EVs are good, but industrial decarbonization is even better

3bl logo

For all the publicity around electric vehicles, having millions of Americans drive a battery-powered car is only one piece of the decarbonization puzzle. Reducing industrial emissions is a more daunting task, and the Joe Biden administration just announced a new plan to tackle the challenge head-on – hopefully without roadblocks at the US Supreme Court.

The need for a national industrial emissions plan

Zeroing vehicle emissions is important, and electric vehicles play a key role in this. However, buying a new electric car is not the only way for future climate heroes to help reduce greenhouse gas emissions related to mobility.

Walking, cycling, carpooling, grocery shopping, shopping locally and using public transportation are well-known ways to reduce a person’s transportation-related emissions without having to buy a new car. Remote working, Zoom conferences and other recent trends can also help.

In contrast, individuals have little or no control over emissions from industrial activities. A national plan based on federal policy is the only effective way to achieve that, given the urgent need to accelerate action on climate change.

Reducing industrial greenhouse gas emissions is just as important as vehicle emissions. According to the latest data from the US Energy Information Administrationindustrial activities are responsible for about 30 percent of CO2 emissions in the US. That is almost as much as the entire transport sector, estimated at 35 percent.

The monumental task of industrial decarbonisation becomes even more apparent when emissions from industry are compared to emissions from passenger cars alone. Removing the industry’s 30 percent annual emissions would be the equivalent of taking 631 million gasoline-powered passenger cars off the road.

Why not just leave the decarbonization job to the EPA?

Another attempt at decarbonizing the industry doesn’t have to start from scratch. After all, the US Environmental Protection Agency has been regulating emissions from power plants and other industrial activities since the 1970s.

However, that route has been tried before. In 2015, the Barack Obama administration proposed the Clean Power Plan, which would have clarified the EPA’s authority to regulate greenhouse gas emissions under the Clean Air Act. That plan never came into effect. It was soon challenged in court by fossil fuel stakeholders and their allies.

The administration of former President Donald Trump followed with a less ambitious proposal called ACE, or the Affordable Clean Energy Rule. That plan was also challenged in court, this time by environmental groups and their allies.

The Biden administration was never given a chance to revive the Clean Power Plan or formulate a plan of its own. The EPA’s legal and constitutional status was stripped last summer, when the 6-3 majority of Republican-appointed Supreme Court justices passed a ruling limiting the EPA’s power to regulate greenhouse gas emissions.

In addition to that particular ruling, the current court has built a solid reputation for undoing precedents and issuing opinions that seem more political than constitutional. For that reason, any new federal action on greenhouse gases must slightly circumvent the EPA and seek new avenues.

The Roadmap for Industrial Decarbonisation

Rather than focusing on energy consumption in power plant emissions, Biden’s new government plan focuses on energy in other industrial activities.

The new plan avoids new constitutional minefields because it does not activate the regulatory authority of the EPA or any other federal agency. It is simply a series of recommendations for investment opportunities in the public and private sectors issued by the US Department of Energy as the new Roadmap for industrial decarbonisation.

The plan focuses on iron and steel production, cement and concrete, food and beverage production, chemical production and petroleum refining. These five sectors are responsible for more than half of the energy-related CO2 emissions in the industrial sector.

The plan lists four pathways to address energy-related emissions from these sectors, including energy efficiency, electrification, the use of lower-carbon fuels and carbon capture with reuse or storage.

Of these four pathways, the Energy Department lists energy efficiency as “the most cost-effective option for reducing greenhouse gas emissions in the short term”. In addition to improvements in equipment and other hardware systems, this area includes software-driven “smart” manufacturing systems and advanced data analytics that improve productivity with regard to energy consumption.

Another Republican fly in the ointment

This all seems relatively innocuous, especially to the extent that it helps investors and industry stakeholders improve their profits by cutting fuel costs while creating new jobs and improving public health.

Nevertheless, state-based Republican office holders have already sharpened their knives against private sector stakeholders looking to invest in decarbonization.

For example, last fall, Republican office holders in Texas passed a law banning public pensions in the state from doing business with a company that “boycotts” fossil energy companies.

More recently, Texas Attorney General Ken Paxton, along with 18 other Republican attorneys general, signed a letter to top wealth management firm BlackRock in August. The letter accused BlackRock of discriminating against fossil fuel companies.

BlackRock had previously provided Texas officials and other energy stakeholders with a detailed account of its significant fossil energy investments in the Lone Star State, so it’s not clear exactly why Paxton and the other attorneys general chose to do so. One clearly false accusation specifically against this one firm to be promulgated.

However, the letter serves as a warning shot. Other investors who see new opportunities in the Energy Department’s new Industrial Decarbonization Roadmap will have to be careful if they want to avoid becoming the next target of a high-profile accusation.

Money talks hopefully

Meanwhile, the Energy Department hopes a new $104 million funding pot for advanced industrial decarbonization technologies will motivate researchers and entrepreneurs to ignore the noise of right-wing election fighters as the 2022 mid-term cycle heats up.

The new chance of industrial emissions will focus on high impact proposals that decarbonise key areas. That includes advanced reactors and separation systems in the chemical industry, clean fuels or electrification in iron and steel, and improved process heating systems for food and beverage operations.

In the field of cement and concrete, the Energy Department is looking for new formulations, low-carbon fuels and carbon capture.
Innovation in the paper and forest products industry is also covered, as are technologies that apply to multiple sectors, including the use of low-temperature waste heat for power supply, thermal energy storage and industrial-scale heat pumps.