Hi,

The Climate Leadership Council is obsessed with data. Here is one trend we’ve been thinking about lately:

The U.S. is the second-largest global manufacturer after China. However, the energy inputs these two countries use to fuel industry are quite different. On average, for every dollar of industrial output in the U.S., we create one-third the greenhouse gasses (GHGs) as China.

The Council’s carbon advantage research has increased awareness regarding the substantial differences in carbon efficiency across the global industrial sector. In this piece, we examine the trends in the primary energy inputs to the American and Chinese industrial sectors to help to understand the foundations of the U.S. industrial carbon advantage.

The growth in the Chinese industrial sector over the past 25 years has been fueled by a colossal increase in fossil fuel consumption – especially coal. The chart shows the primary energy inputs to the U.S. and Chinese industrial sectors, including direct fuel use at facilities, and the implied share of primary energy inputs to power generation to meet industrial load.ⁱ

Figure 1 – Primary energy inputs to industrial sector (quadrillion Btu)ⁱⁱ

From 2000 to 2022, the Chinese industrial sector grew mostly through coal usage:

• The Chinese industrial sector increased its consumption of fossil fuels from 19.3 quadrillion Btu (“quads”) in 2000 to 67.2 quads in 2022 (or 2.5x more).
• The Chinese industrial sector somewhat diversified its primary energy mixture over time, though coal still made up 72% of primary energy in 2022.
• Demand for energy by the Chinese industrial sector (up 3.9x from 2000 to 2022) outpaced growth in value-added (up 3.7x) during the same period.ⁱⁱⁱ

At the same time, the U.S. industrial sector continues to do more with less:

• The U.S. industrial sector reduced its primary energy demand from 21.6 to 17.5 quads (or down 19%) and fossil inputs from 16.7 to 12.8 quads (down 24%).
• Coal decreased from 36% of the primary mixture in 2000 to only 17% in 2022.
• The U.S. industrial sector also invested heavily in energy efficiency and better processes: value-added increased 11%^iv while energy inputs decreased 19%.

Comparing the charts, it is easy to see the U.S. carbon advantage should hold relatively steady for the foreseeable future. This state of affairs offers a tremendous opportunity to develop policies to enhance the competitiveness of the U.S. industrial sector, increase manufacturing employment and output, and lower global emissions.

Stay tuned for more data insights from the Council, and let us know if this sparked any thoughts! We’re always happy to talk.

Scott Nystrom

Director, Policy and Research

Climate Leadership Council

515-290-6990

snystrom@clcouncil.org