States seeking to accelerate industrial decarbonization efforts can assume leading roles in this process.
In the face of potential cuts to federal funding for industrial decarbonization projects, several states are forging ahead with their own initiatives.
The Department of Energy's Industrial Training and Assessment Centers program provides grants of up to $300,000 to help small and medium-sized manufacturers implement energy-efficiency projects. One existing initiative that the bill would extend has already directed about $90 million to such projects over the last few years.
California, a state leading the charge, is considering its greenhouse gas reduction fund as a source of money for AB 1280, a bill that proposes expanding programs that support factory electrification and thermal energy storage. Roughly 35,000 polluting industrial facilities now pay into California's greenhouse gas fund.
Heat pumps, well-suited to electrifying steam heating for various industries, are a key strategy in this transition. They are far more efficient at converting energy into heat than fossil-fueled boilers. Replacing fossil-fueled boilers with industrial heat pumps and electric boilers is a strategy that represents lower-hanging fruit.
The largest of the industrial decarbonization projects funded by those grants is Pennsylvania's $396 million Reducing Industrial Sector Emissions program. Industry is Pennsylvania's top-emitting sector, responsible for about 30% of statewide emissions.
However, the report from think tank RMI and environmental advocacy organization Evergreen Action warns against trying to recreate the federal government's 'massive capital grants,' such as the $6 billion awarded to sites from steel mills to snack factories under the Inflation Reduction Act's Industrial Demonstrations Program. Certain heavy industries like steel and cement have massive capital assets that will need to be replaced or significantly retrofitted to cut emissions.
The report, which examined the industrial decarbonization plans of 25 states and Puerto Rico, provides recommendations and warnings for states aiming to maintain momentum on industrial decarbonization. Molly Freed, RMI senior associate and co-author of the report, stated that what works in one state may not be effective in another.
As federal support for industrial decarbonization projects remains uncertain, state and regional programs like California's cap-and-trade program, the Regional Greenhouse Gas Initiative encompassing 11 Northeastern states, and Washington state's cap-and-invest program continue to collect fees from polluting industries, providing a potential source of funding for future projects.
Many industrial companies rely on 'first mover' public financing to lower the risk of making big investments. Teresa Cheng, California director at Industrious Labs, an advocacy group that supports the legislation, said that this is even more necessary now that federal support has backslid.
In the past year, several U.S. states including California, Texas, New York, and Illinois received grants to support industrial emissions reduction under programs like the Environmental Protection Agency's (EPA) Clean Air Act grants and the Department of Energy's Industrial Emissions Reduction Program.
About 60% of that industrial climate pollution comes from the iron and steel industry. As the transition to cleaner alternatives continues, the future of U.S. industry lies in the balance.
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