How ​‘Buy Clean’ policies will help decarbonize heavy industries

American consumers are used to making informed purchasing choices. We like to compare our options before opening our wallets. We want to know what ingredients are in our shampoo and how many calories are in our ice cream. It took many years of work to establish the federal consumer protection laws and programs that make conscious consumption of household goods a part of everyday life. Businesses benefit from these laws and programs as well; they can more directly respond to the public’s diverse needs and discerning tastes, changing formulations and developing differentiated product lines to meet evolving demands. 

Today a similar transformation is underway, but this time the goods are common building materials, and the consumers are state and federal government agencies.

Many building materials are made through carbon-intensive processes that are contributing to climate change. Cement, aluminum, and steel and iron together account for 15 percent of global greenhouse gas emissions. Getting better data on these materials will help buyers — in this case, government entities — set standards for purchasing products that have fewer associated carbon emissions, and that, in turn, will drive innovation to further reduce emissions.

Federal and state green public-procurement programs — also known as Buy Clean programs — are designed around this objective. The idea is to leverage the vast purchasing power of public agencies to spur decarbonization of dirty heavy industry. The U.S. government, for example, is the largest consumer in the world, spending more than $650 billion on products and services each year. The U.S. General Services Administration by itself is one of the largest landlords in the U.S., owning or leasing 9,624 assets and maintaining more than 375 million square feet of workspace.

Harnessing this purchasing power will reduce carbon in the atmosphere, send strong signals to the private sector and support clean, domestic manufacturing jobs. North American suppliers have cleaner, less carbon-intensive manufacturing operations than many of their international counterparts, whose manufacturing facilities may be subject to less environmental regulation. Buy Clean offers these domestic suppliers a competitive advantage against imports that tend to undercut them on price.

The burgeoning Buy Clean movement 

The Buy Clean movement originated in California. In 2017, the state passed the Buy Clean California Act, which sets maximum emissions limits for steel, glass and mineral wool insulation purchased for public works projects. The first few years of implementation focused on gathering data, before emissions standards went into effect in 2022.

Since then, two additional states — Colorado and Oregon — have passed Buy Clean policies, while Minnesota and Washington state are set to launch pilot programs. Though these Buy Clean policies were enacted through legislation, other jurisdictions have established them via executive authority. New York Governor Kathy Hochul (D), for example, established low-carbon concrete purchasing criteria for the New York State Department of General Services and Department of Transportation, modeling the standards around the Buy Clean framework.

Notably, the Biden administration made Buy Clean a cornerstone of its executive order to achieve zero carbon emissions from the federal government by 2050. The Federal Buy Clean Initiative received a significant boost from the Inflation Reduction Act, which contains $4 billion in funding for the General Services Administration and the Federal Highway Administration to procure low-carbon steel, concrete, asphalt and flat glass. This staggering investment will create market competition and push manufacturers to reduce emissions at their facilities.

In 2023, the Biden administration also launched the Federal-State Buy Clean Partnership with 12 states to exchange best practices and develop cohesive policies.

In other words, Buy Clean is growing up. It’s no longer a nascent policy idea limited to wonky circles but has matured into a robust demonstration of collective public-sector action that can move markets. This is a once-in-a-generation business opportunity for building material suppliers. They can choose to take up the charge and institutionalize decarbonization as part of their business strategy, or they can risk losing market share to competitors.

The nitty-gritty of Buy Clean 

A simple way to think about the status of Buy Clean policy today is through the lens of an age-old business adage: ​“You can’t manage what you don’t measure.”

To develop rigorous emissions standards that will drive investment to cleaner suppliers, we first need improved and widespread data reporting by industry. That is why the near-term priority of the Buy Clean movement is requiring manufacturers of building materials to accurately report on their environmental impact.

The effort to improve data quality has put significant emphasis on the emissions data reports used to implement Buy Clean policies. These are called environmental product declarations, and serve as the ​“nutrition label” for a range of environmental impacts, including greenhouse gas emissions. For many years, industrial emitters have complained that generating these EPDs is a time-intensive and costly process that they can’t afford. However, with new IRA-funded grant programs that financially support manufacturers to disclose their emissions, manufacturers have more incentives than ever before to report environmental impacts.

Alongside reporting requirements, agencies deploying Buy Clean policies have initially set emissions standards that are feasible for the average manufacturer to meet, giving them an opportunity to acclimate to expectations for increasingly lower-carbon production.

Buy Clean’s next phase 

So Buy Clean is gaining momentum, providing manufacturers with a huge incentive to report their emissions and start their decarbonization journey. But what happens next? How does this lead to transformational change in the way materials are made?

Over the next few years, the U.S. Environmental Protection Agency, which received significant funding to develop low-carbon building product programs as part of the IRA, will establish national standards to define low-carbon building materials, starting with steel, concrete, asphalt and glass. Once these standards are established, manufacturers of building materials will have a better sense of where they stand amongst their competitors, and buyers will be able to make better choices.

But EPA’s efforts will require a nuanced understanding of each of the target industries to ensure that emissions standards are designed to achieve their desired outcome. For example, a major risk of poorly designed Buy Clean standards is that they shift demand away from domestic producers in the short term, compromising these facilities’ ability to invest in decarbonization while not meaningfully changing the emissions profile of the industry.

This is particularly true in the steel industry. RMI, the Natural Resources Defense Council and the Center for American Progress undertook a lengthy analysis of the steel industry to provide recommendations for high-impact Buy Clean standards for steel that will fairly accelerate decarbonization across steelmaking facilities.

While there is complexity and risk involved in developing effective standards for low-carbon building materials, this foundational work will unlock the true promise of Buy Clean policies. With more and better data, and nuanced understanding of the supply chains in play, governments can set long-term emissions-reduction pathways for their Buy Clean policies. These target trajectories will provide manufacturers with the confidence to invest in decarbonizing their facilities in anticipation of increasingly stringent public purchasing requirements.

Given these developments on the horizon, manufacturers who do not invest in decarbonization will face multiple risks and missed opportunities. Many producers are already leveraging IRA grant funding to demonstrate innovative industrial decarbonization technologies and seed the next generation of clean, low-carbon manufacturing facilities.

Editor’s note: Canary Media is an independent affiliate of RMI.