Electrify industry

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The industry sector is highly energy intensive, as many processes are reliant on heat. Sourcing this energy from electricity, particularly renewable sources, can substantially mitigate greenhouse gas emissions.

The industry sector is highly energy intensive, mainly because many industrial processes are reliant on heat. Direct greenhouse gas (GHG) emissions from fossil fuel combustion in industry generated 6.5 gigatonnes of carbon dioxide equivalent (GtCO2e) in 2023. But by sourcing that energy from electricity, which can be generated from renewable sources, GHG emissions can be substantially mitigated.

To achieve our climate goals, we need to move quickly to electrify industrial energy generation and decarbonize the power supply. Because the electrification of industrial heat does not yield energy efficiency gains, electrification only makes sense when it’s coupled with the decarbonization of the power supply. However, the promotion of electrification at an early stage can reduce the risk of locking in fossil fuel-based heating technologies, even when the power supply is not yet decarbonized.

Technologies to electrify low- and medium-temperature heat are already commercialized

Most electrification in industry has focused on non-heating machinery such as pumps, robotic arms and conveyor belts, but generating low- and medium-temperature heat (up to 1000 degrees C, or 1832 degrees F) electrically is commercially feasible, and the electrification of heat generation holds significant potential for decreased emissions. Existing technologies could electrify almost half of the energy use in the industry sector today.

Some of the main barriers to electrification are economic — namely, the price of fuel and the capital cost of equipment. Switching to electric power makes economic sense when electricity is cheaper than the fuel used in conventional equipment, but this is currently not the case in most places.

This being said, the declining cost of renewable electricity, a price on carbon and/or removal of fossil fuel subsidies, and research and development to improve the energy efficiency of electrical equipment could enable a shift to widespread electrification throughout the industry sector.

Accelerated technical development and commercialization is needed to electrify high-temperature heat

A separate challenge is electrifying high-heat processes (above 1000 degrees C, or 1832 degrees F). Although this is technically possible, it will require increased efforts in technological development, pilots and demonstrations, as well as considerable investment and policy support.

Other approaches are possible. For instance, industrial thermal batteries running on clean electricity can provide heat for industry and novel electricity-based technologies could reduce the need for high-temperature heat in steel production. Sustainable biomass and other low-carbon fuels could be sources for high-temperature heat. However, these resources are limited in supply, meaning that electrification will remain an important part of decarbonization.

5 Shifts Needed to Decarbonize Industry

Discover how achieving net-zero emissions from industry is possible through emissions reductions from manufacturing processes, lower demand for conventionally produced materials and their replacement with low-carbon products, and more.

Tracking progress on global outcomes

2204: Electricity in the industry sector's final energy demand

Status: Well Off Track

Historical Data Methodology and Challenges:

Data is behind the IEA paywall.

Target Methodology:

We adopted targets for the share of electricity in the industrial sector’s final energy demand from CAT (2025), which employed a top-down approach to establishing near- and long-term targets for this indicator. CAT (2025) identified modelled pathways that limit global temperature rise to 1.5°C from IPCC (2022) and then filtered them, following the criteria:

Scenarios were published in or after 2018;
Scenarios have good regional resolution;
BECCS deployment is restricted to an average of 5 GtCO2/yr from 2040 to 2060, and carbon removal from afforestation and reforestation is limited to an average of 3.6 GtCO2/yr from 2040 to 2060 and to an average of 4.4 GtCO2/yr from 2050 to 2100;
Scenarios are consistent with achieving net-zero greenhouse gas (GHG) emissions in the second half of the century, as stated in Article 4.1 of the Paris Agreement.

The median from this filtered set of 24 scenarios formed the less ambitious bound of the target range, while the 95th percentile served as the more ambitious bound. Insufficient data, as well as limited peer-reviewed literature on bottom-up, sectoral modelling of industrial decarbonization consistent with achieving the Paris Agreement temperature goal, prevented CAT (2025) from integrating additional sources into this target-setting exercise. Instead, CAT exclusively relied on the range from these 24 scenarios to establish 1.5°C-compatible targets for industrial electrification.

S-Curve Trajectory:

Though the historical trend of this indicator is linear, the future growth rate could possibly take an exponential form. That is because future electrification of the industry sector will require both already-available and novel technologies such as electric cement kilns.

Many current industrial processes are highly dependent on fossil fuels. Shifting to electric technologies can reduce this reliance and limit energy-related emissions from industry.

The share of electricity in the industry sector’s final energy demand grew from about 29% to 30% between 2019 and 2023. If the trend continues, the global electrification rate will be off track to achieve the near term-target of 35%-43% by 2030. To reach the midpoint of the 2030 target, this rate of change will need to accelerate more than fivefold, from the current 0.3% to 1.3%.

In industrial subsectors that use low- and medium-temperature heat, electrification with zero-carbon electricity to replace fossil fuel combustion is key to enhancing the share of electricity. Narrowing the difference in operational costs between providing heat with electricity and with fossil fuels — such as through tax exemptions and cross subsidies — is critical to making the electrification of heat economical.

2205: Electrification of low- and medium-temperature heat

Status: Insufficient Data

S-Curve Trajectory:

Changes in this indicator are affected by the advancements of other indicators which have the potential to change at a nonlinear rate, such as the price of clean electricity.

Although the technologies for the electrification of high-temperature heat processes are still under development, low- and medium-temperature heat electrification technologies already exist and could be commercially adopted.

Historically, electrification in the industry sector has targeted non-heating industrial operations, including machinery such as pumps, robotic arms and conveyor belts. This has allowed the rate of electrification to grow at a steady pace. But there is room for greater electrification in the near term, because only a small share of low- to medium-temperature heat has been electrified to date.

Due to the lack of data and appropriate Paris Agreement-compatible targets, we cannot calculate an acceleration factor or evaluate whether or not this indicator is on track.

Key enablers and barriers to change

2092: Countries with policies supporting electrification in industry

The electrification of industrial energy demand requires companies to invest in existing technologies and in the development of new ones. Though technologies for the electrification of low- and medium-temperature heat are already available, new technologies for the electrification of high-temperature heat still need to be developed.

This transition entails additional costs unless the old technology stock has reached the end of its operational lifetime. Therefore, policies supporting earlier adoption of electric technologies can speed up the transition, and policies that encourage faster development of new technology can bring down the costs of transition since companies can align the shift to new technology with the end of life of old technology. There is currently no comprehensive data available on this indicator.

2093: Demonstrations, pilots and patents for commercializing technology to electrify high-temperature heat

Some industrial processes, such as cement and steel production, require high-temperature heat, which traditionally is generated by the combustion of solid fuels. Electrifying that heat could significantly lower emissions if it is coupled with the decarbonization of the electricity supply.

Electrification of high-temperature heat is technically possible but is still in the early stages of development. It needs further development and piloting to be used at commercial scale. Examples such as industrial thermal batteries need policy support for reaching scale. Others, such as ongoing research to electrify cement kilns, aim to demonstrate the technology and put it in commercial use by 2024.

Tracking the number of demonstration projects indicates the extent to which industries are pursuing this technology, but there is currently no comprehensive data available on this indicator.

2094: Industrial companies setting electrification targets

In addition to government policies, companies can set their own targets to increase the electrification rate. These targets can contribute to an increased ambition loop and generate greater momentum for electrification in the industry sector. If companies commit to targets that are more ambitious than the policies currently in place, they can accelerate progress even more.

A commitment to increased electrification rates can send a clear signal to the rest of the industry, feeding the ambition loop. By tracking the number of companies that are setting electrification targets, we can get a clearer picture of how the transition is unfolding.

There is currently no comprehensive data available on this indicator, but there are signs, such as an increasing number of companies publishing sustainability reports that highlight electrification, that industrial manufacturers are increasingly aiming to accelerate their electrification rates.

2095: Price of fuel

The price of electricity relative to that of heating fuels is one of the main barriers to further electrification of industry. Narrowing the difference in operational costs between providing heat with electricity rather than with fossil fuels — through tax exemptions and cross subsidies, for instance — is critical to making the electrification of heat economical. By tracking and comparing prices, we can analyze how far from price parity we are.

Once electricity becomes cheaper than other fossil alternatives, the switch to electric equipment could make more economic sense for companies and might require fewer supporting policies. Further, to the extent that this electricity comes from renewable sources, it can lead to significant emissions reductions. The cost of electricity generated from new utility scale renewables continues to be higher than the pre-COVID-19 level and is expected to remain so in 2024. But prices of fossil fuels have also risen. Following the Russian invasion of Ukraine, coal prices remain well above the average price during 2017-2021. Natural gas price has been volatile and is also projected to be higher than the 2017-2021 average until the end of 2026. This can make some technologies — such as industrial heat pumps and industrial thermal batteries — increasingly cost-competitive when provided the right kind of policy support (for example, financial incentives through existing decarbonization programs).

2096: Research and development spending on electrification of high-temperature heat

Although the electrification of high-temperature heat (above 1000 degrees C, or 1832 degrees F) is technically feasible, it is still in the early stages.

The electrification of high-temperature heat will be particularly important in industries where alternative production processes that utilize lower-temperature heat are challenging, technically and structurally, to implement, such as in cement and steel production.

To speed up its development, increased investment in research and development (R&D) is required. By tracking that spending, we can get an idea of progress toward solutions and whether spending levels are sufficient.

There is currently no comprehensive data available on this indicator.

Centralized and comprehensive data on the electrification of industry and the changes needed in policy and investment to accelerate its scale up are limited. That is partly because the electrification of industry is reliant on emerging technologies, and partly because insufficient data is being collected and publicly published in a comprehensive manner. Some of the data shown throughout the electrification of industry shift is based on manual aggregation across many sources and only represents what information is publicly available, so may not be fully representative of everything that is happening on the ground.

Other shift Other shifts needed to transform the system

To curb rising demand for industrial products that increase greenhouse gas emissions, we need to mainstream material efficiency and circular economy principles in climate policies, alongside adopting regulations incentivizing efficient resource use.

Energy efficiency can power net-zero climate goals — it has the potential to mitigate over 40% of energy-related greenhouse gas emissions by 2040 across all sectors.

Since industrial process emissions that result from chemical reactions cannot be eliminated by decarbonizing the energy supply, new solutions and production methods are critically needed.

Methane is an extremely potent climate pollutant. In the short term, it’s much more potent than carbon dioxide, which is the most common greenhouse gas. To cut methane emissions in oil and gas operations, we need to adopt better monitoring techniques, take action to end flaring and venting, and identify and fix methane leaks.

Electrify industry

Technologies to electrify low- and medium-temperature heat are already commercialized

Accelerated technical development and commercialization is needed to electrify high-temperature heat

Tracking progress on global outcomes

Key enablers and barriers to change

Data challenges

Other shift Other shifts needed to transform the system

Reduce demand for cement, steel and plastics

Improve industrial energy efficiency

Commercialize new solutions for cement, steel and plastics

Reduce methane emissions from oil and gas operations as they are phased down

Technologies to electrify low- and medium-temperature heat are already commercialized

Accelerated technical development and commercialization is needed to electrify high-temperature heat

Tracking progress on global outcomes

2204: Electricity in the industry sector's final energy demand

2205: Electrification of low- and medium-temperature heat

Key enablers and barriers to change

2092: Countries with policies supporting electrification in industry

2093: Demonstrations, pilots and patents for commercializing technology to electrify high-temperature heat

2094: Industrial companies setting electrification targets

2095: Price of fuel

2096: Research and development spending on electrification of high-temperature heat

Other shift Other shifts needed to transform the system

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