Energy
Saturday, September 17th, 2022 1:17 pm EDT
Both the Biden administration and Congress recognize the importance of investing big in a clean and globally competitive industrial manufacturing base. A cornerstone of that effort is leveraging the federal government’s purchasing power to buy cleaner concrete, steel, and other industrial materials to catalyze market transformation. The Biden administration has already laid vital groundwork to do just that, issuing an executive order to establish a federal Buy Clean initiative and a Buy Clean Task Force to spearhead policy rollout, and leading agencies like the Government Services Administration (GSA) have subsequently put forward first-of-a-kind climate standards for both concrete and asphalt.
Missing from the equation has been robust funding to accelerate these efforts. Now, with roughly $5 billion in the Inflation Reduction Act (IRA) for federal agencies to begin procuring lower-carbon materials, Buy Clean is taking center stage. Today the Task Force announced that the federal government will prioritize low-carbon procurement across four major materials categories — steel, concrete, asphalt, and flat glass — and Secretary Buttigieg announced that he will embed Buy Clean principles into everything the U.S. Department of Transportation (DOT) does agency-wide, showing that the administration is serious about putting these policies to work and at a major scale. This means that an astounding 98% of materials purchased by the federal government, across both the GSA and DOT, will be in service of decarbonizing our industrial sector and infrastructure and creating green jobs. Coupled with billions in investments to retrofit industrial facilities and other incentives to slash U.S. industrial emissions, this is exactly the kind of holistic and robust federal investment in climate progress for this sector we’ve long needed.
Ultimately, Buy Clean will require all federally funded public works projects to consider the climate and other pollution impacts generated in the manufacturing of the materials they purchase and preferentially award contracts to manufacturers whose production processes yield lower emissions. In the immediate term, the U.S. DOT and particularly the Federal Highway Administration (FHWA) have a unique opportunity to ensure that billions in infrastructure investments under the Infrastructure Investment and Jobs Act (IIJA) go hand-in-hand with programs under the IRA to purchase clean materials. And because so many transportation infrastructure projects are built using federal funds passed through to states and metropolitan planning organizations, the role of state DOTs in implementation will be critical. There are multiple approaches that FHWA could take to encourage lower embodied emissions in widely used construction materials, both in the context of direct procurement and by incentivizing grantees to use sustainable materials throughout its programs.
Here are four key reasons why this is a big deal:
1. Agencies have a menu of implementation options to boost markets for lower carbon embodied industrial building materials.
FHWA and other agencies can help catalyze market transformation in sectors like concrete and steel by offering a ladder of options that should be applied in the development of projects and potentially specified in plans and programs:
- Requiring or encouraging use of Environmental Product Declarations (EPDs) — a best-practice reporting document for measuring the embodied emissions generated during the production of industrial building materials and products;
- Establishing a carbon intensity ceiling for commonly used construction materials in public infrastructure projects;
- Awarding performance-based bonuses or other types of financial bonuses and incentives for high performers; and
- Making advanced purchasing commitments for breakthrough innovation — e.g., zero emission steel or cement
2. Meaningful GHG emissions reductions are available at modest price premiums and Buy Clean will help drive premiums down.
The IRA now offers funding to help cover both green premiums associated with purchasing lower carbon industrial materials and incentives to encourage adoption of low carbon materials by key industry stakeholders involved in federally funded construction projects. Real-world data shows that simply requiring greater transparency on the embodied carbon emissions of concrete and steel at the time of construction bids (e.g., by asking for EPDs) can drive GHG emissions savings of 10–30% at low or even no premiums. For example, most respondents to a recent Request for Information from GSA said that the lower-carbon alternatives to regular concrete cost “about the same.”
Deeper emissions reductions (60% or more) are available at higher premiums, and may require greater upstream interventions — for example, retrofits of cement plants (cement being the key binding ingredient, and the source of most GHG emissions, in concrete). But in projects like building construction, while materials are responsible for the bulk of the GHG emissions, they are typically a small fraction of the total costs, meaning the net cost impact could remain modest.
3. Low carbon materials procurement ensures cleaner producers have a competitive advantage.
The federal government has a dual role to play: first in establishing the rules of the game so that domestic manufacturers compete globally on a level playing field, and second in using its purchasing power as a major market driver.
The Task Force’s work to standardize requirements for, and encourage the use of, EPDs will help build trust in the integrity of Buy Clean policies and ensure clean materials manufacturers avoid a patchwork of market requirements. The IRA provides the Environmental Protection Agency with $350 million to fund the creation of EPDs and low carbon materials labeling to help these manufacturers differentiate themselves in the marketplace.
Moreover, by creating near-term demand for lower carbon industrial goods, the federal government can incentivize companies to adopt cleaner manufacturing processes, and those investments can spill over to other markets, where private sector companies, states, and foreign countries are increasingly seeking cleaner materials – a win for the climate and American competitiveness. A new report by Boston Consulting Group estimates that by 2050, segments from key industries that support six clean technologies, including clean steel, will have a market of $2 trillion a year, equal to roughly 10% of current U.S. GDP.
4. Buy Clean pilots can accelerate innovation and facilitate a commercial path for a range of low carbon materials technologies already available or approaching the market.
It’s impossible to offer an exhaustive list, but leading low carbon concrete approaches, such as those employed by companies like Fortera, Solidia, and CarbonCure, are now available in the market, as we discussed here. In the cement sector, Limestone Calcined Clay cement (LC3) — a new type of blended cement with significantly lower carbon emissions — is likewise available. Brimstone Energy’s cement alternative, which uses different raw materials and clean energy to produce carbon-free cement remains a pre-commercial technology, but holds promise to become a gamechanger in the sector.
In the steel sector, in addition to the kind of advancements we see at the Cleveland-Cliffs Direct Reduction steel plant in Toledo, Ohio where the Biden administration made its Buy Clean announcement, the IRA now puts the U.S. on track to produce the most competitive zero emissions steel in the world, replacing coal and gas as feedstock in steel manufacturing with green hydrogen, made by splitting water with electrolyzers in a process powered by renewable electricity.
Together, the investments in the IIJA and the IRA have the potential to transform industry. Done right, federal procurement of clean materials by agencies like the U.S. DOT can drive essential early demand for deeply decarbonized concrete (and, by extension, cement) and steel, speeding the uptake of grant, tax credits, and other decarbonization incentives now available to help slash emissions in the most carbon-intensive heavy industries. The result is steeper GHG reductions sooner and thus greater cumulative GHG savings — the metric that ultimately matters most in the climate fight. The Biden administration just put the pedal to the metal on Buy Clean. Now let’s get to work.
Courtesy of NRDC. By Sasha Stashwick, Director, Industrial Policy, Climate & Clean Energy Program.
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Featured image courtesy of New Flyer.
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