The United States makes the lion's share of the world's stuff, having produced $1.6 trillion worth of goods last year for nearly a quarter of global manufacturing value. The U.S. ranks No. 1 in the manufacture of sophisticated items such as satellites and industrial machinery, according to the National Association of Manufacturers (NAM), as well as pharmaceuticals and chemicals. Almost a third of the world's commercial vehicle fleet comes from American factories. Though construction-crazed China produces and consumes most of the world's steel and cement, the U.S. still ranks third in both manufacturing categories, cranking out 91 million and 84 million metric tons of each respectively. The manufacturing of these mountains of material is part of what makes the U.S. a world economic leader, but it also comes with the hefty burden of climate-changing greenhouse gases. 

According to the most recent available data from the Energy Information Administration (EIA), the manufacturing sector collectively emitted over 1.4 billion metric tons of carbon dioxide in 2002. That's more than a sixth of the nation's approximately 6 billion metric tons of carbon emissions annually, then as now. All of the emissions don't stem from energy use, either. Manufacturing and industrial processes themselves release greenhouse gases, which the Environmental Protection Agency (EPA) estimates to be equivalent to about 350 million metric tons of carbon dioxide emissions--5 percent of total U.S. greenhouse gas emissions. 

The bright side of this particular problem is that increasing efficiency, which reduces emissions, also improves the bottom line, and so the manufacturing industry has already begun to think creatively about its sizable carbon footprint. "Less energy used is a dollar saved," says Keith McCoy, NAM's vice-president of energy and resources. "That's the trend and it's becoming the culture [in manufacturing]." 

EIA data shows that manufacturing's overall fuel consumption has indeed dropped by 3.6 percent from 2002 to 2006. Manufacturers have adopted common-sense approaches such as changing to energy-efficient light bulbs at factories and staggering employee shifts based on seasonal peak-electricity-demand hours. Nevertheless, a plethora of opportunities remain for reducing manufacturing-related carbon emissions, says Alexis Karolides, a consultant at the Rocky Mountain Institute, a Colorado-based think tank. Here's how the manufacturing sector can make deeper cuts, from expanding recycling and instituting more dramatic efficiency measures to considering how factories are powered and even where they're sited. 

Near-term: Direct Reporting, Smarter Recycling and More Efficiency

A good place to start, for both manufacturers and regulators, is to know more about manufacturing's carbon-emissions profile. The current federal accounting method as prescribed by the United Nations, known as the greenhouse gas inventory, follows a more top-down approach, rather than a facility-by-facility tack, says the EPA's Lisa Hanle. Because of that, "manufacturing is one very challenging area to use the greenhouse gas inventory for analyses," Hanle says. "We do not have specific information for greenhouse gas emissions from the iron and steel industry, or cement making, for example, so it's hard to get clear readings," she says. The EPA's new mandatory greenhouse gas reporting rule, which will come into effect in 2010, aims to remedy this situation. The rule requires direct annual reporting from every manufacturing facility that produces more than 25,000 tons of carbon dioxide a year. This more detailed information will help inform future carbon-cutting policies, regulators hope, and on the manufacturers' side, the data will enable companies to compare their emissions to others in their particular segment of the industry to better identify reduction opportunities. 

Another key action is smarter recycling, and more of it. Though the U.S. now recycles a third of its municipal waste compared to just 5 percent back in 1970, too much still gets landfilled, experts say. The growing shift to single-stream recycling, where materials are sorted at the processing facility rather than in people's homes, has boosted participation by 30 percent in some communities. For manufacturers, the single-stream trend has pros and cons, though. On the plus side, increased recycling puts more material back into the marketplace, obviating the need for expensive virgin materials. However, throwing all recyclables together means that some, especially paper, get contaminated by, say, food waste and glass bits, leaving less material in quality condition for companies to remanufacture, says Darby Hoover, senior resource specialist at the Natural Resources Defense Council (NRDC). The source of materials for manufacturing has a big carbon impact: Making one ton of office paper from virgin materials produces 5882 pounds of carbon dioxide-equivalent greenhouse gas emissions, while a ton of recycled office paper yields 3422 pounds. Accordingly, manufacturers and communities need to collaborate to determine what method, either traditional separation or single-stream, works best for their recycling markets in terms of cutting greenhouse gases. 

At manufacturing facilities themselves, onsite renewable power generation in the form of solar panels and wind turbines is an obvious way to cut emissions related to electricity consumption. However, for many manufacturers, given the amount of energy they use, this practice often only represents small greenhouse gas-cutting potential, says the Rocky Mountain Institute's Karolides. "It's the maybe boring, hidden, engineering things that can be done to save a lot of energy that aren't as sexy as putting up solar panels," she says, that can really pay off. A simple example: straight pipes for carrying water. RMI found that 85 percent of the energy used by one of its manufacturing clients to pump water came from frictional losses related to convoluted piping. 

Another giant area of opportunity, Karolides says, is combined heat and power (CHP), or cogeneration, which is the simultaneous generation of heat and electricity. For particularly energy-intensive manufacturing processes such as oil refining, steel making and chemical synthesis, exhaust heat and gases can be converted to watts by using simple turbines and recovery units. The widespread capture of this recyclable waste energy from manufacturers could yield an estimated 100 gigawatts of electricity, with a reduction in carbon-dioxide emissions of about 400 million metric tons, as described in a report from Duke University's Center on Globalization, Governance & Competitiveness. One case study highlighted in the report involves a silicon metal manufacturing plant operated in Appalachia by West Virginia Alloys, a subsidiary of Globe Metallurgical, the biggest producer of silicon metal in North America. A project to recycle waste heat there starting next year is expected to shave 290,000 metric tons off the facility's annual carbon emissions. 

10-Plus Years: Closing the Manufacturing Loop

Many manufacturers are looking into so-called closed-loop manufacturing, wherein products are remanufactured and repurposed from recovered, possibly already recycled ones. Some say to encourage this "cradle-to-cradle" concept, fabricators should assume or be legally obligated to take lifetime responsibility for their products, from manufacture to disposal, letting the market determine the best and most profitable practices these companies can employ in this charge. Computer companies have pioneered this approach, with most major manufacturers now taking back old computers free-of-charge for the subsequent harvesting of perfectly reusable or recyclable parts. So-called e-waste recycling laws passed in about a dozen states have advanced this concept and kept many other electronics from ending up in landfills. Manufacturers of various other products will begin to craft their wares to be more readily disassembled and recyclable, especially if the company has to take them back at some point. "There's great interest in designing these products in the first place to make less waste down the line," says NRDC's Hoover. This effort will eat into the carbon emissions associated with disposal and procurement of new raw materials. 

Another emerging carbon-fighting trend is "industrial ecology"--per the metaphor, manufacturers interact as if in a food web. Essentially, one manufacturer's waste serves as another's feedstock. For example, instead of using only fossil fuels to fire its kilns, Pine Hall Brick, a North Carolina-based brick manufacturer, has shifted 40 percent of its fuel use to leftover wood chips and sawdust obtained from local companies such as furniture makers. If waste does not have a home in another production line and cannot be recycled, many municipalities have begun to combust it in waste-to-energy facilities. "Once you've removed all the recyclables from the waste, you can use it in a utility same as you would coal," says Lori Scozzafava, deputy executive director of the Solid Waste Association of North America. She says 89 such plants operate in the U.S. currently, and although they emit carbon dioxide, the EPA estimates the technology prevents the annual release of 40 million metric tons of carbon dioxide equivalents. Construction of such plants has stalled due to construction costs, but Scozzafava sees them gaining ground again in the years ahead. 

Innovation will also be an important factor in reducing emissions over the long term. One prime area of research is finding new climate-friendly ways of manufacturing steel, one of the most carbon-rich processes around. The creation of steel starts with baking coal into coke, a hard, yet spongy-looking carbonaceous material that then gets fed into a blast furnace in order to draw unwanted oxygen from iron-oxide ore. Instead of using coke, Hong Yong Sohn, a professor of metallurgical engineering at the University of Utah, wants to use hydrogen to trap the oxygen. High school chemistry predicts the resulting waste product--steam, which has greenhouse potential itself, but is vastly preferred over CO₂. Sohn says this method would cut energy use by nearly 40 percent and could outright eliminate carbon dioxide emissions at this stage of steel manufacturing. The catch is obtaining the hydrogen, Sohn says, which currently is often a carbon emissions-producing task itself. He predicts the desire for more hydrogen for cars and the greater use of nuclear power to generate it cleanly will help clear this hurdle. Another zero-emissions approach for producing iron for steel involves the direct electrolysis of iron ore to separate the oxygen, but this remains further ahead on the horizon. 

When manufacturers look to build their next generation of factories, site selection will be critically important in reducing carbon footprints. Place factories where there is mass transit access so employees don't have to drive long distances and where the energy comes from utilities using renewable or low-carbon sources, says RMI's Karolides. An expansion of nuclear power capacity and the continued development of carbon-capture and sequestration technologies, which trap the carbon dioxide released by burning coal, could also help energy-intensive manufacturing keep carbon emissions in check.