A primary source of manufacturing-sector emissions is the fossil fuel combustion used to create the heat many industrial processes require. New heat pumps, boilers, and furnaces powered by clean electricity can provide a low- or zero-emissions alternative to these existing fossil-fueled heat sources.
They can also improve local air quality, which is especially important given that many manufacturing facilities are located in, and have created adverse health impacts for, low-income communities.
Electrification is particularly promising for manufacturing processes that require relatively low-temperature heat, which comprise 30 percent of industrial heat requirements. Other production processes, like drying and curing, can also use electricity in place of fossil fuels.
The economic structure of the manufacturing sector presents a barrier to deeper decarbonization. Manufacturing firms make investment decisions on long time frames, and the equipment they purchase can last for 50 years or more. There is currently very little economic incentive to electrify still-functioning equipment within its useful operational life. Moreover, the largest industrial GHG emitters tend to produce materials that are highly commoditized. In a competitive global market, there are few opportunities to receive a premium for low-carbon products. In addition, the fragmentation of product value chains means the necessary capital for decarbonization investments may not be at the firms that need to make those investments.
Many manufacturing processes require very high temperature heat: above 700 degrees Fahrenheit. Currently, there are few options available, other than fossil fuel-fired technologies like boilers and furnaces, to reach these temperatures. Innovations such as high temperature heat pumps powered by electricity are not yet capable of providing high enough temperatures.
Access to Capital
The upfront capital costs associated with replacing existing equipment with new electrification technologies is high, especially if the equipment is still within its estimated useful life. Industrial producers tend to operate with tight profit margins and can get higher investment returns on new production or product development rather than from energy upgrades or retooling at existing facilities. Even if the expenditures are justified based on operational savings, securing enough capital to make these incremental infrastructure investments remains a barrier to electrifying the manufacturing sector.
Technology Innovation Examples
The electrification of technologies across the manufacturing sector provides an opportunity to replace current carbon-intensive systems with low-carbon alternatives. For instance, a large fraction of the energy used by manufacturing is for process heating, which is almost entirely powered by fossil fuels. The development of new high-temperature heat pumps, boilers, and furnaces powered by carbon-free electricity has the potential to shift manufacturing away from non-electric sources of energy and significantly reduce GHG emissions and improve air quality.
Other potential manufacturing processes that are candidates for electrification include machine drives and facility HVAC. Depending on the application, certain electrification technologies are commercial while others are still early-stage.
Iron and steel production are responsible for about 5 percent of global greenhouse gas emissions. Most of these emissions come from the fossil fuels used to convert iron ore into steel through carbothermic reduction, particularly in the blast furnace. Existing cleaner production technologies include direct reduction of iron oxide to steel using natural gas, molten oxide electrolysis, CO2 capture and storage, steel recycling using electric arc furnaces for some steelmaking applications, and the replacement of coal in the steelmaking process with lower-GHG feedstocks.
At present, many of these technologies are not cost competitive with the incumbent processes for primary steel production. The slow stock turnover of industrial facilities also presents a challenge to the rapid diffusion of lower-carbon production approaches. Reducing iron oxide to iron and steel using low-carbon electricity or low-GHG hydrogen (rather than natural gas) is a potentially transformative technology that could substantially reduce steel sector emissions even further.
The production of cement is responsible for about 7 percent of global GHG emissions—roughly 40 percent of which is from the energy used and 60 percent from the CO2 released chemically by the heating of limestone.
Opportunities for significant emissions reductions in cement and concrete include CO2 capture and storage, the development of low-emission material substitutes for cement/concrete, recycling end-of-life concrete for reuse, and the development of processes and materials that consume CO2 (as opposed to generating it) in cement or cement-replacement production—thereby enabling emissions-negative cement production.