Energy use and carbon dioxide emissions in energy-intensive industries in key developing countries

The industrial sector is the most important end-use sector in developing countries in terms of energy use and was responsible for 50% of primary energy use and 53% of associated carbon dioxide emissions in 1995 (Price et al., 1999). The industrial sector is extremely diverse, encompassing the extraction of natural resources, conversion of these resources into raw materials, and manufacture of finished products. Five energy-intensive industrial subsectors account for the bulk of industrial energy use and related carbon dioxide emissions: iron and steel, chemicals, petroleum refining, pulp and paper, and cement.

In this paper, we focus on the steel and cement sectors in Brazil, China, India, and Mexico. We review historical trends, noting that China became the world's largest producer of cement in 1985 and of steel in 1996. We discuss trends that influence energy consumption, such as the amount of additives in cement (illustrated through the clinker/cement ratio), the share of electric arc furnaces, and the level of adoption of continuous casting.

To gauge the potential for improvement in production of steel and cement in these countries, we calculate a "best practice" intensity based on use of international best practice technology to produce the mix of products manufactured in each country in 1995. We show that Brazil has the lowest potential for improvement in both sectors. In contrast, there is significant potential for improvement in Mexico, India, and especially China, where adoption of best practice technologies could reduce energy use and carbon dioxide emissions from steel production by 50% and cement production by 37%.

We conclude by comparing the identified potential for energy efficiency improvement and carbon dioxide emissions reduction in these key developing countries to that of the U.S. This comparison raises interesting questions related to efforts to improve energy efficiency in developing countries, such as: what is the appropriate role of industrialized countries in promoting the adoption of low carbon technologies, how do international steel and cement companies influence the situation, and how can such information be used in the context of Clean Development Mechanism in the Kyoto Protocol?