This study deals with this thermo-economic analysis of energy utilization in the industrial sector (IS) towards establishing energy policies. The relations between capital costs and thermodynamic losses for subsectors; in the IS are investigated. In the analysis, Turkey is taken as an application country based on its actual data over the period from 1990 to 2003. Energy and exergy analyses are performed for eight industrial modes, namely iron-steel, chemical-petrochemical, petrochemical-feedstock, cement, fertilizer, Sugar, non-metal industry, other industry. The energy and exergy utilization efficiency values for the entire Turkish IS are obtained to range from 63.45% to 70.11%, and from 29.72% to 33.23%, respectively. The ratio of thermodynamic loss rate-to-capital cost values is also calculated to vary from 0.76 to 1.01. (C) 2008 Elsevier Ltd. All rights reserved.