American Jobs Plan Would Invest In Cleaning Up US Industry

President Biden’s historic American Jobs Plan elevates climate progress in the industrial sector as a key driver of economic development—not just keeping jobs, but bringing manufacturing home. The plan promises to revitalize American manufacturing, invest in R&D to build next generation industries, and create good-paying jobs while protecting overburdened communities from increases in local pollution.  

Major investment in cleaning up heavy industry here in the U.S. is much-needed. Under business as usual (for all sectors shown), the industrial sector is on track to become the largest source of U.S. greenhouse gas emissions within the next decade.

It is one of the most difficult parts of the economy to decarbonize because it is heavily dependent on fossil fuels, heterogeneous, and has complex supply chains. Yet, we cannot avoid decarbonizing this sector; industrial building materials like cement and steel are foundational to our way of life. Our communities will continue to depend on industrial products for our infrastructure for years to come, so we need to take steps to make our domestic industrial sector compatible with our climate targets.

Cleaning up these industries offers an enormous emissions reduction opportunity important to meeting our near- and long-term climate targets. To get there, we need: 1) demonstration projects and investment in R&D to bring down the costs and risks of decarbonizing; and 2) incentives to make sure that cleaner plants have a competitive advantage, such as Buy Clean.

The President’s plan features several programs important in this effort, including demonstration projects and funds to support large-scale carbon capture and sequestration efforts at industrial facilities. Specifically, it calls for the establishment of ten pioneer facilities that demonstrate carbon capture retrofits for large steel, cement, and chemical production facilities, all while ensuring that overburdened communities are protected. These early stage demonstration projects are critical to jumpstarting industrial decarbonization as facilities are otherwise reluctant to take the risk of being the first plant. The plan also includes a massive expansion to R&D investments that would help invent and improve technologies that can help cut pollution from the industrial sector.

The President’s attention to carbon capture makes sense here because it is one of a suite of advanced technologies that could prove transformational in meeting this challenge. A significant proportion of the emissions from industrial materials like cement and steel results from the underlying chemical reaction in their production process and is therefore unavoidable. For example, 60% of the emissions from cement production are associated with calcination, in which raw materials like limestone are heated at high temperatures in order to release carbon dioxide (CO2) from the rock and produce clinker (a stony residue that is ground down and combined with other ingredients to make cement). Nearly all the remaining emissions come from burning fossil fuels to heat large kilns where this reaction occurs to approximately 2,640°F.

Thus, while a portion of cement emissions can be reduced through energy efficiency, fuel switching, reducing clinker ratios in cement, and/or replacing some cement with supplementary cementitious materials (SCMs) in ready mix concrete, none of these can fully abate the process emissions from cement manufacturing. Carbon capture technologies can permanently sequester these emissions underground or by injecting them into fresh concrete.

The Biden administration should fund carbon capture projects that send captured CO2 to secure saline geologic storage rather than for enhanced oil recovery. In his plan, President Biden proposes funding to help establish multiple geologic sequestration sites around the country. Expanding on the DOE’s CarbonSafe program will be key to facilitate industrial decarbonization and to make it easy for facilities to choose geologic sequestration. Identifying and permitting geologic storage sites is likely to be a daunting hurdle for industrial facilities already taking on the task of adding carbon capture equipment to their facilities.  

President Biden’s plan also seeks to leverage the federal government’s vast procurement apparatus to purchase cleaner materials for construction. That’s because federal agencies are a top purchaser of products like cement and steel for things like buildings, roads and bridges, making government procurement a powerful tool in creating markets for lower carbon alternatives. For instance, 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 awarding contracts. As more companies adopt technologies and practices to reduce their climate impact, the government can require lower and lower embodied carbon in the industrial building materials it purchases.

It’s not clear from President Biden’s announcement what projects might be included in such a program. We think it should apply to all construction projects receiving federal funds and offer the opportunity for companies to go further. This can be achieved by pairing Buy Clean with other creative preferential procurement policies specifically designed to encourage even greater innovation among high performers. The procurement policies in the American Jobs Act are also paired with incentives in domestic manufacturing and supply chains that would help build out a stronger, wider-reaching manufacturing sector and prepare U.S. manufacturing to usher in a climate-friendly economy.

Together, a plan to invest in a revitalized and cleaner American industrial sector will have benefits well beyond reducing carbon emissions. U.S. industry provides jobs to more than 20 million workers that tend to earn higher-than-average wages and have a greater likelihood of being unionized relative to the broader private sector. It’s also a major source of hazardous air pollution: cleaning it up would lead not just to carbon reductions but also cleaner air for the communities that live near industrial facilities.

About the Authors

Sasha Stashwick

Director, Industrial Policy, Climate & Clean Energy Program

Arjun Krishnaswami

Climate Policy Lead, Innovation, Climate & Clean Energy Program

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