Industrial sector companies produce a wide range of materials and products we use every day, from the concrete and steel used to build schools and hospitals to the aluminum and glass in our smart phones. They also account for 40 percent of all greenhouse gas emissions globally, according to the International Energy Agency (IEA), and 23 percent of direct U.S. emissions (i.e., not including the emissions associated with the electricity used by industry). Between 2005 and 2019, total U.S. greenhouse gas emissions declined 12 percent but industrial emissions only fell by less than 1 percent.
Most climate policy discussions focus on replacing coal- and gas-fired power plants with clean electricity sources and replacing cars and trucks with electric vehicles — but to preserve a safe climate and address the pollution harming nearby communities, industry must also slash its emissions.
The impact of climate change is already falling most fiercely on disadvantaged communities: more severe storms, hurricanes, flooding and extreme heat create special issues for folks with fewer resources who cannot evacuate as easily, afford to rebuild or access medical care. The most aggressive climate goal of limiting global average temperature rise to 1.5 degrees Celsius is essential to minimizing these trends. Dramatically reducing industrial emissions is necessary to meet that goal. Industrial facilities also emit pollutants that directly affect the health and safety of the surrounding neighborhoods, exacerbating asthma, allergies, contributing to heart disease and even early death. Decarbonizing these facilities can and must include driving these pollutants down too.
The UN climate conference in Glasgow, also known as COP26, helped bring the importance of industrial emissions into focus in several ways. First, 74 countries have now set net-zero emissions targets, including the United States, China and India. As countries devise long-term strategies to achieve these targets, it’s clear that they can’t ignore the industrial sector. In the nearer term, the Glasgow Climate Pact recognizes that to limit global warming to 1.5 degrees Celsius, global carbon dioxide emissions need to be cut 45 percent by 2030. Although the largest share of these emissions cuts will likely come from the power sector, it will be very difficult to achieve this 2030 target unless all sectors contribute.
Second, outside the formal negotiations on the Glasgow Climate Pact, COP26 featured important initiatives aimed at kickstarting decarbonization of the industrial sector. The U.S.-led First Movers Coalition featured 25 founding member companies that pledged to support innovation needed to achieve net-zero targets by purchasing early supplies of near-zero emissions steel, cement, aluminum and chemicals, among other breakthroughs. Similarly, the Climate Group has launched buyers clubs committed to purchasing zero-carbon steel and concrete. Meanwhile a growing list of steel producers, including the world’s largest, have committed to going carbon-neutral by 2050, and the Portland Cement Association has published a roadmap to carbon-neutral concrete.
Turning these pledges into reality will take education, changes to industry standards, low-carbon product standards, procurement policies and financial incentives. Collaborations like the Industrial Innovation Initiative bring key industry actors together with conservation and environmental groups to agree on a set of policies that can help overcome these obstacles. The collaborative’s Blueprint has recommendations on policies to advance carbon management, low- and zero-carbon hydrogen, government procurement to build markets for lower-carbon technologies, electrification and energy efficiency. It also recommends new approaches to expand collaboration among industrial facilities, build markets for new innovations, as well as examine specific place-based needs to enable industrial decarbonization by midcentury.
Some of these recommendations are reflected in the U.S. Infrastructure Investment and Jobs Act, which was signed into law on Nov. 15. It includes $8 billion for hydrogen hubs along with programs to advance energy efficiency and deploy new decarbonization technologies. Further, the law provides $500 million for industrial emissions demonstration projects that test and validate emissions reducing technologies in the sector, including products such as cement, iron and steel. Other provisions in the new infrastructure law create programs to design, pilot and demonstrate approaches to put carbon captured from industrial facilities back in the ground permanently. Together, these provisions enable industrial producers to take advantage of the technologies available now and build a foundation for the future.
The Build Back Better Act, which cleared the House on Nov. 19, also includes essential provisions to address industrial emissions. The bill would extend and significantly enhance tax credits for carbon sequestration and create a new credit for the production of clean hydrogen. It also includes $4 billion for deploying advanced technologies that can accelerate emission reductions at industrial facilities. Further, it features provisions to support procurement of low-carbon products, including $3.25 billion for the General Service Administration to purchase lower-carbon products and services and funding to provide consistent carbon footprint analyses and labels for construction materials.
The investments in the Build Back Better Act, paired with the Infrastructure Investment and Jobs Act, will set the nation on a path to achieving its 2030 emission reduction target, which depends on progress in the industrial sector. The result would make the world a safer, fairer and more prosperous place and improve the lives of millions of Americans, particularly in historically disadvantaged communities.
Of course, getting this bill through the House was just the first hurdle. Now the deal must be sealed with the U.S. Senate. The Senate must seize the narrow window of opportunity to do the right thing for the sake of the economy, and the health and well-being of all Americans. This is an opportunity the country can’t afford to miss.
This piece has been updated.