Smart Procurement Policies Can Help Decarbonize Concrete
Across state governments and federally, momentum is building to advance policies that encourage production of industrial building materials with lower embodied emissions while investing in domestic manufacturing and high-quality jobs.
Industrial building materials like cement and concrete are foundational to our way of life and the need for them is not going away. They’re also highly emissions intensive; cement alone is the single largest industrial emitter of CO2, responsible for 8% of global CO2 emissions.
For years, climate policies in the U.S. have prioritized decarbonizing other sectors of the economy, such as power and transportation, whereas policies to decarbonize the cement and concrete industries have lagged. Several sometimes-overlapping factors have contributed to this delay, including but not limited to the fact that industrial emissions are often hard to abate, and the industries in question operate with slim margins, exposing them to competitive pressure from foreign manufacturers. As a result, policies to decarbonize cement and concrete production are frequently viewed as expensive and a threat to jobs.
Nevertheless, decarbonizing these sectors (alongside others like steel manufacturing) is critical to achieving more aggressive net zero climate targets. The good news is that the effort is gaining steam—both among innovative companies and also innovative policymakers.
States have taken some action, with California adopting a Buy Clean law in 2017, and a preferential procurement bill for low carbon concrete, the Low Embodied Carbon Climate Leadership Act (LECCLA), introduced in New York and New Jersey. At the federal level, President Biden has proposed creating a climate research agency with goals that include “decarbonizing industrial heat needed to make steel, concrete, and chemicals,” and Congress passed the Clean Industrial Technologies Act as part of the omnibus energy bill last year, authorizing a Department of Energy program on industrial decarbonization.
Across state governments and federally, momentum is building to advance policies that encourage production of industrial building materials with lower embodied emissions while investing in domestic manufacturing and high-quality jobs. Policies that featured prominently in a report by the House Select Committee on the Climate Crisis, which my colleagues and I dug into here, include largescale investment in research, development, demonstration and deployment (RDD&D) and tax incentives to help retool domestic industrial facilities to achieve improved performance, alongside emissions performance standards for industrial facilities.
One area of industrial decarbonization policy that’s received a lot of attention is the use of preferential government procurement for common building materials produced with low greenhouse gas emissions. At both the state and federal level, government agencies are a top purchaser of concrete for things like buildings, roads and bridges, making government procurement policies a powerful tool in creating a market for lower emission materials—and helping jump-start needed innovation.
Best known amongst these policies is Buy Clean, which featured in the Select Committee’s report and has been gaining momentum. Buy Clean sets embodied carbon labeling requirements for a range of products and then requires the government to take climate pollution (and labor protection) into account when determining which companies win contracts. In essence, it defines “clean” by setting a threshold for emissions intensity above which companies cannot bid for government contracts, thereby creating a market for companies that take action to reduce their emissions. And as more companies adopt decarbonization technologies and practices, Buy Clean programs can tighten that threshold over time, gradually “raising the floor” in terms of industry-wide climate performance.
In 2017, labor and environmental groups in California led the charge for the nation’s first Buy Clean program (though cement and concrete were not included at the time). Polling data shows that Buy Clean is popular, and as an emissions policy, it is especially powerful because it can help governments address pollution upstream in the supply chain and beyond their own borders—helping close an effective loophole wherein products like steel and cement are produced in places (other states, foreign countries) with relatively weak regulations and consumed in places with relatively stronger environmental standards (states with economy-wide pollution standards).
Other promising procurement policies like LECCLA seek to generate continuous competition amongst facilities bidding on government contracts to accelerate innovation in low-carbon cement and concrete production and specifically encourage “high performers.”
At the core of LECCLA is a 5% discount that applies to bids with the lowest emissions and another 3% discount for producers that use any carbon capture, utilization, or storage technology, or other breakthrough technology. A discount of this size would make bids more competitive, incentivizing immediate adoption (and pairing) of existing, off-the-shelf solutions (e.g. energy efficiency; cement mixes that use less clinker; concrete mixes that replace some cement with alternative materials) and longer-term investments to tackle harder to abate segments of the supply chain (e.g. process emissions from making a key input to cement).
States that implement policies to incentivize innovation in decarbonizing concrete also stand to attract technology companies and other low-carbon solution providers to the industry that seek proximity to clients across the local concrete supply chain, spurring economic development.
Critically, Buy Clean and LECCLA-style policies can be layered on top of one another.
Both policies rest on a foundation of good data that allows comparisons between material suppliers based on their emissions intensity. A well-established tool, known as an Environmental Product Declaration (EPD), can be used to capture the total embodied emissions in a final product, such as concrete, and both Buy Clean and LECCLA rely on (and in various ways encourage) EPD uptake by industry. While EPDs are not perfect and certainly need improvement, greater use of EPDs in climate leadership states like California and New York—and by the federal government—is the surest way to accelerate that evolution.
Buy Clean programs like that in California rely on voluntary submission of EPDs during a phase-in period, which the government then uses to assess the average climate performance of the industry as a whole and set mandatory emissions thresholds. As soon as an EPD protocol is in place, the government (city, state or federal) or the private sector could start allowing developers to submit EPDs along with bids and offering a discount to the best performers. LECCLA-style incentives could encourage early voluntary use of EPDs, accelerating learning by both industry and government.
In this way, LECCLA could be a precursor to Buy Clean; it gets companies comfortable with using EPDs, and it generates data that can be the basis of Buy Clean emissions thresholds. Further, once a Buy Clean program is fully in effect, it could be paired with a competitive bidding approach so that a discount rate is applied to those bids that do make the cut, thereby encouraging greater emissions reductions above and beyond the performance threshold for any given period.
Combining this type of approach with incentives to retool in-state or domestic facilities could make it even more potent. And all this can ultimately form the basis for a federal clean product standard, which would apply to the entire U.S. market for industrial building materials like cement, concrete, steel and others, not just government purchases.