7071453	166.4106786	147.375141	110.2672588	62.59411362	72.3450115	62.86800818	155.3303433
2015	138.7862391	264.6364673	258.9250781	166.0399969	146.6788415	112.895103	59.72235306	76.7695861	67.34043367	158.3996686
2016	141.9602417	269.3633578	254.3659207	161.7999189	136.0711519	120.1074518	57.0251804	83.53518982	69.01947713	162.140516
2017	144.3174597	268.8525448	255.9274592	165.8474174	138.1251929	119.0275519	55.36074843	88.29108665	71.01462138	165.0267557
2018	145.5182688	277.4027308	249.8118697	164.6851389	140.1661328	118.5443685	56.12180034	91.29011869	70.71834215	166.1863092
2019	147.4468094	282.5650189	245.6498503	166.2758993	142.2915613	119.5051993	55.72344073	95.72598305	71.77819028	167.3869171
2020	150.3749238	289.3559955	247.5274347	168.7561572	145.4670737	122.1224789	55.79031803	100.6330504	73.58850557	169.0515156
2021	154.4246841	295.8410064	252.7948744	171.2982006	149.1117136	125.2433784	56.99290187	106.5457762	75.42266573	172.3544425
2022	158.1519797	301.5057566	257.1279173	174.0156926	152.6074737	127.317796	58.09150754	112.3902171	77.82091327	174.9215033
2023	161.9443571	308.5017665	259.5284678	177.0392758	155.941413	129.3344147	59.24315293	118.4926036	80.35341728	177.839082
2024	166.0172136	315.6529334	263.9310177	180.2852383	159.6432623	131.7022107	60.48368113	124.6631471	82.96383183	181.0708067
2025	170.2674412	323.1532495	268.6717219	183.9010866	163.5913395	134.2421636	61.87095292	130.9895458	85.56695688	184.6068282
2026	174.7546536	331.0378811	273.9382304	187.8691299	167.5749539	136.4681979	63.36685696	137.5619703	88.3192291	188.5919416
2027	179.4709641	339.0142571	279.4808918	192.1475185	171.8430432	138.8542199	64.99745986	144.4330416	91.31176124	192.7047294
2028	184.329159	347.2913507	285.1663852	196.783387	176.3654595	141.4379342	66.75185467	151.4977955	94.31197661	196.9566701
2029	189.4027158	355.8895383	291.0105384	201.8547088	181.1052772	144.2832564	68.65205168	158.7610083	97.60555597	201.3113216
2030	194.6658753	364.9666293	297.1893523	206.9979338	186.002872	147.3357433	70.6213806	166.2371614	101.0918478	205.7865093
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Note: Industrial energy productivity is defined as industrial value-added per unit of energy used. Value-added is calculated using market exchange rate values.


Renewable heat

Over 2010-18, renewable heat consumption increased 2% per year on average, with renewables meeting just under 10% (10 EJ) of industrial energy demand for heat in 2018.

This falls short of the 3% per year increase needed to meet the SDS trajectory by 2030, when renewables satisfy 13% (15 EJ) of industrial heat demand.

The majority (90%) of renewable heat currently consumed in industry comes from bioenergy (including bioenergy used for district heating), equalling 8.5% of industry energy demand for heat. 

While bioenergy is used considerably in pulp and paper production (30% of energy use) and more modestly in cement (5% of energy use), its use is very limited in other energy-intensive industries. Most consumption occurs in industries that produce biomass wastes and residues on site, such as in the pulp and paper subsector and in food and tobacco.

To increase its use in other subsectors, biomass fuel supply chains that are competitive with fossil fuels need to be established. This can be challenging, however, because policy support for renewables in industry and carbon pricing mechanisms are not widespread.

The second-largest share (nearly 10%) of renewable heat used in industry comes from renewable electricity. This share is expanding as renewables figure increasingly in national electricity generation portfolios and as more industrial processes become electrified.

While renewable electricity for heat expands under the SDS, technical challenges and the high costs of using electricity directly for high-temperature heat are likely to limit its penetration.

The use of solar thermal energy for industrial processes has also been expanding, especially for processes that require low-temperature heat (below 100°C). These processes include drying, bleaching, cooking and pasteurisation in industries such as textiles and food.

In energy terms, however, the contribution of solar thermal remains very small and several barriers constrain its uptake: a lack of policy incentives, low awareness of its potential, and challenges integrating it with industrial energy demand.


Renewable heat in industry

While renewable energy consumption has increased in recent years, in the SDS it increases at an accelerated rate.

	Renewable district heat	Renewable electricity for heat	Geothermal	Other renewables	Bioenergy
2010	0.259	0.662	0.014	0.020	7.677
2012	0.301	0.748	0.016	0.030	7.849
2014	0.326	0.815	0.019	0.033	8.069
2016	0.344	0.860	0.023	0.038	8.343
2018	0.352	0.984	0.026	0.046	8.823
2030	0.461	2.596	0.000	0.795	10.886
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Demand for materials

Demand for materials is a major determinant of total energy consumption and CO2 emissions in industry subsectors.

Material demand has historically been closely linked with both population and economic development: as economies develop, urbanise, consume more goods and build up their infrastructure, material demand per capita tends to increase considerably. Once industrialised, an economy’s material demand may level off and perhaps even begin to decline.

Decoupling material demand from economic and population growth can help curb growth in energy consumption and CO2 emissions from material production.

In the past couple of decades, global demand growth for key energy-intensive materials has exceeded population growth and - for many materials – GDP growth. Growth since 2000 has been particularly high, largely driven by rapid economic development in China.

Estimates suggest, however, that global demand levelled off in the past two to three years (at least temporarily) for a number of materials, particularly cement and to some degree steel and aluminium, while GDP and population continue to grow. This levelling-off is largely the result of saturation of material demand in China.

While it may be a first step towards decoupling global material demand from economic and population growth, strong growth in other emerging economies may drive up material demand again in the coming years.

By reducing material demand growth, ambitious pursuit of material efficiency strategies could help reduce some of the deployment needs for other CO2 emissions mitigation options that would normally be required to achieve the SDS emissions reduction.

For instance, pushing material efficiency to its practical but achievable limit in a Material Efficiency variant (MEF) scenario causes demand for steel in 2030 to be more than 15% lower than in the reference New Policies Scenario (NPS), and cement demand is nearly 10% lower.

Conversely, demand for aluminium is 5% higher, as it is used for vehicle lightweighting to reduce use-phase emissions.

Opportunities for material efficiency

Opportunities for material efficiency exist at each stage of any supply value chain. These include:

  • vehicle lightweighting and improved building design (product design and fabrication)
  • extending building lifetimes through repair and refurbishment and reducing vehicle demand through mode-shifting (use-phase),
  • increased metal manufacturing yields (material production stage)
  • reuse (end-of-life).

Additionally, rather than by reducing final material demand, increased end-of-life recycling can reduce emissions by enabling greater uptake of lower-emitting secondary production methods.

Read more in the IEA's Material Efficiency in Clean Energy Transitions report


Demand for materials

Demand for key energy-intensive materials has grown rapidly since 1990 but recently began to level off for a number of materials.

	Cement	Plastics	Aluminium	Steel	GDP	Population
1990	100	100	100	100	100	100
1991	102	104	102	95	101	102
1992	106	110	101	93	103	103
1993	111	115	103	94	105	105
1994	118	127	99	94	108	106
1995	125	131	102	98	111	108
1996	129	141	108	97	116	110
1997	133	150	112	104	120	111
1998	133	157	117	101	123	113
1999	138	169	122	102	127	114
2000	143	178	126	110	134	116
2001	150	183	126	110	137	117
2002	159	194	135	117	141	119
2003	175	202	145	126	146	120
2004	189	214	155	139	154	122
2005	203	219	165	149	161	123
2006	226	233	176	162	170	125
2007	242	245	196	175	179	126
2008	246	233	206	174	184	128
2009	263	238	193	161	183	129
2010	283	256	217	186	193	131
2011	313	266	233	200	201	133
2012	329	274	255	202	208	134
2013	351	285	270	214	215	136
2014	361	296	281	217	222	137
2015	353	307	301	210	229	139
2016	353	321	305	211	237	141
2017	349	336	311	219	245	142
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Policy coverage

In 2017, mandatory policy-driven energy efficiency targets and standards covered less than 25% of total industrial energy use in most regions, with no major increases in coverage relative to the previous year.

While a number of countries have minimum energy performance standards for electric motors, few have mandatory overall performance targets for industrial firms and sectors.

China and India are some of the strongest performers on policy coverage, having put in place mandatory targets for energy savings in industry sectors several years ago that still apply today.

In China, the 100, 1 000, 10 000 Programme has been included as part of the 13th Five-Year Plan (2016‑20), and supersedes the previous Top 10 000 Programme, a component of its 12th Five-Year Plan (2011‑15). In India, the PAT Scheme began in 2012; as its second cycle (2016‑19) is coming to an end, the third is beginning.

To get on track with the SDS, it will be important to extend mandatory policy coverage to a larger portion of industrial energy use, and in more regions. Just as important is to ensure that the strength of requirements of both new and existing policies is ambitious enough.

To achieve high enough emissions reductions, policies need to cover not only energy efficiency and process optimisation, but also other factors that influence industrial emissions such as process emissions and technological shifts. Policies targeting overall CO2 emissions reductions (e.g. a multi-sector or economy-wide emission trading system [ETS]) are therefore important.

China, for example, launched its ETS platform in December 2017. The first steps are being taken to set up the required administrative infrastructure and mock allowance trading, with real spot trading expected to begin in 2020.

The initial phase will cover only the power sector rather than the several industry subsectors originally planned, apparently due to difficulties in collecting robust industrial statistics. Improving data collection and including industry sectors in the scheme would help to achieve emissions reduction objectives.


Mandatory policy coverage of industrial energy

In most regions, mandatory energy efficiency policies covered less than 25% of industrial energy use in 2017.


Voluntary energy efficiency policies also exist in many regions: for instance, the number of ISO 50001 certifications for industrial energy management systems reached at least 21 500 in 2017, according to a voluntary survey by the ISO (ISO, 2019).

The increase in certifications in 2017 was considerably lower than over the previous five years, however. Unless the growth trends of pre-2017 recover, the world may fail to achieve the Clean Energy Ministerial Energy Management Campaign’s target of 50 001 industrial operations with ISO 50001 certification by 2020.

Furthermore, about 80% of the uptake so far has been in Europe, which accounted for just 12% of global final industrial energy use in 2017, so uptake needs to accelerate in other regions.

Other energy management system standards may have higher uptake in specific regions.

For example, in 2016‑17, the number of certifications under China’s GB/T 23331 standard increased by 25% (from 2 036 to 2 552) (CNCA, 2018). Improved data on these various standards, including data on resulting energy and emissions reductions, would be useful to better analyse their impact.


ISO 50001 energy management system certifications

The number of ISO 50001 certifications reached over 20 000 in 2017.

	CEM Energy Management Campaign target	Africa	North America	Central & South America	Middle East	Eurasia	Other Asia Pacific	India	China	Europe
2011		0	1	11	8	1	38	25	12	363
2012		13	9	10	18	9	134	74	58	1911
2013		36	34	34	62	45	330	172	150	3961
2014		18	77	63	89	104	438	271	261	5444
2015		40	77	92	130	165	477	405	565	10034
2016		58	73	81	153	260	722	570	1375	16924
2017		61	127	132	294	334	601	608	1942	17402
2020	50001									
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Note: The ISO estimates the number of certifications using a voluntary survey of certification bodies, so this estimate should be regarded as conservative.


Innovation

Two main approaches are being pursued to develop innovative low-carbon industrial processes:

  • Directly avoiding CO2 emissions by relying on renewable electricity (directly or through electrolytic hydrogen), bioenergy or alternative raw materials
  • Reducing CO2 emissions by minimising process energy, using fossil fuels but integrating CCUS

Finding value-enhancing uses for industrial by-products is another area of innovation, in which synergies are sought among different industrial activities, including through CCUS.

A number of key innovation efforts are under way around the world, including the following:

  • In February 2019, the European Commission announced EUR 10 billion in funding for the demonstration of low-carbon technologies. The Innovation Fund, initially proposed in 2015 and largely funded by revenue from the EU ETS, will support large-scale demonstrations of low-carbon technologies and processes in energy-intensive industries, CCUS, renewable energy and energy storage. The first call for proposals will be in 2020, with subsequent calls until 2030.
  • Mission Innovation is a global initiative of 23 countries and the European Commission to accelerate global clean energy innovation. Four of the seven Innovation Challenges launched in 2016 are relevant to the industry sector: carbon capture, clean energy materials, sustainable biofuels and converting sunlight. In 2018, an eighth Innovation Challenge was launched on renewable and clean hydrogen, also relevant to industry.
  • In China, industry, the government and academia joined forces in 2016 to explore the technical and economic feasibility of integrating carbon capture into steel production. In the same year, the world’s first fully commercial carbon capture and use project came into operation in the United Arab Emirates, on a direct reduced iron plant. In Europe, several innovations in low-carbon steelmaking processes (including process for direct carbon avoidance and carbon capture) aim to reach commercial-scale demonstration between 2022 and 2035.
  • In 2018 the cement industry announced plans to invest in demonstrations of oxy-fuel capture technologies in two commercial-scale cement kilns in Europe (HeidelbergCement’s Colleferro plant in Italy and LafargeHolcim’s Retznei plant in Austria), and is seeking public funds for the project.

While innovation efforts of recent years are promising, accelerated action will be needed to develop and deploy technologies for medium- to long-term CO2 emissions reductions in industry.


Energy and material efficiency

Deployment of best available technologies will be important to raise industry energy efficiency.

Adoption of waste heat/gas recovery and cogeneration could be expanded in sub-sectors such as iron and steel and pulp and paper. Developing plant-level action plans and sharing of best practices may improve uptake of best available technologies.

Governments can also accelerate uptake by adopting energy efficiency targets and regulations.

Furthermore, ensuring efficient equipment operation and maintenance will help guarantee optimal energy performance. This can be reinforced by implementing energy management systems.

Shifting increasingly to secondary production methods – i.e. using recycled inputs – will be important to improve energy efficiency and reduce CO2 emissions for metals, chemical products (including plastics) and paper.

Governments and industries can work together to improve collection avenues for recycled products and increase co‑operation among stakeholders involved in production and end-of-life stages of the value chain. Government-mandated recycling requirements, waste disposal fees, recycled content requirements and extended producer responsibility can also help increase recycling.

Reducing overall demand through material efficiency strategies at all stages of the value chain can avoid CO2 emissions from industrial production.

Industry can help by:

  • Considering lifecycle emissions when designing products and construction projects
  • Reducing waste during manufacturing and construction
  • Developing sharing and circular economy-based business models

Policies that favour durability and refurbishing of buildings over demolition will be pivotal to reduce demand for bulk materials. Governments can also encourage material efficiency by moving from use-phase to life-cycle-based CO2 emissions regulations, and from prescriptive to performance-based design standards.

Industries should also take advantage of opportunities for industrial symbiosis – including using the waste or by-products from one process to produce another product of value – to help close the material loop, reduce energy use and reduce emissions in the case of carbon capture and utilisation.

Examples include using steel blast-furnace slag in cement production, carbon from steel waste gases to produce chemicals and fuels, and waste from other industries as alternative fuels for cement production. Industrial symbiosis can also involve sharing energy utilities, infrastructure and services. Policy support can facilitate these endeavours.

Increase uptake of renewable heat

The share of renewables in industry can be increased by several means: first, by ensuring that biomass waste and residues are used at as high an efficiency as possible by industries that have access to them.

Examples include shifting to higher-efficiency co‑generation technologies in the pulp and paper and sugar and ethanol industries.

The cement industry offers scope to use greater amounts of low-value biomass residues and municipal solid waste to offset thermal demand currently met by coal.

Municipal solid waste consumption especially can be encouraged by increasing refuse-derived fuel availability through best-practice waste management – i.e. highly efficient waste sorting and collection, combined with mechanisms that place a cost on landfill disposal such as landfill taxation.

With increasing shares of renewables in national electricity generation portfolios, the electrification of industrial processes, when possible, can also raise renewable energy consumption. In countries with high amounts of direct irradiation, energy service company (ESCO) business models could boost solar thermal use in industry.

Innovation

Decarbonising current industrial processes is challenging for a number of reasons.

For example, emissions resulting from chemical reactions during industrial processes (process emissions) cannot be mitigated by greater energy efficiency and fuel switching alone. The high-temperature heat required in many industrial processes makes it difficult to switch completely from fossil fuel-based energy to low-carbon electricity and fuels.

Innovation over the next decade will therefore be critical to develop and reduce the costs of industrial processes and technologies that could enable substantial emissions cuts post-2030, including, for example, hydrogen-based production methods and CCUS.

Increased support for RD&D is needed from governments and financial investors, particularly to advance the large-scale demonstration and deployment of technologies that have already shown promise.

Private-public partnerships can help, as can green public procurement, which generates early demand and can enable producers to gain experience and bring down costs. Government co‑ordination of stakeholder efforts can also direct focus to priority areas and avoid overlap.

It will also be important to begin planning and developing infrastructure for eventual deployment of innovative processes, such as CCUS pipeline networks to transport CO2 for use or storage, and electricity transmission grids to enable low-carbon hydrogen production. Gaining social acceptance for building this infrastructure, particularly CO2 transport and storage facilities, will also be necessary.

Mandatory CO2 emissions policies

Governments can promote CO2 emissions reduction efforts by adopting mandatory CO2 emissions reduction policies, such as a gradually increasing carbon price or tradeable industry performance standards that require average CO2 intensity for production of each key material to decline across the economy and permit regulated entities to trade compliance credits.

Adopting these policies at lower stringencies within the next three to five years would provide an early market signal, enabling industry to prepare and adapt as stringency increases over time. It can also help reduce the costs of low-carbon production methods, softening the impact on materials prices in the long term.

Complementary measures may be useful in the short to medium term, such as differentiated market requirements, that is, a government-mandated minimum proportion of low carbon materials in targeted products.

Ideally, mandatory policies would be applied globally at similar strengths. Since a number of industrial products are traded extensively internationally, measures may be needed to help ensure the competitiveness of domestic industries and prevent carbon leakage if the strength of policy efforts differs from one region to another.

Examples include time-limited measures to ease transition, such as declining free allocation of permits, or novel measures to apply emissions regulations on the lifecycle emissions of end-products rather than directly on materials production.

The latter could potentially be used to apply border carbon adjustments, provided that they are implemented in line with international trade rules. For instance, regulating vehicle manufacturing plants to reduce vehicle lifecycle emissions could raise the competitiveness of lower-emissions steel and aluminium.

Governments can extend the reach of their efforts by partaking in multilateral forums to facilitate low-carbon technology transfer and to encourage other countries to also adopt mandatory CO2 emissions policies.

Improve data collection

Improving collection, transparency and accessibility of energy performance and CO2 emissions statistics on industry would facilitate research, regulatory and monitoring efforts.

Industry participation and government co‑ordination are both important to improve data collection and reporting. Government efforts are also needed to clarify avenues for greater data sharing in a way that will not put industry at risk of breaching compliance with competition laws.

Industry technologies


None of the industry subsectors are on track with the SDS, and CCUS is well off-track.

While energy efficiency has improved, growing production outweighs much of this gain. A number of projects to develop innovative industrial processes have been launched, but overall progress in innovation is well short of what is needed to enable deep CO2 emissions reductions.

Considerably greater decarbonisation efforts are required in all subsectors to get industry onto the SDS pathway.


Chemicals

Direct CO2 emissions from the chemical and petrochemical subsector reached 1.25 Gt in 2017, a 2% increase from the previous year. In the SDS, despite continued strong growth in demand, the sector's emissions increase at a much more modest rate before peaking around 2025 and returning to today's level by 2030. To get on track, efforts from government and industry are needed to address CO2 emissions from chemical production – such as the use of electrolytic hydrogen as a feedstock or the application of CCUS – as well as from the use and disposal of chemical products.

Direct CO2 emissions from primary chemical production

Emissions from primary chemical production need to peak around 2025 in the SDS.

	HVCs	Ammonia	Methanol	Emissions reductions*
2015	219.35	427.79	182.72	
2017	250.87	439.04	237.11	
2025	276.0558138	395.7833795	292.1759347	65.29482571
2030	289.5325109	365.6948463	283.371564	129.7891977
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* Relative to current trends. Direct CO2 emissions encompass energy and process emissions.

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Iron and steel

In 2017, the CO2 intensity of crude steel fell by 1.8%, following an average annual decline of 1.4% from 2010 to 2016. To align with the SDS, however, the CO2 intensity of crude steel needs to fall by 1.9% annually between 2017 and 2030. This decrease is especially important if global steel production continues to grow – as it did in 2017 with an exceptional 4% increase. Government efforts are needed to improve steel scrap collection and sorting avenues, provide RD&D funding for low-carbon process routes such as production with electrolytic hydrogen or CCUS, and adopt mandatory CO2 emissions reduction policies.

Direct CO2 intensity in iron and steel

The direct CO2 intensity of steel production peaked in 2009 and has since generally declined, with a 1.8% drop in 2017. However, larger declines are needed under the SDS.

	CO2 intensity
2000	100
2001	98
2002	93
2003	95
2004	96
2005	98
2006	96
2007	97
2008	104
2009	115
2010	112
2011	112
2012	113
2013	107
2014	108
2015	108
2016	103
2017	101
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Note: Direct CO2 emissions encompass energy and process emissions.

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Cement

From 2014 to 2017, the direct CO2 intensity of cement production increased 0.3% per year. To get on track with the SDS, a 0.7% annual decline is necessary to 2030. More focus is needed in a number of key areas: reducing the clinker-to-cement ratio (including through greater uptake of blended cements), deploying innovative technologies (including CCUS) and increasing uptake of alternative fuels. Governments can stimulate investment and innovation through RD&D funding and by adopting mandatory CO2 emissions reduction policies.

Direct CO2 intensity of cement

The direct CO2 intensity of cement needs to decline by 0.7% annually to 2030.

	CO2 intensity
2014	0.529
2017	0.535
2030	0.49
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Note: Direct CO2 emissions encompass energy-related and process emissions.

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Pulp and paper

Final energy use in pulp and paper grew by 1.8% in 2017, while paper and paperboard output increased 2.3%. For comparison, during 2000‑16 energy use grew 0.1% per year on average, while production expanded 1.4% per year. In the SDS, energy use needs to decline 0.4% per year to 2030, with paper and paperboard production increasing 0.9% annually. This will require greater recycling, as recycled production requires considerably less energy. Using a higher share of bioenergy and adopting waste heat recovery technologies will also be important.

Final energy demand in pulp and paper

Fossil fuel consumption declined from 2000 to 2017.

	Other renewables	Bioenergy	Imported heat	Electricity	Gas	Oil	Coal
2000	0.006	1.527	0.114	1.937	1.379	0.781	0.868
2001	0.006	1.350	0.113	1.946	1.275	0.763	0.898
2002	0.006	1.352	0.131	1.703	1.270	0.707	0.969
2003	0.006	1.427	0.146	1.750	1.197	0.771	1.006
2004	0.006	1.531	0.191	1.818	1.136	0.779	1.159
2005	0.006	1.576	0.269	1.878	1.050	0.798	1.242
2006	0.006	1.721	0.302	1.942	0.997	0.737	1.277
2007	0.006	1.742	0.333	1.963	1.004	0.642	1.309
2008	0.006	1.668	0.326	1.904	0.970	0.569	1.355
2009	0.006	1.595	0.301	1.778	0.929	0.469	1.432
2010	0.006	1.769	0.335	1.836	1.027	0.472	1.481
2011	0.005	1.777	0.362	1.829	1.006	0.348	1.447
2012	0.005	1.747	0.375	1.834	1.021	0.339	1.294
2013	0.004	1.818	0.371	1.816	1.057	0.319	1.203
2014	0.004	1.860	0.387	1.718	1.083	0.322	1.033
2015	0.004	1.906	0.396	1.954	1.127	0.283	0.979
2016	0.005	1.942	0.396	2.025	1.133	0.304	0.922
2017	0.004	1.990	0.411	2.075	1.164	0.308	0.894
2030	0.03	2.13	0.34	2.05	0.98	0.26	0.75
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Aluminium

The CO2 intensity of aluminium production remained flat in 2017, as it has since 2014. According to the SDS, however, an annual decline of 1.2% is needed to 2030. Getting on track with the SDS will require improved scrap collection and sorting to enable greater production from scrap, and further development of new technologies to reduce emissions from primary production. Governments can better co‑ordinate aluminium scrap collection and sorting, provide RD&D funding and adopt mandatory CO2 emission reduction policies.

Direct CO2 intensity of aluminium production

The CO2 intensity of aluminium production has remained flat in the past few years, but the SDS requires an annual decline of 1.2%.

	CO2 intensity
2000	100
2001	94
2002	94
2003	93
2004	92
2005	94
2006	100
2007	104
2008	104
2009	101
2010	98
2011	93
2012	92
2013	92
2014	86
2015	88
2016	87
2017	87
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Note: Direct CO2 emissions encompass energy and process emissions. Aluminium production is of liquid aluminium, including primary production and recycled production from old, new and internal scrap.

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CCUS in industry and transformation

The total number of CCUS projects in industry and fuel transformation rose to 17 in 2019, when the Gorgon CO2 injection came into operation in Australia. Six new industrial projects are under development in Europe, with three linked to low-carbon hydrogen production. Nevertheless, even though CCUS is one of few technology options available to significantly reduce CO2 emissions in many industries, its deployment is woefully below the SDS level. Complementary and targeted policy measures, such as public procurement, low-carbon product incentives, tax credits and grant funding, are needed.

Large-scale CCUS projects in industry and transformation

CCUS deployment is severely off track from the SDS.

	SDS	Iron and steel	Chemicals	Biofuels	Refining	Natural gas processing
2000		0	0.7	0	3	9.15
2010		0	0.7	0	3	18.25
2015		0	1.7	0	5	20.2
2017		0.8	1.7	1	5	20.2
2025		0.8	3.05	1	6.3	25.15
2030	400					
2040	1340					
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Notes


  1. Direct industrial CO2 emissions include energy-related and process emissions. Process emissions include those generated in the production of primary aluminium, ferroalloys, clinker and fuels through coal and gas to liquids routes; in the production and use of lime and soda ash, as well as in the use of lubricants and paraffins. On this page, all growth rates are calculated as the compound annual growth rate.

References


  1. Bataille, C. et al. (2018), "A review of technology and policy deep decarbonization pathway options for making energy-intensive industry production consistent with the Paris Agreement", Journal of Cleaner Production, Vol. 187/20, pp. 960-973, https://doi.org/10.1016/j.jclepro.2018.03.107.
  2. Cao, Z. et al. (2017), "Elaborating the history of our cementing societies: An in-use stock perspective", Environmental Science and Technology, Vol. 51/19, pp. 11468-11476, https://doi.org/DOI:10.1021/acs.est.7b03077.
  3. CNCA (Certification and Accreditation Administration of the People’s Republic of China) (2018), "National Certification and Accreditation Administration announced the 2017 quality management system certification and energy management system: Announcement of certification supervision and inspection results", CNCA, Beijing, https://www.cnca.gov.cn/xxgk/ggxx/2018/201801/t20180118_56141.shtml .
  4. Energy Transitions Commission (2018), Mission Possible: Reaching Net-Zero Carbon Emissions from Harder-to-Abate Sectors by Mid-Century, , http://www.energy-transitions.org/sites/default/files/ETC_MissionPossible_ReportSummary_English.pdf.
  5. ISO (International Organization for Standardization) (2019), ISO Survey 2017, , https://www.iso.org/the-iso-survey.html.
  6. Liu, G., C. Bangs and D.B. Müller (2013), "Stock dynamics and emission pathways of the global aluminum cycle", Nature Climate Change, Vol. 3, pp. 338-342, https://doi.org/DOI: 10.1038/nclimate1698.
  7. Milford, R.L. et al. (2013), "The roles of energy and material efficiency in meeting steel industry CO2 targets", Environmental Science and Technology, pp. 3455-3462, https://doi.org/10.1021/es3031424.
  8. Pauliuk, S., T. Wang and D.B. Müller (2013), "Steel all over the world: Estimating in-use stocks of iron for 200 countries", Resources, Conservation and Recycling, Vol. 71, pp. 22-30, https://doi.org/10.1016/j.resconrec.2012.11.008.
  9. UN Environment (United Nations Environment programme) (2017), "Eco-efficient cements: Potential economically viable solutions for a low-CO2 cement-based materials industry", , http://wedocs.unep.org/handle/20.500.11822/25281.

Acknowledgements


Asa Ekdahl (World Steel Association), Claude Lorea (Global Cement and Concrete Association), Florian Ausfelder (Dechema), Hugo Salamanca (IEA), Jose Moya (European Commission), Julians Somers (European Commission), Paulo Partidario (Directorate General of Energy and Geology, Portugal)