Policy Solutions


How We Make Things

Manufacturing—the cement in our buildings and bridges, the steel in our cars and appliances, the clothes we wear, the books we read, the plastic toys and containers we buy, refining the gas we put in our cars—directly accounted for nearly 26 percent of greenhouse gas (GHG) emissions in the U.S. in 2018, making it the nation’s third largest source after transportation and power generation.

(That number includes emissions from the production, transportation, and transformation of oil and gas, but not from the combustion of those fuels in buildings, power plants, and vehicles. It also excludes emissions associated with the generation of electricity used in industrial processes.)

Adding the emissions associated with electricity use in the manufacturing sector increases its emissions share to 29 percent of the U.S. total, essentially tied with transportation as the largest-emitting sector in the economy. These emissions come from using energy to generate heat, electricity, and steam, drive machines, and from chemical reactions that are the basis for how we manufacture goods today.

To get our industrial sector to net-zero emissions, policy action needs to encourage the development and deployment of new technologies. Currently, low-GHG technological options in this sector are lagging in deployment compared to electricity, buildings or transportation, and there are fewer existing policy levers. Fortunately, more opportunities are emerging to decarbonize manufacturing —including electrifying industrial processes that currently use fossil fuels, developing low-GHG alternatives to fuels where electrification isn’t cost-effective, increasing energy and material efficiency, deploying carbon capture technologies, and reducing methane emissions from the production and transportation of oil and gas.

Manufacturing Policy Focus Areas

  • Electrification
    A primary source of emissions in the manufacturing sector is the fossil-fuel combustion used to create the heat for industrial processes. New heat pumps, boilers, and furnaces powered by clean electricity can provide a low or zero-emissions alternative to these existing fossil-fueled heat sources.
  • Low-Carbon Fuels
    Where manufacturing requires very high temperatures, biofuels, hydrogen, and other electrofuels have the potential to replace conventional fossil-derived fuels. We need policies that drive investment in, and reduce the cost of, low-GHG fuels like these until they are commercially competitive at scale.
  • Energy & Material Efficiency
    Efficient manufacturing, which takes less energy to make the same product, reduces GHG emissions on a per-unit basis. Strategies for increasing manufacturing efficiency include replacing old equipment and using smart energy-management systems to turn equipment down or off when it isn’t in use.
  • Carbon Capture
    To limit emissions, manufacturing facilities can install technology that captures carbon dioxide before it is released into the atmosphere. This captured carbon can be stored underground or used for other products. But for carbon capture to make a real difference, durable public policies must encourage companies to invest in and deploy the necessary equipment at scale.
  • Oil & Gas Methane
    In 2018, oil and gas was the largest single source of methane in this sector: it represents more than 15 percent of total manufacturing emissions. Technologies to detect and prevent methane leaks can dramatically reduce emissions, especially when combined with best practices, high-performance equipment, and smart policies that protect air quality and community health.