DOE Clean Energy Investments Should Focus on Climate, Innovation, and Equity

WASHINGTON (March 8, 2023) – Today, the Office of Clean Energy Demonstrations (OCED) in the Department of Energy (DOE) officially issued its Funding Opportunity Announcement for roughly $6 billion in federal investments to help deploy transformational technologies to deeply decarbonize American industrial facilities. This program, with funding passed as part of the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), is designed to accelerate deployment of advanced technology to reduce or eliminate greenhouse emissions from heavy industry.  

Alongside the funding announcement, the White House released further details on its Buy Clean policy, designed to drive demand for low carbon industrial materials, including coordination across federal agencies. The White House also shared information about a table of 12 states that will work together with federal leaders on developing and implementing clean materials procurement for new infrastructure and other publicly funded construction projects. 

These programs will help ensure that as the United States invests big in decarbonizing its steel, cement, aluminum, and other industrial facilities, it also fosters market demand for their low carbon outputs. Together, these measures will help spur innovation and build a cleaner, globally competitive, and resilient domestic industrial manufacturing base for the clean economy. 

A coalition of environmental groups called on OCED Director David Crane to target large, ambitious projects that help unlock innovation critical to tackling emissions in the industrial sector, such as direct reduction of iron for steel-making with clean hydrogen, electrified and non-combustion heat kilns in cement manufacturing, and electrification in the chemicals sector. 

The groups also called on the DOE to allocate at least 40% of the resources made available under the program to facilities near communities that face harmful impacts from both environmental and social factors, in line with the administration’s Justice40 Initiative. 

Today, those groups offered the following statements in support of the funding announcement and launch of the project application process: 

“OCED is capitalizing on an historic chance to deploy game-changing technologies to decarbonize the most challenging industrial applications in sectors like steel, cement, and aluminum,” said Sasha Stashwick, Director of Industrial Policy at the Natural Resources Defense Council. “With this $6 billion funding stream and other federal incentives like Buy Clean, American manufacturers have the opportunity to produce the world’s most competitive low and zero-carbon industrial materials. These are the products buyers around the world will be seeking in the clean economy.” 

“This funding is crucial to the whole-of-government approach to transform our industrial landscape, address the climate crisis, support family-sustaining jobs, and protect fenceline communities," said Hebah Kassem, Director of the Living Economy program at the Sierra Club. “By awarding these resources in a way that is consistent with the Justice40 Initiative, the DOE can cut toxic pollution that has long been a source of adverse health effects, especially in low-income communities and communities of color.” 

“We applaud DOE for driving this program forward,” commented Brian Payer, Senior Principal in the Climate-Aligned Industries Program at clean energy nonprofit RMI. “Decisionmakers in heavy industry will be re-evaluating their capital allocation programs given this funding opportunity and the suite of historic incentives through IRA and BIL. We believe that building commercial scale, low-emissions plants now will confer lasting competitive advantage for companies.” 

“There are eight integrated mills in the U.S. that still use 14th century technology to make steel using coal. It’s time for an upgrade," said Hilary Lewis, Steel Director, Industrious Labs. "This new funding is an unmissable opportunity to modernize American primary steel manufacturing, reduce climate and health harming pollution and create jobs. Without investment today, the industry risks falling behind in the race to green steel." 

“We commend the staff of the Office of Clean Energy Demonstrations for their timely release of this funding opportunity to support projects that help reduce emissions in some of the hardest-to-decarbonize sectors of our economy,” said Jackie Toth, Deputy Director of the Good Energy Collective. “Communities deserve to reap the economic benefits of regional manufacturing businesses without sacrificing their local air quality.” 

“This funding is going to help enable companies to use and scale up transformational technologies that will decarbonize American industry,” said Nora Esram, Senior Director for Research at the American Council for an Energy-Efficient Economy (ACEEE). “The Department of Energy is encouraging companies to think long-term and develop comprehensive solutions to decarbonize not just individual processes but their whole operations.” 

“This announcement is not just a major step toward reducing emissions from critical industries such as steel and cement,” said Mike Williams, Senior Fellow with the Center for American Progress. “It also signals a commitment to strengthen domestic manufacturing by linking decarbonization with the goal of buying lower carbon materials — also known as Buy Clean. This announcement also incorporates critical social impact components, including support for workers’ rights to unionize, collaboration with Tribal groups, and parallel efforts to reduce toxic emissions. We look forward to ensuring that the commitments to make progress on climate, jobs, and justice in this announcement are fully realized.”

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