THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYSAMANTHAGROSSENERGY&CLIMATEJUNE2021ForeignPolicyatBrookings1THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYSAMANTHAGROSSEXECUTIVESUMMARYHeavyindustrymakesproductsthatarecentraltoourmodernwayoflifebutisalsoresponsiblefornearly40%ofglobalcarbondioxide(CO2)emissions.Steel,cement,andchemicalsarethetopthreeemittingindustriesandareamongthemostdifficulttodecarbonize,owingtotechnicalfactorsliketheneedforveryhighheatandprocessemissionsofcarbondioxide,andeconomicfactorsincludinglowprofitmargins,capitalintensity,longassetlife,andtradeexposure.Steelmakingusescoalbothasasourceofheatandaspartofthechemicalprocessofconvertingironoretoelementaliron.Bothoftheseusesproducecarbondioxide.EliminatingCO2emissionsfromsteelmakingrequiresachangeinprocess.UsinghydrogenastheheatsourceandthechemicalreducingagentcaneliminateCO2emissions,orcarboncapturecanremovethem.SteelcanalsoberecycledwithoutCO2emissions,butdemandforsteelistoolargetobemetwithrecycledsteelalone.CementproductionalsoreleasesCO2aspartofthechemicalprocess,inthiscasewhenlimestoneisheatedtoveryhightemperaturetoproducecalciumoxide“clinker,”thecement’sprimarycomponent.Othersubstancescanbemixedwithclinkerwhilestillmaintainingcementquality,buttheprimarymethodofdecarbonizingthesectoristocapturetheCO2andstoreorfindauseforit.Thechemicalindustryisdifferentfromtheothertwo,encompassingmanythousandsofprocessesandproducts.However,morethan90%of“organic,”orcarbon-containing,chemicalsarederivedfromjustafewbuildingblocks,whichareproducedinlargequantitiesandtradedinternationally.Thechemicalindustryisalsouniqueinthatitusescoal,oil,andnaturalgasasfeedstocksthataretransformedintofinalproducts,notjustsourcesofenergy.Fossilfuelswilllikelystillbefeedstocksinazero-carbonworld,withprocesselectrificationandzero-carbonhydrogenasmethodsofremovingCO2emissions.Ammoniaiscrucialforfertilizerandalthoughitdoesnotcontaincarbon,hydrogenneededforitsproductionistodaymadefromnaturalgas,withcarbondioxideasaby-product.ForeignPolicyatBrookings2THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYTheseindustriesandotherssharetechnicalchallengesincommon,includingprocessemissionsofcarbondioxide,theneedforhighheat,anduseorpotentialuseofhydrogen.Anumberoftechnicalsolutionscanbesharedacrossthesectorsaswell,whichareinterrelatedandsynergisticinsomecases.Carbondioxidecaptureandutilizationorstorage(CCUS)isanoptionforemissionsthatcannotbeeliminatedorwhereeliminationisprohibitivelyexpensive.Despitetheiremissionsandenergyintensity,thesteel,cement,andchemicalindustriesarewithustostay.Muchoftheinfrastructureneededtobuildalow-carboneconomywillbemadeofsteelandcement.Reductionsinsingle-useplasticscouldhelpreduceorganicchemicaldemand,butplasticshaveusefulqualitiesthatarehardtoreplace,suchastheirlightweightanddurability.Policywillbecrucialtoachievingindustrialdecarbonization,sinceitwillrequirelargecapitalinvestmentsinlow-marginindustries,notsomethingthatmostcompanieswillbeabletodoontheirown.Governmentscanassistwiththeinvestmentcost,providedemandpullforlow-carbonproducts,andusetradepolicytoprotectdomesticlow-carbonindustriesfromcheaperbuthigher-carbonproductsfromabroad.Thesepoliciesusedifferentleverstospuraction,andindustrymayneedallofthemtomakesuchextensivechanges.CENTRALTOMODERNLIFE,BUTANIMPORTANTEMISSIONSSOURCEIndustrialrawmaterialsarekeytoourmodernlife.Theyarethebuildingblocksofmanyproductsweuseconstantly,frombuildingsandinfrastructuretoubiquitousplasticgoods.Continuingeconomicgrowth,especiallyinthedevelopingworld,willonlyincreasedemandforthesegoods.Since1971,globaldemandforsteelhasincreasedbyafactorofthree,cementbynearlyseven,andplasticsbymorethan10.Atthesametime,theglobalpopulationhasdoubledandGDPhasgrownnearlyfivefold.1Atthesametime,globalCO2emissionshaveincreasedbyafactorof2.3.2Theindustrialsectorisanimportantsourceofgreenhousegas(GHG)emissions,responsiblefornearlyone-quarterofdirectCO2emissionsin2017.Itencompassesarangeofsources,includingmanufacturing,mining,andconstruction.Whenalsoaccountingforindirectemissions—thoseresultingfromoffsitepowergeneration—theindustrialsectorisresponsiblefornearly40%ofglobalCO2emissions.3Industrialemissionsmadeup28%ofU.S.CO2emissionsin2019,andtheRhodiumGroupestimatesthatindustrywillovertaketransportationasthelargestsourceofU.S.greenhousegasemissionswithinthenext10years.4ReducingindustrialCO2emissionsiscrucialtoachievingdeepdecarbonizationgoals,suchasreachingtheU.S.andEuropeanUniongoalsofnet-zeroGHGemissionsby2050.Whenaccountingforindirectemissions—thoseresultingfromoffsitepowergeneration—theindustrialsectorisresponsiblefornearly40%ofglobalCO2emissions.“ForeignPolicyatBrookings3THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYFIGURE1:U.S.CO2EMISSIONSBYSECTORSource:U.S.EnergyInformationAdministration5Thispaperfocusesonironandsteel,cement,andchemicals.Theyarecrucialmaterialsproducedaroundtheworld,butarealsoamongthelargestsourcesofindustrialemissionsandthemostdifficulttoabate.Thesethreesectorsaccountformorethanhalfofindustrialenergyuseandapproximately70%ofindustrialCO2emissions.6Coalisthemostimportantfuelsourceinironandsteel(75%)andcement(60%)production.Naturalgasandoildominatethepetrochemicalsector,asbothfuelsandfeedstocks.7Chinaistheworld’slargestproducerofsteelandcement,accountingformorethan50%ofboth(seeFigure2)asitsindustriessupportrapidurbanizationandinfrastructurebuildout.8China’schemicalindustryaccountsfornearly40%ofglobalrevenue,abettermeasurethanvolumeforsuchadiverseindustry.9ChinaisresponsiblefornearlyhalfofglobalindustrialGHGemissions,whiletherestoftheAsia-Pacificregioncontributesanother21%.10ExpansioninheavyindustrywasanimportantdriverofChina’srapideconomicgrowthfrom2000through2010.Incontrast,heavyindustryisasmallershareofOrganisationforEconomicCo-operationandDevelopment(OECD)economiesandemissions.05001000150020002500199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019MillionmetrictonstransportationindustrialresidentialcommercialForeignPolicyatBrookings4THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYFIGURES2:TOPFIVESTEEL-PRODUCINGANDTOPFIVECEMENT-PRODUCINGNATIONS,2019(MILLIONMETRICTONS)Source:WorldSteelAssociation11;U.S.GeologicalSurvey12Twoimportanttechnicalfactorsmaketheseindustriesdifficulttodecarbonize.First,manyprocessesneedalevelofheatthatisdifficulttoachievewithoutcombustion.Onethirdofindustrialenergydemandisforhigh-temperatureheat,andtherearefewalternativestodaytothedirectuseoffossilfuels.13Second,eachoftheseindustriesincludesprocessesthatproduceCO2aspartofachemicalreaction,ratherthanasacombustionproduct.Fortheseprocesses,eliminatingCO2emissionsrequireseitherfindinganotherchemicalprocessthatdoesnotproduceCO2orcapturingtheCO2producedandeitherusingorstoringit,amethodknownasCCUS.Theseprocessemissionsconstituteonequarterofemissionsfromtheindustrialsector,andmuchgreaterincertainindustries.14Economicfactorsalsomaketheseindustriesdifficulttodecarbonize.Steel,cement,andbulkchemicalsarecrucialproducts,butarealsodifficultbusinessesinwhichtomakeaprofit.Theyareverycapitalintensivewithminimaldifferentiationamongproductsandproducers.Profitmarginstendtobelowandcyclical,varyingaccordingtothecostofrawmaterialsandtherateofeconomicgrowth.Economiesofscaleandlowrawmaterialandenergypricesarecrucialtoprofitability.Thereislittleroominbudgetsforinvestmentinnewtechnology.Becausetheproductisperceivedtobethesameacrosssuppliers,buyersfocusprimarilyonprice.Furthermore,productionofthesematerialsrequireslargecapitalinvestmentsinproductionfacilitiesthatcanbeusedforaslongas50years,potentially“lockingin”emissionsoverthelongterm.Thelock-ineffectintheindustrialsectorislongerthanforthepowergeneration,transport,andbuildingsectors.15Inadditiontothetechnicalandeconomicchallengeswithabatingindustrialemissions,traderaisesadditionalchallenges.Materialsthatproducelargeemissionsareoftentradedinternationally.Thismeansthatregulatingemissionsinoneareamaypushproductionandemissionsintoanothermarket,ratherthaneliminatingthem,aneffectknownascarbonleakage.High-emissions,trade-exposedcommoditiesincludesteel,chemicals,andaluminum.China996.3India111.2Japan99.3UnitedStates87.8Russia71.9Restoftheworld486.3TOP5STEEL-PRODUCINGNATIONSChina2,200India320Vietnam95UnitedStates89Egypt76Restoftheworld1,306TOP5CEMENT-PRODUCINGNATIONSForeignPolicyatBrookings5THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYANINTRODUCTIONTOTHEINDUSTRIESANDTHEIREMISSIONSSteelmakingSteelistheworld’smosttradedcommodityafteroil.16Globally,thesteelindustryaccountedfor8%oftheworld’senergyusein2019.17Aboutthree-quartersofthesector’senergyneedsaremetbycoal—includingcokeproducedfromcoal,whichisalsoanimportantpartofthechemicalprocess.18Steelismostlyiron,withothermetalsandcarbonaddedtoimprovestrength,hardness,andmalleability.Theironisproducedfromironore—mineralsconsistingofironandoxygen,mostlymagnetite(Fe3O4)andhematite(Fe2O3).Althoughimprovementsovertimehavemadeitmoreefficient,themostcommonwaythatironoreisprocessedtoproducesteelhasn’tfundamentallychangedinthe150yearssincesteelcameintouse.19Thefirststepinproducingvirginsteel(thatmadefromironore)inanintegratedsteelmillistoconverttheironoretoelementaliron,breakingthechemicalbondbetweentheironandoxygeninablastfurnaceatatemperatureof1000°Corgreater.Thechemicalprocessrequiresareducingagent,asubstancetotakeontheoxygenfromtheiron.Insteelmaking,thereducingagentisusuallycarbon,addedtothefurnaceintheformofcoke,aformofrefinedcoalthathasbeenheatedtoremoveimpuritiesandincreasethecontentofpurecarbon.Ironoxidesandcokeentertheblastfurnace(alongwithasmallamountoflime,calciumoxideorCaO,“flux”toremoveimpurities);molten“pigiron”andCO2exitthefurnace(alongwithmoltenslagcontainingimpurities).TheCO2producedinthisprocesscomesfromtwosources—fuelcombustiontoheatthefurnaceandthechemicaloutputofthereaction.Approximately80%oftheCO2fromtheprocessofmakingvirginsteeloccursatthisstage.20Thepigironproducedintheblastfurnacecontainsmorecarbonthanfinishedsteelandisbrittleanddifficulttowork.Thesecondstageinanintegratedsteelmillisthebasicoxygenfurnace,whichremovesexcesscarbonbyheatingthepigiron,alongwithasmallamountofscrapsteel,withpureoxygentodriveofftheexcesscarbonandotherimpurities.ThisprocessalsocreatesCO2,althoughlessthantheblastfurnace.Smallamountsofothermetalscanbeaddedatthisstagetoproducedesirableproperties.Thisprocessproducesliquidsteel,whichisthenformedorrolledintoitsfinalshape.ForeignPolicyatBrookings6THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYFIGURE3:SIMPLIFIEDPROCESSDIAGRAMFORBLASTFURNACESteeliscompletelyrecyclableandrecyclingsteeluses74%lessenergythancreatingvirginsteelfromironore.21Recycledsteelisprocessedforreuseinelectricarcfurnacesinso-called“minimills.”Scrapmetal,alongwithsmallamountsofothermaterialstohelpremoveimpurities,isloadedintoafurnace,thenelectrodesareloweredontothematerial.Anelectricarcformsbetweentheelectrodesandthescrapmetal,whichmeltsthematerialandoxidizesimpuritiesinthescrapattemperatureupto1800°C.22Moltensteelandslagcontainingimpuritiesarethefinalproducts.Recycledsteeliscost-effective,energyefficient,andreliesonelectricityratherthancoalasitsenergysource,meaningthatitcanuserenewableelectricity.Additionally,unlikeinvirginsteelproduction,itdoesnotproduceprocessemissionsofCO2.However,thereisnotenoughscrapsteeltomeetglobaldemand.Two-thirdsofU.S.steelproductionisrecycledsteelfromelectricarcfurnaces.However,indevelopingmarketswithmuchgreaterappetiteforsteelthansteelavailableforrecycling,virginsteelproducedfromironoredominates.Forecastssuggestthattherewillcontinuetobehighdemandforvirginsteelmadefromironore,meaningthatprocesschangesorcarboncaptureandstorageareneededtodealwiththeCO2emissionsfromironoreprocessing.23Clearly,increasingtherecoveryofsteelforrecyclingcanreduceenergyuseandCO2emissions.Reinforcingsteel(rebar)andpackagingcurrentlyhavethelowestcollectionratesforrecycling,sotargetedeffortsinthesesectorswillbehelpful.Otherimportantstepsincludedesigningsteel-containingproductswithrecyclinginmindandimprovingprocessesforseparatingmetalsforrecycling(especiallycopperandsteel).24Giventhattherewillbecontinueddemandforsteelproducedfromironore,improvementsinvirginsteelproductionareneededtoachievedeepdecarbonization.Productionhasbecomemoreefficientandloweremissionsovertime,throughoptimizingtheindividualpartsoftheprocessandthroughusingwasteheatandwastematerials.However,Ironore(Fe3O4,Fe2O3)Limestone(CaCO3)Lime(CaCO)HeatCarbondioxide(CO2)KILNBLASTFURNACECoalCALCINERHeatSlagCokePigiron(Fe,C)BASICOXYGENFURNACEHeatCrudesteelOxygen(O2)Carbondioxide(CO2)Carbondioxide(CO2)HeatForeignPolicyatBrookings7THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYthemostefficientproducersarenowreachingthethermodynamiclimitsofefficiency,meaningthatfurtherimprovementsingreenhousegasemissionsneedtocomefromprocesschanges.25Biocarbonisapotentialreplacementforcarbonfromcoalasthereducingagentintheblastfurnace.TheprocessstillemitsCO2,butsomeofthisCO2wastakeninbytheplantsastheygrew,resultinginlowernetemissions.Thismethodrequireslittlechangeintheblastfurnaceprocess,andthusoffersanear-termopportunitytoreduceCO2emissionsfromvirginsteelproductionwithoutbuildingnewfacilities.Rawbiomassmustbeconvertedintocharcoalthroughpyrolysis(heatingtoveryhightemperaturesintheabsenceofoxygen),similartotheprocessthatconvertscoalintocoke,removingimpuritiesandgreatlyincreasingthecontentofpurecarbon.Theheatforthisprocesstypicallycomesfromburningaportionofthebiomassused.Conditionsinthepyrolysisprocesscanbecontrolledtoproducecharcoalappropriatefordifferenttypesofsteelmaking.26Potentialsourcesofbiomassincludewasteproductsfromthelumber,pulpandpaper,andbiofuelindustries.Thisprocesshasthepotentialtoreduceemissionsfromvirginsteelproductionbyaround20%.27However,thereiscompetitionforbiomassanditspriceisoftenhigherthanfossilfuels.Onepotentialgamechangerisusinghydrogenratherthancarbonasthereducingagentinproducingironandasthefurnacefuel,inaprocesscalledhydrogendirectreduction.Theoxygenintheironorecombineswiththehydrogentoproducewater(insteadofwithcarbontoproduceCO2),eliminatingtheCO2emissionsfromthispartoftheprocess.The“spongeiron”productisthenprocessedinanelectricarcfurnacetoproducesteel.28Sincethearcfurnacerunsonelectricity,thispartoftheprocesscanbereadilydecarbonizedaswell.FIGURE4:SIMPLIFIEDPROCESSDIAGRAMFORHYDROGENDIRECTREDUCTIONNosteelmakerisusingthisprocessatacommercialscaletoday,butaconsortiumofcompaniesinSwedenisplanningtostartconstructiononanindustrial-scaledemonstrationplantin2023,withproductionbeginningin2025.29Theyestimatethatthisprocesswillproducesteelatacostpremiumof20to30%abovestandardblastfurnacetechnology,30apricewhichcorrespondstoacarbonpriceof$70to$100pertonofCO2.31Additionally,researchshowsthathydrogencanbesubstitutedintoexistingblastfurnaceprocessestomeetupto30%ofprocessenergyrequirementswithoutmajorchangestoexistingequipment,allowingemissionsreductionsinexistingplantsbeforedeploymentofcompletelynew,all-hydrogentechnology.32SuchtechnologyisundergoingtestingnowinGermany.Water(H2O)ElectricityOxygen(O2)HYDROGENPLANTSpongeiron(Fe)CrudesteelDIRECTREDUCTIONHeatWater(H2O)Ironore(Fe3O4,Fe2O3)H2ELECTRICARCFURNACEElectricitySlagLime(CaCO)ScrapsteelCokeForeignPolicyatBrookings8THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYCementandconcreteCementisthemostwidelyusedman-madematerialinexistenceandcementmanufactureisthesecond-largestindustrialemitterofgreenhousegasesbehindironandsteel.Cementisakeyingredientinconcrete—thegluethatholdsittogether.Cementformsapastewithwaterthatbindstogetherthesandandgravelcomponentsofconcrete,thenhardensasitdries.Concreteistypically10to15%cement.33Concreteandcementarekeymaterialsinbuildings,roads,andotherinfrastructure.Usehasbeengrowingrapidly;between2000and2014,morecementwasproducedgloballythanduringtheentire20thcentury.34Portlandcement,themostcommontype,waspatentednearly200yearsagoanditsproductionhaschangedlittlesincethen.Likesteel,productionofcementinvolvesachemicalreactionthatproducesCO2,apartfromandinadditiontoemissionsfromenergyuseintheprocess.Thefundamentalreactiontoproducecementinvolvesheatinglimestone(calciumcarbonate,CaCO3)inakilntoatemperatureof1400°to1500°CtoproduceCaOandCO2.TheCO2fromthischemicalreactionmakesupanaverageof60%ofGHGemissionsfromtoday’scementproduction,withtheremainderofemissionsfromfossilfuelusedtoheatthekiln.35Theresultingproductisknownas“clinker,”whichisgroundtoapowderandcombinedwithothercompounds(silicatesandaluminates)toproducecement.FIGURE5:SIMPLIFIEDPROCESSDIAGRAMFORCEMENTPRODUCTIONCCUSwillbeanimportanttechnologyforreducingemissionsfromcementproduction,sincethemajorityofCO2emissionscomefromtheprocessofproducingclinkerandthuscannotbeabated.RecentstudiesofdeepdecarbonizationincementindustryfoundthatnearlyhalfofpotentialreductionswouldbeachievedbyCCUS.36However,thetechnologyisonlybeginningtobeimplementedatanindustrialscale.Thelargestpilot-scalecarboncaptureplantintheindustrytodayisattheAnhuiConchCementCompany’sWuhuPlantinChina,whichcaptures50,000tonsofthe1.5milliontonsofCO2producedperyearbyasinglekilnline.37ThecapturedCO2issoldtolocalindustrialcustomers.HeidelbergCementCompanyplansthefirstindustrial-scaleCCUSatitsplantinBrevik,Norway,capturing400,000tonsofCO2annuallyforgeologicstorage.38Replacementofsomeclinkerwithothermaterialsisanotherpotentialpathwaytoemissionsreductions.“Supplementarycementitiousmaterials”thatcanbesubstitutedforclinkerinPortlandcementincludeindustrialby-productslikeflyashfromcoal-firedpowergenerationorground-granulatedblastfurnaceslagfromsteelproduction,ornaturalsubstanceslikegypsum,groundlimestone,calcinedclay,orpozzolans(naturalvolcanicash).39Recentstudiessuggestthatclinkersubstitutioncouldaccountfor27%ofemissionsreductionsinCalifornia’scementindustryand37%ofemissionsLimestone(CaCO3)HeatCarbondioxide(CO2)KILNClinker(CaO)GRINDERPortlandcementSilicatesaluminatesForeignPolicyatBrookings9THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYglobally.40However,thevitalimportanceoffinishedconcreteperformancemeansthatthecementindustryisverycautiousaboutchangesinthecompositionoftheirproduct.Procurementcriteriaandqualityconcernsareimportantbarrierstochangesincementcomposition.Additionally,thesupplyofindustrialbyproductsmaydeclineovertimeascoal-firedpowerplantsandvirginsteelproductionarereplacedbymoreefficientandlower-emittingprocesses.TheremainingpotentialreductionsinemissionsfromcementproductioncomethroughreductionsinCO2productionfromenergy,mostlyfromfuelswitching.Coalandcokearethemostcommonfuelsforcementproductiontoday.Emissionsreductionscanbeachievedthroughsubstitutionwithnaturalgasorwithbio-basedfuelsorwastes.Biofuelsandwasteswillbeinshortersupplyovertime,however,asmanyindustriesthatneedcombustionforprocessheatorcarbonbuildingblocksforproductsturntobiomassandwasteasfossilfuelsubstitutes.ChemicalsUnlikethesteelandcementsectors,thechemicalindustryencompassesalargevarietyofprocessestocreateproductsthatweuseeveryday.Forexample,polyesteraccountsfor60%offiberusedglobally,greaterthannaturalfiberslikewoolorcotton.41Demandforchemicalsisgrowingveryrapidly.Forexample,globalplasticdemandhasnearlydoubledsince2000.42Demandfornitrogenfertilizerhaslargelyplateauedindevelopedcountries,butisgrowingrapidlyinthedevelopingworld.Onapercapitabasis,thewealthyworldusesupto20timesasmuchplasticand10timesasmuchfertilizerascountrieslikeIndiaorIndonesia.43Theindustrycanbebroadlydividedintoorganicchemicalsthatarebasedoncarbon,includingalcohols,plasticsandfibers,andinorganicsthatdonotcontaincarbon,suchasammonia,causticsoda,andindustrialgaseslikechlorine.Carbondioxideisacommoningredientorbyproductoftheproductionofbothorganicandinorganicchemicals.Becausetheindustryissodiverse,thispaperwillfocusonthemostimportantindustrialchemicalsthatarethebuildingblocksforotherproducts:methanol,olefins,aromatics,andammonia.Theproductsdiscussedbelowaccountformorethantwo-thirdsofchemicalsectorenergyconsumption.Beyondthesebulkchemicals,theindustryiswildlycomplexaroundtheedges;theEuropeanChemicalsAgencytracks100,000uniquesubstances.OrganicchemicalsOrganicchemicalstypicallyusefossilfuelsasthesourceofthecarbonthatformsthebackboneofthefinalchemical.Organicchemicalmanufacturingabsorbs14%ofoiland8%ofgasproductionglobally.44Thechemicalindustryusesasmuchfossilfuelasthesteelandcementsectorscombined,butemitslessCO2thanthoseindustriesbecauseithasfewerprocess-relatedCO2emissionsandbecausesomeofthefossilfuelinputsareconvertedintofinalproducts,ratherthanbeingcombusted.Whichfossilfuelsareusedbytheindustryvariesbylocalavailabilityandprice.InEuropechemicalsuse73%oiland16%naturalgas,45whilenaturalgasliquidsareamorecommonfeedstockinNorthAmericaandcoalisusedinmanyprocessesinChina.46Biomasscanalsobeasourceofcarbontobeprocessedintoindustrialchemicals.MethanolisproducedfromsugarcaneinBrazil,butitisusedprimarilyasamotorfuelratherthananindustrialfeedstock.ForeignPolicyatBrookings10THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYMorethan90%oforganicchemicalsarederivedfromseven“primarychemicals”orbuildingblocks:methanol;theolefinsethylene,propylene,andbutadiene;andthearomaticcompoundsbenzene,toluene,andxylene.47Thesechemicalsareultimatelyusedinthemanufactureoflarge-volumeproductslikeplasticresins,syntheticrubber,dyesandpigments,andfiberslikepolyester,alongwithsmall-volumespecialtychemicalslikeadditivesforfoodorcosmeticsorchemicalsusedinelectronicsmanufacturing.Theseprimarychemicalsareresponsibleforabouttwo-thirdsofthesectors’energyconsumption.Theirlow-margin,high-volumenaturemakesthemchallenging,butimportant,todecarbonize.Animportantconsiderationforallchemicalmanufacturingisthehighprocessheatneeded.Forexample,asteamcrackerusedtoproduceolefinsandaromaticsoperatesnear1000°C.48Nomaturetechnologycangeneratethislevelofheatwithoutcombustion.49Methanol.Methanolisakeyprecursortoimportantchemicals,includingformaldehydeandaceticacid,whicharefurtherprocessedintoproductslikeadhesives,solvents,andresins.Additionally,aboutone-thirdofmethanolproducedtodayisuseddirectlyasafuelorintheproductionoffueladditives.50Methanoltodayismostlyproducedfromnaturalgasfeedstockbysteamreformingthegastoproduce“synthesisgas,”amixtureofmostlyhydrogenandcarbonmonoxide.Thisgasmixtureisthenconvertedtomethanolatelevatedtemperatureandpressure.However,synthesisgascanbeproducedfromanycarbon-containingmaterial,includingcoalandoil,agriculturalwasteandforestryresidues,andmunicipalsolidwaste.ThemethanolindustryinChinamostlyusescoalasafeedstock.Thecoalmustbegasifiedbeforeitcanbeusedtogeneratesynthesisgas,withtwicetheenergyconsumptionandfivetimestheCO2intensityofproductionfromnaturalgas.51FIGURE6:SIMPLIFIEDPROCESSDIAGRAMFORMENTHANOLPRODUCTIONAlthoughcoalandoilarehigher-emissionswaysofproducingsynthesisgas,wastesandplantmaterialfeedstocksprovidepathwaysforremovingfossilfuelsandCO2emissionsfromthesynthesisgasproductionprocess.ProducingmethanolfromsuchfeedstockscanreduceprocessCO2emissionsbyasmuchas95%.52Forexample,EnerkemoperatesaplantinEdmonton,Albertathatconvertsmorethan100,000metrictonsperyearofnon-recyclable,non-compostablemunicipalwasteintomethanol.53Anotherlow-carbonpathwayformethanolproductionusesCO2emissionsfromindustrialprocessesorfossilfueluseandhydrogenproducedthroughelectrolysis,preferablypoweredbyrenewableelectricity.CarbonRecyclingInternationaloperatessuchaplantinIceland,whichuses5,600metrictonsofCO2fromageothermalpowerstationeachyear.54(Geothermalpowerisrenewable,butoftentheundergroundliquidpumpedtothesurfacecontainssomeCO2.)Naturalgas(CH4)Carbondioxide(CO2)STEAMREFORMINGMethanol(CH3OH)REACTORHeatSteam(H2O)Sythesisgas(H2,CO)ForeignPolicyatBrookings11THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYOlefinsandaromatics.Theolefinsethylene,propylene,andbutadienearemonomers.Thedoublebondsinthese“unsaturated”hydrocarbonsallowthemtoreactchemicallytoformverylongchainscalledpolymers,whichbecomeplastics,fibers,andothermaterials.55Ethyleneisproducedinlargerquantitiesthananyotherchemical,asitistheprecursortomanycommonproducts,includingpolyethyleneusedinbags,films,andotherformsofpackaging;polyethyleneterephthalate(PET)usedinwaterandsodabottles;andpolyvinylchloride(PVC)usedinpipesandotherconstructionmaterials.Unlikemethanol,olefinsaregenerallyproducedfromnaturalgasliquidsoroil,ratherthannaturalgas.Olefinsareprimarilyproducedbysteamcracking,aprocessinwhichchemicalbondsbetweenatomsarebrokenandsaturatedhydrocarbonsarebrokendownintounsaturatedhydrocarbons.Theinputstotheprocessareprimarilyethaneorpropane,fromnaturalgasliquids,andnaphtha,aportionofrefinedcrudeoilthatcontainscompoundswithroughlyfiveto10carbonatoms.Themixofoutputsdependsonthefeedstockused.Ethyleneisproducedmostlybysteamcrackingethaneinchemical-specificfacilities,whereaspropyleneandbutadieneareprimarilyproducedfromnaphthainoilrefineriesalongwithfuels.56TheseprocessesdonotproduceCO2aspartofthechemistry.Theydoproducehydrogen,whichisusedinotherprocesseswithinthechemicalplantorrefinery.FIGURE7:EXAMPLECHEMICALREACTIONSINSTEAMCRACKINGC2H6→C2H4+H2ethaneethylenehydrogenC3H8→C3H6+H2propanepropylenehydrogenC6H14→2C3H6+H2hexanepropylenehydrogenInChina,methanolisconvertedtoolefinsonalargescale,allowingcoaltobetransformedintofinalproductsthatareproducedfromnaturalgasliquidsoroilinotherpartsoftheworld,withahighenvironmentalcostintheformofgreaterCO2emissions.Aromaticsareaparticulartypeofunsaturatedhydrocarbons,basedonaringofsixcarbonatoms.Aromaticscanbeproducedalongwitholefinsduringthesteamcrackingofnaphthaorheaviercrudefractions,orthroughcatalyticreformingofnaphtha,whichrearrangesstraightchainsofcarbonmoleculesintotheringstructurecharacteristicofaromatics.Thisprocessalsocreateshighoctaneblendingcomponentsforgasoline.57Morethan80%ofglobalaromaticsproductionoccursatrefineriesalongwithfuelproduction.58Asinsteamcracking,catalyticcrackingreactionsgenerallyproducehydrogen.ForeignPolicyatBrookings12THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYFIGURE8:EXAMPLECHEMICALREACTIONSINCATALYTICCRACKINGC7H14→C7H8+3H2heptanetoluenehydrogenC6H12→C6H6+3H2cyclohexanebenzenehydrogenIn2019,sixchemicalcompanieslaunchedtheCrackeroftheFutureConsortium,agreeingtoinvestandshareknowledgeastheyexploretheuseofrenewableelectricitytorunnaphthaorgassteamcrackers.Thecompaniesaimtohaveapilotplantinoperationby2030andwidespreadcommercialoperationby2050.59Achallengeforthisandallindustrialelectrificationwillbetheamountofelectricityrequired.ReplacingfossilfuelsatEurope’s40steamcrackersiteswouldrequirearound171terawatthoursayearofelectricity.60Thisisastaggeringamountofpower,equalto30%ofEurope’sentiregenerationofrenewableelectricityin2019.61Anotherpathwaytodecarbonizationistousebiomass-derivedfeedstocksinsteadofpetroleum.SeveralrefineriesinthewesternUnitedStatesareconvertingfromcrudeoilfeedstockstowasteoilsandfatsandsoybeanoil.62TheseplantsareprimarilyfocusedonproducingrenewabledieselfuelthatcanqualifyforlucrativecreditsunderCalifornia’sLowCarbonFuelStandardandthefederalRenewableFuelsStandard.However,theserefineriesproduceaslateofotherproductsaswell,includingrenewablejetfuelandproductsinthenaphtharange.This“renewablenaphtha”canbeusedasagasolineblendingstock,butitisalsowell-suitedtobecrackedintoolefinsandaromatics,justlikeitsfossilequivalent.IntheUnitedStates,biofuelpolicysupportsusingthismaterialasfuelratherthanfeedstock,butEuropeanrefinersarebeginningtouserenewablenaphthatomakechemicals.Forexample,arefineryownedbyTotalinFranceisshiftingtoprocessingoilsandfatsintorenewablejetfuel,diesel,andnaphthaforbioplastics.63PlasticRecyclingRecyclingisonewaytoreducetheenergyandrawmaterialuseoftheplasticsindustry.Plasticsareubiquitousinourmodernworld,withwealthycountriesusingmorethan60kilogramspercapitaannually.Developingcountryuseislower;percapitademandinChinais45kgandinIndiaisninekg.64However,plasticrecyclingisoftenchemicallyandeconomicallychallenging,andin2017onlyaround16%ofavailableplasticwastewasrecycled.65IntheUnitedStates,plasticrecyclingisfarbelowlevelsachievedforpaper,metal,andglass.66Plasticsrecyclingtakestwomainforms:mechanicalandchemicalrecycling.Mechanicalrecyclinginvolvessorting,cleaning,shredding,andmeltingplasticmaterialsformoldingintonewproducts.Thechemicalmakeupoftheplasticdoesnotchangeduringtheprocess.PETbeveragebottles(plastic#1)andpolyethylenebottlesforproductslikemilkanddetergent(plastic#2)aremostcommonlyrecycledinthisway.MechanicalrecyclingemitslessCO2thanproducingvirginplastic.67ForeignPolicyatBrookings13THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYInorganicchemicals—ammoniaInorganicchemicalsarethosenotbasedoncarbon.Ammoniaisthemostimportantinorganicchemicalintheeconomy,intermsofamountproducedandCO2emissions.Nearly90%ofammoniaproductionisusedinfertilizermanufacturing.71Ammonia-basedfertilizerhasbeencrucialtofeedingtheworld’sgrowingpopulation;abouthalfofglobalfoodproductionreliesonit.72Theremainderofproductionisusedinthemanufacturingofnearlyeverychemicalthatcontainsnitrogen,includingpharmaceuticals,plastics,andtextiles.Plasticsfrommechanicalrecyclingaretypicallyoflowerqualitythanvirginplastic.Coloradditivesareaparticularchallengetomechanicalrecycling.Separatingplasticsbycolorisdifficult,meaningthatproductsmadefrompost-consumerrecycledplasticareoftendarkincolor.PETdegradeseachtimeitisre-processed.68Someprocesses“downcycle”intonewproductsthatarenotthemselvesrecyclable,forinstance,turningdrinkbottlesintopolyesterfibersforclothingorcarpet.Chemicalrecyclingtakestherecycledmaterialbacktothemonomerlevel(olefins)andoffersthepossibilityofacirculareconomyforplastics.Depolymerizationcanbreakdownsomeplasticsintotheirrawmaterials,forconversionintonewproductswithqualityequaltovirginplastics.Theprocesscanremovecolorsandimpuritiesthatreducethequalityofmechanicallyrecycledplastic.Anothermethodofchemicallyrecyclingplasticsispyrolysis,whichcanturnmixedplasticwasteintonaphtha,goingonestepfurtherbackintheproductionprocessthandepolymerization.Pyrolysiscanbeusedformixedplasticwasteandplasticsthataredifficulttorecycleanyotherway,likepolypropyleneyogurtcups(plastic#5)andmultilayeredplasticpouches.69However,bothmethodsofchemicalrecyclingarecapitalintensiveandmoreexpensivetodaythanvirginplasticproduction,andthusarenotusedonanindustrialscale.Verylargeplantsareneededtoachieveeconomiesofscale.Additionally,theGHGemissionssavingscreatedarelowerforchemicalrecyclingthanformechanicalrecycling.AstudyfromtheNetherlandsofrecyclingPETtrays(suchasthoseasusedformeatsingrocerystores)foundthatdepolymerizationcouldresultina60%reductioninCO2whilemechanicalrecyclingcouldresultinanemissionsreductiongreaterthan90%,bothcomparedtoproducingvirginplastic.70Forthesereasons,chemicalrecyclingislikelytobeacomplementtomechanicalrecycling,ratherthanareplacement.Ingeneral,recyclingreducesGHGemissionsanddemandforfossilfuelfeedstocks,butisnotanoverallsolutiontoemissionsfromplasticproduction.Recyclingisstillenergyintensiveanddemandforplasticsisgrowingrapidly,farexceedingtheavailabilityofmaterialtorecycle.Gatheringrecyclablesandmovingthemtorecyclingcentersaddtothecostandenergyuseoftheprocess.Nonetheless,designingpackagingandmaterialstomakerecyclingeasiercouldincreaserecyclingratesandreducedemandforvirginplastic.ForeignPolicyatBrookings14THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYAmmoniaproductionisasignificantsourceofCO2emissions.Likemanyindustrialchemicals,thefundamentalprocessformakingammoniahaschangedlittlesinceitwascommercializedin1913.Theprocessbeginswithsteamreformingnaturalgastoproducehydrogen-richsynthesisgasandCO2,inaprocesssimilartothatusedinmethanolproduction.About90%oftheCO2producedoccursatthisstage.73TheHaber-Boschprocessthencombinesthishydrogenwithnitrogengasseparatedfromairatatemperatureof400°to500°Candhighpressureoveranironcatalysttoproduceammoniagas(NH3).74Processefficiencyhasimprovedovertimefromsuchimprovementsaswasteheatrecoveryandmoreefficientcompressors.75Theheatrequiredforammoniaproductionislowerthanforsuchproductsassteelorcement,makingitamenabletoelectrification.Asinmethanolproduction,Chineseammoniaproductionusescoalasthesourceforhydrogen,withsimilarincreasesinenergyuseandCO2emissions.FIGURE9:SIMPLIFIEDPROCESSDIAGRAMFORAMMONIAPRODUCTIONInmanyfacilities,ammoniaiscombinedwiththeCO2releasedduringsynthesisgasproductiontocreateurea,asolid,moreeasilytransportableformofnitrogen-basedfertilizer.However,theCO2isreleasedagaintotheatmospherewhenthefertilizerisused,meaningthatthisusedoesnotchangethenetemissionsofCO2totheatmosphere.Infact,decarbonizingammoniauseinfertilizerwillrequireashiftawayfromureatowardformsofnitrogenfertilizerthatdonotcontaincarbon.Thekeytolow-carbonammoniaproductionisproducinghydrogenwithoutCO2emissions,acommonchallengeacrossindustrialprocessesdiscussedinthenextsection.SteamreformingofnaturalgaswithCCUSorelectrolysisofwaterarethetwomostcommonlydiscussedmethodsofproducingzero-carbonhydrogen,andplantsusingtheseprocessesareinoperation.However,anewplantinNebraskaisfollowingadifferentpath.Theprocessusesmethanepyrolysistoproducehydrogenandcarbonblack,aproductusedinthemanufacturingoftiresandotherrubbergoods,plastics,andprintingink.Ademonstrationplantisinoperationtodayandthenewplantwillproduce275,000metrictonsofammoniaayearwithzeroCO2emissions.76Uniqueamongtheproductsdiscussedinthispaper,ammoniacouldplayanadditional,completelydifferentroleinazero-carboneconomy.Inadditiontoitsuseasfertilizerandintheproductionofnitrogen-containingchemicals,ammoniacouldalsoactasazero-carbonenergycarrierandstoragemethod,similartotheroleenvisionedforhydrogen.TheammoniamoleculecontainsnocarbonandthusdoesnotemitCO2whenitisburnedorusedinafuelcell.Ammoniacouldbeproducedusingexcessrenewableelectricityandstoredforlateruseinpowergenerationortransportation.InSeptemberNaturalgas(CH4)Carbondioxide(CO2)STEAMREFORMINGAmmonia(NH3)HABER-BOSCHREACTORHeatSteam(H2O)H2IRONCATALYSTfromairNitrogen(N2)ForeignPolicyatBrookings15THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRY2020,SaudiArabiasentapilotshipmentof40tonnesoflow-carbonammoniatoJapanforpowergeneration.77Adiscussionofthepotentialforammoniaasafuelisbeyondthescopeofthispaper,butthefactthatdecarbonizationofammoniaissopossiblethatitcouldbeusedasalow-carbonfuelmakesituniqueamongindustrialchemicals.78COMMONCHALLENGESANDSOLUTIONSACROSSTHESECTORSThethreeindustrialsectorshaveseveraltechnicalchallengesincommon,includingprocessemissionsofCO2,theneedforhighheat,anduseorpotentialuseofhydrogen.Therefore,anumberoftechnicalsolutionscanbesharedacrossthesectorsaswell.Insomecases,thesesolutionsareinterrelatedandsynergistic.Carbondioxidecaptureandutilizationorstorage(CCUS)RemovingCO2fromanexhauststreamisanoptionwheneliminatingtheemissionisimpossibleorprohibitivelyexpensive.TheCO2canthenbeusedinanindustrialprocessorpermanentlystoredingeologicalformationsdeepunderground.IntheIEACleanTechnologyScenario,designedtokeepglobaltemperaturerisewellbelow2°C,CCUSaccountsfornearly20%oftheemissionsreductionsintheindustrialsector,mostoftheseintheironandsteel,cement,andchemicalsindustries.79However,asofmid-2020,only19CCUSprojectswereinoperationgloballyintheindustryandrefiningsectors.80AlthoughcapturingCO2andcompressingitforstorageoruseisanenergy-intensiveandexpensiveprocess,theuseofCCUSasatoolforemissionsmitigationcanreducetheoverallcostofdecarbonizingenergy-intensiveindustries.81Processemissionsfromthesteelandcementindustriesaregoodcandidatesforcarboncapture,sincetheyaredifficulttoeliminatewithoutdrasticallychangingtheunderlyingproductionprocess.AconsistentchallengeincarboncaptureisthatitinvolvesseparatingCO2fromothersubstancesintheeffluentgasstream,generallyusingasolvent.Thesolventmustthenberegenerated,releasingtheCO2forstorageoruseandallowingthesolventtobeusedagain.Thisprocesstendstobeenergyintensive.ItisalsomoreefficientwitheffluentstreamsthatcontainhigherconcentrationsofCO2.Forcombustionprocesses,burningthefuelinanatmosphereofpureoxygen,ratherthanaircontaining78%nitrogen,increasestheconcentrationofCO2intheeffluentandtheefficiencyofcarboncapture.Generatingpureoxygenfortheprocessisalsoexpensive,butthegainincarboncaptureefficiencymayreducecostsoverall.InadditiontothetechnicalandeconomicchallengesforCCUS,publicperceptioncanraisechallenges.StudiesshowthatthepublicviewsCCUSmorenegativelywhenitisseenasadelayingtacticorasubstituteforimplementingcleanerenergytechnologies.82Paradoxically,althoughCCUSislikelytoplayanimportantroleindeepdecarbonizationoftheeconomy,themostenvironmentally-mindedcitizensareleastsupportiveofthetechnologysincetheyoftenviewitasawaytoavoidthe“real”solutionAlthoughCCUSislikelytoplayanimportantroleindeepdecarbonizationoftheeconomy,themostenvironmentally-mindedcitizensareleastsupportiveofthetechnology.“ForeignPolicyatBrookings16THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYofasocietalshiftawayfromfossilfuels.83Betterframingofthetechnologyanditsusefulnessineliminatingemissionsthataredifficulttoabateanyotherwaycouldhelp,alongwithmoredemonstrationsofthesafetyofthetechnologyanditsabilitytokeepCO2outoftheatmosphereoverthelongterm.Carboncaptureinsteelmakingisfocusedontheblastfurnace,wherethemajorityofplantemissionstakesplace.Technologiesthatcanberetrofitontoexistingfurnacescanremove50%to75%ofemissionsatacostof$50to$90pertonofCO2removed.84Retrofitscanallowsignificantemissionsreductionswithouttheexpenseofretiringfacilitiesbeforetheendoftheirusefullife.However,retrofitshavenotyetoccurred,largelybecausepolicychangeisneededtomakethemeconomicallyviable.Thefirstindustrial-scaleCCUSprojectatanewsteelmillbeganoperationin2017atanEmiratesSteelfacilityinAbuDhabi,capturing800,000tonsperyearofCO2tobeusedinenhancedoilrecoveryinnearbyoilfields.85Theplantuseshydrogenandcarbonmonoxideproducedfromnaturalgasasthereducingagentsinthefurnace,producingaveryhighconcentrationofCO2intheeffluent,makingrecoveryofCO2withasolventmoreefficient.86Calcium-loopingtechnologyisaninterestingcandidateforcarboncaptureinboththecementandsteelindustries.Bothindustrieshavekilnsonsitetoconvertlimestoneintolime(CaO)—incementtoproduceclinkerandinsteeltoproducelimeforuseasimpurity-removingfluxintheblastfurnace.CalciumloopingusessomeofthelimeproducedastheabsorbentforCO2,capturingbothCO2fromthecalcinedlimestoneandthefuelusedforcombustion.87Thisprocessusesmaterialsalreadyonsiteandfamiliartooperators,ratherthantheliquidsolventsusedinsomeothercarboncaptureprocesses.Fuelinthekilncanbeburnedinanoxygen-richenvironmenttominimizetheamountofnitrogeninthefluegas,makingamoreconcentratedstreamofCO2andimprovingCO2captureefficiency.Thistechnologyhasbeendemonstratedatseveralpilot-scalepowerplantsandthesynergywithcementproductionisconsideredabonus.88ThemostcommonuseforcapturedCO2todayisinenhancedoilrecovery,whereitispumpedintoundergroundreservoirstoincreasethepressureandallowmoreoilproduction.Thismayseembackwards,butenhancedoilrecoverycanprovideasignificantvolumeofsecureCO2storagewhilehelpingtoproduceoilthattheeconomywillstillneedformanyyears.89Otherpotentialuses,nowandinthefuture,includeuseingreenhousestoincreaseplantgrowth,incementandbuildingmaterials,andasacarbonsourceforsyntheticchemicalsandfuels.High-temperatureprocessesProcessheatingisaprimarycomponentofindustrialenergydemand.Oneofthecommonchallengesinheavyindustryistheneedforprocessestooperateathightemperatures.Beyondaround400°C,directuseofrenewableheatorelectricityforheating,withsuchequipmentasheatpumpsorresistanceheaters,isimpractical.90Suchtemperaturesarenecessaryinthesteel,cement,andchemicalsindustries.Electricarcfurnacescanprovideveryhighheat,buttheyworkonlyinapplicationswherethematerialsbeingheatedconductelectricity,suchasmeltingsteelforrecycling.Forotherapplications,combustionisneeded.ForeignPolicyatBrookings17THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYZero-carbonsourcesofheatwillbeakeycomponentofdecarbonizingheavyindustry.Renewablehydrogenisapotentialsolutionthatcanproducehighheatthroughcombustion.Itisanespeciallyattractiveoptioninindustriesthatcurrentlyusenaturalgas,wherehydrogencouldbeusedwithlittleprocesschange.Hydrogencouldevenbeblendedintotheexistingnaturalgasfuelasaninterimemissions-reducingstepwithlittleornochangetoexistingequipment.91Combustionofbiomassisanotherhigh-temperatureoption,throughdirectcombustionorbytransformingbiomasstomethanethroughgasificationoranaerobicdigestion.92However,supplyofsustainablebiomassisachallenge,especiallyasthecallonbiomassandarablelandforotheruses(agricultureforagrowingpopulation,carbonrawmaterialsforchemicals,carbonoffsetsthroughforestpreservation)growsinacarbon-constrainedworld.Solarthermaltechnologiesareanon-combustionwaytoprovideheat,buttodayarepracticalonlyattemperatureslessthan400°C.93However,researchisunderwaytousesolarenergytoprovideheatforacementkiln,amuchhighertemperatureprocess.94Anotherpotentialfuturetechnologyismodularnuclearreactors.Thesereactorsaremuchsmallerthantoday’sutility-scalemodelsandaredesignedtobemass-manufacturedatmuchlowercost.Thesereactorsarenotyetcommercial,buttheyareoneoffewnon-combustiontechnologiesthatcanproduceheatof1000°Cormore.95Likeanyformofnuclearpower,however,publicopinionwillbeachallenge.HydrogenproductionanduseHydrogenisacommoncomponentacrossindustrialsectors:asapotentialreducingagentinsteelblastfurnaces;asarawmaterialintheproductionofmanychemicals,includingmethanolandammonia;andasapotentialzero-carbonfuelinmanyindustries.Thegreenhousegasimplicationsofhydrogenusedependonhowitisproduced.Today,hydrogenisgenerallyproducedbysteamreformingnaturalgas,toproducehydrogenandCO2.IftheCO2fromthisprocessiscapturedandstoredorused,theproductisknownas“blue”hydrogen.Anotherhydrogenproductionmethodisusingrenewableelectricitytosplitwaterintoitscomponentsofhydrogenandoxygen,producingso-called“green”hydrogen.Greenandbluehydrogenhavethepotentialtobeimportantcomponentsofazero-carboneconomy,asanindustrialfuelandrawmaterialand,forgreenhydrogen,asawayofbalancingtheproductionanduseofrenewableelectricity.Thechoicebetweengreenandbluehydrogeninaparticularlocationorprocesswilldependontherelativecostsofrenewableelectricityandnaturalgas,theavailabilityofgeologicalstorageoruseforCO2,andtheacceptabilityofCCUStolocalcitizens.Infrastructureforstoringandtransportinghydrogenwouldbeneededforbothtechnologies.Electrolysisforgreenhydrogenisarelativelymaturetechnology,buteconomiesofscaleinproducinglarge-scaleequipmentwouldhelpbringdowncosts.96Thisraisesachickenandeggproblemsinceyouneeddemandtobuildlargefacilities,butdemandcan’tdevelopuntilhydrogenisavailable.LargeprojectsareunderconsiderationinAustraliaandinSaudiArabia,inareaswithexcellentrenewableelectricitypotential,buthowandwheretheresultinghydrogenwillbeusedisstillunclear.97Mustwewaitforthewidespreadavailabilityofblueorgreenhydrogentogainthebenefitsofsubstitutinghydrogeninindustrialprocesses?Perhapsnot.AstudyfromtheRockyMountainInstituteshowsthatbenefitscanbeachievedfromusinghydrogenasthereducingagent(insteadofcoal)inasteelmillevenbeforetheelectricitysectorisForeignPolicyatBrookings18THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYcompletelydecarbonized.98Ahydrogendirectreductionsteelmillthatcreateshydrogenbywaterelectrolysisusingtoday’sglobalaverageelectricitysupplywouldhaveaboutequalgreenhousegasemissionstoastandardblastfurnaceintegratedmill.Andincountrieswithgreenerelectricity,thehydrogenmillswouldproduceloweremissionstoday,forexample19%lowerintheUnitedStatesand38%lowerintheEuropeanUnion.Theseresultsareencouraging,astheymeanthatconversionofprocessestohydrogeninparallelwithelectricitydecarbonizationisaviablepathforward.TradeexposureandindustrialproductsNotallthesharedchallengesacrossindustriesaretechnical.Thetradeexposureofthesteelandchemicalindustriesraiseschallengesforestablishingdecarbonizationpolicy.Regulatingemissionsinonecountryorregionwouldlikelyrequireprotectionfromcheaper,higher-emissionsproductmadeelsewhere,forbothimportsandexports.Conversely,onlyabout7%ofcementistradedontheinternationalmarket,becauseitislowvaluecomparedtoitsweightandvolumeandbecauseitsrawmaterialsarewidelyavailablegeographically.In2019,25%ofsteelintermediateproducts(likewire,tube,ingots,andunworkedcastingsandforgings)weretradedinternationally.99Thereforecustomershavetheabilitytosearchforlower-costmaterialsproducedabroad.Additionally,thesteelindustrytodayissufferingfromglobalovercapacity,makingcompetitionevenmorefierce.Theeconomicsofsteelproductionareverysensitivetolocalenergycosts.100Nonetheless,thecostofsteelisoftenasmallpartofthecostofthefinishedproductorproject.Forthisreason,anincreaseinsteelpricestoachievedecarbonizationgoalswouldnotresultinasignificantincreaseinproductcostsoroverallcosttotheeconomy,eventhoughthesteelindustryistrade-exposed.TheUnitedStatesistheworld’slargeststeelimporter,importingabout29%ofitstotalsteelsupplyin2019.101ConstructionisthemostimportantuseofsteelintheUnitedStates,makingup44%ofthetotal,followedbytheautomotiveindustryat28%andmachineryandequipmentat9%.102MoststeelusedinconstructionintheUnitedStatesisrecycledsteelproducedinelectricarcfurnaces.103Foralargebuildingwithstructuralsteel,thecostofsteelisapproximately15%oftotalbuildingcost.104Steelmakesupamuchsmallerportionofcostsforwoodormasonryconstruction.Theautomotiveandmachinerysectorsprimarilyusenewsteelproducedfromironore,105forwhichdecarbonizationismoredifficult.Theaveragecarcontainsnearly2,000poundsofsteel.106However,thecosttotheconsumeroflow-emissionssteelmightonlyadd0.2%tothecostofacar.107Forchemicals,tradetendstohappenfurtherdownthevaluechain,notintheprimarychemicalsdiscussedinthispaper.Thederivativeproductsarehighervalueandofteneasiertotransportthantheirbuildingblocks.Forexample,only7%ofglobalammoniagasproductionwastradedinternationallyin2016,buttradeineasier-to-transportureawasthreetimeslarger.108Thesameistrueoforganicchemicals—polyethyleneismuchmoretradedthanethyleneitself.However,theprimarychemicalsarestilltrade-exposedThetradeexposureofthesteelandchemicalindustriesraiseschallengesforestablishingdecarbonizationpolicy.Regulatingemissionsinonecountryorregionwouldlikelyrequireprotectionfromcheaper,higher-emissionsproductmadeelsewhere.“ForeignPolicyatBrookings19THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYthroughtheirderivatives,astheentirevaluechaincanbemovedtoadifferentcountry.Productionofprimarychemicalsandtheirderivativestendstooccurinareaswithlowrawmaterialscosts.Forexample,sincetheU.S.revolutioninoilandgasproductionbeganinthemid-2000s,theUnitedStateshasbecomeanimportantlow-costchemicalsproducer,especiallyofthosebasedonnaturalgasliquids.Sincetheworldisunlikelytodecarbonizeatthesamerate,earlymoversintrade-exposedindustriesarelikelytoneedprotectionfrominternationalcompetition.Twoprimarymethodsareunderconsideration.IntheEuropeanUnion,bordercarbonadjustmentmechanismsarebeingconsideredaspartoftheimplementationoftheEuropeanGreenDeal.SuchtaxeswouldensurethatimportedgoodspaythesamefortheirembodiedemissionsasproductsproducedwithintheEU,whileexportedgoodswouldberelievedoftheirnecessitytopayfortheirembodiedemissionswhentheyaretradedtonationsthatdonotrequiresuchpaymentfordomesticgoods.Thisschemeiseasytounderstandandappealing,butverydifficulttodesignandimplementinpractice.109Inparticular,determiningthepointofcomplianceischallenging,suchashowtoaccountforthesteelorchemicalsincludedinimportedfinishedproducts.TheUnitedStatesistodaymorefocusedonencouraginginnovationthroughdirectgovernmentfundingofresearchandsupportforinnovativetechnologiesthroughtaxbreaksandothermethodstodecreasecosts.Suchpoliciescanreducethecostoflow-emissionstechnologies,especiallyforfirstmovers.Additionally,procurementstandardscanbecreatedtorequirethepurchaseoflower-carbongoods.PartsoftheU.S.federalgovernmenthavegreenprocurementstandardsforsomeitems,includingvehicles,appliances,andofficeequipment,butnostandardsforsteelorcement.TheCaliforniaBuyCleanprogramsetsstandardsforinfrastructurematerials,includingmanysteelproducts.ComplianceisrequiredinJuly2021.110AbillwasintroducedintheCaliforniaStateAssemblytorequirecomplianceinthecementsectoraswell.111AbillintroducedintheNewYorkStateAssemblywouldadvantagebidsfromlow-carboncementproducers.112However,governmentdemandislikelynotenoughtoincentivizenewfacilityconstructionorupgradeofexistingfacilities.Policy,notjustgovernmentprocurement,willbeneededtoprovidegreaterincentiveformodernizationanddecarbonization.Bordermeasuresandmechanismstoreducethecostsoflower-carbontechnologiescancertainlymoveemissionsintherightdirectionbutarelikelynotenoughtoachievethecompletetransformationneededtoreachthenet-zeroby2050goalssetbyanumberofentities,includingtheEU.Suchgoalsgenerallyrequirecompletetransformationinindustries,withcapitalexpenditureforallnewproductionfacilitiesand,inmanycases,higheroperatingexpensesaswell.Policiesthattweaktherelativecompetitivenessofdifferentproductionmethodsarenotenoughtobringaboutthislevelofrapid,wholesalechange.Achievingmid-centurydecarbonizationgoalswillrequireindustrialpolicythatworkswithindustrytobringaboutchangeandestablishesmechanismstokeepindustrycompetitive.Thissortofindustrialpolicyhasn’tbeenseenoutsideofcentrallyplannedeconomiesandrequiresaverydifferentapproachtomarketsthanisseenintheEUandUnitedStatestoday.Suchdiscussionsarestillatanearlystagebutneedtoadvancerapidlyifmid-centurygoalsaretobeachieved.Adiscussionofthepros,cons,andWorldTradeOrganizationcomplianceissuesinvolvedinprotectingtrade-exposedlow-carbonindustrycouldbethesubjectofabook.Butinthiscontext,recognizingthenatureoftradeexposureandsomemechanismstoalleviateitisthepoint.ForeignPolicyatBrookings20THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYCONCLUSION:ALOW-CARBONECONOMYNEEDSINDUSTRIALRAWMATERIALSThispaperhasprimarilyfocusedonhowtoreduceemissionsfromthesteel,cement,andchemicalsindustry.Butaquestionremains—canwereduceemissionsbyreducingdemandfortheseproducts?Especiallyforsteelandcement,theanswerislargelyno.Manytechnologiesthatwillbeimportantpartsofanetzero-energysystem,suchastransportationinfrastructure,renewablepowergenerationandtransmissioninfrastructure,CCUSequipment,andCO2orhydrogenpipelineswillconsumelargeamountsofsteelandcement.TheInternationalEnergyAgency’sSustainableDevelopmentScenarioenvisionsapathwaytonet-zeroglobalgreenhousegasemissionsby2070.Inthisscenario,globalsteelproductionrisesslightlybetweennowand2060,despitetheadoptionofanumberofstrategiestoincreasetheefficiencyofsteeluse.113Plasticsandothermaterialsderivedfrombasicchemicalswillalsoplayanimportantroleinalow-carboneconomy,includingprovidinglightweightmaterialsforcarsandothermodesoftransportandinsulationforefficientbuildings.Additionally,developingcountrieswillrequiresteel,cement,andchemicalstosupporttheirgrowingpopulationsandincreasingprosperity.Futuregrowthinchemicaldemandcouldbeimpactedbythepushtoeliminatesingle-useplasticsinsomepartsoftheworld.However,forsomeusestherearenotsuitablesubstitutes,andplasticsprovideadvantagessuchastheirlowweightandtheirabilitytoreducespoilageanddamagetoproductsintransit.Additionally,plasticsonlymakeupone-thirdofchemicaldemandandotherusescontinuetogrow.114Sustainablefarmingpracticesandreductionsinfoodwastecandampendemandforammoniaasfertilizer,butdemandisstilllikelytogrowastheworld’spopulationgrowsanddevelopingcountriesadoptmoreintensiveagriculturalpractices.TheCOVID-19crisisraisesbothchallengesandopportunitiesfordecarbonizingheavyindustry.Demandforhigh-emissionsindustrialproductsdeclinedglobally,by6%forcement,5%forsteel,and2%forchemicals,inthefirsthalfof2020asthepandemictookhold.115Theseindustrieswillrecoverastheeconomydoes,butifinfrastructureprojects,withtheirlargedemandforsteelandcement,areimportantpartsofwidereconomicrecovery,thatcouldposeachallengefordecarbonization.Wiseuseofinfrastructureinvestmentcouldincreasecountries’resiliencetoclimatechange,butconstructionofsuchinfrastructurecouldbeanimportantsourceofemissionsitself.Ideally,recoverypackageswillincludeinfrastructureinvestmentsandprogramstogreentheindustriesthatproducetherawmaterialsforinfrastructureconstruction.It’stooearlyforgreenprocurementstandardsinmostcases,butassistancewithpilotprojectsandnewtechnologyimplementationwouldbeagooduseofrecoveryfunding,aswellasattentiontogreenbuildingpracticesintheprojectsthemselves.Sincekeyindustrialrawmaterialsaren’tgoingaway,policymakersmustfocusonhowtodecarbonizetheirproduction.Fortheseindustries,policymakersfacechoicesonhowtoacceleratetechnologiesthatarenotyetcommercial,averydifferentproblemthanencouragingmorematuretechnologieslikerenewablepowergenerationorelectricvehicles.Industrieswillneedsupportforcapitalexpenditurestoretooltheirproduction.Canwereduceemissionsbyreducingdemandfortheseproducts?Especiallyforsteelandcement,theanswerislargelyno.“ForeignPolicyatBrookings21THECHALLENGEOFDECARBONIZINGHEAVYINDUSTRYSeveralnewlow-carbonprocesses,likehydrogendirectreductionforvirginsteelproduction,willalsohavehigheroperatingcoststhantheprocessestheyreplace.Infiercelycompetitive,low-marginindustries,policyistheonlywaytomakethesechangeshappen.Demonstrationprojectsfornewtechnologiesareunderway,butinsteel,cement,andchemicals,theracefor“winning”low-carbontechnologiesisstillunderway.Localconsiderations,likeavailabilityoflow-costrenewablepowerandattitudestowardCCUS,willbeimportantconsiderationsinwhichtechnologiesareadopted.Thecompetitionforwinningideasisn’tjusttakingplaceintechnology.Governmentsaretryingoutdifferentpolicymechanismsaswell.Europe’sfocusoncarbonborderadjustmentswillbechallengingtoimplementinanenvironmentwhereothercountries,especiallytheUnitedStates,arefocusedonthecarrotofsubsidizingandencouragingnewtechnology,ratherthanthestickofkeepinghigher-carbonproductsout.Aswithtechnologies,localpoliticswillbeimportantinwhichpolicymechanismsareadoptedinwhichareas.However,unlikefortechnology,policymechanismswiththesamegoalscanworkatcrosspurposes.Forexample,carbonborderadjustmentmechanismscanpenalizelow-carbonproductsthatdonotfacecarbonpricesathome.Conversely,thetechnologysubsidyinonecountrycanexceedthecarbonpricebenefitofferedinanother.Bothofthesepossibilitiesarebarrierstotradeinlow-carbonproducts.Completelyavoidingtheseoutcomesislikelyimpossible,buttradepoliciesandpolicyharmonizationaremoreimportantforlow-carbonindustrythanforothersectors,addinganotherwrinkletoanalreadydifficultclimatechallenge.Finally,anydiscussionofdecarbonizationofheavyindustrymusthaveaspecialfocusonChina.Manyprocessesinthechemicalindustrythatinothercountriesuseoilorgasasfuelandrawmaterial—includingintheproductionofammonia,methanol,andolefins—inChinauselocal,inexpensivecoal.AndasFigure2shows,Chinaistheworld’slargestproducerofbothsteelandcement,byalargemargin.GlobalmechanismstoreduceindustrialemissionsmustfindawaytoreachtheseChineseproducts,includingthosethatarenottradedoutsideChina.Research,development,anddeploymentoflow-carbontechnologieswillbeneededgloballytoachievethelow-carbontransformationtheworldneeds.REFERENCES1“TransformingIndustrythroughCCUS,”(Paris:InternationalEnergyAgency,May2019),https://www.iea.org/reports/transforming-industry-through-ccus.2HannahRitchieandMaxRoser,“CO2emissions,”OurWorldinData,https://ourworldindata.org/co2-emissions.3Ibid.4BenKing,JohnLarsen,WhitneyHerndon,andTrevorHouser,“Cleanproductsstandard:Anewapproachtoindustrialdecarbonization,”(NewYork:RhodiumGroup,December9,2020),https://rhg.com/wp-content/uploads/2020/12/Clean-Products-Standard-A-New-Approach-to-Industrial-Decarbonization.pdf.5“U.S.Energy-RelatedCarbonDioxideEmissions,2019,”(Washington,DC:U.S.EnergyInformationAdministration,September2020),https://www.eia.gov/environment/emissions/carbon/pdf/2019_co2analysis.pdf.6“EnergyTechnologyPerspectives2020,”(Paris:InternationalEnergyAgency,September2020),https://www.iea.org/reports/energy-technology-perspectives-2020.7“TransformingIndustrythroughCCUS,”InternationalEnergyAgency.8Ibid.9ShengHong,YifanJie,XiaosongLi,andNathanLiu,“China’schemicalindu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TheFutureofPetrochemicals:Towardsmoresustainableplasticsandfertilisers,”InternationalEnergyAgency.47“2019GuidetotheBusinessofChemistry,”(Washington,DC:AmericanChemistryCouncil,2019),https://www.americanchemistry.com/GBC2019.pdf.48“EnergyTechnologyPerspectives2020,”InternationalEnergyAgency.49Anelectricarcfurnacecangenerateveryhightemperatures,asinrecycledsteelproduction,butonlyforheatingmaterialsthatcanconductelectricity.Thus,thistechnologyisnotfeasibleforuseinchemicalsmanufacturing.50Ibid.51“TheFutureofPetrochemicals:Towardsmoresustainableplasticsandfertilisers,”InternationalEnergyAgency.52“RenewableMethanolReport,”(Alexandria,VA:MethanolInstitute,December2018),https://www.methanol.org/wp-content/uploads/2019/01/MethanolReport.pdf.53“FacilitiesandProjects:Edmonton,Alberta,Canada,”Enerkem,https://enerkem.com/company/facilities-projects/.54“RenewableMethanolReport,”MethanolInstitute.55Theterms“saturated”and“unsaturated”hydrocarbonsrefertothenumberofhydrogenatomsattachedtoeachcarbonatom.Saturatedhydrocarbonshavethemaximumnumberofhydrogenatoms,whileunsaturatedhydrocarbonshavelessthanthemaximumnumber,withdoubleortriplebondsbetweencarbonatomsinsteadofadditionalatomsofhydrogen.Doubleandtriplebondsaregenerallylessstableandallowolefinstobereadilytransformedintomanyproducts.56“TheFutureofPetrochemicals:Towardsmoresustainableplasticsandfertilisers,”InternationalEnergyAgency.57PeterR.PujadóandMarkMoser,“Catalyticreforming,”inHandbookofPetroleumProcessing,eds.DavidS.J.JonesandPeterR.Pujadó(Dordrecht,TheNetherlands:Springer,2008),217-237,https://doi.org/10.1007/1-4020-2820-2_5.58“TheFutureofPetrochemicals:Towardsmoresustainableplasticsandfertilisers,”InternationalEnergyAgency.59AlexScott,“Europeanchemicalmakersplan‘crackerofthefuture,’”ChemicalandEngineeringNews97,no.35(September4,2019),https://cen.acs.org/business/petrochemicals/European-chemical-makers-plan-cracker/97/i35.60“Total:The‘crackerofthefuture’consortium,”OilandGasClimateInitiative,https://oilandgasclimateinitiative.com/knowledge-base/total-petrochemical-case-study/.61BrianPublicover,“SolarandwindgenerationoutpacedcoalinEuropelastyear,”pvmagazine,February7,2020,https://www.pv-magazine.com/2020/02/07/solar-and-wind-generation-outpaced-coal-in-europe-last-year/.62RobertTuttle,“Massiverefinersareturningintobiofuelplantsinthewest,”BloombergGreen,August12,2020,https://www.bloomberg.com/news/articles/2020-08-12/phillips-66-is-latest-refiner-to-shun-crude-oil-in-favor-of-fat.63“EnergyTransition:Totalisinvestingmorethan€500milliontoconvertitsGrandpuitsRefineryintoazero-crudeplatformforbiofuelsandbioplastics,”Total,September24,2020,https://www.total.com/media/news/actualites/energy-transition-total-is-investing-more-than-eu500-million-to-convert-its.64“TheFutureofPetrochemicals:Towardsmoresustainableplasticsandfertilisers,”InternationalEnergyAgency.65Ibid.66AlexanderH.Tullo,“Plastichasaproblem;ischemicalrecyclingthesolution?”ChemicalandEngineeringNews97,no.39(October6,2019),https://cen.acs.org/environment/recycling/Plastic-problem-chemical-recycling-solution/97/i39.67DavidA.Turner,IanD.Williams,andSimonKemp,“Greenhousegasemissionfactorsforrecyclingofsource-segregatedwastematerials,”Resources,ConservationandRecycling105,PartA(December2015):186-197,https://doi.org/10.1016/j.resconrec.2015.10.026.68AlexanderH.Tullo,“Plastichasaproblem.”69Ibid.70“Explorationchemicalrecycling–Extendedsummary:WhatisthepotentialcontributionofchemicalrecyclingtoDutchclimatepolicy?”(Delft,Netherlands:CEDelft,January2020),https://cedelft.eu/wp-content/uploads/sites/2/2021/03/CE_Delft_2P22_Exploration_chemical_recycling_Extended_summary.pdf.Numberscalculatedbyauthorfromdatainstudy.71VenkatPattabathulaandJimRichardson,“IntroductiontoAmmoniaProduction,”(NewYork:AmericanInstituteofChemicalEngineers,September2016),https://www.aiche.org/resources/publications/cep/2016/september/introduction-ammonia-production.72LeighKrietschBoerner,“IndustrialammoniaproductionemitsmoreCO2thananyotherchemical-makingreaction.Chemistswanttochangethat,”ChemicalandEngineeringNews97,no.24(June15,2019),https://cen.acs.org/environment/green-chemistry/Industrial-ammonia-production-emits-CO2/97/i24.73“Ammonia:zero-carbonfertiliser,fuelandenergystore,”(London:TheRoyalSociety,February19,2020),https://royalsociety.org/topics-policy/projects/low-carbon-energy-programme/green-ammonia/.74VenkatPattabathulaandJimRichardson,“IntroductiontoAmmoniaProduction.”75Ibid.76“MonolithMaterialsPlanstoBuildCountry’sFirstLargeScaleCarbon-FreeAmmoniaPlant,”MonolithMaterials,October6,2020,https://monolithmaterials.com/news/monolith-materials-carbon-free-ammonia-plant.77TakeoKumagai,“SaudiArabiashipsmaidenblueammoniatoJapanforzero-carbonemissionpowergeneration,”S&PGlobalPlatts,September28,2020,https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/092820-saudi-arabia-ships-maiden-blue-ammonia-to-japan-for-zero-carbon-emission-power-generation.78Asummaryofammonia’suseasafuelcanbefoundhere:AlexanderH.Tullo,“Isammoniathefuelofthefuture?”ChemicalandEngineeringNews99,no8(March8,2021),https://cen.acs.org/business/petrochemicals/ammonia-fuel-future/99/i8.79“TransformingIndustrythroughCCUS,”InternationalEnergyAgency.80RaimundMalischek,“CCUSinIndustryandTransformation,”(Paris:InternationalEnergyAgency,June2020),https://www.iea.org/reports/ccus-in-industry-and-transformation.81“ClimateChange2014:SynthesisReport.InContributionofWorkingGroupsI,IIandIIItotheFifthAssessmentReportoftheIntergovernmentalPanelonClimateChange,”(Geneva:IntergovernmentalPanelonClimateChange,2014),https://www.ipcc.ch/site/assets/uploads/2018/05/SYR_AR5_FINAL_full_wcover.pdf.82LorraineWhitmarsh,DimitriosXenias,andChristopherR.Jones,“Framingeffectsonpublicsupportforcarboncaptureandstorage,”PalgraveCommunications5,no.17(February19,2019),https://doi.org/10.1057/s41599-019-0217-x.83Ibid.84D.Leeson,N.MacDowell,N.Shah,C.Petit,andP.S.Fennell,“ATechno-economicanalysisandsystematicreviewofcarboncaptureandstorage(CCS)appliedtotheironandsteel,cement,oilrefiningandpulpandpaperindustries,aswellasotherhighpuritysources.”85DipakSakaria,“Casestudy:AlReyadahCCUSproject,”(AbuDhabi:CarbonSequestrationLeadershipForumMay2,2017),https://www.cslforum.org/cslf/sites/default/files/documents/AbuDhabi2017/AbuDhabi17-TW-Sakaria-Session2.pdf.86Ibid.87AntonioPerejón,LuisM.Romeo,YolandaLara,PilarLisbona,AnaMartínez,andJoseManuelValverde,“TheCalcium-LoopingtechnologyforCO2capture:Ontheimportantrolesofenergyintegrationandsorbentbehavior,”AppliedEnergy162(January15,2016):787-807,https://doi.org/10.1016/j.apenergy.2015.10.121.88MarcoAstolfi,EdoardoDeLena,andMatteoC.Romano,“ImprovedflexibilityandeconomicsofCalciumLoopingpowerplantsbythermochemicalenergystorage,”InternationalJournalofGreenhouseGasControl83,(April2019):140-155,https://doi.org/10.1016/j.ijggc.2019.01.023.89SamanthaGross,“Whyarefossilfuelssohardtoquit?”(Washington,DC:TheBrookingsInstitution,June8,2020),https://www.brookings.edu/essay/why-are-fossil-fuels-so-hard-to-quit/.90ElieBellevratandKiraWest,“Cleanandefficientheatforindustry,”InternationalEnergyAgency,January23,2018,https://www.iea.org/commentaries/clean-and-efficient-heat-for-industry.91KeithLovegrove,DaniAlexander,RomanBader,StephenEdwards,MichaelLord,AhmadMojiri,JayRutovitz,HughSaddler,CameronStanley,KaliUrkalan,andMurielWatt,“Renewableenergyoptionsforindustrialprocessheat,”(Canberra:AustralianRenewableEnergyAgency,November2019),https://arena.gov.au/knowledge-bank/renewable-energy-options-for-industrial-process-heat/.92Ibid.93“SolarHeatforIndustrialProcesses,”(Paris:InternationalRenewableEnergyAgencyandInternationalEnergyAgencyEnergyTechnologySystemsAnalysisProgram,January2015),http://www.inship.eu/docs/sh5.pdf.94RiccardoBattisti,“ConcentratingSolarThermalforHigh-TemperatureSolarProcessHeat,”solarthermalworld.org,September23,2017,https://www.solarthermalworld.org/news/concentrating-solar-thermal-high-temperature-solar-process-heat.95JonathanTirone,“Atomicheatinsmallpackagesgivesbigindustryaclimateoption,”BloombergGreen,December4,2020,https://www.bloomberg.com/news/articles/2020-12-05/nuclear-power-in-energy-transition-small-modular-reactors-challenge-natural-gas.96NeilFord,“Rapidscalingofelectrolyzersaccelerateswindhydrogensavings,”ReutersEvents,June17,2020,https://www.reutersevents.com/renewables/wind/rapid-scaling-electrolyzers-accelerates-wind-hydrogen-savings.97ChristopherM.MatthewsandKatherineBlunt,“GreenhydrogenplantinSaudidesertaimstoampupcleanpower,”TheWallStreetJournal,February8,2021,https://www.wsj.com/articles/green-hydrogen-plant-in-saudi-desert-aims-to-amp-up-clean-power-11612807226.98ThomasKochBlank,“TheDisruptivePotentialofGreenSteel.”99“2020WorldSteelinFigures,”(Brussels:WorldSteelAssociation,April30,2020),https://www.worldsteel.org/en/dam/jcr:f7982217-cfde-4fdc-8ba0-795ed807f513/.100“EnergyTechnologyPerspectives2020,”InternationalEnergyAgency.101“Importsofsemi-finishedandfinishedsteelproducts,”WorldSteelAssociation,https://www.worldsteel.org/steel-by-topic/statistics/steel-data-viewer_new/T_imports_sf_f_total_pub/USA/DEU.102AmyEbben,“U.S.SteelMarketUpdate,”ArcelorMittalUSA,December13,2019,https://www.chicagofed.org/~/media/others/events/2019/economic-outlook-symposium/ebben-steel-industry-outlook-pdf.pdf.103EdZarenski,“SteelStatisticsandSteelCostIncreaseAffectonConstruction?”ConstructionAnalytics,March2018,https://edzarenski.com/2016/09/18/steel-statistics-and-steel-cost-increase-affect-on-construction-02-19/.104Ibid.105Ibid.106“SteelinAutomotive,”WorldSteelAssociation,2020,https://www.worldsteel.org/steel-by-topic/steel-markets/automotive.html.107“EnergyTechnologyPerspectives2020,”InternationalEnergyAgency.108“TheFutureofPetrochemicals:Towardsmoresustainableplasticsandfertilisers,”InternationalEnergyAgency.109SusanneDroegeandCarolynFischer,“PricingCarbonattheBorder:KeyQuestionsfortheEU,”(Munich:ifoInstitute,Spring2020),https://www.ifo.de/DocDL/ifo-dice-2020-1-Fischer-Droege-Pricing-Carbon-at-the-Border-Key-Questions-for-the-EU-spring.pdf.110AlanKrupnik,“GreenPublicProcurementforNaturalGas,Cement,andSteel,”(Washington,DC:ResourcesfortheFuture,November2020),https://www.rff.org/publications/reports/green-public-procurement-natural-gas-cement-and-steel/.111CementPlants,CaliforniaAssemblyBill966(February19,2021),https://trackbill.com/bill/california-assembly-bill-966-cement-plants/1699393/.112Relatesto“TheNewYorkStateLowEmbodiedCarbonConcreteLeadershipAct,”NewYorkSenateBillS8965(September4,2020),https://www.nysenate.gov/legislation/bills/2019/s8965.113“EnergyTechnologyPerspectives2020,”InternationalEnergyAgency.114Ibid.115Ibid.ForeignPolicyatBrookings29TheBrookingsInstitutionisanonprofitorganizationdevotedtoindependentresearchandpolicysolutions.Itsmissionistoconducthigh-quality,independentresearchand,basedonthatresearch,toprovideinnovative,practicalrecommendationsforpolicymakersandthepublic.TheconclusionsandrecommendationsofanyBrookingspublicationaresolelythoseofitsauthor(s),anddonotreflecttheviewsoftheInstitution,itsmanagement,oritsotherscholars.ABOUTTHEAUTHORSamanthaGrossisafellowanddirectoroftheEnergySecurityandClimateInitiativeatBrookings.Herworkisfocusedontheintersectionofenergy,environment,andpolicy.ShehasbeenavisitingfellowattheKingAbdullahPetroleumStudiesandResearchCenter,andwasdirectoroftheOfficeofInternationalClimateandCleanEnergyattheU.S.DepartmentofEnergy,directingU.S.activitiesundertheCleanEnergyMinisterial.PriortohertimeattheDepartmentofEnergy,GrosswasdirectorofintegratedresearchatIHSCERA.ShehasalsoworkedattheGovernmentAccountabilityOfficeandasanengineerdirectingenvironmentalassessmentandremediationprojects.GrossholdsaBachelorofScienceinchemicalengineeringfromtheUniversityofIllinois,aMasterofScienceinenvironmentalengineeringfromStanford,andaMasterofBusinessAdministrationfromtheUniversityofCaliforniaatBerkeley.ACKNOWLEDGEMENTSJennPerronprovidedresearchsupport,TedReinertandCarolineKlaffeditedthispaper,andRachelSlatteryprovidedlayout.TheBrookingsInstitution1775MassachusettsAve.,NWWashington,D.C.20036brookings.edu
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