Biden admin invests $6B to cut carbon from steel, cement — and snacks

U.S. factories making industrial essentials like steel, aluminum, cement, chemicals — and even household staples like ice cream and mac and cheese — are about to get a whole lot cleaner.

On Monday, the Biden administration awarded $6 billion for demonstration projects that aim to sharply reduce greenhouse gas emissions from heavy industrial sectors. The initiative represents the single-largest decarbonization investment in American history, according to officials. When including companies’ share of project costs, the awards represent $20 billion in total investment.

The U.S. Department of Energy selected 33 demonstration projects in more than 20 states for award negotiations. The program, led by the agency’s Office of Clean Energy Demonstrations, will help manufacturers to electrify and decarbonize the giant boilers, furnaces and factories that make the materials that underpin our modern lives — from buildings, bridges and roads to appliances, cosmetics and processed foods.

“These projects offer solutions to slash emissions in some of the highest-emitting sectors of our economy,” Energy Secretary Jennifer Granholm said on a call with reporters. ​“Plus, the solutions that we are funding are replicable, and they’re scalable, meaning they’re going to set a new gold standard for clean manufacturing in the United States and around the world.”

Heavy industry accounts for about one-third of U.S. carbon dioxide emissions every year. But tackling this planet-warming pollution is particularly challenging. That’s because facilities consume extraordinary amounts of energy and heat, at levels that are often difficult to supply with electricity alone. Some processes, like turning raw ore into iron or ​“cracking” molecules into different kinds of chemicals, are complex, multistep — and have only been done at scale using fossil fuels.

“When you look at the decarbonization pathways that countries have plotted out to get to net zero by the middle of this century, the area that’s often sort of written off as the ​‘hardest to decarbonize’ is the industrial sector,” Ali Zaidi, the national climate advisor to the White House, said on the press call.

“Today, the Biden administration is showing that there’s no sector that’s too hard to decarbonize,” he added.

The Industrial Demonstrations Program, announced a year ago, received more than 400 concept papers seeking $60 billion in federal funding. From there, program leaders whittled the group down to nearly three dozen selectees. The Inflation Reduction Act is behind most of the program’s funding, providing $5.47 billion. Another $489 million is from the Bipartisan Infrastructure Law.

The combined projects are expected to eliminate 14 million metric tons of CO₂ emissions every year — or less than 1 percent of the country’s total industrial emissions. Still, the program could eventually lead to deeper emissions reductions as other companies and facilities scale these new solutions.

Rebecca Dell, who directs the industry program for the ClimateWorks Foundation, said the DOE initiative is a ​“hugely important program” because it will move industrial-decarbonization efforts beyond a few scattered pilot projects into large-scale operations.

“One of the key things that’s been holding progress back is not that we don’t have good ideas for how we could produce the materials we need without the greenhouse gas emissions,” she told Canary Media. ​“The problem is that those ideas have not been commercialized.”

She added, ​“Being able to demonstrate that something works at a small-scale test facility is very different than being able to say [that] this will actually work under industrial conditions.”

Turning dirty factories into clean industries

The dirtiest industries were among the biggest winners in Monday’s announcement.

Projects to decarbonize cement and concrete — which account for around 8 percent of global CO₂ emissions every year — were selected to receive a total of $1.5 billion in federal support. Iron and steel, which generate as much as 9 percent of annual planet-warming emissions, also garnered $1.5 billion for a half-dozen projects.

The U.S. steelmaker Cleveland-Cliffs was awarded up to $500 million to help it retire an existing blast furnace at a steel mill in Middletown, Ohio. Blast furnaces use purified coal (or ​“coke”) and limestone to turn iron ore into iron. In its place, Cleveland-Cliffs will install a ​“hydrogen-ready” direct reduced iron plant that operates without directly using fossil fuels. The company also plans to install two electric melting furnaces to feed molten iron into existing finishing facilities.

Granholm said she planned to visit the southwestern Ohio facility on Monday to highlight the investment, which is expected to help slash emissions at the steel mill by 1 million metric tons per year.

Chemical and refinery projects were selected for $1.2 billion in total awards, while aluminum and metals manufacturers snagged more than $930 million.

Aluminum manufacturer Constellium will put the funding to use at its facility in Ravenswood, West Virginia. The DOE agreed to provide up to $75 million for a zero-carbon casting plant, where molten aluminum is poured into molds to make finished products. The first-of-a-kind facility will include low-emissions furnaces that can operate on a range of cleaner fuels, including hydrogen.

Projects to decarbonize glass, pulp and paper, process heat, and food and beverage manufacturing rounded out the rest of the $6 billion award.

That includes up to $170.9 million for Kraft Heinz, which plans to upgrade and electrify food production at 10 facilities nationwide, including its mac-and-cheese plant in Holland, Michigan. Using gas to heat and dry all of those elbow-shaped noodles is emissions-intensive. So the company plans to deploy heat pumps and electric heaters and boilers to slash macaroni emissions by 99 percent, Granholm said.

Selected demonstrated projects were judged against four high-priority criteria, according to the Office of Clean Energy Demonstrations.

First, the projects had to meet ​“deep-decarbonization” targets set by program officials. Second was their market viability, meaning the ability of producers to find offtakers or customers for their products and the ability of cutting-edge technologies or processes to be replicated across the industry. Third, projects had to show that they could be completed in a timely way, in order to start driving deep emissions cuts this decade. And finally, the demonstrations had to prove that they would have strong community benefits — meaning creating and sustaining jobs, as well as improving the livelihoods of people living near facilities.

Almost 80 percent of the selected projects are located in what the White House considers to be ​“Justice40” communities. These include disadvantaged communities affected by a legacy of pollution and environmental injustices. Steelmaking, for example, contributes not just copious amounts of CO₂ emissions but also pollution from sulfur dioxide and toxic heavy metals that can harm people’s health.

Dell said that, despite the unprecedented size of the DOE investment, it represents only a ​“down payment” on industrial decarbonization.

“Actually achieving our climate goals is going to require more of these kinds of investments in the future,” she said. ​“So we need to show this is a good idea, this works, this delivers value for the American people.”