#Industry

#Manufacturing

The industrial manufacturing sector reflects an aggregation of many different sectors and processes, some of which (such as steel and cement) are represented in detail in this analysis, while others are represented in terms of more generic process heat, steam, and other service demands. At a high level, industrial energy demand can be divided into demand for process heat and steam and other manufacturing energy use, which includes machine drive, cooling, and other electric-driven processes, and non-process energy use such as facilities lighting and HVAC. The second category is either already primarily electric or can be cost-effectively electrified as part of an economy-wide decarbonization effort. On the other hand, process heat and steam will likely rely more heavily on non-electric low-carbon technologies, although some electrification is possible in some processes, and efficiency improvements can be a major factor in reducing the scale of industrial energy demand. Figure 40 shows the composition of final energy use for process heat and steam across scenarios. In the Net-Zero All Options scenario, there is increased use of bioenergy (including biomass and liquid biofuels), hydrogen, and electricity, but a large role remains for natural gas. Carbon capture is deployed with coal use in the cement industry, while steelmaking shifts to a combination of electric arc furnaces and direct reduced iron fuel by hydrogen.^[1] In the Net-Zero Higher Fuel Cost scenario, fuel-switching to electricity and hydrogen increases, reducing pipeline gas and biofuel demand. In the Net-Zero Limited Options scenario, there is a much larger substitution of hydrogen and electricity for natural gas (which itself has been largely decarbonized on the supply side), with more limited use of bioenergy and larger investments in energy efficiency to lower overall energy demands. While this more restrictive scenario does have lower direct emissions in the industrial sector, it is a significantly more expensive approach to economy-wide decarbonization in terms of expenditure on delivered fuels. This analysis does not explore the potential macroeconomic impacts of higher energy costs on energy production, which could include international competitiveness effects depending on the global scenario.

#Non-Manufacturing

Non-road vehicles and equipment in the non-manufacturing industries, such as agriculture, construction, and mining, represent a significant amount of energy use and constitute a challenge for scenario modeling due to data limitations. These segments are characterized by a wide diversity of applications, many with unique considerations and circumstances. Vehicles used by these industries, such as tractors and haul trucks, are similar in some respects (e.g., weight and power versus energy requirements) to on-road medium- and heavy-duty vehicles, but they are potentially more difficult to electrify. For this reason, the decarbonization pathway for these segments deploys hydrogen fuel cell vehicles to a greater extent than in on-road transportation. For other types of non-road equipment, such as pumps and dryers, electrification is a potentially more effective alternative, along with natural gas (or blended equivalent). In the Net-Zero All Options scenario, some renewable diesel remains, while in the more restrictive Net-Zero Scenarios, liquid fuels are replaced almost entirely with electricity and hydrogen. However, there is particularly high uncertainty around the results of the analysis in these segments, given the lack of available data and research on alternative technologies.