Sector Overview
Best Practice Network: Institute for Industrial Productivity
Sector Overview
Under business-as-usual models, emissions from the smokestacks that rise above the world’s steel mills, cement plants, and other factories—and the power plants that fuel them—will increase 60 percent to a projected 18.4 billion tons by 2030. Factories are built to last, so inefficient designs constructed today will “lock in” unnecessarily high emissions for decades to come. One-third of industrial emissions come from the generation of electricity for industrial use, so the sector can also exacerbate lock-in in the power sector by boosting demand for new coal-fired power plants.
The industrial sector must therefore overcome steep costs and technological barriers, but dramatic progress can be made through reforms and smart policies that steer capital toward cleaner technologies. The most-efficient cement plants, for example, use half as much energy as the least-efficient ones. And major industrial emitters often have a strong financial incentive to conserve power. According to ClimateWorks’ analysis, the industry sector as a whole has the second-highest potential to reduce CO2 emissions, after the power sector.
To achieve these reductions, ClimateWorks and its grantees work with government agencies and industry leaders to implement energy-management targets, as well as to design new equipment standards and achieve power sector reform that will reduce overall industrial emissions. These approaches can help steer capital toward cleaner technologies and practices.
The ClimateWorks Network supports a number of proven policies and approaches, including national industrial energy efficiency targets; policies that promote best practices and alleviate financial barriers; efficiency standards for equipment such as motors and pumps; and demand-side management policies that further reduce energy waste, such as rebates for the purchase of more efficient equipment.
Institute for Industrial Productivity
The Institute for Industrial Productivity (IIP) focuses on design, implementation, and enforcement of policies to promote energy efficiency, cogeneration, and reduced process emissions in the industrial sector. The IIP aims to disseminate low-carbon practices while improving companies’ competitiveness and productivity.
IIP will serve as a hub for information on global best practices, as well as a source for direct, expert assistance with economic analysis, technical research, efficient industrial processes, and energy management. Specifically, IIP will offer policy assistance, financial expertise, technical support, and dissemination of best practices. It will focus on energy- and carbon-intensive industries (e.g. cement, iron, and steel), and on policies that reduce the energy intensity of “universal” equipment used in all manufacturing sectors. IIP works in China, India, the United States, and Europe. IIP has offices in Paris and Washington D.C. and has staff based in New Delhi and Beijing.
The Institute for Industrial Productivity also works closely with other ClimateWorks Network organizations in the regions that provide the greatest potential to reduce greenhouse gas emissions.
Country Cost Curve
Industry
Key Policies
Industrial efficiency standards can encourage investments in equipment upgrades and other energy-efficiency improvements.
Mandatory or voluntary efficiency targets can be set at the national level to reduce the energy use or greenhouse gas emissions of entire facilities.
Industrial equipment efficiency standards can specify a maximum level of energy use for motors, pumps, and other commonly used equipment.
Complementary policies can boost the central policies’ effectiveness and alleviate financial, information, or research and development barriers. These policies include energy management training and certification, enforcement protocols, and benchmarking manuals.
News & Reports
Gaining through saving »
Jointly produced by the International Energy Agency and the Institute for Industrial Productivity, this report defines a policy pathway and outlines the critical steps for policy makers implementing energy management programmes for industry. Organized into four phases--plan, implement, monitor, and evaluate--the approach is highlighted through case studies in Ireland, Sweden, Denmark, Australia, and the E.U.
Designing great industrial efficiency policies »
In this paper from the Institute for Industrial Productivity, policy packages for industrial energy efficiency in China, India, Japan, the Netherlands, the United Kingdom, and the United States are presented according to the IIP Policy Pyramid. The report outlines five steps for effective policy making and sharing best practices, showing how these policies lead to energy savings in industrial activities, and how they can be replicated.
China slashes energy use, carbon emissions with industrial efficiency (video) »
Four years ago, the Chinese government adopted aggressive targets to improve energy efficiency in the industrial facilities responsible for most of China's energy use and carbon emissions. In the fall of 2009, ClimateWorks met with provincial leaders and technical experts in Shandong Province to learn how these industrial efficiency targets are being implemented in the 1,000 largest factories in China, which collectively consume one-third of all the energy in the country.