Accelerating Decarbonization in the United States: Technology, Policy, and Societal Dimensions (2024)

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10 Industrial Decarbonization ABSTRACT Significant reductions in industrial greenhouse gas (GHG) emissions by 2050 will re- quire aggressive support and pursuit of key decarbonization pillars: improving energy and materials efficiency, implementing beneficial electrification, using low-carbon energy sources and feedstocks, employing mitigation options as needed, and increas- ing demand for low-carbon products. Recent legislation—for example, the Energy Act of 2020, the Infrastructure Investment and Jobs Act of 2021 (IIJA), the CHIPS and Science Act of 2022, and the Inflation Reduction Act of 2022 (IRA)—provides a signifi- cant infusion of seed funding to initiate the decarbonization transition in industry and other sectors. A continued drive for innovation, focus on reducing costs, development of infrastructure supporting low-carbon solutions, and supply chain engagement are vital for that seed funding to be most effective. Analyses of the impact of these bills suggest that industrial GHG emissions will de- crease 6–14 percent by 2030. However, the scenarios in the Biden administration’s strategy and the funding priorities in the IRA and IIJA court risk by placing the major- ity of industrial CO2 reductions on the latter decarbonization pillars. This risk could be diminished by prompt investments in faster-acting pillars (e.g., energy and materials efficiency, electrification) that could deliver substantial CO2 reductions in the next 5–10 years. Rapid innovation, agile learning, and implementation advances to relent- lessly pursue cost parity with incumbent solutions and persistent lowering of adop- tion barriers will be crucial to use this funding most effectively and to support future funding justification across the next 5–10 years and beyond. INTRODUCTION The industrial sector accounts for nearly 30 percent of U.S. energy-related CO2 emissions—around 1,360 MMT CO2 in 2020 (DOE 2022a). Although industry generates significant GHG emissions, it can also play a role in emissions mitigation by making products that enable low-carbon pathways in transportation, power generation, trans- portation, and buildings. To achieve this goal, however, will require significant reduc- tions in the GHG emissions associated with making products, the carbon intensity of 525 A00026--Accelerating Decarbonization in the United States_CH10.indd 525 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S those products, the emissions across value chains where the products are transported and used, and the products’ end-of-life footprint. Industrial companies are increasingly responding to stakeholder requests for improved sustainability by setting more aggressive emissions reduction goals, considering the carbon contributions along supply chains (e.g., Scope 3 emissions), responding to customer requests by increasingly making lower-carbon products, and investing in companies developing innovative low-carbon technologies and products. The IIJA and IRA provide incentives for industrial emissions reductions over the next 5–10 years, but to be on pace with the GHG reductions needed to reach net-zero emissions by mid- century, a significant increase is required in near-, mid-, and long-term investments. Approximately half of industrial emissions reductions will likely come from emerging technologies (IEA 2020b) that are more expensive than existing technologies, and thus will require continued support for research, development, and demonstration (RD&D) to spur innovation, improve the cost position, and drive adoption (Gaster et al. 2023). Major technology transitions in industry can take many decades (Grubler et al. 2016). To accelerate industrial decarbonization, it will be vital to address not only technical and economic hurdles that are key elements of risk reduction but also behaviors that reinforce the status quo in the face of uncertainties on market-pull, integration, and durability associated with making major technology changes. These many socioeco- nomic, environmental, and behavioral elements must be understood, balanced, and managed over decades with an agile approach to successfully arrive at net-zero GHG emissions by midcentury. This chapter begins by outlining recent federal legislation related to industrial decar- bonization and examining its potential impacts on emissions reductions in the sector. The chapter then describes five major pillars of industrial decarbonization, which are relevant across heavy and light industry and small, medium, and large manufacturers: (1) energy and materials efficiency, (2) beneficial electrification, (3) low-carbon energy sources and feedstocks, (4) mitigation options, and (5) demand for low-carbon products. Given that many prior analyses of industrial decarbonization have focused on large, heavy industry, this chapter additionally highlights the considerations for decarbonizing light industry and small- and medium-size manufacturers and examines approaches to tailor industrial decarbonization strategies for different states or regions. It also analyzes technical, socioeconomic, environmental, and behavioral barriers to industrial decar- bonization, as well as potential policy solutions to overcome those barriers. Through- out the chapter, the committee provides findings and recommendations to facilitate industrial decarbonization efforts over the next decade and set industry on a path to net-zero emissions by midcentury. Table 10-5, at the end of the chapter, summarizes all the recommendations that appear in this chapter to support decarbonizing industry. 526 A00026--Accelerating Decarbonization in the United States_CH10.indd 526 4/13/24 10:33 AM 

Industrial Decarbonization PACE OF INDUSTRIAL DECARBONIZATION PER RECENT LEGISLATION The IIJA and IRA provide funding for several decarbonization initiatives that will help advance RD&D in industry, adding to the provisions in the Energy Act of 2020 that provided appropriations for carbon management, hydrogen technology, and emissions reduction programs in heavy industry and established programs for technical assis- tance and smart manufacturing (Energy Act of 2020; see Titles IV, V, and VI). As shown in Figure 10-1, the IRA and IIJA give strong starting support for hydrogen, carbon capture, utilization, and storage (CCUS), and transformative process technologies (e.g., the Ad- vanced Industrial Facilities Deployment Program [AIFDP]). The $8 billion in funding ap- propriated for the hydrogen hubs (DOE-OCED n.d.(b)) will support 6–10 demonstrations in various regions of the country, as well as the development of networks—producers, consumers, and local infrastructure to accelerate the use of hydrogen as an energy car- rier. The $6.4 billion in authorized and appropriated CCUS funding in the IIJA continues long-running support for these technologies, dating to at least 1997 (Lawson 2022). Carbon capture funding also includes $3.5 billion in appropriations for regional direct air capture (DAC) hubs (DOE 2022b). The $5.8 billion in funding appropriations for AIFDP (IRA §50161) supports demonstrations at scale of transformative low-carbon technolo- gies directly involved in producing products in heavy industry. Figure 10-1 also indicates the absence of support for the two fast-start decarbonization pillars—electrification and $5 Industrial/Manufacturing Programs Future of Industry Program and Industrial Research and Assessment Centers Advanced Industrial Facilities Deployment Program Funding in IIJA and IRA (billions) $4 Hydrogen Programs Clean Hydrogen Electrolysis Program: Demonstration Projects $3 Clean Hydrogen Manufacturing And Recycling: Clean Hydrogen Technology Recycling RD&D Regional Clean Hydrogen Hubs $2 CCUS Programs Carbon Capture Demonstration Projects Program Carbon Capture Large-Scale Pilot Projects $1 Carbon Capture Technology Program Carbon Utilization Program $0 Carbon Storage Commercialization Program FY 22 FY 23 FY 24 FY 25 FY 26 FIGURE 10-1  Summary of authorized and appropriated funding for industrial programs in the IIJA and IRA. NOTES: Program funding is shown distributed equally across the program years. The Department of Energy (DOE) funding for the programs may vary. SOURCE: Data from ITIF (2023). 527 A00026--Accelerating Decarbonization in the United States_CH10.indd 527 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S energy and materials efficiency (see the section “Major Pillars of Industrial Decarboniza- tion” below). Significant funding and program implementation are needed to accelerate the GHG reduction impact of these two pillars. The IRA and IIJA also contain support for manufacturing decarbonization programs outside of RD&D. This includes, in the IRA, an update to the investment tax credits and storage credits for CCUS (45Q; IRA §13104), an extension of the advanced energy project investment tax credit (48C; IRA §13501), and establishment of a new clean hydrogen production tax credit (45V; IRA §13204). The IIJA appropriates $2.1 billion for CO2 transportation infrastructure development (IIJA §40304) and $400 million for in- dustrial energy efficiency in the form of support for industrial research and assessment centers in the Future of Industry Program (IIJA §40521). Also in the IIJA are directives for the Department of Energy (DOE) to include smart manufacturing technologies and practices within the scope of industrial assessment centers (IIJA §40532) and to study how to increase access to high-performance computing resources at National Laboratories for small- and medium-size manufacturers (IIJA §40533). (As discussed in Chapter 6, the IRA and IIJA also provide substantial incentives for decarbonizing power generation, which will indirectly affect emissions related to industrial electricity use.) While the IIJA has support for increasing generation of clean electricity and infrastruc- ture, it contains little direct support for industrial electrification. The relatively low levels of funding for energy efficiency and electrification in industry are major gaps considering that these decarbonization pillars are most amenable to early action and impact owing to their relatively low costs, capital requirements, and infrastructure needs (DOE 2022a). A natural question is whether the funding provided by the IIJA and IRA for indus- trial emissions reductions is sufficient to set the sector on pace to reach net zero by 2050. Several groups have analyzed the potential impact of these bills on economy- wide emissions reductions (Jenkins et al. 2022a,b; Larsen et al. 2022; Mahajan et al. 2022). An analysis by the Rhodium Group, summarized in Table 10-1, separates out the impact of the industrial sector and shows that, collectively, the measures in the bills could potentially spur a 6–14 percent reduction in emissions of CO2e by 2030 versus a 2005 baseline (King 2022).1 The magnitude of reductions estimated in the Rhodium Group analysis is in a similar range to analyses from other groups across the economy and scenarios for CO2e reductions in industry if multiple decarboniza- tion pillars are aggressively pursued. As shown in Figure 10-2, the “net-zero” scenario 1  If upstream emissions from the oil and gas sectors are included as industrial emissions, the estimated range of reduction is 3.0–16.0 percent by 2030 from a 2005 baseline, spurred by a methane emission fee and a decline in oil and gas production (Larsen et al. 2022). 528 A00026--Accelerating Decarbonization in the United States_CH10.indd 528 4/13/24 10:33 AM 

Industrial Decarbonization TABLE 10-1  Rhodium Group Estimates of Industrial GHG Emissions Reductions Afforded by the IIJA and IRA by 2030 Percent CO2e Reduction Versus 2005 Baseline Oil and Gas Sector Emissions Not Oil and Gas Sector Emissions 2030 Scenario Included Included Low 14.0 16.0 Medium 12.9 11.0 High 6.2 3.0 NOTE: The “low” scenario achieves the greatest reductions, while the “high” scenario is the high-emissions case. SOURCES: Data for oil and gas sector emissions not included from King (2022). Data for oil and gas sector emissions included from Larsen et al. (2022). within DOE’s Industrial Decarbonization Roadmap estimates that an emissions reduction of 29 percent versus a 2015 baseline could be achieved by 2030 if all pil- lars are rigorously pursued.2 That the Rhodium Group’s estimates of industrial CO2 emissions reductions from the IRA and IIJA are less than half of the potential reduc- tions noted by the DOE Roadmap suggests that the reductions supported by these bills spur only a portion of the possible reductions during this time period. As noted earlier, support for energy and materials efficiency and electrification are remaining opportunities. Additional discrepancies between the emissions reductions estimates could result from the different baseline years used—2005 for the Rhodium Group analysis and 2015 for the DOE Roadmap analysis. The Biden administration’s long-term strategy document (DOS and EOP 2021) illus- trates the potential impact of these major decarbonization pillars in industry as well, yet in those scenarios, major CO2 reductions owing to electrification (via transforma- tion of the power grid), hydrogen, and CCUS do not occur until 2030 or 2040 (e.g., see Figure 10-2). Although CO2 reductions of 50 percent are targeted economy-wide by 2030, the Biden administration’s strategy does not set a specific target for industry (DOS and EOP 2021). The infrastructure investments, deployment timeline of hydro- gen and CCUS, and adoption cascade of low-carbon technologies across industry will require decades—especially considering the high investment capital, complexity, heterogeneity of industry, and cost hurdles. 2 The estimated emissions reductions in the DOE Roadmap do not include upstream emissions from the oil and gas sector, only downstream decarbonization impacts at refineries. The DOE Roadmap considers only emissions from major commodity products in five industrial subsectors (chemicals, iron and steel, petroleum refining, food and beverage, and cement), which represent about 30 percent of total industrial emissions. 529 A00026--Accelerating Decarbonization in the United States_CH10.indd 529 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S 500 BAU Emissions 450 Reductions (Million metric tons per year) 400 CCUS 350 Further CO2 emissions Emissions 300 Reductions Industrial Through 250 Electrification Investments & LCFFES Across All 200 Pillars 150 Energy Efficiency 100 Difficult-to- Abate 50 Alternate Emissions Approaches Addressed 0 by Other 2015 2030 2040 2050 Approaches Remaining GHG Emissions Emissions Reduction by CCUS Emissions Reduction by Industrial Electrification & LCFFES Emissions Reduction by Energy Efficiency Emissions Reduction by Alternate Approaches (e.g., Negative Emissions Technologies) FIGURE 10-2  Potential emissions reductions in the DOE Industrial Decarbonization Roadmap’s “net-zero” scenario from the application of four decarbonization pillars: energy efficiency (light pink); electrification and low-carbon fuels, feedstocks, and energy sources (green); carbon capture, utilization, and storage (blue); and alternative approaches such as negative emissions technologies (purple). NOTE: The scenario considered major commodity products in five industrial subsectors (chemicals, iron and steel, food and beverage, petroleum refining, and cement), reflecting approximately 30 percent of industrial emissions. SOURCE: DOE (2022c). The scenarios in the Biden administration’s strategy and the funding priorities in the IRA and IIJA court risk by placing the majority of industrial CO2 reductions on these late-delivering pillars. This risk could be diminished by prompt investments in faster- acting pillars that could deliver substantial CO2 reductions in the next 5–10 years. Accelerating the pace of reductions will require more aggressive support for the fast- start pillars of energy efficiency, materials efficiency, and electrification of process heat and key processes that are the backbone of heavy industries; pursuit of crosscutting approaches and a focus on achieving cost parity for low-carbon technologies; and decreased hurdles for implementation. Coordinated and dedicated engagement will be needed to accelerate implementation, including enhanced education and training to design, develop, demonstrate, and commission efficient energy systems. Several energy and materials efficiency provisions that did not appear in the IRA and IIJA are good starting candidates for accelerating GHG reductions in industry. Described in Ungar et al. (2021), these programs include (1) support for audits and programs to pursue efficiency projects at large to small plants, (2) support of energy 530 A00026--Accelerating Decarbonization in the United States_CH10.indd 530 4/13/24 10:33 AM 

Industrial Decarbonization TABLE 10-2  Cost, Energy, Emissions, Value, and Jobs Impact of Industrial Energy Efficiency Investments Large Plant Audits and Grants Cost, $ Quads of CO2 Reduced, Value, $ Jobs, for Energy Efficiency Billions Energy Reduced MMT Billions Thousands Audits and grants 2.6 10.7 458 85.0 153 Energy managers 0.3 0.74 32 5.8 9 Strategic energy management 0.2 0.41 15 4.5 9 NOTES: Estimated cumulative present value federal investments and net savings ($ billion). Estimated net job creation (thousand full-time-equivalent job-years), Quads = quadrillion British thermal units (BTUs). SOURCE: Data aggregated from Ungar et al. (2021, Tables A1, A2, and A3). managers at small to medium plants (a workforce development and entry opportunity), (3) strategic energy management, and (4) a range of programs to catalyze energy and materials efficiency at industrial clusters. These fast-start options are attractive to industry and have relatively low technology barriers and good workforce development prospects. In particular, the programs would recognize the capital, staffing, business model, and technical capability challenges of small and medium manufacturers that differ from those of large manufacturers. This is important, as approximately 75 percent of manufacturing firms (NAICS codes 31–33) have fewer than 20 employees (U.S. Census Bureau 2022). One analysis of impacts across various metrics found that for a $3 billion investment, these programs could reduce CO2 emissions by 500 million metric tons/year and energy use by 400 quads, provide a value return of $96 billion, and yield 171,000 full-time-equivalent job-years (see Table 10-2) (Ungar et al. 2021). Electrification of key process technologies, process heat, and movement of goods within and outside of facilities remains a significant and largely under-pursued opportunity (Rightor et al. 2020). Hastening adoption and impact will require efforts to (1) lower the costs for known and emerging technologies (including offsetting the price difference between natural gas and electricity to spur early adopters), (2) demonstrate low-carbon technologies (e.g., industrial heat pumps, Rightor et al. 2022a) at scale, and (3) develop the community (e.g., service companies, academics) and workforce needed to support the technologies. Process heat provides a key crosscutting opportunity, as it accounts for about 50 percent of the on-site energy use in industry and is prevalent in all heavy industries (DOE 2022c). Recognizing this, one of DOE’s Energy Earthshot Initiatives™ is for process heat and targets 85 percent GHG emissions reductions in industrial heat technologies by 2035 (DOE-EERE n.d.). A greater drive for implementation and adoption across the 531 A00026--Accelerating Decarbonization in the United States_CH10.indd 531 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S breadth of heavy and light industry and small/medium to large manufacturers could maximize leverage and impact. For example, demonstration at scale that electrification can produce the 800–875°C temperatures needed for steam crackers (Linde Engineering 2023) would open opportunities and spur adoption in additional high-temperature ap- plications in chemicals, as well as iron and steel, cement, and other areas (Rightor 2022). To accelerate the deployment rate of low-carbon technologies, it is essential to de- crease their cost to close to that of incumbent technologies. Demonstrations at scale of first-of-a-kind, low-carbon technologies, as supported by DOE’s Advanced Industrial Technologies Deployment Program, are vital not only because they demonstrate fea- sibility, but also because they accelerate learning and innovation. Additional emphasis on RD&D and implementation to bring costs down will be needed so that market drivers can carry the burden of disseminating these technologies across the broad distribution of uses in multiple industrial sectors. Increasing the pace of industrial decarbonization will require: • Additional support for energy efficiency, materials efficiency, and electrification, as they are near-term opportunities that received a proportionally lower level of support in the above-mentioned bills. • Additional support for process technology innovation (catalyzing changes in how materials are made). Support in the IRA for the Advanced Industrial Tech- nologies Deployment Program provides a start, but far greater support and focus from DOE, industry, and others is needed for step-change increases in innovation, which can help integrate decarbonization pillars and yield further emissions reductions. The higher cost of low-carbon technologies compared to incumbents is a huge barrier for adoption, so innovation to reduce cost needs to be relentlessly pursued. • Implementation rigor to deliver the maximum possible impact from the funding provided in the bills. While there is a tendency to add scope to initiatives in the bills, if doing so slows the rate or magnitude of emissions reductions, or hampers the acceleration of emissions reductions, then the overall potential for achiev- ing reductions will suffer. Hence, it is vital to keep implementation the focus of industrial support provisions and to avoid the expansion of scope unnecessarily. Maximizing leverage across sectors and infrastructure projects and amplifying the how innovations are applied across opportunities in parallel will also be crucial to achieve the greatest possible emissions reductions (Rightor 2023). • Removal of impediments to implementation (e.g., staffing to process permits) where possible and development of capabilities to allow major projects to proceed as fast as possible while still providing ample opportunity for com- munity engagement. 532 A00026--Accelerating Decarbonization in the United States_CH10.indd 532 4/13/24 10:33 AM 

Industrial Decarbonization Finding 10-1: The authorized and appropriated funding and tax credits in the IIJA and IRA will help spur CO2 reductions in industry (estimated 6–14 percent by 2030) aligned with the long-term trajectory of climate stabilization. However, the low ambition for reductions and lack of support for early action represent a lost opportunity and an increased risk of failure to achieve 2050 net-zero targets. To accelerate industrial emissions reductions, near-term pathways (e.g., energy and materials efficiency, electrification, and low-carbon fuels substitutions) need to be supported and pursued. A focus on innovation, demonstrations at scale, cost reductions, and integration of solutions with multiple upstream and downstream processes and associated control systems is needed to relentlessly pursue price/ cost equivalence for low-carbon solutions and have the market increasingly drive adoption. Recommendation 10-1: Develop and Enable Cost-Competitive Process and Waste Heat Solutions. In partnership with leading industrial companies and their supply chain partners (including small- and medium-size manu- facturers), the Department of Energy (DOE) should develop and enable cost-competitive solutions to transition 50 percent of on-site process heat use to low-carbon sources by 2035 and to increase the use of waste heat for on-site energy demands and off-site reuse applications (e.g., district or community heating). DOE should pursue the attainment of price parity for an array of low-carbon process heat options while driving the Energy Earthshot Initiative for process heat and reporting yearly on progress. Finding 10-2: Additional legislative support is needed for fast-start approaches (e.g., energy and materials efficiency, electrification, and low-carbon fuel substitu- tions such as biofuels) while also setting the stage for implementing low-carbon technologies that will take longer to demonstrate at scale and achieve economic parity. Support for the two fast-start decarbonization pillars—electrification and energy and materials efficiency—is largely absent in the industrial sections of the IRA and IIJA. Recommendation 10-2: Invest in Energy and Materials Efficiency and Indus- trial Electrification. Congress should increase funding for the Department of Energy (DOE) to invest in energy and materials efficiency and electrification of industrial processes, as these pillars of decarbonization were largely left out of recent legislative support. For efficiency, this could include driving optimization across entire systems and process facilities, providing partial support for energy managers at small and medium manufacturers for a limited time to pursue energy and CO2 reduction audits and strategic energy 533 A00026--Accelerating Decarbonization in the United States_CH10.indd 533 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S management, and spurring supply chain networks to improve circular econ- omy implementation. DOE should also support beneficial electrification via research, development, and demonstration in process heat, foundational processes, and direct use of clean energy at industrial facilities (e.g., sens- ing, control, demand response—connected with energy storage at scale). To support these programs, a funding level of $4 billion is recommended across 5 years or until expended. Recommendation 10-3: Spur Innovation to Achieve Price-Performance Parity for Low-Carbon Solutions. To support the transition to low-carbon energy sources in industry, non-governmental organizations, associations (e.g., American Chemistry Council, American Iron and Steel Institute, Portland Cement Association, National Association of Manufacturers, and others), and industry should work with Congress to develop, propose, and adopt policies that a. Drive cost reductions for low-carbon technologies to achieve parity with current market solutions; b. Offset a portion of the price difference between incumbent energy sources and their low-carbon alternatives (e.g., low-carbon electricity versus natural gas) for a limited time to drive innovation and scale; and c. Initiate performance-based carbon intensity targets for major product families (e.g., steel and cement) and connect them with low-carbon product procurement and Buy Clean provisions. These policies should also provide incentives for the manufacture and deployment of low-carbon technologies, increased use of on-site and off-site low-carbon energy, and integration of energy storage (thermal, chemical, mechanical, or electrical) with process heat generation and use. Congress should direct the Department of Energy to initiate programs to implement these policies with funding of $1 billion over 5 years or until expended. MAJOR PILLARS OF INDUSTRIAL DECARBONIZATION Numerous reports have described paths to deep decarbonization in the industrial sector (e.g., Bashmakov et al. 2022; DOE 2022c; USCA 2022; Williams and Bell 2022), primar- ily focused on decarbonizing heavy industries—chemicals, refining, iron and steel, and cement—which account for nearly 50 percent of industrial CO2 emissions in the 534 A00026--Accelerating Decarbonization in the United States_CH10.indd 534 4/13/24 10:33 AM 

Industrial Decarbonization Industrial CO2 Emissions by Subsector Non- Manufacturing Chemicals Industrial 17% 20% All Other Refining Manufacturing 17% 31% Iron & Steel 7% Food & Cement & Beverage 6% Lime 2% FIGURE 10-3  Industrial CO2 emissions by subsector, illustrating that nearly 50 percent of emissions come from the heavy industries of chemicals, refining, iron and steel, and cement and lime. SOURCE: Data from DOE (2022c). United States3 (Figure 10-3). (For a discussion of non-CO2 GHG emissions from industry, see Box 10-1 below.) As one representative example, the 2022 Industrial Decarbonization Roadmap from DOE provides an overview of decarbonization pillars; RD&D needs; bar- riers to industrial decarbonization; and routes to accelerate deployment of technologies related to these pillars (DOE 2022c). The DOE roadmap identified four major pillars of industrial decarbonization: energy efficiency, electrification, low-carbon fuels and feed- stocks, and mitigation options (e.g., CCUS and DAC). Another key pillar discussed in this report is the need to increase demand for low-carbon products. The following sections briefly summarize how each pillar can be pursued while enhancing workforce, environ- mental justice, and diversity objectives that are also critical to setting U.S. industry on a path to decarbonization by midcentury. A summary of opportunities for GHG emissions reductions by industry subsector and decarbonization pillar is provided in Table 10-3. 3  While this report focuses on U.S. industry, the committee emphasizes that industrial decarbonization is a global challenge and refers the reader to IEA (2020a) for a discussion of technology needs and pathways for emissions reductions in heavy industry worldwide. 535 A00026--Accelerating Decarbonization in the United States_CH10.indd 535 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S BOX 10-1 NON-CO2 GHG EMISSIONS FROM INDUSTRY Industrial processes accounted for approximately 16 percent of U.S. non-CO2 GHG emissions in 2019 (EPA 2021). They are responsible for all emissions of fluorinated gases (F-gases), specifi- cally hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3) (EPA 2021). The largest share of F-gas emissions (~91 percent) comes from ozone-depletant substitutes (EPA 2021) following the replacement of chlorofluorocarbons with HFCs and PFCs under the Montreal Protocol and the Clean Air Act Amendments of 1990. Indeed, since 1991, U.S. emissions owing to production and use of ozone depletant substitutes have been increasing (EPA 2021). HFCs and PFCs are not ozone depletants, but they are potent GHGs, addressed in the 2019 Kigali Amendment to the Montreal Protocol, which mandated a global phasedown of HFCs and PFCs to help avoid up to 0.5°C warming by 2100. The United States ratified the Kigali Amendment in October 2022 and adopted guidelines for the phasedown of these ozone-depletant substitutes under the American Innovation and Manufacturing (AIM) Act enacted in December 2020. The AIM Act directs EPA to implement an 85 percent reduction of the production and consumption of HFCs so that they reach 15 percent of their 2011–2013 average annual levels by 2036, as well as to minimize releases from equipment and to facilitate the transition to next-generation technologies through sector-based restrictions. The end-use sectors that contribute the most to HFC and PFC emissions are refrigeration and air-conditioning (78 percent); aerosols in metered dose inhalers, personal care, and specialty products (10 percent); and foams (9 percent) (EPA 2021). Industry stakeholders have supported the phasedown and have acted toward this goal (NRDC 2019). Phasing down HFCs and PFCs requires developing and using alternative coolants, including hydrofluoroolefins and “natural” refrigerants such as propane, propene, ammonia, isobutene, water, and carbon dioxide. Many of these alternatives are already used; however, concerns still exist regarding their energy efficiency and safety. For example, the flammability of hydrocar- bons and toxicity of ammonia call for risk assessment analyses with possible use limitations (EC 2020). In addition to substituting F-gases in equipment, monitoring and preventing leakages in existing equipment, accurately reporting F-gas emissions, and adequate disposal also help limit emissions. Another source of F-gas emissions is semiconductor manufacturing, where various fluo- rinated gases are used for etching on silicon wafers and cleaning chemical vapor deposition tool chambers (EPA 2022c). The magnitude of F-gas emissions varies by the types of gas, equip- ment, and process used, but can range from 10 to 80 percent of the amount of input gas (EPA 2022c). Mitigation strategies—which include process improvements, source reduction, use of alternative chemicals, and destruction technologies—will become increasingly important if U.S. semiconductor production, and consequently use of F-gases, expands as anticipated with implementation of the CHIPS Act. Additional RD&D support is needed to develop alternatives for the chemicals used in these processes so that they meet performance and cost requirements with lower GHG impacts. RD&D is also needed to improve processing and mitigation until such alternative chemicals can be developed at the necessary cost and scale. 536 A00026--Accelerating Decarbonization in the United States_CH10.indd 536 4/13/24 10:33 AM 

TABLE 10-3  Opportunities for GHG Emissions Reduction by Industry Subsector and Decarbonization Pillar Decarbonization Pillar Industry Energy and Materials Low-Carbon Energy Demand for Subsector Efficiency Beneficial Electrification Sources and Feedstocks Mitigation Options Low-Carbon Products Chemicals • Efficiency • Clean electricity for • Clean hydrogen for • Carbon capture • Industry accepted improvements in process heat and ammonia, methanol, • Conversion of CO2 and standards and separations, across hydrogen production and ethylene other waste gases into benchmarking for processes, systems, • Use of variable energy syntheses valuable products reducing product and entire facilities from off-site, and use • Biomass as feedstock • Incorporation of carbon intensity • Materials recycling directly on site for chemical synthesis CO2 directly into • Shared databases of A00026--Accelerating Decarbonization in the United States_CH10.indd 537 across facilities and • Low-carbon process precursors and end parameters used in supply chains heat from nuclear, products LCAs, standards, and • Improvements to clean electricity, solar benchmarking catalyst conversion thermal, hydrogen, yields and biomass Refining • Efficiency • Clean electricity for • Low-carbon process • Carbon capture • Standards and improvements for hydrogen production heat from nuclear, • Use of captured CO2 benchmarking for distillations and • Clean electricity clean electricity, solar for low-carbon fuels product carbon separations to replace steam thermal, hydrogen, production intensity • Process conversion generation capacity and biomass efficiency improvements continued 537 4/13/24 10:33 AM 

538 TABLE 10-3 Continued Decarbonization Pillar Industry Energy and Materials Low-Carbon Energy Demand for Subsector Efficiency Beneficial Electrification Sources and Feedstocks Mitigation Options Low-Carbon Products Iron and Steela • Waste heat recovery • Electrification of • Replacement of coal/ • Carbon capture • Buy Clean initiative • Blast furnace process heating petroleum coke with • Use of captured CO2 • Standards and optimization pathways where viable natural gas, biomass, for chemical/fuels benchmarking for • Predictive • Direct electrolysis of biogas, or hydrogen production product carbon maintenance, iron • Use of hydrogen as intensity improved process reductant in DRI-EAF control A00026--Accelerating Decarbonization in the United States_CH10.indd 538 • Systems energy efficiency improvements Cement • Waste heat recovery • Direct and indirect • Replacement of coal/ • Capture of process- • Buy Clean initiative • High-efficiency clinker calcination with petroleum coke with related CO2 emissions • Standards and cooling and grinding electric heating natural gas, biomass, or • CO2 use in concrete benchmarking for • Efficiency hydrogen product carbon improvements for • Use of supplementary intensity multistage preheater/ cementitious materials precalciner kilns and alternative binding materials • Use of biological routes to cement and concrete a Note that there are different solution sets for decarbonizing BF-BOFs and EAFs given their different feedstocks used, process constraints, and product markets. SOURCES: Data from DOE (2022c), Jacoby (2023), and USCA (2022). 4/13/24 10:33 AM 

Industrial Decarbonization Energy and Materials Efficiency Catalyzing rapid progress in the near term is vital to build momentum, develop capa- bilities, rally the current and future workforce to action, and drive further adoption, scale, and dispersion of low-carbon technologies. Rising energy prices and supply security concerns create strong motivation to pursue efficiency investments. Spurring innovation for further efficiency improvements with current, emerging, and future technologies and making vast improvements in materials efficiency will be impor- tant for lowering energy and resource consumption and emissions in industry. This, in turn, will minimize the power demand needed by next-generation low-carbon technologies and will help to lower the cost and resource hurdles for deploying these technologies. By accelerating investments in deep energy and materials efficiency improvements in the near term, industry can achieve 40–50 percent reductions in CO2 emissions below a 2019 level (Nadel and Ungar 2019). Energy efficiency (EE) is the most cost-effective option for reducing energy use and GHG emissions in the near term, as it is low cost; often provides multiple energy and non-energy benefits; and has low technical, integration, and adoption hurdles. EE can also lower the energy and resource demand for production facilities prior to imple- mentation of more costly transformative technologies, which decreases economic hurdles and risk. Therefore, continued pursuit of EE throughout the entire course of the decarbonization transformation is critical. To meet the International Energy Agency’s (IEA’s) Net Zero Emissions to 2050 Scenario, the current rate of EE improve- ment in industry of about 1 percent per year needs to triple to 3 percent per year (IEA 2022). That level of productivity improvement could be achievable based on experience from the 250 manufacturing partners in the Better Plants program hosted by DOE, which reports an annual energy intensity improvement rate of 2.5 percent (DOE 2020a). Considerable opportunity remains for energy efficiency improvements in heavy manufacturing. Whenever manufacturing processes are updated, altered, or re- placed, additional opportunities are created for efficiency. The advent of high-speed computing, artificial intelligence, and machine learning capabilities allows efficiency optimization to occur at a higher level (e.g., across the entire production site, not just an individual process or facility). Also, as shown in Figure 10-6 below, opportuni- ties in light manufacturing may be even larger than those in heavy manufacturing, as efficiency has received less focus historically in light manufacturing. This signifi- cant opportunity can be pursued by the audits and grants, energy managers, and strategic energy management mentioned above in the section “Pace of Industrial Decarbonization per Recent Legislation.” 539 A00026--Accelerating Decarbonization in the United States_CH10.indd 539 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S Materials efficiency (ME), circular economy, and related resource conservation approaches can also decrease energy demand and GHG emissions. Their impact is especially evident in cement, steel, and aluminum, where they can provide up to 30 percent of the emissions reduction targets (IEA 2019b). As the industrial sector continues to improve its energy efficiency, recovering the estimated 20–50 percent of industrial energy input lost as waste heat will become increasingly important (DOE-EERE 2017). Waste heat can be in the form of hot exhaust gases, cooling water, and heat losses from equipment surfaces and products. Waste heat recovery provides benefits in cost and environmental impact, as well as work- flow and productivity. These technologies are not being pursued to the fullest extent possible owing to material constraints, system and process complexity, and high costs (DOE-EERE 2017). Beneficial Electrification from Low-Carbon Sources As the proportion of low-carbon electricity on the electric grid increases (see Chapter 6), a transformation in the way that energy is generated, stored, and used will occur. One top priority for increasing the use of low-carbon electricity and reduc- ing emissions in industry is in process heat, which currently accounts for 51 percent of the on-site energy used in manufacturing (DOE 2022c). For industry overall, some 55 percent of process heat needs are below 200°C, and more than 66 percent are below 300°C (Rightor et al. 2022a,b). For some industries such as food and textiles, the proportion of low-temperature heat used is even higher (Naegler et al. 2015). Cur- rently, heavy industries use electricity to supply <5 percent of process heat (Rightor et al. 2022b), and there is good potential for expanded use, as commercial electric technologies can provide heat at appropriate temperatures, making electrification a major near- to medium-term opportunity. For example, BASF, SABIC, and Linde are collaborating on a demonstration plant for an electric steam cracker, which could yield 90 percent reductions in CO2 emissions by providing the 850°C heat required with electricity instead of natural gas (SABIC 2022). Boston Metal is developing a molten oxide electrolysis technology to reduce iron ore for steelmaking using electric- ity rather than coking coal (Boston Metal 2023). In addition to attainment of a target temperature, the effective transfer (and reuse where possible) of that energy to the material or process being heated (or cooled) is important. A number of low-carbon heat approaches exist, and where there are challenges, there are also numerous op- portunities for innovation, energy, and GHG reductions (Friedman et al. 2019). 540 A00026--Accelerating Decarbonization in the United States_CH10.indd 540 4/13/24 10:33 AM 

Industrial Decarbonization Electrification of industry will face integration, control, and capital cost hurdles. There are scaling and heat transfer challenges in switching from fuels to electrification across all applications and temperature ranges, and maintaining the 24/7 capacity factors needed for some processes to be economically viable is a concern. Although these hurdles will be lower for certain application areas like low- to medium-temperature process heat, the capital cost to deliver clean electricity reliably, at the right voltage, and with 24/7 availability will be a challenge. Collaboration, negotiation, and support are needed to integrate electrical infrastructure both outside and inside the fenceline of industrial facilities; this will include addressing the cost of busbars, substations, and transformers; determining who pays for and maintains electricity generation and storage infrastructure; and negotiating an appropriate valuation of energy storage resources. Long-duration energy storage (LDES)—whether thermal, mechanical, chemical, or electrochemical—can help mitigate the variability of renewable energy sources, translating it into energy that can be relied on 24/7 (Boyles et al. 2023). A wide variety of LDES technologies are in various stages of development (DOE 2023b; LDES Coun- cil and McKinsey & Company 2021, 2022), with several available commercially. DOE’s LDES Commercial Liftoff report further describes potential use cases and technolo- gies and highlights the need for the costs of LDES to decrease and the value allotted to LDES (i.e., compensation for its economic and reliability benefits) to increase (DOE 2023b). DOE’s Energy Earthshot on LDES, which aims for 90 percent cost reductions in grid-scale storage systems delivering more than 10 hours of storage within 1 decade (by 2031), is part of the effort to decrease costs, and some $500 million is allotted for demonstration projects (DOE-EERE 2021; DOE-OCED n.d.(a)). Those demonstrations need to increasingly show the value return for LDES in a variety of end-user applica- tions to accelerate learning, demonstrate integration aspects, and spur adoption (Boyles et al. 2023). While electrifying industrial applications presents challenges, there are also co-benefits, such as increased reliability and resilience and the potential for improved capacity fac- tor and load management. For example, experience in California has shown that with increased renewables, curtailment and low-capacity factors have negatively impacted utilization rates and economics of clean electricity (CAISO 2017). Increased use of clean electricity by industry could improve the utilization and economics of those low- carbon energy sources. Evaluation of these co-benefits of infrastructure upgrades to deliver and use clean electricity will be important to developing the business case for industrial electrification. 541 A00026--Accelerating Decarbonization in the United States_CH10.indd 541 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S Low-Carbon Energy Sources and Feedstocks In 2020, U.S. industrial primary energy consumption, including both fuel and feedstock energy, came primarily from natural gas (46.8 percent) and petroleum (38.6 percent), with some contributions from renewables (10.4 percent, predominantly from biomass4) and coal (4.2 percent) (EIA 2023). The manufacturing sector, which accounts for 81 per- cent of industrial energy consumption, uses predominantly fossil fuel–derived feed- stocks (EIA 2021b). Switching the current fuels and feedstocks to low-carbon sources is one major pillar of industrial decarbonization. However, as illustrated in Table 2.7.1 of the committee’s first report (NASEM 2021, p. 102), low-carbon fuels are typically more expensive than conventional energy carriers. This section describes opportunities for hydrogen and biomass to serve as low-carbon energy sources and feedstocks for indus- try, discusses co-pollutant emissions from renewable fuels, and examines opportunities for recycling carbon-based materials and using other low-carbon energy sources, such as solar thermal and nuclear, for industrial applications. Hydrogen As of 2020, annual U.S. hydrogen use totaled 11.4 MMT (Figure 10-4), primarily for oil refining (e.g., hydrotreatment to remove impurities and hydrocracking to upgrade crude oil), chemical production (primarily ammonia and methanol), and iron and steel production (FCHEA 2020; IEA 2019a). The demand for hydrogen in all four current use areas (see Figure 10-4) is predicted to increase through 2050, with the largest short- term increases expected for methanol and ammonia production, and the largest long-term increases for iron and steel production (IEA 2019a). Current industrial uses of hydrogen are not low carbon, however, because most hydrogen production occurs via steam reforming of natural gas, a process that also emits CO2. The current cost and availability of low-carbon hydrogen represent substantial barriers to reducing indus- trial emissions from processes that use hydrogen, as discussed further in the section “Challenges for Using Hydrogen to Decarbonize Industry” below. Hydrogen can be used in industry to replace fossil feedstocks—for example, as the reductant in iron/steel production in place of coal or in combination with captured CO2 to synthesize hydrocarbons—or fossil fuel combustion—for example, by pro- viding a source of high-temperature process heat or fueling furnaces for petroleum refining. 4  In 2020, 97.8 percent of the renewable energy use in U.S. industry was from biomass. Solar, wind, geothermal, and hydroelectric all had minimal contributions. 542 A00026--Accelerating Decarbonization in the United States_CH10.indd 542 4/13/24 10:33 AM 

Industrial Decarbonization Total hydrogen use in the United States Million metric tons per year 0.4 11.4 1.6 0.2 2.7 6.5 Metal Refining Ammonia Methanol Processing Other Total Hydrocracking Ammonia Liquid methanol Welding Chemicals Hydrotreating production fuel Heat treatment (polymers, other (such as Ammonia Chemical of steel petrochemicals) desulfurization derivatives derivative Glass production Float glass of petroleum) (such as urea/ production from Rocket fuel fertilizer) methanol Forming and Refining of blanketing of gas Electronics biomass/biogas (semiconductors) Hydrogenation FIGURE 10-4  Current uses of hydrogen in the United States. SOURCE: FCHEA (2020). The primary approach to decarbonize iron and steel production using hydrogen is direct reduction of iron in an electric arc furnace (DRI-EAF). The natural-gas-based DRI process can incorporate up to 30 percent hydrogen in the gas stream without any process changes, and up to 100 percent hydrogen5 with some retrofits (Fan and Friedmann 2021). DRI-EAF is considered the most mature low-carbon emissions pathway for iron and steel production and, if operated using hydrogen and zero- carbon electricity, could reduce CO2 emissions by around 80 percent compared to current production methods (Fan and Friedmann 2021). Bartlett and Krupnick (2020) estimated a breakeven price for hydrogen of $1.30–$1.40 per kg to make DRI-EAF cost competitive with current steelmaking processes. An analysis of the impacts of the IRA and IIJA suggests that the price range for low-carbon (e.g., “green” or “blue”) hydrogen can be within or approach this range (depending on scenario) considering 5  Hydrogen Breakthrough Ironmaking Technology (HYBRIT), developed in Sweden, uses green hydro- gen as the sole reductant in DRI and began operation of a pilot plant in 2020, with plans for a demonstration plant to come online in 2026 (HYBRIT n.d.). 543 A00026--Accelerating Decarbonization in the United States_CH10.indd 543 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S the subsidies in these bills (Larsen et al. 2022). It will be crucial to spur the technology, integration, production scale, and market innovations needed to allow low-carbon hydrogen to compete when the incentives expire. Ammonia and methanol syntheses provide the largest volume opportunities to use low-carbon hydrogen as a feedstock to decarbonize chemical production. Each year, 31 MtH2, or 50 percent of global hydrogen generation, is used for ammonia synthesis, a process that emits around 500 MtCO2 per year, with around half of those emissions attributed to hydrogen production (Bartlett and Krupnick 2020; Sandalow et al. 2019). About 12 MtH2 per year is used globally in the production of methanol (Bartlett and Krupnick 2020). A plethora of other chemical processes utilize hydrogen—for ex- ample, hydrogen serves as a reductant in glass manufacturing and as a hydrogenat- ing agent in industrial food production and synthesis of olefins and BTX (DOE 2020c; FCHEA 2020)—so transitioning to low-carbon hydrogen could reduce emissions throughout the chemical industry. Hydrogen is also being considered—along with electricity, biomass, and CCUS—as a low-carbon alternative for industrial process heat. Among these low-carbon alternatives, hydrogen is the most promising for higher-temperature applications (>2100°C), delivering sufficient heat flux, availability, and reliability (Bartlett and Krupnick 2020). However, the different combustion properties (e.g., temperature, flame speed, radiative heat transfer) of hydrogen compared to natural gas necessitate equipment modifications to accommodate its use,6 which increases costs (Pisciotta et al. 2022; Thiel and Stark 2021). Research and development (R&D) needs include optimizing combustion controls, mitigating NOx emis- sions, and improving materials compatibility (DOE 2020c; Thiel and Stark 2021). Biomass The 2016 Billion-Ton Report from Oak Ridge National Laboratory indicated that the United States could produce up to 1 billion tons of biomass per year by 2030 at less than $60 per ton, although at the time of the study, biomass production was only around 400 million tons per year (DOE-BETO 2016). The 2019 National Academies’ re- port on negative emissions technologies (NASEM 2019b), the first report of this com- mittee (NASEM 2021), and Chapter 8 of the current report conclude that competition among alternative needs for arable land will limit annual biomass use to the amount provided by forestry and agricultural waste and feedstocks grown on lands currently devoted to corn ethanol. Together, these total about 0.7 Gt/y of biomass. 6  While the specific value can vary depending on technology, hydrogen blending of up to 38 percent by volume into natural gas has been demonstrated without extensive equipment retrofits (Tisheva 2023). 544 A00026--Accelerating Decarbonization in the United States_CH10.indd 544 4/13/24 10:33 AM 

Industrial Decarbonization FIGURE 10-5  Biomass resources by U.S. county, where darker coloration indicates higher quantity. SOURCES: Abramson et al. (2022), Great Plains Institute with data from NREL (2014). Taking advantage of the full 0.7 Gt/y of biomass—in industry as well as other sectors—would require system-level considerations, such as enhanced efforts to couple the type of biomass grown and the intended use—that is, considering the crop and conversion aspects together (Abdullah et al. 2022). Other key factors to consider include the full system cost (e.g., feedstock, supply chain, refinery, conversion), feed- stock availability, life-cycle GHG emissions, and related credits or incentives (Abdullah et al. 2022). As shown in Figure 10-5, biomass resources are distributed across the United States, albeit with regional differences in quantity and type; thus, regional aspects of fuel production, transportation, use, and storage need to be considered, as they impact cost and supply chains (Abdullah et al. 2022; Abramson et al. 2022). Regional availability, quality, and cost of water also need to be considered and may pose risks to biomass feedstock quality and supply (DOE-BETO 2017; Séférian et al. 2018; Stone et al. 2010). In the industrial sector, the current primary use of biomass is as a source of process heat. Biomass accounts for about 86 percent of the renewable heat consumed by industry worldwide (IEA 2019d). The U.S. industrial sector used 2,313 TBTU of biomass 545 A00026--Accelerating Decarbonization in the United States_CH10.indd 545 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S energy in 2021, or 48 percent of the total biomass energy used in the United States that year (EIA 2022). Most industrial biomass use occurs in the pulp/paper and sugar/ ethanol industries, which produce biomass wastes on site, and some use occurs in the cement industry (IEA 2019d). The paper and wood products industries obtain bio- mass primarily from wood/wood waste for consumption in combined heat and power plants (DOE-BETO 2016; EIA 2022). Opportunities exist to expand the use of biomass as a low-carbon7 fuel and feed- stock to facilitate industrial decarbonization. Biomass in appropriate forms can be used to displace the three energy sources commonly used in industry: solid fuels (e.g., petcoke), fuel oils, and fossil-derived natural gas. Specifically, biomass pellets can substitute in applications that currently use solid fuels; bio-oils derived from pyrolysis or hydrothermal liquefaction of biomass could replace traditional fuel oils; and gas generated via biomass gasification systems can be used in place of fossil- derived natural gas (Abdullah et al. 2022). Industrial feedstock opportunities for biomass include valorizing lignocellulosic biomass to provide aromatics, anaerobi- cally digesting food waste to generate organic acids, and incorporating biomass as a binder to reduce embodied carbon in building materials (Abdullah et al. 2022). Bio(electro)catalytic ammonia production is also being explored to displace the Haber-Bosch process, one of the most energy- and carbon-intensive industrial processes (Krietsch Boerner 2019). These industrial opportunities for biomass use would compete with the two other primary uses: as a feedstock for low-carbon transportation fuels (Chapter 9) and in Biomass Energy with Carbon Capture and Storage (BECCS), where it produces both a significant carbon sink and either energy, a carbohydrate fuel, or hydrogen. Pollutant Emissions from Renewable Fuels While renewable fuels may not directly release CO2 (as in the case of hydrogen or ammonia) or may have near zero life-cycle CO2 emissions (as in the case of biofuels or e-fuels8), their combustion causes emissions of conventional air pollutants, includ- ing nitrogen oxides (NOx), carbon monoxide (CO), sulfur oxides (SOx), and particulates (O’Connor et al. 2022). 7  Or in some cases, a net-negative option, if the end of life for some of the organic carbon is sequestra- tion underground or in long-lived materials rather than combustion. 8  E-fuels, or electrofuels, are fuels synthetized from H and captured CO . Depending on the emissions 2 2 of the energy inputs and other upstream and downstream processes involved in their production, these fuels may emit no net CO2 on a life-cycle basis. 546 A00026--Accelerating Decarbonization in the United States_CH10.indd 546 4/13/24 10:33 AM 

Industrial Decarbonization NOx is formed whenever air, composed of N2 and O2, is heated up to temperatures (approximately 1,800 K) at which the N2 and O2 begin to react. This can occur with any fuel or means of adding heat to air, regardless of its carbon emissions. Significant R&D investments over the past 2 decades have developed low-NOx burner designs to drive NOx emissions levels to well below Environmental Protection Agency (EPA) limits. Such technologies rely on premixing the fuel and air, maintaining combustion temperatures below levels where significant NOx formation occurs, and minimizing residence times of combustion products at high temperatures. These technologies are often referred to as “lean, premixed” combustion technologies or “dry, low NOx.” There are several trade-offs to consider, such as the power and performance of ma- chines, emissions of co-pollutants, economics, and complexity (Lewis 2021; Lieuwen et al. 2013). Some studies of H2/air combustion have shown significant increases in NOx produc- tion relative to natural gas combustion (Therkelsen et al. 2009). However, in order to draw conclusions about the results, it is critically important to identify what is held constant in these comparisons and what type of burner technology is being used. The flame temperature of any fuel/air combination is a function of fuel/air ratio. The peak flame temperature (typically achieved at near-stoichiometric fuel/air ratios) of hydro- gen is higher than that of natural gas, and NOx production is an exponential function of temperature. As a result, if combustion occurs at stoichiometric fuel/air ratios, as in older high-NOx technologies, then hydrogen combustion can lead to significant increases in NOx production relative to natural gas. Modern, low-NOx combustion sys- tems are designed to operate in lean premixed mode that reduces the flame tempera- ture. A hydrogen-fired system can also be operated at a set fuel/air ratio to achieve a given flame temperature. If the flame temperature is held constant, the effect of fuel switching from natural gas to hydrogen is much weaker, and NOx emissions may actu- ally be reduced (Breer et al. 2022). Furthermore, NOx numbers are typically reported in ppm (parts per million) in a dried sample, with the value corrected to some reference oxygen concentration (typically 3 percent in the industrial community and 15 percent in the gas turbine community [Douglas et al. 2022]). However, when comparing NOx values across different fuels, the metric of primary interest is not ppm, but rather mass production rate of pol- lutant, normalized by the thermal or electric power of the device. Comparing ppm values rather than mass production rates can artificially inflate apparent NOx emis- sions from hydrogen combustion, largely because drying the exhaust gas sample concentrates the NOx in hydrogen (and ammonia to a lesser extent) systems because the only combustion product—water—is removed in the drying process (Douglas et al. 2022, In press). 547 A00026--Accelerating Decarbonization in the United States_CH10.indd 547 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S Carbon monoxide and particulate emissions are also pollutants of concern when- ever the fuel contains carbon atoms, as do biofuels and e-fuels. Carbon monoxide emissions can be managed by appropriate technologies, primarily by ensuring that sufficient time is provided for all of the fuel to burn. A serendipitous benefit of lean, premixed technologies using gaseous fuels is that particulate emissions are very low and generally not a concern. However, particulates are more of an issue with liquid- fueled systems where the fuel is not prevaporized. In this case, the composition of the fuel influences emissions—in particular, attention must be given to technologies that mitigate particulate emissions when liquid fuels are not prevaporized and contain significant aromatic content. Particulate emissions are dramatically reduced when the fuel does not contain significant aromatics, as is the case with e-fuels synthesized via the Fischer–Tröpsch process (Colket 2013). SOx emissions occur if the fuel contains sul- fur, as is the case with coal and some liquid fossil fuels, but sulfur is not typically pres- ent in most renewable fuels, such as hydrogen, ammonia, or Fischer–Tropsch-derived liquid fuels. As noted in Chapter 3, because SOx can react with other small particles in the atmosphere and lead to particulate matter formation, its absence in renewable fuels could have additional air quality benefits. Opportunistic Reduction of Co-Pollutants As transformative low-carbon technologies are pursued, there will be opportuni- ties to reduce co-pollutant emissions to air, land, and water. For example, hydrogen combustion does not cause SOx, particulate matter, or CO emissions. Some of these health benefits are already achieved with existing technology, and others may require more investigation and investment to facilitate low-carbon, low co-pollutant technol- ogy. Trade-offs may be encountered between minimizing co-pollutants (e.g., efforts to reduce NOx can lead to increases in CO), so rather than stipulating limits on these pollutants separately, there may be opportunities to reduce overall health impacts by providing flexibility in permitting, such as regulating weighted sums of these pollut- ants. Trade-offs in reduction of the co-pollutants versus project costs, complexity, and installation time may also occur. One example of a low-carbon technology with potential co-pollutant reductions is steam crackers, which produce ethylene and hydrogen by heating ethane with natural gas until its chemical bonds break apart. This is a foundational production process in the chemical industry, as ethylene is a top commodity product. Globally, ethane crack- ers emit some 260 million tonnes of CO2 per year (Sarin et al. 2021), as well as signifi- cant amounts of co-pollutants. Multiple routes for decarbonizing ethylene production 548 A00026--Accelerating Decarbonization in the United States_CH10.indd 548 4/13/24 10:33 AM 

Industrial Decarbonization via steam crackers are being pursued, including several electrification routes. Electric crackers could avoid combustion of natural gas, potentially reducing CO2 emissions some 90 percent (SABIC 2022). For a single cracker operating at 1.5 tonnes per annum (tpa), CO2 reductions then could approach 1.35 tpa (Rightor 2022). Because electric crackers could avoid natural gas combustion, co-pollutant emissions could also be reduced. For a single cracker, the reductions could be 40 tpa methane (a GHG that is 27 times more potent than CO2), 160 Mtpa NOx, 9 Mtpa SOx, and 66 tpa particulate matter (Rightor 2022). The resulting cleaner air would provide significant benefits to the surrounding communities. There are also potential co-pollutant reductions for processes that capture gases from process vents, capture CO2 for CCUS, and generate alternative hydrocarbon fuels. To better understand what co-pollutant reductions are possible, evaluations of the costs, benefits, and trade-offs are needed. This is a prime opportunity for project co-funding, as additional capital, engineering, and infrastructure may be required beyond the targeted reduction of CO2. The reduction of refrigerants during manufacture, transportation, use, and recovery is also an area of potential co-pollutant reduction. For example, fluorinated GHGs (F-GHGs) are the most potent and long-lived GHGs and are associated with electronics manufacturing, metals, and other production processes (EPA 2022a). Where it is pos- sible to achieve reductions in F-GHGs in parallel with CO2 reductions, the emissions impact could be amplified greatly. Finding 10-3: Combustion of renewable fuels can still lead to pollutant emissions, which have to be managed by appropriate technology developments and burner upgrades. As transformative low-carbon technologies are pursued, opportunities to reduce co-pollutant emissions (e.g., refrigerants, NOx, SOx, particulate matter, hazardous chemicals) to air, land, and water need to be considered where feasible, and adjustments in the evaluation metrics (e.g., concentration versus mass-based metrics for NOx from hydrogen combustion systems) may be needed to correctly evaluate reductions. Recommendation 10-4: Pursue Technologies That Reduce Both Greenhouse Gas (GHG) and Air Pollution Emissions. While pursuing GHG reductions, the De- partment of Energy should work in parallel to reduce co-pollutants. Partners in this work could include non-governmental organizations, industry, indus- try associations (e.g., American Iron and Steel Institute, American Chemistry Council, Portland Cement Association, National Association of Manufactur- ers, and others), and engineering companies. Where co-pollutant reduction 549 A00026--Accelerating Decarbonization in the United States_CH10.indd 549 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S opportunities are viable but additional funding is required, co-funding could be lined up by the Foundation for Energy Security and Innovation. To initi- ate the program, a funding level of $1 billion devoted to the public match is recommended. Recommendation 10-5: Use Mass-Based Rather Than Concentration-Based NOx Standards. Regulatory and permitting organizations should eliminate all concentration-based (i.e., ppm-based) NOx standards and instead use mass output-based standards (ng/J) so that emissions can be accurately compared across different fuels. This is particularly important for hydrogen fueling, where the drying process prior to measurement and correction to a fixed O2 level artificially elevates NOx levels. Recycled Carbon Materials The carbon present in current waste streams represents a resource that could be re- purposed as a feedstock for chemical production and gradually displace fossil fuels (Lange 2021). There is an array of options for more effectively tapping the carbon that is already in products—reuse, reprocessing (e.g., mechanical recycling), depolymerization, conversion to chemical feedstock, and energy recovery. This follows the general waste management priority pyramid (EPA 2022b), where the first step is reducing use where not necessary (e.g., superfluous packaging). One of DOE’s Manufacturing USA Institutes, Reducing Embodied-Energy and Decreasing Emissions (REMADE), focuses on these chal- lenges of reducing GHG emissions and virgin material consumption, increasing second- ary material consumption, and ensuring use of waste in processes (Dyck et al. 2022). A resurgence in RD&D on chemical recycling is adding to the options for depolymer- izing polymers, even for typically difficult-to-recycle thermoset polymers (where chemical bonds need to be broken) such as polystyrene and epoxies (Li et al. 2022). The options for plastics recycling vary depending on the type of polymer; some can be depolymerized or cracked, but for others, chemical recycling methods are yet to be developed (Lange 2021). These various avenues to recover and reuse the carbon and other elements in polymers provide routes for displacing a small portion of fossil fuel feedstocks used today. The potential for and challenges associated with repurposing the carbon in polymers and displacing fossil fuel feedstocks reflect the status of repurposing many materi- als. Today, less than 10 percent of materials used in manufacturing are recycled (Dyck et al. 2022; Li et al. 2022), so the volume of material available is limited, especially in regions where the local recycling rate is even lower. Mechanical recycling is largely 550 A00026--Accelerating Decarbonization in the United States_CH10.indd 550 4/13/24 10:33 AM 

Industrial Decarbonization limited to fairly clean waste streams (Barrett 2020; Lange 2021; Schyns and Shaver 2021), and products tend to end up in lower-value applications (e.g., downcycling). The material losses in recycle loops can be up to 50 percent (Lange 2021), leaving a materials gap that, in the future, will need to be filled with carbon from reused CO2, biogenic sources, or other low-carbon pathways. There also are challenges associated with consumer awareness of what can be recycled, willingness of consumers to pay more for recycled materials, higher cost of reprocessing wastes, and waste stream pu- rity (Collias et al. 2021). Closing materials loops with attention to the life-cycle impacts is an area where continued support, innovation, and application are needed, as they provide additional options for reducing fossil fuel use and decreasing the environ- mental footprint of manufacturing. Other Low-Carbon Energy Sources Additional opportunities to use low-carbon energy sources in industry include solar thermal for industrial process heat (IPH) and nuclear energy for IPH and other industrial applications. Solar IPH is currently deployed in 34 countries worldwide, including the United States, primarily in the food and beverage, metals, and textiles industries because of low to moderate temperature requirements (Schoeneberger et al. 2020). A 2021 NREL analysis examined the potential for three categories of solar technologies—non-concentrating collectors, concentrating collectors, and PV-connected electrotechnologies—to be used for IPH (McMillan et al. 2021). It found that most solar thermal technologies cannot meet IPH demands 100 percent of the time and would need to be augmented by fuel-based heating or grid electric- ity for industries that require continuous operation. Incorporating thermal or bat- tery energy storage would enable increased use of solar IPH, as “the ability to match the temporal aspect of IPH demand is a more significant barrier than matching solar technologies to IPH temperature” (McMillan et al. 2021). Additional barriers to adopting solar IPH include temperature requirements, process integration and dis- ruption risks, high upfront costs, and geography and land-use constraints (McMillan et al. 2021; Schoeneberger et al. 2020). Use of nuclear-generated heat for industrial applications is an area of active R&D (Boardman et al. 2021; Rosen 2020), and some demonstrations of nuclear-generated hydrogen are under way at existing reactors (NASEM 2023b). The existing fleet of light water reactors produces heat at around 300°C, which can be used for lower- temperature processes (e.g., chemical separations, hydrogen generation via proton exchange membrane electrolysis) (NASEM 2023b). Many of the advanced reactor designs under development could generate higher-temperature heat, up to about 551 A00026--Accelerating Decarbonization in the United States_CH10.indd 551 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S 800°C, which would be suitable for high-temperature processes (e.g., steam methane reforming, hydrogen generation via solid oxide electrolysis, and cement and steel production) (NASEM 2023b). As one example, Dow Chemical has announced plans to partner with X-Energy to deploy a small, modular, high-temperature gas reactor to provide both electricity and process heat at Dow’s Seadrift industrial site on the Gulf Coast (World Nuclear News 2023; X-Energy 2023). Nonetheless, key RD&D needs for industrial heat applications of nuclear remain, and include “assessing system integra- tion, operations, safety, community acceptance, market size as a function of varying levels of implicit or explicit carbon price, and regulatory risks” (NASEM 2023b). Mitigation Options GHG emissions from the industrial sector will likely remain above the levels needed to reach net zero even with aggressive pursuit of the decarbonization pillars, owing to unavoidable process emissions and the high costs and technical complexity of some decarbonization solutions. Several additional strategies for mitigating or offset- ting GHG emissions include CCUS, DAC, land use approaches (such as reforestation; see Chapter 8), and CO2 mineralization. CCUS is the most recognized and developed technology following decades of research and demonstration projects (IEA 2020a). DAC is also gaining visibility (NASEM 2019b), but it is much earlier in development and has significantly higher economic costs. CCUS could be deployed directly on indus- trial facilities to capture and sequester their emissions, while DAC could be deployed anywhere as a means of offsetting industrial emissions at a different location. Miner- alization approaches such as in the curing of cement are also being probed and could provide durable storage of CO2 in building materials (NASEM 2019a,b, 2023a). For CCUS and DAC, pipeline networks, storage facilities, and reuse applications for CO2, where feasible, are part of the extensive infrastructure that will be needed for industry to take full advantage of these options (NASEM 2023a). Different deployment pathways for CCUS in net-zero scenarios have been examined, with the potential for storage approaching 1.0–1.7 billion tons of CO2 per year by 2050 across a network of pipeline and storage facilities (Larson et al. 2021). The most favorable starting points for CO2 capture and reuse options in industry have also been studied (Psarras et al. 2017). More concentrated CO2 sources have substantially lower capture costs than dilute sources (IEA 2021). It is also beneficial to capture CO2 at locations with geographically localized industry, large quantities of CO2 available, starting pipeline infrastructure, and nearby storage options such as saline aquifers. The location of reuse options near the capture and storage areas can be important as well. Emerging reuse options include the generation of synthetic fuels, polymers, and 552 A00026--Accelerating Decarbonization in the United States_CH10.indd 552 4/13/24 10:33 AM 

Industrial Decarbonization other chemicals; mineralization; and production of elemental carbon materials and various niche products (NASEM 2023a). These options need to be further developed in regions where CCUS infrastructure is expanded. Decreasing the cost of CCUS will be crucial to its success. Integrating CCUS with pro- cess heat may, in some applications (e.g., using heat to regenerate amine absorbents that capture the CO2), defray some of the cost, but finding value return options that customers are willing to pay for will be vital. For example, adding CCUS to methanol or ammonia production increases the cost by 20–40 percent (IEA 2021), and further innovation is needed to bring the costs down to enable adoption. Recent approaches to capture CO2 from industrial process vents and convert it to key intermediates such as ethanol (which can then be converted to products such as jet fuel) illustrate the potential for value return (Crumpacker 2022; IEA 2019c; NASEM 2019a). Another route for tapping co-benefits may be the reduction of co-pollutants, as discussed above. For reuse options other than enhanced oil recovery (EOR)9 to grow substantially, a significant degree of innovation will be needed. Policy enablers can help by providing support for RD&D and deployment of approaches to capture and repurpose CO2 in nearby industrial applications (e.g., within the fenceline or nearby an industrial facility where the CO2 is generated), and by improving the incentives specifically for reuse ap- plications (other than EOR). The current 45Q tax credits provide $85 per metric ton for CO2 storage, $60 per metric ton for EOR or other industrial uses, and $180 per metric ton for direct air capture (JDSUPRA 2022). Increasing the incentive for CO2 reuse in industrial applications to $85 per metric ton could, depending on the process, sig- nificantly spur additional projects (Hughes and Zoelle 2022). A recent study from the National Energy Technology Laboratory showed that the cost of CO2 capture from ce- ment plants could reach $75 per metric ton, depending on cement plant capacity and CO2 capture rate, although this estimate did not include transportation and storage costs (Hughes and Zoelle 2022). Establishing increased market pull for reused CO2 is a significant opportunity to defray the costs of CCUS and argues for a renumeration for CO2 use in industry (non-EOR applications) at least as high as that for sequestration. Demand for Low-Carbon Products (Markets) Numerous stakeholders—including investors, customers, supply chain partners, and non-governmental organizations—are calling for manufacturing to make materi- als with lower carbon intensity (i.e., low embodied carbon materials). Increased 9  Enhanced oil recovery involves the injection of CO into an oil reservoir to extract additional oil, and 2 results in some long-term storage of CO2 underground. 553 A00026--Accelerating Decarbonization in the United States_CH10.indd 553 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S market pull for low-carbon products is vital to send the signal of consumer demand. The Buy Clean initiative (Federal CSO n.d.), for example, calls on large purchasers of goods (especially state and federal government entities) to increasingly request and specify materials with lower embodied carbon. The movement has started with low-carbon materials for buildings and infrastructure, specifically targeting cement and steel (Lobet 2020), with the intent of lowering the emissions footprint of build- ings and infrastructure while also increasing market pull for low embodied carbon materials. Another effort to establish demand for low-carbon materials is the First Movers Coalition (FMC), which obtains purchase commitments for low-carbon products and technologies across eight sectors: aviation, shipping, steel, trucking, aluminum, carbon removal, cement/concrete, and chemicals (FMC n.d.) As of June 2023, the FMC had 106 commitments from 81 companies and 1 nonprofit organiza- tion, totaling $12 billion in demand for low-carbon products (FMC 2023). Ultimately, these initiatives should provide a strong price signal for manufacturing companies to preferentially make these materials. Showing a viable market for these products is also important, as is demonstrat- ing that the market will provide compensation for the likely higher-cost products. Recent work on Buy Clean proposes key elements that include (1) transparency and disclosure, (2) direct investment and RD&D in industry, and (3) establishing stan- dards (BGA 2022). For the latter, the move toward codes and standards in building materials will help improve clarity on product carbon intensity and business case (Srinivasan et al. 2022). Federal agencies, national laboratories, academia, industry, and non-governmental organizations are engaged in evaluating the carbon intensity of products, support- ing the development of standards, and using those early standards in end-use areas such as buildings and construction (Srinivasan et al. 2022). Examples include national laboratory-developed LCA tools for energy technologies and pathways (NETL n.d.) and models for transportation fuels (ANL 2023), as well as efforts to measure embodied carbon in buildings—for example, through the university-based Carbon Leadership Forum (CLF n.d.) and the National Institute of Standards and Technology’s (NIST’s) met- rics and tools for sustainable buildings (NIST 2020). The committee’s first report recom- mended that Congress task EPA and DOE with establishing a library of environmental product declarations and the associated accounting and reporting infrastructure to support a Buy Clean policy (NASEM 2021). Similarly, other recent reports have recom- mended harmonization and standardization of LCA for CCUS projects and labeling of product carbon intensity to improve transparency for buyers (e.g., Recommendations 3-2 and 5-3 in NASEM 2023a). 554 A00026--Accelerating Decarbonization in the United States_CH10.indd 554 4/13/24 10:33 AM 

Industrial Decarbonization Nonetheless, more work is needed to understand the carbon intensity of products as pro- duced, as well as the addition of carbon intensity throughout the supply chain. There is a broad-based need to develop knowledge infrastructure to standardize how data on the carbon intensity of raw materials, precursors, manufactured products, and finished goods delivered to consumers are determined across the entire life cycle. This knowledge infra- structure includes the development of codes, standards, and evaluation protocols (see, e.g., Srinivasan et al. 2022), as well as the development of common data warehouses to share accepted parameters and protocols for calculating life-cycle emissions of products and energy carriers. A current effort toward this latter goal is the Federal LCA Commons, an interagency agreement for coordinating and sharing data, research, and informa- tion systems related to LCA (Federal LCA Commons n.d.). The trial and demonstration of low-carbon technologies provides an opportunity to monitor the impact on the products’ carbon intensity, which could be included as a metric in DOE’s and other agencies’ lists of technology evaluation criteria for demonstrations. Studying reductions in carbon intensity via low-carbon technology implementation is also an opportunity to develop communities of practice that accelerate progress in low-carbon technologies. These communities can be engaged in updating product and purchasing standards, catalyzing RD&D (across industry, academia, engineering companies, etc.), and training people with the skills needed for the design, installation, and maintenance of equipment. Finding 10-4: Market-pull mechanisms, such as Buy Clean and the First Movers Coali- tion, have a key role to play in helping to establish markets for low-carbon products. A number of value-chain players—from materials producers to consumers—need to be engaged in the development of codes, standards, and evaluation protocols for determining and transparently reporting the carbon intensity for products through- out their life cycle. Recommendation 10-6: Develop and Standardize Life-Cycle Assessment Ap- proaches for Carbon Intensity of Industrial Products. The Department of Energy should lead an effort, in collaboration with the Environmental Protection Agency, National Institute of Standards and Technology, and other relevant agencies, to develop, harmonize, and standardize life-cycle assessment ap- proaches for determining the carbon intensity of products from industry, start- ing with those products responsible for the largest proportion of greenhouse gas emissions. This effort should connect with related federal procurement programs for low-carbon products (e.g., Buy Clean). It should also assess the carbon impact across supply chains and develop labeling programs so that consumers can clearly evaluate the life-cycle carbon intensity of products. 555 A00026--Accelerating Decarbonization in the United States_CH10.indd 555 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S Recommendation 10-7: Establish a Program Connecting Market-Pull Approaches to the Deployment of Low-Carbon Technologies. Congress should enact legislation to establish a program connecting market-pull approaches (e.g., procurement of low-embodied carbon products/Buy Clean) with the deployment of low- carbon technologies and process technology innovations to make lower-carbon products. This program could include developing protocols to quantify impacts and knowledge infrastructure to transparently report results and accelerate further improvements. It should also foster partnerships to pursue continued step-change reductions in embodied carbon across supply chains, develop “low- carbon communities” in carbon-intensive industries, and engage with states that are trailblazers in this area. The Departments of Energy (DOE), Commerce, Defense, and Transportation and the General Services Administration should be involved in this program, with DOE having responsibility for leading it. DECARBONIZING ACROSS THE BREADTH OF INDUSTRY Industry is highly heterogeneous, from light industry (e.g., metal finishing, plastics pro- cessing) to heavy industry (e.g., cement, iron and steel, chemicals). As noted above, most analyses of industrial decarbonization focus on heavy industries, where strategies center around the major pillars of energy and materials efficiency, beneficial electrification, low-carbon energy sources and feedstocks, mitigation options, and demand for low- carbon products. Decarbonizing all of industry will require considering routes for light industry and engaging small and medium manufacturers (which comprise the majority of companies) in addition to the recognizable large companies in heavy industry. The pillars are applicable across industry, and this section is meant to build on the use of the decarbonization pillars across industry—while illustrating how they can be tailored for light industry and small- and medium-size manufacturers (SMMs). For example, given their lower complexity, cost sensitivity, and strong market-pull from customer demand, light industry and SMMs may see benefits from early application of low-carbon technol- ogies in some cases (e.g., industrial heat pumps for low–moderate temperature process heat). This section highlights how opportunities and challenges for light industry and SMMs differ from those of heavy industry and large manufacturers. Light Industry Light industries use primary materials produced by upstream heavy industry to create final consumer products. They are characteristically smaller, more consumer-oriented, and less energy- and carbon-intensive than heavy industries (Worrell and Boyd 2022a). 556 A00026--Accelerating Decarbonization in the United States_CH10.indd 556 4/13/24 10:33 AM 

Industrial Decarbonization Examples of light industries include food processing, consumer electronics, textiles, metal casting, and appliances. In the United States, light industry used 2.43 exajoules (EJ) of fuel in total in 2014, and 1.69 EJ of electricity (Worrell and Boyd 2022a). According to Worrell and Boyd (2021), the primary uses of fuel are in boilers (31 percent), process heating (44 percent), and space heating and cooling (17 percent), while the primary uses of electricity are in motor systems (40 percent), facility heating ventilation and cooling and lighting (26 percent), and ovens and furnaces (13 percent). Key energy consumers include food and beverage, fabricated metals, and transportation equipment industries (EIA 2021a; Worrell and Boyd 2022a). Pursuing opportunities to reuse process heat and increasing the percentage of energy-intensive material that ends up serving customer needs are significant business opportunities (Lovins 2021). In most heavy industries, energy use is dominated by a few processes that require high temperatures provided by fossil fuels; however, light industry uses a relatively large share of electricity because its processes generally require lower temperatures more conducive to electric technologies. Electricity currently comprises 40 percent of total site energy use in light industry—and about 60 percent when accounting for source energy—compared to less than 10 percent in heavy industry (Worrell and Boyd 2022b). There is significant opportunity for light industries to electrify further, given the wide availability of new innovative technologies (e.g., heat pumps, mechanical vapor recompression) at relatively high technology readiness levels (Worrell and Boyd 2022b). Additionally, electrification is more feasible in light industry than in heavy industry because the smaller power requirements of light industry facilities put less demand on the grid. Worrell and Boyd (2022a) further point out that light industry tends to use more electricity (and less process heat, especially that which is high tem- perature), have lower process integration (making it easier to change out/implement new processes), and have relatively clear early non-energy benefits (e.g., better control of temperature, minimizing maintenance, quality, product preservation). Light indus- try uses up to four times the amount of electricity versus fossil fuels (the opposite rela- tionship exists for heavy industry) (Worrell and Boyd 2022b), so the heavier reliance on electricity and usage of electrical equipment suggests a lower early adoption barrier. Looking across all of industry, the GHG emissions reduction potential of light indus- try is large, representing 39 percent of the total potential emissions reductions in the sector (Figure 10-6; Worrell and Boyd 2022a). Worrell and Boyd (2022a) indicate that energy efficiency could deliver upward of 40 percent of this potential. In light industry, because energy use makes up a smaller proportion of costs, improving energy ef- ficiency has historically not been a high priority, and there have been fewer staff and resources devoted to this area. 557 A00026--Accelerating Decarbonization in the United States_CH10.indd 557 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S 700 600 P1 Energy Efficiency P2 Material Efficiency (Million metric tons CO2) 500 P3 Sector Specific Potential emissions P4 Power Grid Synergy 400 Remaining Emissions 300 200 100 0 Light Bulk Refining Iron & Cement Paper Aluminum Industry Chemical Steel & Glass FIGURE 10-6  Potential emissions reductions in specific industries from different actions: energy effi- ciency, material efficiency, industry-specific, and power grid. NOTE: Remaining emissions are indicated with the darkest blue shading. SOURCE: Data from Worrell and Boyd (2022a), https://doi.org/10.1016/j. jclepro.2021.129758. CC BY 4.0. Small- and Medium-Size Manufacturers Of the more than 300,000 manufacturing companies in the United States, more than 90 percent have fewer than 500 employees, and most have fewer than 20 employees (U.S. Census Bureau 2022). All manufacturers and supply chain partners—whether large, medium, or small—need to participate in decarbonization efforts. While major manufacturers, strongly represented by heavy industry, use vast quantities of energy and emit large volumes of GHGs, there are also a vast number of SMMs. The SMM category includes companies that transform, combine, or customize products from earlier supply chain partners into intermediate or finished products. The supply chain partners of many heavy industrial companies (typically SMMs) use additional energy and emit additional GHGs as they prepare products for final end-use, which contrib- utes to the Scope 3 emissions of the major manufacturers. Key starting points for decarbonizing SMMs include dedicated energy and resource management approaches, targets, and reporting of progress. However, transmitting information to this sector has been a challenge globally. Countries like Switzerland and Germany have seen some success with networking programs that connect local SMMs to facilitate information transfer (Worrell and Boyd 2022b). Third-party aggrega- tors may be able to play a role in coordinating small facilities and providing them with 558 A00026--Accelerating Decarbonization in the United States_CH10.indd 558 4/13/24 10:33 AM 

Industrial Decarbonization services they do not have the resources for on their own (McMillan 2022). Another approach to engaging SMMs in decarbonization efforts is by including them in supply chain partnerships with larger companies pursuing electrification, energy efficiency, and increased use of low-carbon fuels and feedstocks. Smaller companies have a lot less capital but more nimbleness, and they need programs that are cognizant of that difference (Dyck et al. 2022). Examples of SMM networks in the United States include • Small Business Development Centers • American Small Manufacturers Coalition • Department of Commerce’s NIST Manufacturing Extension Partnership (MEP) National Network • National Association of Manufacturers (NAM) • Department of Energy’s Industrial Assessment Centers (IACs) TAILORING INDUSTRIAL DECARBONIZATION APPROACHES TO SPECIFIC STATES OR REGIONS Several factors will influence how the industrial decarbonization pillars may need to be tailored at the regional or state level, including geography, resource availability, economics of energy sources, concentration of industrial activity, infrastructure, work- force capabilities, and the policy and regulatory environment. Aligning the resources and capabilities to pursue decarbonization pillars with state incentives for accelerat- ing reductions in energy and GHGs will help to facilitate industrial decarbonization. Recent reports show that states are taking varied approaches to supporting industrial decarbonization (Srinivasan and Esram 2022; USCA 2022) and describe best practices for industrial decarbonization at the state level (I3 2022). The availability and delivery efficiency of the low-carbon energy sources and feedstocks needed to decarbonize industry vary across the country. For example, Figure 10-5 showed that biomass availability varies considerably by state, and likely by season as well. The capacity and delivery capability of low-carbon electricity (e.g., wind, solar, nu- clear) is also variable. Texas leads the nation in wind capacity, and although transmission capabilities have been upgraded, there are still constraints considering the expected growth of both wind and solar (see LBNL 2022 for an indication of expected growth). Electrification initiatives for industry will also need to consider the electricity/natural gas price ratio, which varies by state and region, as shown in Figure 10-7. A lower ratio decreases the economic hurdles for adopting technologies like industrial heat pumps (IHPs); in regions where the electricity/natural gas price ratio is below 3.5, simple pay- backs for IHPs can be less than 2 years (Rightor et al. 2022a). Hurdles to adoption still 559 A00026--Accelerating Decarbonization in the United States_CH10.indd 559 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S Electricity/gas price ratio $/MMBtu basis <3 3–3.49 3.5–3.99 4–4.49 > 4.5 FIGURE 10-7  Electricity/natural gas price ratio variation across the United States, where lighter color rep- resents a higher ratio. SOURCE: Rightor et al. (2022), American Council for an Energy-Efficient Economy. exist, however, and policy incentives could help accelerate adoption of IHPs and other electric technologies. Incentives that reduce the cost of capital or electric rates would be instrumental in locations where the electricity/natural gas price ratio is higher. BARRIERS TO INDUSTRIAL DECARBONIZATION Common barriers to reducing emissions exist across all sizes and sectors of industry, as detailed in DOE (2022c). Such challenges need to be met with the combined efforts of state and federal policy, as well as the actions of private enterprises. The following sections briefly highlight key barriers for specific segments and technologies relevant to this work. 560 A00026--Accelerating Decarbonization in the United States_CH10.indd 560 4/13/24 10:33 AM 

Industrial Decarbonization Challenges for Using Hydrogen to Decarbonize Industry The primary challenges for using hydrogen to decarbonize industry are the produc- tion, distribution, and storage of low-carbon hydrogen. Low-carbon hydrogen gen- eration, either via renewable electrolysis (i.e., “green hydrogen”) or steam methane reforming (SMR) with carbon capture (i.e., “blue hydrogen”),10 costs more than con- ventional hydrogen production from natural gas (Ochu et al. 2021). “Green hydrogen” is currently about 4–6 times more expensive than conventional hydrogen, and “blue hydrogen” costs about 50 percent more than conventional hydrogen on average (Ochu et al. 2021), so additional innovation is needed in both cases to reduce costs. To that end, DOE’s Hydrogen Shot program, launched in June 2021, has set a target for the cost of clean hydrogen to be $1 per kg H2 within 1 decade (DOE-HFTO n.d.(b)). In current applications, about 85 percent of hydrogen is produced and used at the same site, minimizing costs associated with transport and storage (Bartlett and Krupnick 2020; IEA 2019a). If such co-location is not feasible for future hydrogen use cases, then infrastructure to transport and store hydrogen will need to be developed to connect sites of production and demand. Pipelines are the most efficient method to transport large quantities of hydrogen, although they may be difficult to site. Pipeline development has high capital costs, but pipelines typically have low operating costs over their 40- to 80-year lifetime (IEA 2019a). The feasibility of retrofitting natural gas pipelines to transport hydrogen or hydrogen blends is actively being explored (Blanton et al. 2021; EFI 2021; IEA 2019a). Converting gaseous hydrogen to a liquid hy- drogen carrier for easier transport is also being considered (e.g., Tullo 2022) but is only cost-effective over long distances because of the high cost and energy intensity of the chemical conversion process (Bartlett and Krupnick 2020). Storing hydrogen in a gaseous, liquid, or solid form will be necessary if production and consumption are not temporally aligned. The lowest-cost option is to store large volumes of gaseous hydro- gen in a geologic formation, preferably a salt cavern, but this option is geographically limited (BNEF 2020). Storing hydrogen as a liquid or solid (e.g., liquefied H2, ammonia, liquid organic hydrogen carriers, metal hydrides) is more expensive and better suited for smaller volumes, but it does not face geographic limitations (BNEF 2020). In addition to high costs, the transport and storage of hydrogen risk fugitive emissions. Hydrogen is an indirect GHG with a 100-year global warming potential (GWP) estimated to be between 3 and 11 (Field and Derwent 2021; Paulot et al. 2021; Warwick et al. 2022). Hydrogen leaks are much more difficult to prevent than natural gas leaks because of the 10  For hydrogen generated via SMR with carbon capture to qualify as “low carbon” (≤2 kg CO2e per kg H2 at the site of production, per IIJA §40315), methane and CO2 emissions need to be minimized across the supply chain and high carbon capture efficiencies must be achieved (Pettersen et al. 2022). 561 A00026--Accelerating Decarbonization in the United States_CH10.indd 561 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S small size of the molecule. The possibility of future regulation of fugitive hydrogen emis- sions argues for use near its production sources. As the hydrogen hub demonstrations proceed, there may be an opportunity to examine technologies that most effectively monitor and reduce hydrogen leakage. The timing of hydrogen use is a question for some applications. The carbon inten- sity associated with hydrogen generation affects the extent of emissions reductions achieved by incorporating hydrogen in chemical or industrial processes. For example, CO2 emissions from methanol production would be higher if current grid-based electricity were used to make hydrogen than if traditional production methods were used; not until the grid is nearly fully decarbonized would net emissions decrease (DOE 2022c). Using clean energy to power hydrogen generation would decrease emis- sions, but the amount of clean energy needed at a commercial-scale facility would likely be well beyond the local supply, as methanol is one of the largest global com- modity chemicals. In the near term, it would be better to focus on applications where the value proposition and market pull for low-carbon-intensity hydrogen is strongest and where the margin will support the added cost. An example is ammonia, which is used to produce fertilizer and is one of the largest commodity chemicals—at $67 bil- lion in market value in 2020 and projected to grow to about $111 billion in 2028 (Fortune Business Insights 2021). This connection to fertilizer and hence food, which is highly visible to consumers, is apparently strong enough for an early market for green ammonia ($36 million in 2021, 0.05 percent of the overall ammonia market) and is ex- pected to grow (Precedence Research 2022). As a result, CF Industries, Yara, and others have piloted facilities that are using hydrogen generated from renewable energy to meet customer interest for low-carbon ammonia (Jones 2022). Identifying where market players will see the greatest value add for low-carbon H2 (≤2 kg CO2e per kg H2 at the site of production, per IIJA §40315) remains a question. As noted above, economics is a major factor, as are location, end-customer demand for low-carbon-intensity products, and the ability to capture value from products made with low-carbon hydrogen. The market for hydrogen with various carbon inten- sities is at an early stage, and given the higher cost of lower-carbon options, there is uncertainty about the applications, price points, and volumes for which demand will materialize. The rate of expansion of hydrogen production and market demand is another ques- tion. The $7 billion of DOE support for 6 to 10 hydrogen hubs (DOE-OCED n.d.(b)) authorized in the IIJA aims to catalyze production of low-carbon hydrogen, seed the market, and encourage H2-related infrastructure development. How fast the expe- rience in the hubs spurs developments in other areas of the country and how the 562 A00026--Accelerating Decarbonization in the United States_CH10.indd 562 4/13/24 10:33 AM 

Industrial Decarbonization learnings and scale help to reduce the cost of low-carbon hydrogen remain to be seen. Encouraging rapid reductions in the cost of hydrogen will require support for a market transformation where the low-carbon hydrogen (that likely will be at a higher price initially) can gain a foothold. The 45V Hydrogen Production Tax Credit enacted in the IRA, which gives up to a $3/kg credit,11 is a first step. Voluntary commitments from end users, aggregation of demand by market players (perhaps inspired by bulk purchases) and potentially by governmental off-takers, and the development of standards for nomenclature, life-cycle procedures for evaluating hydrogen’s carbon intensity, and energy efficiency could also help improve market confidence. Challenges for Using Biomass to Decarbonize Industry Three potential applications of biomass in industry require additional RD&D to be im- plemented at a commercial scale. First, use of biomass as a direct replacement for fos- sil fuels might be limited by its lower calorific value compared to some fuel types (e.g., bituminous coal) or by the fuel quality requirements and standards in some applica- tions (Fivga and Mayer 2016). Second, bio-oils derived from pyrolysis technologies are often unstable and acidic, and current stabilization processes add cost (Abdullah et al. 2022). Third, while lignin is a promising source of aromatics, its integration into cellu- lose and tendency to condense into oligomers present challenges for extracting and cracking it in a manner that produces clean aromatic monomers (Abdullah et al. 2022). DOE’s Bioenergy Technologies Office has several active efforts in lignin valorization aimed at solving these challenges (DOE-BETO 2021). Realizing opportunities to use biomass for industrial decarbonization will also depend on policies and incentives, competition between biomass use cases, and consumer demand. Current U.S. policies related to biomass utilization—namely, the Environ- mental Protection Agency’s Renewable Fuel Standard and California’s Low Carbon Fuel Standard (LCFS)—center around biofuel production. Consequently, the use of biomass in industry may have to compete with an alternative use for the same biomass source that benefits from an existing policy. For example, food waste can be anaerobically digested to generate organic acids, which can serve as feedstocks in chemical syn- theses. Alternatively, the same food waste could be converted to renewable natural gas, reformed into hydrogen, and then used by the petroleum industry in California to obtain LCFS credits, which is more attractive in the current policy environment (Abdullah et al. 2022). Changing consumer preferences could also influence industrial 11  The exact value of the tax credit depends on the emissions associated with hydrogen production. 563 A00026--Accelerating Decarbonization in the United States_CH10.indd 563 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S biomass use—for example, in recent years consumers have begun to value the “green premium” and are willing to pay more for a certifiably sustainable chemical, which could be derived from a biomass feedstock (Abdullah et al. 2022). Barriers for Light Industry and Small- and Medium-Size Manufacturers Light industry and SMMs face unique, additional challenges to decarbonizing com- pared to heavy industry—namely, a lack of sufficient resources, staffing, standardiza- tion, and coordination. McMillan (2018) identified some specific examples of these challenges: • Limited policies exist to motivate industry to electrify; this is unlike buildings and transportation. • Industrial electric technologies lack the public profile of electric vehicles and consumer-focused technologies for buildings. • Researchers and policy makers face significant gaps in data (e.g., energy use, cost) and analysis tools (McMillan 2018, p. 2). There are current and emerging opportunities to drastically lower these barriers, as well as many existing policies at various levels of jurisdiction that can be leveraged or applied at the state level. Table 10-4 describes crosscutting challenges that SMMs face in decarbonizing, state actions that can help overcome those challenges, and policy mechanisms that can enable such actions and drive emissions mitigation. Supply Chain Challenges Supply chain dependencies and constraints among and across industrial sectors will need to be addressed in the course of decarbonization. For example, U.S. steel pro- duction is principally based on electric arc furnaces (EAFs), which are lower carbon emitting than blast furnace–basic oxygen furnaces (BF-BOFs). EAFs typically use scrap steel, which has intertwined domestic and global supply chains, and insufficient scrap supply limits expansion of U.S. EAF production. As other countries pursue EAFs in sup- port of decarbonization goals, increased demand for scrap could further limit capacity unless new DRI technologies are developed to provide the reduced iron for EAFs. More generally, energy-intensive industries depend on integrated infrastructure, which today delivers power and natural gas and has overlays with transportation of raw ma- terials and finished products. These industries are interconnected by a complex system of supply chain logistics to plan, implement, control, and optimize the movement of 564 A00026--Accelerating Decarbonization in the United States_CH10.indd 564 4/13/24 10:33 AM 

Industrial Decarbonization TABLE 10-4  Common Barriers for Small- and Medium-Size Manufacturers Across Industry Challenge/Barrier Opportunities: State Perspective Policy Connections Energy is a • Stimulate energy and material • Expand communication, outreach, smaller driver for productivity (yield, value return, networking, and visibility of star companies customer satisfaction, margin performers retention, GHG reduction) • Leverage guides on energy and material efficiency (e.g., EPA Energy STAR) Limited personnel/ • Expand support, decrease hurdles/ • Support energy managers at resources transaction friction company or cohort, energy assessments • Incentivize project implementation Combined waste • Develop programs to reduce waste • Incentivize waste reduction high, but for • Accumulate and transform, reuse • Incentivize collection, reuse, and individual company where possible transformation of waste it can be low • Give tax breaks to companies that collect/transform waste Limited capacity • Provide information on • Provide decarbonization roadmaps to consider/pursue decarbonization pathways tailored to SMMs/communicate decarbonization • Simplify solution options • Involve SMMs in pilots/demos of • Consider working with third-party transformative technologies aggregators to reach, collaborate • Incentivize low-carbon technology with, and serve SMMs choices that are commercial today • Provide support to SMMs for implementation of low-carbon technology • Expand leverage with current utility providers to reach SMMs Limited access • Ensure that SMM access needs are • Consider SMM needs in to emerging considered in planning infrastructure planning (build low-carbon experience at clusters) infrastructure • Provide grants to build connections where efficient Lack of • Work with associations and others to • Work across jurisdictional levels to standardization develop/deploy standards develop/convey standards SOURCES: Data from DOE (2022c), McMillan (2022), and Worrell and Boyd (2022a,b). 565 A00026--Accelerating Decarbonization in the United States_CH10.indd 565 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S materials and products. Decarbonization of industrial logistics would benefit from holis- tic decision-making and energy management (Miklautsch and Woschank 2022). Under- standing the choices and new dependencies of clean energy and low-carbon product scenarios will require modeling to minimize constraints and avoid suboptimal solutions. WORKFORCE, EQUITY, AND JUSTICE CONSIDERATIONS FOR INDUSTRIAL DECARBONIZATION As discussed in Chapter 4, employment impacts will depend on the pathway taken to net zero. As new industries develop and mature and old industries decline or trans- form, the workforce will need to align with the developing changes in the economy. Such realignment provides an opportunity to address current racial disparities in employment and pollution risk from industrial facilities. For example, deindustrializa- tion over the past several decades has disproportionately impacted workers of color; in the early 1990s, the Black share of the total U.S. workforce and of the manufacturing workforce were about equal, but as of 2020, Black workers comprised 10.2 percent of the manufacturing workforce, compared to 12.3 percent of the total workforce (Scott et al. 2022). Additionally, Ash and Boyce (2018) found that, on average, the share of pollution exposure risk from industrial facilities experienced by Black and Hispanic communities exceeds their share of employment at those facilities. Manufacturing the equipment and building out the infrastructure needed for a net- zero economy will be a key part of the transition and is an opportunity to create and maintain high-quality jobs, as well as to increase global competitiveness. Studies examining job growth resulting from policies in the IRA project that manufacturing jobs could increase by about 100,000 annually, for a total of nearly 1.1 million over the 10 years of the IRA (LEP 2022; Pollin et al. 2022). However, several current trends in manufacturing that could be barriers to implementing a net-zero transition need to be addressed. Manufacturing has been hailed as a pathway to the middle class, espe- cially for workers without a college degree, but the manufacturing wage premium has declined and disappeared in recent years (Bayard et al. 2022), and reliance on tem- porary workers disguises losses even further (Ruckelshaus and Leberstein 2014). The loss of manufacturing jobs has resulted in offshoring of jobs and deindustrialization of communities and has hit workers of color especially hard (Scott et al. 2022). Losses in manufacturing jobs have been in part driven by globalization, unfair trade policy, and U.S. trade deficits (Scott et al. 2020, 2022). Difficulty recruiting and retaining employ- ees is widespread in the manufacturing sector; 76 percent of surveyed manufacturers identify attracting and retaining a quality workforce as one of the biggest problems they currently face (NAM 2022; see also DOE 2022d). 566 A00026--Accelerating Decarbonization in the United States_CH10.indd 566 4/13/24 10:33 AM 

Industrial Decarbonization Many factors will impact industrial sector employment and workforce needs during the net-zero transition. Different segments of the industrial sector will adopt different decarbonization strategies, and decarbonization will occur along differing timelines. Decarbonization of light industry (e.g., durable goods, food and textile processing, and even mining and non-ferrous metal production) is likely to rely primarily on elec- trification and efficiency improvements (SDSN 2020). A WRI analysis estimates that, in a net-zero scenario, industry could add 764,000 jobs in installation of energy-efficient measures at manufacturing facilities by 2035 (Shrestha et al. 2022). Heavy industry will likely rely primarily on a switch to low-carbon fuels, feedstocks, and processes. Petrochemicals may rely on demand reduction and product substitution; semiconduc- tors and electronics may rely on electrification, and fertilizer may utilize alternative feedstocks. Some high-carbon-intensity materials like steel and cement will have to be manufactured in a different way or integrate carbon capture (Williams and Bell 2022). Mitigation options (e.g., CCUS and DAC) will likely also play a role in industrial decar- bonization and could be another source of employment opportunities. For example, an analysis by Rhodium Group found that through 2050, capital investment in carbon capture retrofits could create 142,000 jobs, and retrofit operations could create 96,000 jobs, which would span a variety of industries, including ethanol, hydrogen, cement, refineries, steel, and power plants (Larsen et al. 2021). A DOE report estimates that supporting CCS operations of 2.0 gigatons per annum (Gtpa) by 2050 would require 35,160–155,975 jobs in operations and 236,273–1,758,000 in project/infrastructure (DOE 2022b). Some paths to industrial decarbonization could spur new industries that may utilize skills and expertise of the existing workforce, but others may create entirely new kinds of jobs as well (see Chapter 4 for more detail on skills development). For example, jobs in CO2 storage would require skills currently used in oil and gas industries—for reservoir characterization, well drilling, and design and operation of compression and injection facilities (LEP 2021). The expected increase in U.S. semiconductor manufac- turing incentivized by the CHIPS and Science Act will require training of new skilled workers in a wide variety of fields, including materials science, electrical engineering, software development, and factory machine operation (Shivakumar et al. 2022). The hydrogen workforce, of particular interest given the significant investments being made in regional hydrogen hubs, has opportunities for both new and existing occupa- tions across a wide range of industries (see Box 10-2). Reshoring initiatives are also a part of the workforce landscape connected with decarbonization, as they could bring more jobs for skilled workers and help address the challenges brought about by deindustrialization (discussed above). Reshoring is creating more manufacturing jobs in the United States than foreign direct investment, 567 A00026--Accelerating Decarbonization in the United States_CH10.indd 567 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S BOX 10-2 HYDROGEN: A WORKFORCE DEVELOPMENT EXAMPLE The variety of potential uses for hydrogen in a net-zero economy, and the significant in- vestments being made through DOE’s Regional Clean Hydrogen Hubs program, provides an opportunity to examine the jobs and workforce development opportunities. Globally, hydrogen jobs span several sectors—industry, transportation, power generation—and many disciplines, including construction, manufacturing, engineering, pipeline transportation, and operations and maintenance (Bezdek 2019; DOE-HFTO n.d.(a); Hufnagel-Smith 2022; Queensland Government 2022). Other supporting industries include business and commercial development to perform financial and techno-economic analyses; environmental, social, and governance roles to un- derstand sustainability impacts across the hydrogen value chain; and stakeholder engagement specialists to communicate with the public (Hufnagel-Smith 2022). A study of the potential jobs connected with hydrogen estimates that 8,500 jobs could be created by 2035 related to the tax credits and other provisions in the IRA and IIJA, and 369,000 jobs could be created by 2050 in a net-zero scenario (Saha et al. 2022). The same study found that by 2050, the estimated labor income connected with hydrogen approaches $15 billion, with taxes estimated at $5.7 billion (in 2020$). This increase in hydrogen jobs would help relieve some of the job losses for fossil fuels (estimated at 1.9 million, a 44 per- cent decline), but clearly the increase in hydrogen jobs will be a small fraction of the jobs that could be lost across the entire fossil fuel sector. Some hydrogen jobs can leverage skills from the existing workforce. For example, current oil and gas workers have skills in instrumentation, pipeline construction, and compression and handling of gas and liquid fuels that will be relevant for working with hydrogen (Hufnagel- Smith 2022; Queensland Government 2022). Jobs manufacturing infrastructure components like pressure vessels, piping systems, valves, and turbines will also continue to be important (Hufnagel-Smith 2022). However, a hydrogen workforce would also include jobs requiring new skills, such as fuel cell and electrolyzer technicians, technicians to maintain and repair fuel cell electric vehicles, operators of hydrogen combustion turbines, and hydrogen emergency response teams (Hufnagel-Smith 2022; Queensland Government 2022). Hufnagel-Smith (2022, p. 3) suggests that the requisite training and skill development could occur as the industry de- velops: “Increased demand for hydrogen will initially be marked by deployment of technology that requires retrofitting and conversion of existing systems, equipment and infrastructure to accommodate fuel switching, co-combustion and blending of hydrogen with other fuels includ- ing natural gas and diesel. This provides opportunity to augment the skills and knowledge of workers so that they can work in both systems, transitioning to full-time hydrogen roles at the same pace the industry advances.” Recognizing the need to train a future hydrogen workforce, DOE funded the Hydrogen Education for a Decarbonized Global Economy (H2EDGE) program beginning in early 2021 (EPRI n.d.). H2EDGE, a collaboration of the Electric Power Research Institute, Gas Technology Institute, and several universities, aims to develop training and education materials for the production, delivery, storage, and use of hydrogen (Reddoch et al. 2021). Additionally, DOE requires applicants to the Regional Clean Hydrogen Hub funding opportunity to submit a 568 A00026--Accelerating Decarbonization in the United States_CH10.indd 568 4/13/24 10:33 AM 

Industrial Decarbonization BOX 10-2  Continued Community Benefits Plan that “should describe the applicant’s comprehensive plan for the creation and retention of high-paying quality jobs and development of a skilled workforce” (DOE-OCED 2023, p. 50). This examination of hydrogen jobs serves as an example of how the transformations needed to achieve net-zero can provide an opportunity for job growth. Some of the fossil-fuel-related jobs lost could be transitioned to enable the growth in generation and use of hydrogen, but job training programs need to be developed to make this transition as smooth as possible. a trend that has been observed for several years. In 2022, reshoring generated about 220,000 jobs, and foreign direct investment generated about 130,000 (Reshoring Initiative 2022). The COVID-19 pandemic, supply chain issues, geopolitical tensions, national security, and tariffs are major drivers for reshoring. A labor shortage, however, is putting a cap on the number of overseas manufacturing jobs that the United States can accommodate. Reshoring the ability to manufacture products that are key to sup- ply chains, changing the perspective to total cost of ownership (versus factory price), and addressing workforce are important steps to avoid systemic trade imbalances (Moser 2022). NIST supports reshoring through its MEP program by scouting and vet- ting local manufacturing suppliers (NIST 2022). A skilled workforce is crucial to industrial decarbonization efforts. Several workforce efforts and frameworks already exist at DOE, including IACs, Manufacturing USA Insti- tutes, Renewable Energy Competency Model, and Hydrogen Education for a Decarbon- ized Global Economy (H2EDGE) program (DOE 2022c). In parallel, the Department of Commerce Strategic Plan for 2022–2026 contains a number of workforce objectives, several of which cross over with the industrial sector (DOC 2022). DOE also has funding to train and provide resources for the clean energy and manufacturing energy manage- ment workforce and to provide technical assistance for implementing clean energy and efficiency practices in industry. In fiscal year 2023, the Entrepreneurial Ecosystems and Advanced Manufacturing Workforce program within the Advanced Materials and Manu- facturing Technologies Office received $17.5 million, and the Technical Assistance and Workforce Development program within the Industrial Efficiency and Decarbonization Office received $45 million (DOE 2023a). The Center for Energy Workforce Development, a consortium of 120 energy companies, provides resources and training to support clean energy careers in diverse, equitable, and inclusive workplaces (CEWD 2023) and could leverage opportunities provided by DOE workforce efforts and funding. These programs provide a scale for the level of investment in jobs training programs. 569 A00026--Accelerating Decarbonization in the United States_CH10.indd 569 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S A complementary level of investment is needed for expanding the range of this outreach to include the diversity of industrial sector needs and broadening training engagement at technical schools, minority serving institutions, and academia. Despite the existing efforts, more work is required to better understand the potential employment impacts and workforce needs resulting from industrial decarbonization. Some industry-specific analyses have begun to address these questions and provide recommendations that could be generalized and applied across industries. For example, the Center for American Progress notes that understanding employment impacts of decarbonizing the steel industry will require analyzing the labor needs for existing steel- making processes (e.g., BF-BOF and EAF) compared to those for the different decar- bonization options (e.g., DRI with green hydrogen or adding carbon capture to BF-BOF) (Williams and Bell 2022). DOE’s Energy Storage Grand Challenge Roadmap provides recommendations for enhancing workforce development and emphasizes the need for evaluations to measure success, starting by analyzing the existing (baseline) educa- tion and workforce programs (DOE 2020b). The report also highlights the importance of stakeholder engagement to ensure that communities are aware of available programs and opportunities. Coordination and understanding workforce needs will be critical to ensuring that the transition can happen in a way that maximizes benefits and minimizes costs. Additional funding will be required to expand the scope of existing programs— for instance, by increasing outreach and training to cover additional industrial sectors and applications, and to provide crosscutting support for ongoing and future initiatives. Finding 10-5: While the criticality of industrial workforce development for the tran- sition to net zero is recognized, significant training, support, and job placement needs remain to ensure the viability of this transformation. Recommendation 10-8: Develop Effective Workforce Development Programs for Industry. The Department of Energy (DOE) should take the point role in conven- ing partners in manufacturing—including labor associations, non-governmental organizations, industry leaders, and academia—to develop effective workforce development programs for industry, building on learnings from past initiatives. The programs should be piloted and improved through collaboration with state and local authorities and institutions of higher learning, including minority- serving institutions, and should stretch across small, medium, and large manu- facturers. This effort should leverage and serve as crosscutting support across current/future initiatives (e.g., carbon capture, utilization, and storage; hydro- gen; electrification hubs) and programs (e.g., Industrial Assessment Center, Manufacturing Extension Partnership, National Institute of Standards and Technology) with a strategy to enhance the learnings and impact of funding 570 A00026--Accelerating Decarbonization in the United States_CH10.indd 570 4/13/24 10:33 AM 

Industrial Decarbonization from recent legislation (the Inflation Reduction Act, the Infrastructure Invest- ment and Jobs Act, and the Creating Helpful Incentives to Produce Semiconduc- tors and Science Act) in order to further clarify where, how, and when workforce programs should be initiated to foster capability development for the low- carbon future. Congress should appropriate $100 million over 4 years, or until expended, for DOE to develop such programs. POLICY ENABLERS: LANDSCAPE OF CURRENT INITIATIVES AND FUTURE NEEDS Technologies tend to proceed from early-stage development to market commercial- ization along an “S-curve,” in which the initial share of market penetration for a new technology is low, but then rises quickly as market adoption accelerates before slow- ing again at the point of market saturation. An analysis by Carey and Shepard (2022) suggested that the CHIPS and Science Act largely supports the early stages, the IIJA supports the middle stage, and the IRA invests heavily in the later stages. Box 10-3 provides select examples of technology transitions in industry. BOX 10-3 DRIVING ADOPTION OF INNOVATIVE TECHNOLOGIES IN INDUSTRY Wesseling et al. (2017) offers important historical insights into sociotechnical transitions in energy-intensive industries, demonstrating that adoption and diffusion of innovative tech- nologies initially take place when a given technology has attractive benefits not necessarily related to cost. Such technologies are adopted first by a few specific industries where they fit well; as they become more broadly applicable, their diffusion across larger sections of industry becomes possible. It is therefore crucial to identify where and how those attractive features take off. McMillan (2022) provided several examples: • Example 1: In 1870, the Corliss steam engine, important for the metalworking and textiles industries, enabled easier power control and greater efficiency and speed, reducing the probability of thread breakage in textiles. • Example 2: The newspaper printing industry adopted the electric machine drive, a simple conversion for their machines that removed the messiness of lubricants and grease that belt drive machines required. • Example 3: The pulp and paper industry, one of the last to electrify, faced difficulty in finding the right set of complementary technologies that made electrification of the paper machines possible. The industry coordinated with Westinghouse and General Electric to figure out solutions—in essence, emerging electric utilities were working directly with manufacturers to fine-tune and innovate, which ultimately gave them new electricity customers. 571 A00026--Accelerating Decarbonization in the United States_CH10.indd 571 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S FISCAL Taxes on fossil fuels Fees Tax credits Rebates REGULATORY/ Feed-in tariffs ADMINISTRATIVE Performance standards Cap-and-trade Command and control Carbon taxes Permitting OTHER Loans Siting Fuel bans Loan guarantees Restrictions Industrial Deregulation Sectoral on behavior Infrastructure Target allocation or assignment Voluntary MARKET-BASED Pilot programs Labeling Public education campaigns Gov’t procurement Required disclosures Public–private partnerships Market-formation policies INFORMATIVE DIPLOMATIC Joint R&D INNOVATION Dialogues or forums or science Certification schemes Treaties projects Investments in R&D Rating systems International negotiations Technology demonstration FIGURE 10-8  Policy approaches for climate mitigation. SOURCE: K.S. Gallagher and X. Xuan, forewords by J.P. Holdren and J. Zhang, Titans of the Climate, Fig. 5.1 (p. 106), © 2019 Massachusetts Institute of Technology, by permission of MIT Press. Gallagher and Xuan (2019) grouped policies for decarbonization into seven cat- egories, as shown in Figure 10-8. This typology of climate policy approaches illustrates the range of possible approaches in a policy maker’s toolbox, from regu- latory approaches such as performance standards to market-based approaches such as carbon taxation. Countries that have embarked on decarbonization pathways have used a variety of policy mixes, including fiscal tools such as feed- in tariffs or production tax credits, market-based tools such as emissions trading, and regulatory tools such as performance standards to achieve their objectives. Sometimes those policies have been unintentionally or deliberately sequenced to create the political conditions for new policies (Meckling et al. 2015). In China’s green industrialization process, the Chinese government used a wide range of policy instruments including every type of policy depicted in Figure 10-8, such as investing in R&D, attracting human resource talent from around the world, 572 A00026--Accelerating Decarbonization in the United States_CH10.indd 572 4/13/24 10:33 AM 

Industrial Decarbonization creating pilot and demonstration programs, imposing performance standards on industry, using public education campaigns, and providing subsidies to consumers (Gallagher 2014). The current provisions for industry in the IIJA and IRA are heavily weighted toward the “Innovation” and “Fiscal” categories of Figure 10-8. This aligns with the need to significantly decrease the cost of transformative technology, because if those tech- nologies are not economic, adoption may not occur beyond demonstration plants (i.e., the cascade of low-carbon technologies throughout industries will be slow or nonexistent). For a low-carbon technology to be widely adopted, it needs to achieve similar or better performance as the incumbent while also delivering a similar cost/ price. A small portion of the market may be willing to pay a modest “green pre- mium,” but the larger portion will balk at paying more. The market also needs to be ready to support new technologies once installed (e.g., domestic maintenance of the technologies on site). Fiscal approaches such as production tax incentives (e.g., for low-carbon hydrogen) may not have the desired effect if economic price parity for technologies is not achieved during the time window of support for demonstra- tions or if market support structures (e.g., service company support, infrastructure) are not yet in place. Some funded programs in the IRA and IIJA are connected to the “Market-Based” cat- egory in Figure 10-8, including government procurement programs such as Buy Clean. Production tax credits for hydrogen and incentives for CO2 capture and utilization (such as 45V and 45Q, respectively) could help to establish markets for low-carbon hydrogen and aid market development for reuse of CO2. Further proposals may be developed and implemented, such as incentives for innovations that would lower the cost of the products made by low-carbon technologies (e.g., the “green premium” for low-carbon hydrogen). Approaches tried in other countries include a Carbon Contract for Differences approach, which has been used in the United Kingdom and the Euro- pean Union (Sartor and Bataille 2019), and a market auction approach such as that being used for low-carbon hydrogen in Germany (Hydrogen Europe 2022). Further study and consideration of these approaches is warranted by the market-pull they may provide. The “Informative” category in Figure 10-8 is represented in the IRA and the IIJA to some extent by labeling programs connected with the market-based approaches. For example, connected with the Buy Clean programs, there are provisions to initiate labeling the carbon intensity of products, backed up by environmen- tal product declarations, which would inform customers. Labeling the energy 573 A00026--Accelerating Decarbonization in the United States_CH10.indd 573 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S use of products (e.g., DOE’s Energy Star program) has been successful for years. The confidence in metrics, transparency, and simplicity for relating numbers to customers is at an early stage, and there are numerous opportunities for future policy development. The “Diplomatic” category in Figure 10-8 has received heightened visibility ow- ing to discussions about developing global trade policy that seeks to address the carbon intensity of products, national competitiveness, and trade imbalances. The European Union introduced a Carbon Border Adjustment Mechanism (CBAM) where manufactured products from non-carbon-pricing countries face a similar carbon price to domestic EU products; this CBAM will start a transitional phase in October 2023 (EC 2021, 2023). The G7 established a Climate Club in December 2022 focused on international cooperation in industrial decarbonization, including strategies for mitigating carbon leakage (e.g., CBAMs) (G7 2022). As discussed by Kopp et al. (2022), the idea would be for a group of countries to align their decarbonization efforts and trade policies both to avoid shifting industrial activity and emissions to less regulated jurisdictions and to provide incentives for trading partners to increase their mitigation ambition. The EU actions have sparked new interest in trade policy and industrial decarboniza- tion in the United States. The FAIR Transition and Competition Act (H.R. 4534) was introduced in the 117th Congress with the aim of adjusting for the embodied carbon emissions from imported manufactured products. This approach would attempt to shift U.S. demand toward cleaner domestic production without seeking further domestic emission reductions. In contrast, the Clean Competition Act (S. 4355) would do both: it would set an embodied carbon benchmark and assign a fee for the carbon content above the benchmark for both domestic and imported goods. There is continuing discussion and negotiation connected with the World Trade Organization rules to clarify if there are conflicts between these types of policies and fair-trade rules (Smith 2023). The focus of these strategies that combine both regula- tion and diplomatic approaches is to decarbonize heavy industry in a way that will not shift production of high-carbon-content materials to countries with weaker regula- tions and higher-carbon-intensity energy use (e.g., carbon leakage). Given the high degree of trade in most industrial goods, these approaches linking trade and decar- bonization have high potential for further development and application in reducing GHG emissions. Regulatory and administrative approaches can also be the subject of discordant per- spectives. A carbon price on emissions has been called for, is industry supported, and 574 A00026--Accelerating Decarbonization in the United States_CH10.indd 574 4/13/24 10:33 AM 

Industrial Decarbonization would be foundational to GHG reductions (Patnaik and Kennedy 2021), yet it remains politically difficult. For the industrial sector, it would need to be paired with a CBAM, as noted above. Approaches that decrease hurdles for siting, permitting, and other implementation aspects of IRA and IIJA initiatives can improve the effectiveness of these bills and likely will be discussed in the 118th Congress. Performance standards can advance cus- tomer acceptance and market pull for lower-carbon products and are likely to receive bipartisan support. These approaches can also serve to decrease costs for low-carbon technologies to help them compete with incumbent technologies. Combined with approaches in the “Informative” category—such as labeling, improvement of data, and transparency—“Administrative” approaches can improve consumer confidence and market-pull for low-carbon products. Additional regulatory approaches could address issues that inhibit the turnover of capital stock to low-carbon technology—such as risk sharing/mitigation and recycling/reuse of equipment. As some industries rise, others will decline, and the best routes to phase out carbon-intensive industries and capital equipment will need to be determined (Semieniuk et al. 2020). An improved understanding of the risks, impediments, financial impacts, and paths forward to address stranded assets needs to be further developed. This is an area where U.S. trading partners will face the same challenges and where shared learnings and collaboration would be beneficial (Baron and Fischer 2015). Regulatory approaches can force compliance costs, and, because many industries are energy intensive and trade exposed, this area needs to be approached cautiously and in concert with corresponding trade policies. With achievement of cost parity for transformative technologies and incumbent technologies prior to introducing regulations, the risk of driving manufacturing offshore and the hurdles to a cascade of adoption can be minimized. Continued development and understanding of when and where regulations can be used to spur reductions (in the last portion of GHG emissions) is needed. The “Other” category of policy approaches includes voluntary approaches where a number of players can learn rapidly. Additional policy tools, approaches, and even ad- ditional categories will likely have to be developed during the multi-decade journey of decarbonization. An agile approach is needed to understand how well current policies are working to reduce GHG emissions while minimizing unintended consequences in parallel with developing additional policies that provide mid-course corrections as needed. 575 A00026--Accelerating Decarbonization in the United States_CH10.indd 575 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S As mentioned above, provisions for industry in the IRA and IIJA largely fall into the “Innovation” or “Fiscal” categories. As those provisions make impact, complementary measures from the other categories may be useful to spur progress. For example, once innovation drives down the cost of low-carbon solutions to be competitive with in- cumbents and their adoption begins to accelerate, standards, benchmarking, and ulti- mately regulations may help to further adoption in industries that resist transitioning to low-carbon solutions (even when cost effective). “Informative” and “Market-Based” measures could be expanded to help increase customer demand for low-carbon- intensity products. Support for “Other” measures, such as pilot programs, will build experience, knowledge, and support across supply chains for low-carbon products. The timing, sequence, and reinforcement of these additional policy approaches can be important for bolstering the impacts of singular measures. Research and experience are needed in how best to sequence the various approaches to achieve maximum cost-effectiveness and rapid reductions in GHG emissions, while avoid- ing unintended consequences (e.g., costly technology lock-in, consumer pushback) and backsliding. Based on approaches used in the European Union and California, Meckling et al. (2017) present a “benefits-to-costs” policy sequence consisting of three steps: (1) green innovation and industrial policies, in which the government supports and invests in low-carbon energy technologies; (2) addition of carbon pricing policies; and (3) ratcheting-up the policy mix over time—for example, by tying subsidies for low-carbon energy technologies to revenues from carbon pricing policies. Any addi- tion of carbon pricing on industrial goods would need to consider trade implications, as discussed above. Analysis, documentation, and transparent communication of the effectiveness of current and proposed measures will provide policy makers with the information required to design future policies that can complement early measures. Recommendation 10-9: Implement a Product-Based Tradable Performance Standard for Domestic Manufacturing and Foreign Trade. To drive emissions to net zero in industry, Congress should task the Department of Commerce and the Department of Energy to work with a variety of stakeholders to establish declining carbon intensity benchmarks for major product families. Congress should require the Environmental Protection Agency to create a tradable performance standard for domestically produced and imported products based on these benchmarks, starting with products where there is alignment with current initiatives (e.g., Buy Clean provisions start with iron and steel, and cement in building and construction markets) to gain experience. Table 10-5 summarizes all of the recommendations in this chapter to support decar- bonizing industry. 576 A00026--Accelerating Decarbonization in the United States_CH10.indd 576 4/13/24 10:33 AM 

Industrial Decarbonization SUMMARY OF RECOMMENDATIONS ON INDUSTRIAL DECARBONIZATION TABLE 10-5  Summary of Recommendations on Industrial Decarbonization Actor(s) Overarching Responsible for Sector(s) Objective(s) Categories Short-Form Implementing Addressed by Addressed by Addressed by Recommendation Recommendation Recommendation Recommendation Recommendation 10-1: Develop Department of • Buildings • Greenhouse Rigorous and and Enable Energy (DOE) • Industry gas (GHG) Transparent Cost-Competitive and industrial reductions Analysis and Process and Waste companies Reporting Heat Solutions for Adaptive Management Tightened Targets for the Buildings and Industrial Sectors and a Backstop for the Transport Sector Research, Development, and Demonstration Needs 10-2: Invest Congress and DOE • Buildings • GHG reductions A Broadened in Energy • Industry Policy Portfolio and Materials • Finance Tightened Targets Efficiency • Non-federal for the Buildings and Industrial actors and Industrial Electrification • Transportation Sectors and a Backstop for the Transport Sector Research, Development, and Demonstration Needs continued 577 A00026--Accelerating Decarbonization in the United States_CH10.indd 577 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S TABLE 10-5  Continued Actor(s) Overarching Responsible for Sector(s) Objective(s) Categories Short-Form Implementing Addressed by Addressed by Addressed by Recommendation Recommendation Recommendation Recommendation Recommendation 10-3: Spur Congress, DOE, • Industry • GHG reductions A Broadened Innovation to non-governmental • Finance Policy Portfolio Achieve Price- organizations • Non-federal Tightened Targets Performance (NGOs), industry actors for the Buildings Parity for Low- associations and Industrial Carbon Solutions (e.g., American Sectors and a Chemistry Council Backstop for the [ACC], American Transport Sector Iron and Steel Institute [AISI], Portland Cement Association [PCA], National Association of Manufacturers [NAM], and others), and industry 10-4: Pursue DOE, NGOs, • Industry • GHG reductions Ensuring Equity, Technologies industry, industry • Non-federal • Health Justice, Health, That Reduce Both associations, (e.g., actors and Fairness of Greenhouse Gas ACC, AISI, PCA, Impacts and Air Pollution NAM, and others), Tightened Targets Emissions and engineering for the Buildings companies and Industrial Sectors and a Backstop for the Transport Sector Research, Development, and Demonstration Needs 10-5: Use Mass- Regulatory • Industry • GHG reductions Rigorous and Based Rather Than and permitting • Electricity • Health Transparent Concentration- organizations • Transportation Analysis and Based NOx Reporting Standards for Adaptive Management 578 A00026--Accelerating Decarbonization in the United States_CH10.indd 578 4/13/24 10:33 AM 

Industrial Decarbonization TABLE 10-5  Continued Actor(s) Overarching Responsible for Sector(s) Objective(s) Categories Short-Form Implementing Addressed by Addressed by Addressed by Recommendation Recommendation Recommendation Recommendation Recommendation 10-6: Develop and DOE, • Industry • GHG reductions A Broadened Standardize Life- Environmental • Buildings Policy Portfolio Cycle Assessment Protection Agency • Transportation Rigorous and Approaches for (EPA), National • Non-federal Transparent Carbon Intensity Institute of actors Analysis and of Industrial Standards and Reporting Products Technology (NIST), for Adaptive and other relevant Management agencies Tightened Targets for the Buildings and Industrial Sectors and a Backstop for the Transport Sector Research, Development, and Demonstration Needs 10-7: Establish Congress, DOE, • Buildings • GHG reductions A Broadened a Program Department of • Transportation Policy Portfolio Connecting Commerce (DOC), • Industry Rigorous and Market-Pull General Services • Non-federal Transparent Approaches to Administration, actors Analysis and the Deployment Department of • Finance Reporting of Low-Carbon Defense, and for Adaptive Technologies Department of Management Transportation Tightened Targets for the Buildings and Industrial Sectors and a Backstop for the Transport Sector continued 579 A00026--Accelerating Decarbonization in the United States_CH10.indd 579 4/13/24 10:33 AM 

A C C E L E R AT I N G D E C A R B O N I Z AT I O N I N T H E U N I T E D S TAT E S TABLE 10-5  Continued Actor(s) Overarching Responsible for Sector(s) Objective(s) Categories Short-Form Implementing Addressed by Addressed by Addressed by Recommendation Recommendation Recommendation Recommendation Recommendation 10-8: Develop Congress, DOE, • Industry • Employment Building the Effective Workforce labor associations, • Non-federal Needed Workforce Development NGOs, industry actors and Capacity Programs for leaders, and Industry academia 10-9: Implement Congress, DOE, • Industry • GHG reductions A Broadened a Product- DOC, and EPA • Finance Policy Portfolio Based Tradable Tightened Targets Performance for the Buildings Standard for and Industrial Domestic Sectors and a Manufacturing Backstop for the and Foreign Trade Transport Sector REFERENCES Abdullah, Z., R. Allen, L. Tao, J. Male, and B. Davison. 2022. “Industrial Decarbonization Options: Biomass as an Energy Source and Feedstock for Industry.” Presentation to the Committee on Accelerating Decarbonization in the United States, online, February 8. https://www.nationalacademies.org/event/02-08-2022/accelerating-decarbonization-in- the-united-states-technology-policy-and-societal-dimensions-industrial-companies-open-session. Abramson, E., E. Thomley, and D. McFarlane. 2022. An Atlas of Carbon and Hydrogen Hubs for United States Decarbonization. Minneapolis, MN: Great Plains Institute. https://scripts.betterenergy.org/CarbonCaptureReady/GPI_Carbon_and_ Hydrogen_Hubs_Atlas.pdf. ANL (Argonne National Laboratory). 2023. “GREET Model.” Energy Systems and Infrastructure Analysis. https://greet. es.anl.gov. Ash, M., and J.K. Boyce. 2018. “Racial Disparities in Pollution Exposure and Employment at US Industrial Facilities.” Proceed- ings of the National Academy of Sciences 115(42):10636–10641. https://doi.org/10.1073/pnas.1721640115. Baron, R., and D. Fischer. 2015. “Divestment and Stranded Assets in the Low-Carbon Transition.” Background paper for the 32nd Round Table on Sustainable Development. Paris: Organisation for Economic Co-Operation and Development. https://www.oecd.org/sd-roundtable/papersandpublications/Divestment%20and%20Stranded%20Assets%20 in%20the%20Low-carbon%20Economy%2032nd%20OECD%20RTSD.pdf. Barrett, A. 2020. “Mechanical vs. Chemical Recycling.” Bioplastics News, November 20. https://bioplasticsnews. com/2020/11/20/difference-mechanical-chemical-recycling. Bartlett, J., and A. Krupnick. 2020. “Decarbonized Hydrogen in the US Power and Industrial Sectors: Identifying and In- centivizing Opportunities to Lower Emissions.” Washington, DC: Resources for the Future. https://media.rff.org/ documents/RFF_Report_20-25_Decarbonized_Hydrogen.pdf. Bashmakov, I.A., L.J. Nilsson, A. Acquaye, C. Bataille, J.M. Cullen, S. de la Rue du Can, M. Fischedick, Y. Geng, and K. Tanaka. 2022. Chapter 11 in Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report, P.R. Shukla, J. Skea, R. Slade, et al., eds. Intergovernmental Panel on Climate Change. Cambridge, UK, and New York: Cambridge University Press. https://doi.org/10.1017/9781009157926.013. 580 A00026--Accelerating Decarbonization in the United States_CH10.indd 580 4/13/24 10:33 AM 

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