Industrial emissions poised to become largest U.S. carbon source 

Washington D.C. Correspondent
Source: Rhodium Group, Taking Stock 2024 • Industrial emissions arise from production and use of fossil fuels on site and exclude indirect emissions from electric power purchased by industry. Values are drawn from Rhodium's 'mid-emissions scenario," which assumes cost declines for clean energy technologies, fossil fuel prices consistent with historical trends and Congressional Budget Office projections for economic growth.

The industrial sector is slated to become the largest source of greenhouse gas emissions in the United States over the next decade, owing to the slow pace of clean technology deployment in the sector and an increase in oil and gas production, according to new data from the Rhodium Group shared exclusively with Cipher.

The U.S. goal of halving its greenhouse gas emissions by 2030 will remain challenging if industrial-sector emissions, which currently account for a quarter of the nation’s emissions, cannot be curbed.

Published on July 23, Rhodium’s Taking Stock 2024 report projects industrial emissions will surpass the transportation sector as the country’s largest source of carbon emissions by 2033.

“We find the industrial sector playing an ever-larger role in U.S. emissions in 2030 and beyond as decarbonization solutions are rolled out much more slowly compared to power and transportation,” Ben King, associate director on Rhodium Group’s U.S Energy Team, told Cipher.

In the power and transportation sectors, large-scale deployment of solar panels and electric vehicles has been ramping up for years, due to tax credits, declining costs and compliance with federal regulations, according to a May report from Rhodium.

While Rhodium expects power and transportation emissions to decline through 2035, the group predicts industrial emissions will remain nearly flat and therefore make up an increasing portion of declining total emissions.

The industrial sector is “not monolithic,” Rhodium said in the report, and is comprised of at least half a dozen carbon-intensive industries. Of these, the oil and gas sector is the only one facing federal methane reduction rules and is projected to show a 12 to 28% decline in emissions in 2035, despite persistently higher oil and gas production levels.

In contrast, emissions from five other major industries — chemical production, mining, cement manufacturing, iron and steel production and food production — are projected to rise 6% by 2035.

The 2022 Inflation Reduction Act’s tax credits for carbon capture and storage and clean hydrogen are insufficient on their own to significantly reduce industrial emissions, according to Rhodium.

“A broader range of technological solutions and policies is necessary for meaningful decarbonization,” King said.