The Rebar Revolution

The main ingredient in that concrete is cement, the most widely used man-made material in the world. Together, cement and steel production make up 10% of global greenhouse emissions.

The ubiquity of these materials is just one reason why manufacturing is the hardest sector to decarbonize. But here’s the good news: It’s also the one that’s seen arguably the most exciting progress over the last year—on policy, innovation, and actual deployment of technologies.

Let’s start on the policy side. Earlier this year, as part of the Inflation Reduction Act, the U.S. Department of Energy announced $6 billion in funding for innovative clean industrial technologies through the Industrial Demonstrations Program (IDP). A number of companies with promising technologies received capital from this critical funding, which represents the single largest federal investment for industrial decarbonization.

In addition to more public funding, we’ve seen an increasing focus on procurement contracts. Since both steel and cement are “merchant markets,” they have trouble securing long-term offtake agreements, making it harder to build new factories and begin production. This has long been a barrier in this space, even before the development of clean industrial technology. The Federal Buy Clean Initiative is helping solve this problem, allocating funds for the U.S. government—the country’s biggest purchaser of construction materials—to buy more clean materials.

If you want to lose weight or eat healthier, you may start looking at the nutrition labels on the food you eat. The same goes for buying clean materials—in order to lower your carbon footprint, you need to know how much embodied carbon is in materials you’re using to build.

That kind of transparency has traditionally been lacking in this space. That’s why the Bipartisan Infrastructure Act’s recent funding for Environmental Product Declarations is so important. Like nutrition labels, these declarations allow government and private consumers to make more informed decisions about which products to purchase.

Unfortunately, the advancements we’ve seen in the U.S. over the last year have not translated globally. While Europe, for example, has made progress in end-use applications, such as including regulation on whole-life carbon in new buildings, the region remains stagnant in its decarbonization goals for cement, which accounts for 4 percent of its CO2 emissions.

Last year, BE helped launch the Alliance for Low-Carbon Cement and Concrete, a group of companies and NGOs from across the industrial ecosystem, to spur action on cement in the EU. We have technologies that are ready to scale right now—we just need more movement and urgency from European lawmakers to support performance-based standards, “buy clean” policies, innovative financing, and a level-playing field with incumbents.

We’ve also seen broader acceptance, over the past year, of innovation’s critical role in decarbonizing heavy industrials—not just through carbon capture and sequestration, but also through new technologies and solutions. And this innovation can be found across the three phases of growth in the climate tech space, what we often refer to as the three D’s: Discovery, Development, and Deployment.

We’ve made remarkable progress. But we still have work to do. And we could face a few obstacles in the coming year that can have lasting impacts, especially in the U.S. For example, the recent Chevron decision by the U.S. Supreme Court has the potential to hamper the efficiency and effectiveness of federal agencies in implementing new climate policies.

Even assuming that today’s policies remain untouched, we still have to continue investing in the supply of low-carbon technologies, spurring demand for low-carbon products, and supporting transparency for industrial materials.

But there are two more wrinkles here. First, we have to address embodied carbon in trade globally. When one country receives raw materials from others, they need to account for the emissions in the production of those materials as well, otherwise they risk undermining all the investments they’re making at home. But this can be accounted for; Europe, for instance, is tackling this problem with its Carbon Border Adjustment Mechanism.

Second, we have to build enabling infrastructure for all of these technologies to work. That means new transmission lines, as we discussed in the transmission section.

It means further investment in carbon capture and sequestration, since some manufacturing sectors might take a long time to fully decarbonize. And it means leaning into other tools, like clean hydrogen, which could help clean up heavy industry through a variety of ways—from being used as chemical feedstock for steel production, to the ammonia that can power the shipping of industrial materials.