A Dynamic Marginal Abatement Cost Framework for Manufacturing Systems: Optimising Emissions Reductions under real-world policy constraints

This study presents an integrated techno-economic and policy analysis of decarbonisation pathways for industrial manufacturing systems, combining life cycle assessment (LCA) with dynamic marginal abatement cost curve (MACC) modelling. Using a baseline scenario with variable manufacturing emissions (0-88 kgCO₂eq), fixed operational emissions (55 kgCO₂eq), and end-of-life emissions (11 kgCO₂eq), we demonstrate how strategic interventions can optimise emissions reductions while minimising costs. Our MACC analysis identifies renewable energy adoption (0.30 kgCO₂eq) as the most cost-effective abatement measure. The research extends conventional LCA by incorporating two critical dimensions: (1) region-specific carbon pricing variations (from 0.12 kgCO₂eq in the EU) and (2) policy incentive impacts, including the US 45Q tax credit (10% cost reduction for CCS) and EU renewable energy subsidies. Our results reveal that such incentives can alter optimal abatement pathways, improving ROI by 27-52% and reducing payback periods from 1.5 to 1.1 years in a US case study scenario achieving 30% emissions reduction. A novel contribution is the development of a decision-support framework that dynamically adjusts strategy recommendations based on real-time policy data and local economic conditions. The study provides empirical evidence that policy-aware decarbonisation planning can bridge the gap between technical potential and economic feasibility in industrial systems, with particular relevance for energy-intensive manufacturing sectors.