Clean Energy Standard for Industry: Scoping Analysis

An analysis of the potential for policy-driven emissions reductions in three major industrial sectors: iron and steel, cement, and petrochemicals, with focus on a clean energy standard.



April 9, 2020


Issue Brief

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1 minute


Electrification, hydrogen, enhanced efficiency, and other technological innovations are essential for long term greenhouse gas (GHG) emission reductions in the industrial sector (Rissman, et. al. 2020). At the same time, greater use of existing technologies already in place in some facilities can yield near-term emissions reductions and help achieve climate objectives.

In 2018, the US industrial sector accounted for about one-fourth of total net GHG emissions, including direct combustion of fossil fuels as heat sources or feedstock, electricity use, and the release of non-CO₂ gases via various industrial processes. Within the industrial sector, iron and steel, cement, and petrochemicals are among the largest emitters. Although the electric power and transportation sectors have been the focus of multiple climate policies, the industrial sector has seen relatively little policy action to reduce emissions, particularly at the federal level. Near-term policy options to reduce emissions do exist, however. The US Environmental Protection Agency (EPA) could establish clean energy standards for industry under the Clean Air Act (CAA) to bring up the laggards via use of existing technologies; additionally, the US Congress could mandate new emissions standards, as it did in 1990 when it amended the Clean Air Act to more tightly restrict certain air pollutants. For example, the EPA used its regulatory authority under the CAA to create the Clean Power Plan and Affordable Clean Energy Rule, which set performance standards for carbon dioxide emissions from existing power plants. Taken together, developing new technologies and broadening adoption of existing technologies are distinct but complementary means of reducing industrial GHG emissions. [1]

This Issue Brief presents a scoping analysis and demonstration of methods for estimating the potential emissions reductions achievable via regulation in three major industrial sectors: iron and steel, cement, and petrochemicals. We consider performance standards of varying levels of stringency. For practical reasons we use data from 2012. The main conclusion is that substantial emission reductions from these industries appear to be feasible. Future work will expand the nature and breadth of the analyses conducted, and consider the most recent data.

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