By Blaine Collison, Senior Vice President, David Gardiner and Associates, and Claire Dougherty, Research Associate, David Gardiner and Associates
This summer, the House Select Committee on the Climate Crisis, the Senate Democrats’ Special Committee on the Climate Crisis, and Democratic Presidential Nominee Joe Biden each released climate action plans, all carrying strong implications for industrial decarbonization. Each report identifies decarbonization strategies, market barriers, and federal actions to overcome the barriers. Here are some of the key takeaways.
The House and Senate plans both identify four important pathways for industrial decarbonization:
- Industrial energy efficiency remains a huge opportunity for immediate investment and emissions reductions. Existing technologies, including combined heat and power (CHP) and waste heat to power (WHP) systems, can deliver significant efficiency performance across a wide range of applications.
- Process fuel switching to low- and zero-emission alternatives – including renewable natural gas (RNG) for low- and medium-temperature applications and hydrogen, ammonia, solar thermal and others for high-temperature needs. Green hydrogen – created from renewable electricity-powered electrolysis – is an especially important opportunity.
- Beneficial electrification can shift industrial loads onto an electric grid increasingly supplied by renewables, producing net emissions reductions.
- Carbon capture, utilization, and storage (CCUS) can provide emissions reductions in industrial applications for which other solutions aren’t yet available.
The Biden plan specifically identifies the decarbonization of industrial heat for steel, concrete, and chemical manufacturing, and using renewables to manufacture green hydrogen; both within the context of meeting a proposed United States-wide 100% clean energy target.
All three plans recognize that federal policy is required to accelerate U.S. industrial decarbonization (as well as broader U.S. decarbonization and climate efforts). From the Senate report:
“[W]e will need to use all the federal policy tools available and invest significant government resources…The government must also guide the markets to value emission reductions; it has several policy options at its disposal, including tax incentives, a price on carbon, emissions regulations, and others.”[i]
Each plan identifies a broad range of policies and mechanisms to overcome market barriers and accelerate decarbonization deployments. Though there are some differences in specifics, each report proposes policies around:
- Financial support: Tax incentives, direct grants and rebates, revolving loan funds, financing programs, and public-private partnerships;
- Boosting the market for low-emission products through federal purchasing requirements;
- Creating a border adjustment mechanism to account for competition from goods created under less-strict emissions standards;
- Investing in domestic workforce training and education.
Together, the three reports provide a detailed preview of how a Biden administration could approach industrial decarbonization policies and mechanisms. The full reports can be found here:
Solving the Climate Crisis: The Congressional Action Plan for a Clean Energy Economy and a Healthy, Resilient, and Just America, House Select Committee on the Climate Crisis
The Case for Climate Action: Building a Clean Economy for the American People, Senate Democrats’ Special Committee on the Climate Crisis
[i] The Case for Climate Action: Building a Clean Economy for the American People, Senate Democrats Special Committee on the Climate Crisis, page 38