A Roadmap for Industrial Decarbonization in Pennsylvania

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Across the United States, progress is accelerating toward economy-wide decarbonization. The establishment of federal emissions reduction targets, coupled with the passage of major pieces of legislation to advance decarbonization, mark historic steps toward addressing climate change. Still, significant hurdles remain to meeting both near-term and mid-century climate goals. These obstacles are particularly acute in the industrial sector. Compared to other economic sectors, such as power or buildings, industry is conventionally considered “difficult to decarbonize,” and progress toward decarbonization has been accordingly slower. The challenges in decarbonizing the industrial sector stem from a range of factors, including the diversity of industrial processes, the need for high temperature heat to drive many processes, greenhouse gas (GHG) emissions released as byproducts of industrial processes, and growing demand for many industrial products.

In Pennsylvania, the industrial sector has been a central economic driver for more than a century, producing critical goods, including steel, cement, and glass, that helped build and grow the modern U.S. economy. Today, manufacturing contributes more than $113 billion in state domestic product and provides 11% of the commonwealth’s jobs. This significant manufacturing footprint means that industry is responsible for one-third of Pennsylvania’s GHG emissions, the largest-emitting sector in the commonwealth’s economy. While state policies, research and demonstration projects, and other ongoing efforts will help move Pennsylvania toward its goal of reducing economy-wide GHG emissions 80% below 2005 levels by 2050, emissions from the industrial sector are still projected to increase in the future, absent further actions.

To chart a path toward Pennsylvania’s goals, Strategen developed an industrial decarbonization roadmap through 2050. This pathway addresses emissions from all industrial subsectors, including fossil fuel extraction and delivery, iron and steel, minerals (e.g., cement, lime), chemicals, and refining, among others. To address emissions from these sectors, the roadmap explores the role of five major decarbonization levers: energy efficiency, material efficiency, electrification, fuel switching, and carbon capture and storage. In some circumstances, production ramp-downs and facility and equipment retirements have also been considered. Pursuing the decarbonization pathways outlined in this report would reduce carbon dioxide equivalent (CO2e) emissions from 2019 baseline levels by 18.2 million metric tons (MMT) by 2030 and 72.6 MMT by 2050, resulting in an 84% reduction (see Figure 1). Across all subsectors, transitioning from fossil fuel combustion to electrification enables roughly half of the total emissions reductions, followed by efficiency, carbon capture, and fuel switching.

Figure 1: Pennsylvania Industrial Decarbonization Pathway, by decarbonization lever

As shown in Figure 2, the subsectors contributing the most to overall emissions reductions are fossil fuel extraction and delivery, low heat subsectors, and metals, which includes iron and steel.

Figure 2: Pennsylvania Industrial Decarbonization Pathway, by industrial subsector

Strategen’s roadmap would require $34.6 billion in unsubsidized implementation expenditures across all subsectors by 2050; incorporating federal tax credits for carbon capture lowers the cost to $33.7 billion. While this is a massive investment, it would also result in significant societal benefits through avoided GHG emissions, reaching $14 billion in savings annually by 2050, compared to a business-as-usual scenario. This decarbonization pathway also offers the potential for major health and equity improvements in Pennsylvania by sharply reducing the emission of local pollutants from fossil fuel usage in the industrial sector, which have a disproportionate impact on fenceline communities. Industrial decarbonization can be a local economic driver as well, while serving to maintain the competitiveness of Pennsylvania industries in global and national economies that are increasingly factoring environmental and sustainability attributes into the marketplace.

Successfully decarbonizing Pennsylvania’s industrial sector, while achieving the potential benefits outlined above, necessitates proactive measures by both state government and industry. The following complementary actions can enable and accelerate progress toward decarbonization:

  • Maximize energy efficiency investments in industry to reduce the need for more costly decarbonization solutions.
  • Accelerate the decarbonization of Pennsylvania’s power sector to enable economy-wide emissions reductions.
  • Explore options for an economy-wide carbon pricing mechanism, drawing on examples from other states.
  • Continue to detail strategies to decarbonize Pennsylvania’s industrial sector in the next Climate Action Plan based on lessons learned from other states.
  • Evaluate and take advantage of federal funding opportunities and incentives for technologies that are expected to become cost effective and sustainable at scale.
  • Pursue community and worker engagement, and benefits planning for decarbonization projects and policies.
  • Invest in training and job placement programs that can develop new workers and channel existing skillsets to growth industries.
  • Explore options for state procurement of low-carbon industrial products to foster demand and in-state economic growth.

While decarbonizing Pennsylvania’s industrial sector will be no small task, doing so will be critical to achieving both state and national climate targets. The commonwealth, as well as the communities and companies within it, all stand to gain significantly from proactive investments in industrial decarbonization.