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What you should know about the White House’s industrial decarbonization plan

The policies, funded by the bipartisan infrastructure bill, reflect the power of the federal government to send market signals to decarbonize.

The White House

The White House is advocating new initiatives on industrial decarbonization/Photo by Kristina Volgenau on Unsplash

This article was adapted from Energy Weekly, a free newsletter about the clean energy transition.

The White House is making moves to reduce some of the world’s most stubborn emissions: Those from the industrial sector.

Industrial emissions — emissions associated with manufacturing of everything from cities to phones — account for a third of greenhouse gas emissions globally. They’re also some of the toughest to address, necessitating an array of complex solutions for different applications with few market-ready technologies that often increase costs.

The White House outlined a slew of initiatives designed to reduce emissions in the industrial sector in a statement last week. The policies, funded by the bipartisan infrastructure bill, reflect the power of the federal government to send market signals to decarbonize, even as its climate legislation (through the Build Back Better Act) continues to be stymied. 

Here are two initiatives from the plan, and why they matter to companies. 

Accelerating the clean hydrogen market

The plan earmarks $9.5 billion to spur forward clean hydrogen technologies. This includes $8 billion to develop regional hubs to connect producers and customers; $1 billion for a clean hydrogen electrolysis program; and $500 million for research and development. 

Why hydrogen matters: Unlike conventional hydrogen, green hydrogen is created without emissions through electrolysis (powered by clean energy) that separates water into hydrogen and oxygen.

If harnessed, clean (or green) hydrogen has great decarbonization potential. It promises to provide seasonal, clean energy storage. With proper technological upgrades, hydrogen could also be plugged into an array of industrial processes that currently rely on natural gas. 

"The industrial processes used in the production of things like steel, cement, glass and chemicals all require high temperature heat," RMI explains in a January 2020 report, "Hydrogen’s Decarbonization Impact for Industry." "Currently, this heat is produced by burning fossil fuels. For these hard-to-abate sectors, there is essentially no way to reach net-zero emissions at the scale required."

Why the policy matters: Hydrogen is also a pesky fuel. It’s hard to store and transport. It’s expensive and energy intensive to make. And today’s infrastructure isn’t created to support it. 

The White House policy is aimed at addressing some of these key challenges. The regional hubs approach engages the private sector to address the infrastructure challenges and create a market, and the electrolysis and R&D programs aim to bring down the costs. This supports the Department of Energy’s Hydrogen Shot initiative, announced earlier this month, to bring down the cost of clean hydrogen by 80 percent in a decade. 

What companies should know: If your organization is exploring clean hydrogen for its operations, check out the H2 Matchmaker resource, designed to connect producers and end-users. There are also numerous funding opportunities for networks, electrolysis deployment and R&D. 

Using government procurements to 'buy clean'

The U.S. federal government has an annual purchasing power of over $650 billion, making it the largest purchaser in the world. That type of procurement power can help spur forward markets for clean materials, no additional legislation necessary. 

What the initiatives do: The White House has established the first Buy Clean Task Force, designed to promote use of construction materials with lower embodied emissions and across their life cycle. The task force’s mission includes: 

  • Identify lower-carbon options for materials, such as steel and concrete, for federally funded projects 
  • Increase transparency of embodied emissions through supplier reporting, and provide incentives for domestic manufacturers to up their reporting game
  • Launch pilot programs to boost federal procurement of clean construction materials

Why it matters: In organizations’ net-zero journeys, much focus is placed on operating emissions and much less on embodied emissions — the emissions it takes to manufacture and build things. 

While both are important, companies and governments should be tracking embodied emissions better. That’s because once a thing is built, the emissions are spent — there’s no going back. And embodied emissions are emissions already spent, which results in a more immediate climate impact. 

This helps shine a light on embodied emissions, spur forward lower-carbon materials and incentivize better reporting so other climate-conscious organizations can follow suit. 

What companies should know: If you’re building or manufacturing anything, pay attention to the emissions associated with your supplies. In many cases, lower-carbon options don’t even come at a cost premium; you just need to know what to choose. 

Pay attention to innovations in other materials, too. The White House initiative is working to reduce the carbon in concrete, for example, and mobilizing investments in other clean technologies. 

Finally, consider joining the First Movers Coalition, a group of 34 global companies, valued at $6 trillion, creating a demand signal for innovations to decarbonize hard-to-abate sectors. 

Other initiatives to reduce heavy-industry carbon emissions 

In addition to the above, the White House announced three other strategies to decarbonize heavy industry. 

  • Using trade policy to incentivize cleaner steel and aluminum from international suppliers. This agreement, made with the European Union, is designed to even the playing field for cleaner supplies to compete with cheap, dirty ones. 
  • Issuing guidance on responsible deployment of carbon capture, use and sequestration technologies to ensure actions will actually lead to lower emissions. 
  • Launching an initiative to engage local communities with social scientists, engineers, industry and other stakeholders, with the goal of ensuring a just transition and new, good-paying jobs for American workers.

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