In this paper, we review industrial energy use and energy intensity trends, and discuss industrial decision making and how it relates to changes in energy intensity. Based on this review, me propose that policies that promote technology innovation and investment in process equipment are most likely to lead to greater industrial energy efficiency. We propose and analyse four such policies and project that with full implementation of these policies, industrial energy consumption and carbon emissions will be reduced in 2010 by 12.4% and 12.1%, respectively, over the base case without changing economic growth. Reductions will increase to 35.65% and 33.1% in 2030.