Industrial Decarbonization

At the 2026 MI Healthy Climate Conference, industrial decarbonization was highlighted as one of the key components in Michigan’s carbon reduction strategy. Reducing the emissions coming out of industrial facilities and processes takes a variety of tools, including renewable energy, battery storage, and often starts with energy efficiency.

In this article, we’ll take a closer look at industrial decarbonization, why it matters to Michigan’s climate goals, and how facilities can begin turning broad emissions goals into practical next steps. We’ll also explore the role energy efficiency can play, the types of strategies facilities may consider, and the resources that can help support progress. Whether your organization is just starting to explore decarbonization or looking for practical next steps, we’ll provide you a straightforward look at where energy efficiency and other strategies can fit into the process.

What does industrial decarbonization mean?

Industrial decarbonization is the process of reducing or removing greenhouse gas emissions (GHG) from all areas of industry. This includes addressing both energy-related emissions, such as electricity and fuel use, and process emissions that are inherent to certain industries. In this context, industry includes energy intensive sectors such as steel, chemicals, cement, refinery, and other forms of manufacturing.

Why is it a focus of the MI Healthy Climate Plan?

The MI Healthy Climate Plan created the groundwork for Michigan to become 100% carbon neutral by 2050. To become carbon neutral, the state of Michigan took a deeper look into their Greenhouse Gas Inventory from previous years to understand which sectors are the largest contributors. As Michigan is a manufacturing state it came as no surprise that industry contributed to 18% of the state’s greenhouse gasses. A key pillar since the inception of the plan is the state’s commitment to drive clean innovation in industry, which would mean working to deploy cleaner manufacturing technologies and RD to reduce emissions from hard to decarbonize industries.

Does industrial decarbonization play a role in other states carbon reduction goals? If so, how?

The short answer here is yes. In the United States, the industrial sector accounts for about 30% of all energy-related carbon emissions. States that are heavier in energy intensive manufacturing industries such as cement have a greater need to make this a priority when compared to those with less of their carbon emissions coming from the industrial sector. State-by-state goals and strategies vary, but the need to reduce emissions and the steps facilities can take to decarbonize are relatively universal.

What should an industrial facility start with if they have decarbonization goals?

Facilities should begin by establishing a clear understanding of their current energy use and emissions profile. This includes conducting an energy assessment, emissions inventory, or facility audit to identify major sources of energy consumption and GHG emissions. From there, facilities can prioritize opportunities based on emissions impact, cost-effectiveness, and operational needs. Energy efficiency is often the first step because using less energy can reduce emissions and operational costs right away. It can also make future investments, such as renewable energy, electrification, or energy storage, easier and more cost-effective to implement.

A facility that is looking to decarbonize should start with reducing their energy baseline through energy efficiency improvements, exploring electrification opportunities, and finally by seeing how renewable energy can be utilized for their operations.

How can energy efficiency support facilities in their industrial decarbonization goals?

Energy efficiency supports industrial decarbonization by reducing the amount of energy required to maintain production and operational performance. Improvements to equipment, process optimization, controls, and building systems can lower energy consumption, resulting in direct reductions in greenhouse gas emissions. Additionally, reducing overall energy demand can improve the feasibility and cost-effectiveness of other decarbonization strategies, including renewable energy deployment, battery storage integration, and equipment electrification.

What type of energy efficiency measures are typically employed, when working towards decarbonization?

Common energy efficiency measures for industrial decarbonization often begin with a system-level view of facility performance. This can include strategic energy management to track performance, identify savings opportunities, and support continuous improvement across the facility. Smart manufacturing and data analytics can also improve energy productivity throughout production processes, while thermal system optimization can reduce energy use in heating, boiler systems, process heat recovery, and combined heat and power applications.

Are there sources of financial to support available to fund decarbonization efforts?

There are a number of sources for financial support to complete decarbonization projects from the state of Michigan as well as local utilities. We have listed links to several utility programs and state funding sources as a reference below. As for federal funding, there have been programs made available by the DOE in the past, however as of 2026 there are limited opportunities.

MI Utility Programs

• https://www.dteenergy.com/us/en/business/energy-efficiency/getting-started/rebate-programs.html
• https://www.consumersenergy.com/business/savings-and-energy-solutions/rebates-and-discounts/industrial-energy-service-program

MI State Funding Sources

• https://www.michigan.gov/egle/about/organization/materialsmanagement/energy/rfps-loans/small-manufacturers-retooling
• https://www.michigan.gov/egle/about/organization/materialsmanagement/energy/rfps-loans/energy-revolving-fund
• https://www.michigan.gov/egle/about/organization/materialsmanagement/energy/rfps-loans/water-energy-nexus

Beyond energy efficiency measures, what other strategies can industrial facilities use to work towards decarbonization?

Industrial facilities can pursue a range of strategies depending on their processes, energy needs, and emissions sources. These can include transitioning to renewable energy sources, electrifying equipment and processes that currently rely on fossil fuels, incorporating battery energy storage, improving demand management, and exploring lower-carbon fuels or alternative process technologies. Facilities can also reduce emissions through operational improvements, supply chain strategies, and better data collection and monitoring to identify additional reduction opportunities. A successful decarbonization approach typically combines multiple strategies rather than relying on a single solution.

What do some of those strategies look like in action?

Electrification would seek to electrify multiple industrial processes including things like transportation and heating, transitioning from equipment that relies on fossil fuels, to those that are electricity driven. Another strategy could include carbon capture and storage, which may be more feasible for larger corporations to achieve. Facilities can also look to utilize green fuels which could include things like hydrogen or biofuels as a fossil fuel replacement. One of the easiest decarbonization strategies to implement is recycling in facilities that use raw materials such as steel, aluminum, and plastics.

Is there anything else you would like to say about industrial decarbonization and or Michigan’s Healthy Climate Goals?

Industrial decarbonization requires collaboration between manufacturers, utilities, policymakers, and technical experts. Michigan’s climate goals highlight the importance of supporting industry in reducing emissions while maintaining competitiveness and economic growth. For many facilities, the path to decarbonization starts with understanding current energy use, identifying practical improvements, and developing a long-term strategy that aligns emissions reductions with operational and financial goals.

The Michigan Healthy Climate Plan is a road map that the state is actively looking to as it works towards their carbon neutral goals. Key stakeholders from around the state have come together to work towards a carbon neutral future across all sectors.

Where to go from here?

Industrial decarbonization can feel complex, but the starting point is often straightforward: understand how energy is being used today, identify the highest-impact opportunities, and build a practical plan that supports both emissions reduction and operational performance. Energy Sciences helps commercial and industrial organizations do exactly that through energy consulting, decarbonization planning, system optimization, energy audits, commissioning, lighting assessments, compressed air surveys, steam audits, and strategic energy management programs.

If your facility is beginning to explore industrial decarbonization or looking for a clearer path forward, our team can help you establish a baseline, prioritize next steps, and turn long-term goals into practical action.