Economic development in Lebanon has required increased access to energy as both urbanization and industrialization create greater energy demands. Production of energy based on imported oil has become a constraint to development of the economy and improvement of the environment. Energy consumption leads to pervasive externalities, ranging from local pollution to global greenhouse gases that are not reflected in energy supply costs and planning efforts. In 1994, the total energy consumption in Lebanon was 28.276×10⁶ GJ (7854.5 GW h), of which industry used 10.14×10⁶ GJ (2816.6 GW h). Industrial sector electricity comes from two sources: 6.228×10⁶ GJ (1728 GW h) are generated by industry using diesel generators and 3.919×10⁶ GJ (1088.6 GW h) are purchased from the National Electric Utility, EDL (Electricite du Liban). The Lebanese manufacturing industry emitted about 4.7 million tonnes of CO₂ in 1994 from energy use and processes.

The industrial sector in Lebanon is quite complex and heterogeneous including all manufacturing and construction activities. Industries in Lebanon range from those that transform raw material into more refined form (e.g. steel, cement, plastics and glass) to those that produce highly finished products (e.g. the food processing, pharmaceuticals and paper industries). Many different processes are used to produce various products without proper qualified technical assessment. This complexity makes it difficult to conduct a very accurate assessment in a “bottom-up” approach. The development of the baseline scenario relied on available data on major plants’ outputs, and on reported amounts of fuels used by the industrial sector as a whole and by the major plants of specific industries. Information about specific processes used by a few industries were obtained, and discussions with several plants’ engineers in some industries clarified the current status of energy use in Lebanese industry and the wide opportunities for mitigation of greenhouse gases (GHG) emissions.

The first objective of this work is to establish, to the best of our knowledge, a realistic most likely scenario for the energy demand associated with the industrial sector. The development of the baseline scenario for the industrial sector will proceed by considering the cases of cement production and steel separately, to investigate mitigation options for those processes. Energy use in industry will be considered by lumping different types of industries in terms of US$, value and deriving the energy intensities per dollar value of output for each industrial sub-sector. Whenever actual production data, fuel and electricity consumption data are available for a given industry, they are separately considered.

The second objective of this work is to target by year 2005 a 15% reduction of CO₂ emissions from the base year value and a 20–30% reduction of CO₂ emissions by the year 2040. Several mitigation scenarios will be developed and evaluated in comparison with the two baseline scenarios of low and high economic growth. The mitigation options selected for analysis are screened on the basis of the GHG inventory and expert judgement of the viability of wide-scale implementation and economic benefits. Using macroeconomic assessment with a bottom up approach and energy price assumptions, the LEAP Software (long-range energy alternatives planning system) is used to compute the final estimates for potential GHG emissions and costs for the mitigation analysis. The mitigation options will be analysed and ranked by single effect and by multiple effect in combination with other options. Each mitigation option will be developed with multiple scenarios, reflecting different economic indices.

The GHG emissions from energy use in manufacturing industries and construction represent about 24% of the total emissions of the energy sector, and 24% of total CO₂ emissions from all sectors in Lebanon for the base year 1994. Energy sources for industrial use in Lebanon for the year 1994 are divided into four major sources: electricity, gas oil/diesel, residual fuel oil, and liquid propane gas (LPG). The amounts of fuels that were used by the industry in the base year are given in Table 1, as reported in the Lebanese National GHG Emissions Inventory. Forty-two percent of the gas oil/diesel used by the industry was for power generation. Fuel oil and LPG are mainly used for combustion in boilers and furnaces. The coal is used mainly in the cement industry.

The baseline scenarios for projecting energy use in industry and the corresponding GHG emissions for Lebanon reflect technologies, activities and practices that are likely to evolve. The scenarios are directly linked to the economic conditions in the country. In most industries, the industrial $ value growth rate is assumed to be the same as the economic growth of the gross domestic product (GDP). To minimize uncertainty in the development of the baseline scenario, more than one set of values of economic indices is used to place minimum and maximum bounds on projected energy use in industry. Table 2 lists all the different economic indices that are used in this sector to develop the baseline scenario and for assessment of the mitigation options. Two baseline scenarios are created using a low economic growth index (case BA) and a high economic growth index (case CA), while the other economic indices (inflation and discount rates) are used later for the mitigation options.

The industrial sector is divided into five sub-sectors. The division is done on the basis of physical data availability for specific industries. Industries whose physical data on production and energy use are not available are lumped into one sub-sector for which the US$ value of output is used for the activity level, and the overall energy intensities are calculated based on reference quantities of fuel and electricity use in the country. The emission factors of GHG emissions for the different types of industrial activities and fuels are calculated from Intergovernmental Panel on Climate Change (IPCC) methodology and from the environmental database provided through the LEAP software. The projections for energy use for short and long term planning are based on the growth rate of the economy with the exception of two sub-sectors, namely the cement industry and bakeries. The bakeries’ energy use is projected using the population growth rate while the cement industry follows projections based on demand and future government planning for new cement plants. All the industrial sub-sectors’ branches and energy intensity data are shown in Table 3a and b for the baseline scenarios BA and CA, respectively.

The energy demand represented by fuel type for the industrial sector is presented for both scenarios BA and CA at low and high economic growth rates. Electricity use in the sector is also presented directly and not in terms of fuel used to produce electricity, which is either fuel oil or diesel, as this is considered in the supply side. Table 4a shows the energy demand for Lebanon in millions of gigajoules for scenario BA (economic growth is 3%). Table 4b shows the energy demand for Lebanon in millions of gigajoules for scenario CA (economic growth is 6%).

The energy demand shows that residual fuel oil is the largest energy source used by industry, followed by diesel oil, then electricity. The fuel oil has a high sulfur content and is mainly used in boilers that are not so efficient. The high usage of gas oil/diesel is mainly due to bakeries. The low growth rate scenario shows that energy consumption will increase by the year 2005 by 28% over the current level, and will triple by the year 2040. This implies an average annual growth of 2.5% for the whole period in scenario BA. The high growth rate scenario shows that the energy consumption will increase by year 2005 by 70% over the current level and by 950% by year 2040. This implies an average annual growth of 5.94% for the whole period in scenario CA.

The electricity supply comes from combustion of two fuel sources to the industry, diesel oil and fuel oil. If the overall efficiency of the diesel plants is assumed to be 25% and that for the fuel oil plants assumed to be 42%, then the amounts of fuel required by industry for electricity production can be easily calculated from the demand. Table 5 shows the fuel demand for electric power generation in both scenarios BA and CA.