Individual sectors of the economy have long recognized the importance of carbon and carbon-based materials to their activities, competitiveness and profitability. However, it wasn't until recently that it became clear that carbon will be a major consideration, and perhaps one of a select few key considerations, for industry and the economy in general, both in the United States and abroad.

The importance of carbon can be broken down into three main areas:

  • Carbon as a raw material/feedstock basic commodity
  • Carbon as a material for emerging technologies and applications
  • Carbon as a measure of cost, a medium for exchange, and a key environmental metric.

This article seeks to explore and explain the growing importance carbon has in each of these areas, and how this growth indicates that carbon will be a primary consideration in the economy of the future.

Carbon Feedstocks
Carbon's classic function has been as a basic feedstock for the chemicals, refining, and forest products industries, in addition to others. These industries take basic materials (like crude oil, natural gas, and forest and agricultural matter) and convert and transform them into commodities and intermediate chemicals for distribution to other industrial sectors, or into final products for consumer use. Five of the major historical feedstocks for the chemicals and allied industries (including refining) have been petroleum, natural gas, oxygen and nitrogen, chlorine, and sulfur dioxide. Refining and combining these feedstock lines produce most major consumer end products, including textiles; food production, safety, and packaging; transportation; housing materials; recreation; communications; and health and hygiene. Petroleum and natural gas are the two main sources for carbon and are necessary for the production of most of the downstream products (as depicted in Figure 1).

Figure 1: Major Chemical Chains

Illustration of major chemical chains. There are four columns titled Feedstocks, Commodities, Secondary Commodities and Intermediates, and Finished Products and Goods. The Feedstocks column includes the five major historical feedstocks for the chemicals industry, which goes downstream and has arrows pointing to the next two columns that contain the commodities and secondary commodities of the feedstocks. Arrows then point to the final column that lists the finished products and goods produced by the feedstocks.

Data source: Pacific Northwest National Laboratory and the National Renewable Energy Laboratory, August 2004, Top Value Added Chemicals From Biomass Volume I: Results of Screening for Potential Candidates from Sugars and Synthesis Gas.


Though recent estimates of the United State's natural gas supply have increased due to exploration and technology, petroleum resources are not increasing as fast — domestic production peaked in 1970 and worldwide production is expected to peak in the next zero to 25 years (see Markets and Trends: M. King Hubbert and U.S. Oil Production, Energy Matters: Spring 2010). This means that petroleum will become increasingly scarce, increasingly expensive, and will eventually become unavailable. Thus, alternative carbon sources must be considered. Taking the lead demonstrated by the forest products industry, much of this alternative supply will come from renewable biomass. In 2003, the United States consumed approximately 190 million dry tons of biomass from agricultural and forest land for biofuels and bioproducts, providing 3% of our energy consumption. The U.S. Department of Energy (DOE) estimates that under reasonable conditions, at full production, sometime in the mid-21st century the United States will be able to produce 1,366 million dry tons of biomass annually, in addition to food, feed, and export needs.1 Maximum available production could easily exceed this with technology developments (like algae for biofuel/biomass production) and greater changes to land management.

It is the carbon content of this biomass and its applicability to many uses that make it the valuable feedstock of the future. Industries most dependent on petroleum feedstock include the utilities/power production (combustion for electricity), transportation fuels (conversion to liquid fuels), and chemicals products (transformation into end products) sectors. The sooner these alternative biomass technologies and alternative feedstocks/chemical chains can be developed and commercialized, the less negative the impact will be on these sectors and the more competitive U.S. industry will be.

Figure 2: Potential, Conservative Mid-21st-Century U.S. Biomass Production


Emerging Technologies and Applications
In addition to its use as a basic feedstock, carbon has numerous applications in carbon fibers (CFs) and related materials for the transportation, military, and packaging sectors, among others. About 70 to 80 percent of the CF market is for industrial purposes, and that market has been growing at 10 to 15 percent in recent years (the market for aircraft parts is growing fastest at 15 to 24 percent).2 Industrial and aerospace applications started to really take off in the mid 2000s and are expected to grow to approximately 135,000 tons per year by 2013.3




There are many emerging applications for CF and related materials, including

  • Alternative Energy — wind turbine structural materials; pipeline and storage systems for compressed natural gas, fuel transportation, and fuel cells
  • Fuel Efficient Automobiles — high-performance automobiles, expanding to include production series cars in both car parts and body panels
  • Construction and Infrastructure — strengthening material in light-weight, pre-cast concrete, and in earthquake protection structures
  • Oil Exploration — on deep sea drilling platforms, for buoyancy, umbilical lines, chokes, kill lines, and drill pipes
  • High-performance Materials — for medical applications or electronics.4

In addition to the largely structural function CF plays in these sectors, other high-performance applications have been developed for carbon in other forms — namely, carbon nanotubes/nanomaterials and graphene. These technologies will be key to the electronics sector and to manufacturing in general (through nanomanufacturing and related processes). Some main applications/technologies being developed for nanotubes/nanomaterials include5, 6

  • Nanotube inks (direct printing of electronics)
  • Nanotube super capacitor batteries (efficient electrode materials; other structural and non-structural elements)
  • Buckypaper (armor and electronic displays)
  • Structural and non-structural nanocomposites (high-strength, advanced optical/electrical/magnetic properties)
  • Solar cells (improved energy capture, conversion, and storage)
  • Chemical filters or storage materials (high-capacity and high-specificity).

Graphene is a very recent development for carbon. It has been identified by name since 1987, but recent breakthroughs in understanding, characterization, production, and manipulation have started to make graphene into a viable industrial material. Graphene has the potential to replace silicon as the major component in integrated circuits, which will provide many benefits to the industry in terms of performance. Graphene also has the potential to be valuable in more general applications like electronic displays (along with nanotubes). Graphene is still so new that the limits to its possible applications are still undefined, but its unique properties and impressive capabilities indicate that it will be in high demand.7, 8 These applications will all drive demand for carbon, both in raw form and in refined forms needed for specific industries (like potentially single-crystals for electronics). This means that prices for raw carbon-containing materials will increase unless new sources, new refining, and new recycling/reprocessing technologies are developed.

Greenhouse Gas Emissions and Carbon Pricing
The final step in the carbon lifecycle is often combustion into carbon dioxide (CO2), carbon monoxide, or other gasses that are then emitted into the atmosphere. Not only is this a potential waste (in terms of carbon that could be recycled into feedstock), but carbon emissions are an increasing concern in terms of pollution and greenhouse gas (GHG) effects. Though the United States hasn't signed on to the Kyoto Protocol, it has indicated awareness of the importance of carbon pollution, and has made some progress toward addressing the issue domestically. The first efforts have been through voluntary or mandatory reporting of GHG emissions.

Voluntary Reporting
There are many voluntary carbon registries in the United States. These registries track carbon emissions or emissions mitigation projects and serve as an exchange in the effort to reduce overall emissions. Some of the major voluntary registries include Voluntary Carbon Registry, the Chicago Climate Exchange, the Climate Action Reserve, and the American Carbon Registry9, the Climate Registry10, the California Climate Action Registry and DOE's 1605(b) Voluntary Reporting Program.11

Mandatory Reporting
In response to the fiscal year (FY) 2008 Consolidated Appropriations Act (H.R. 2764; Public Law 110–161), the U.S. Environmental Protection Agency (EPA) has issued regulations (40 CFR Part 98) that require reporting of GHG emissions from large sources and suppliers in the United States. Part 98's goal is to collect emissions data to inform future policy decisions.12 The major requirements for reporting include

  • Suppliers of fossil fuels or industrial GHGs, manufacturers of vehicles and engines, and facilities that emit 25,000 metric tons or more per year
  • Oil and natural gas industries, industries that emit fluorinated GHGs, and facilities that inject and store CO2 underground for the purposes of geologic sequestration or enhanced oil and gas recovery
  • Magnesium production, underground coal mines, industrial wastewater treatment, and industrial landfills
  • Excluded: ethanol production and food processing, and suppliers of coal
  • First reports are due in March 2011.

California requires reporting of GHGs by major sources in the California Global Warming Solutions Act. The Air Resources Board approved the regulation in December 2007, which went into effect January 2009.13

Second efforts are through the United State's potential to enact a carbon cap and trade system in the future. The United States already has cap and trade-like regulation for acid rain (nitrogen oxide [NOx] and sulfur dioxide, nationally) and NOx (regionally), which has been cited as being very effective, but it doesn't yet have one that covers carbon emissions. Proponents of such a system, including Paul Krugman, anticipate that the carbon cap and trade system would have similar positive effects on CO2 emissions as the previous systems did on acid rain.14 In June 2009, H.R. 2454: American Clean Energy and Security Act of 2009 (a.k.a. Waxman-Markey Climate Change Bill) passed the House, but since then has not made progress in the Senate.15 Pressures for other legislation have taken precedence, but it is still possible (though unlikely) that it will be passed.16, 17

In the meantime, EPA has concluded that CO2 emissions endanger human health and welfare under the Clean Air Act (they were required to make a finding for or against by a 2007 Supreme Court ruling). This finding will be the basis to craft regulations of CO2 emissions, though it is being challenged in court.18, 19

Reporting and exchanging of carbon emissions and mitigation projects, cap and trade systems, and other emissions regulations put a price on carbon emissions, and thus, put a price on carbon and the efficiency in which it is used in industrial settings.

In the preceding sections, it has been made clear that carbon is becoming a more important feedstock/raw material; that more and more applications are being developed for it every day; that it is likely to have significant or key impacts on major industries like chemicals, power and fuel production, electronics, and manufacturing in general; and that systems are under development where carbon is traded, priced, and taxed or capped to control and reduce its impact on the environment and human quality of life. In these ways, carbon is becoming the major metric or currency for industrial operations and we are transitioning toward a carbon economy.

This article appeared in Energy Matters, the newsletter of the U.S. Department of Energy's Industrial Technologies Program.

1 U.S. Department of Energy (April 2005). Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply.

2 (August 24, 2008). The Future of Carbon fiber in Cars.

3 Zoltek. The Future of Carbon Fiber.

4 Toray Industries, Inc. (April 11, 2008). Toray's Strategy for Carbon Fiber Composite Materials.

5 Nanotubes and their Applications.

6 AZ Nanotechnology (June 17, 2004). Carbon Nanotubes – Applications of Carbon Nanotubes.

7 Graphene Applications.

8 National Physical Laboratory ( January 19, 2010). European Collaboration Breakthrough in Developing Graphene.

9 Somers, J. and Cote, M. (May 2010). Managing Methane.

10 The Climate Registry.

11 World Resources Institute (March 2008). GHG Emissions Registries.

12 U.S. Environmental Protection Agency (July 7, 2010). Greenhouse Gas Reporting Program.

13 California Environmental Protection Agency Air Resources Board (May 12, 2010). Mandatory Greenhouse Gas Emissions Reporting.

14 The New York Times (May 17, 2009). The Perfect, the Good, the Planet.

15 (2009). H.R. 2454: American Clean Energy and Security Act of 2009.

16 (June 25, 2010). 364 days later, looking back at Waxman-Markey.

17 USA Today (June 29, 2010). Obama, Senators Grapple with ‘Cap And Trade,' Energy Bill.

18 The Washington Times (December 7, 2010). EPA Issues CO2 ‘Endangerment Finding'.

19 The New York Times (February 17, 2010). 16 ‘Endangerment' Lawsuits Filed Against EPA Before Deadline.