Industrial

The U.S. industrial sector consumes more total energy than any other end-use sector, and is responsible for 24% of total U.S. greenhouse gas emissions.1 It was also responsible for slightly more than 23% of the U.S. gross domestic product in 2021.2 As a result, this sector is a natural space to invest in energy efficiency; from 1980 to 2021, the industry halved energy intensity, while more than doubling value added. Energy efficiency contributed to this trend, with the deployment of innovative industrial processes, smart manufacturing, strategic energy management, and other strategies.3

The carbon intensity (carbon emissions per value of output) from the industrial sector has steadily declined over the last five decades. Between 1980 and 2021, industrial carbon intensity has fallen by 70%. This decline is due to various factors, including energy efficiency, a shift to producing higher-value goods, and changes in energy source. However, this progress has slowed in the last decade or so.

Manufacturing makes up roughly 80% of industrial emissions, while non-manufacturing subsectors of construction, mining, and agriculture make up the balance of industrial emissions.

Combined heat and power (CHP) technologies are accompanied by significant efficiency gains: where separate systems to provide heat and electricity may reach 50% energy efficiency, CHP can often reach 75% efficiency. Most CHP installations are used for industrial applications, such as chemicals, refining, paper, primary metals, food processing, and other industrial processes, and natural gas is the most common CHP fuel, accounting for approximately 70% of U.S. CHP capacity in 2021.4, 5, 6 However, a wide variety of other commercial institutions are estimated to have significant untapped technical potential, collectively adding up to over 30 GW of potential capacity. 7 The total electrical capacity of CHP generation has remained largely constant from 2009 to 2020, though the number of sites has increased by approximately 27% over the same time period, largely driven by minor decreases in larger industrial installations, and increases in smaller commercial installations.

Industry accounts for more than 25% of U.S. energy use and greenhouse gas (GHG) emissions. Reducing this energy use through proven, cost-effective energy management techniques will improve the competitiveness of firms, helping maintain well-paying jobs in manufacturing. In order to reach long-term GHG reduction goals, it is vital that industrial emissions decline significantly. Energy management can deliver near- and longer-term reductions with low capital cost and can provide a host of energy and non-energy benefits.

While over 131,000 manufacturing establishments use energy efficiency as part of their purchasing decisions, fewer have taken specific steps to improve efficiency, such as establishing baseline energy use, conducting audits to identify opportunities, or setting energy consumption goals. However, nearly 20% of establishments identified that energy consumption is becoming a higher priority. ENERGY STAR® is the most common program for those who participate in some sort of energy management program.

ISO 50001 is an internationally recognized voluntary standard to support continuously-improving energy performance. DOE’s 50001 Ready is a simpler, self-guided energy management program. Facilities that have been certified to ISO 50001 and can demonstrate improved energy performance are eligible to be certified to DOE’s Superior Energy Performance (SEP) program. SEP-certified facilities have improved energy performance 4.6% annually, on average, through mostly (75%) no/low cost operational improvements.8 While the early adopters of ISO 50001 are realizing significant savings, there is enormous market potential for ISO 50001 to grow. Internationally, it is estimated that full ISO 50001 implementation could drive a cumulative energy savings of 59 quads, over $600 billion in energy costs, and avoid 6,500 Mt of carbon dioxide emissions to 2030.9

The Better Plants Program’s 250+ partners make up 14% of the U.S. manufacturing energy footprint, span a diverse set of subsectors, and have already saved a cumulative 1.9 quads since the program’s inception.10 The number of Better Plants participants has steadily increased since 2014, with a slower growth as a share of manufacturing energy footprint.

In 2020 alone, the ENERGY STAR® program for industrial plants helped businesses save 30 billion kilowatt-hours of electricity (roughly 3% of all industrial electric use in that year),11 avoid $2 billion in energy costs, and achieve 30 million metric tons of greenhouse gas reductions by partnering with hundreds of companies to deploy ENERGY STAR® strategic energy management (SEM) resources to develop an organizational culture on continuous improvement of energy performance. EPA has convened 33 “Industrial Sector Focuses” to collaborate and develop industry-specific resources. Between 2000 and 2021, associated cumulative savings were 417 TWh of electricity and more than 4 quads of primary fuel savings.

ENERGY STAR® will continue to deliver industrial savings. In 2021, 93 new plants earned the ENERGY STAR® certification—earning above an ENERGY STAR® score of 75 out of 100—and another 28 industrial plants committed to reduce their energy use by 10% over 5 years.12