Department of Energy Report on Industrial Decarbonization Underscores Enormous Opportunities for Steel, Cement, Aluminum Sectors

WASHINGTON, DC — Earlier this week, the Department of Energy (DOE) released a new report, “Pathways to Commercial Liftoff: Industrial Decarbonization”, which is part of a series of reports that lays out possible pathways to cleaning up the eight carbon-intensive industrial sectors highlighted in the Inflation Reduction Act — including steel, cement, and aluminum. 

The report underscores the enormous opportunities for the private sector, thanks to billions of dollars in public investments from the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law. 

“We agree with the Department of Energy that ‘the time is now’ to transform America’s industrial sector. This report shines a light on the full suite of decarbonization options, and highlights how technological advances like carbon capture are often less cost effective than investing in emerging technologies to reduce emissions before they are released, like electrification. Most importantly, the report also draws attention to the environmental justice implications and the importance of creating good quality jobs to anchor industrial transformation,”  said Yong Kwon, Senior Policy Advisor with the Sierra Club.

Report highlights

The report focuses on several key issues, including ensuring America's competitiveness, the importance of a transition that benefits fenceline communities and protects jobs, and the need to ensure carbon capture is not an all-encompassing solution to decarbonization.

• US COMPETITIVENESS: The report reiterates how domestic progress towards deep decarbonization is at risk of lagging internationally and falling short of our own targets in the foreseeable future. This pushes back on arguments that environmental regulations and higher standards for greenhouse gas emissions threaten American jobs and business competitiveness, when in fact, the US might become less competitive in an increasingly climate-conscious global market if corporations do not take advantage of IRA resources.
• JOBS AND JUSTICE: One of the goals of the report is to “provide a guide to a private sector-led, industry-wide decarbonization effort that is deeper and faster than it would otherwise be and that directly benefits fenceline communities by emphasizing environmental justice and the creation of good jobs”. This acknowledges how meaningful industrial transformation must look beyond climate pollution and lift up the needs of environmental justice communities and America’s workers. 
• TECHNOLOGY NEUTRAL: The report takes a balanced view on the need for major investments in both new process technologies and commercial adoption of carbon capture in certain contexts. It makes clear that retrofitting carbon capture in existing facilities is not an all-encompassing solution. The report also presents marginal abatement cost estimates for each decarbonization lever, which helps policymakers and the public assess industry claims about affordability of certain interventions. 

What's missing

Several key issues were insufficiently highlighted in the report, including the importance of responsible demand for end products, the need for better data, and the value of coordinating public investments. 

• RESPONSIBLE DEMAND: A key component of decarbonization includes demand discipline, which is a critical element in complementary DOE reports. For example, building design that efficiently employs cement and steel plays a role in the broader decarbonization effort. Global material needs will only continue to grow in the foreseeable future, and stretching the availability of these critical industrial products while still lowering emissions requires their end uses to be better thought through.  
• BETTER DATA: Implementation of public policies and business investments in decarbonization require more data. For government policies where lower carbon emissions intensity are a key specification, effective allocation of available public resources cannot take place without better data. This includes both greater transparency from the private sector and more stringent accounting by the Environmental Protection Agency. 
• COORDINATED PUBLIC INVESTMENTS: The public resources outlined in the pathways report are meant to work together, and the elimination of any one of these public programs threatens to derail the decarbonization effort. However, more measures are needed, including policies like the carbon border adjustment, which would prevent the import of more pollution while higher standards for industries are being established at home.

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