The United States allocates $6 billion towards industrial decarbonization and electrification.
A newly established branch of the US Department of Energy (DOE) announced a federal funding package of $6 billion to support the decarbonization efforts of 33 industrial projects spanning across 20 states.
This funding, administered through the DOE’s Office of Clean Energy Demonstrations, is part of President Biden’s Bipartisan Infrastructure Law and Inflation Reduction Act (IRA), integral components of the government’s nationwide net-zero plans. Of the total funds, $5.47 billion will be sourced from the IRA.
The $6 billion investment is aimed at decarbonizing energy-intensive industries, curbing industrial greenhouse gas (GHG) emissions, fostering union employment opportunities, rejuvenating industrial communities, and enhancing the country’s manufacturing competitiveness.
The selected projects, situated in the highest-emitting industries such as steel, paper, concrete, and glass manufacturing, will benefit from the funding. Among them, seven projects are in the chemicals and refining sector, six in cement and concrete, six in iron and steel, five in aluminum and metals, three in food and beverage, three in glassmaking, two in process heating, and one in pulp and paper.
A pivotal aspect of their decarbonization strategy involves the electrification of industrial processes. For instance, traditional coal-fired furnaces in steelmaking will be substituted with electric arc furnaces, potentially powered entirely by renewable electricity. Additionally, hydrogen-based technology will be introduced in ironmaking facilities.
US Secretary of Energy Jennifer Granholm hailed the DOE's historic investment in industrial decarbonization, emphasizing its significance in reducing emissions from challenging-to-decarbonize sectors and maintaining the nation's economic leadership.
The investment is projected to annually reduce CO₂ emissions from the targeted sectors by over 14 million tonnes, representing an average decrease of 77%. Furthermore, it is anticipated to generate tens of thousands of jobs, with a focus on promoting union-backed employment practices.
Nearly 80% of the funded projects are situated in disadvantaged communities, offering an opportunity to create employment opportunities and improve air quality in regions historically neglected.
Given that the industrial sector contributes nearly one-third of the nation’s overall GHG emissions, the federal investment will be matched by the selected projects to mobilize over $20 billion in total. These funds will be instrumental in implementing commercial-scale decarbonization solutions necessary to propel the industrial sector towards net-zero emissions.
Concrete production, which accounted for 7% of global CO₂ emissions in 2019, will benefit from the selected cement and concrete projects, receiving over $1 billion in DOE funding. These projects will leverage innovative technologies capable of rendering the entire production process net negative in terms of emissions. Additionally, the metals industry will focus on enhancing recycling processes and decarbonizing supply chains.