Biden administration seeks to lower industrial greenhouse gas emissions — and that won't be easy

With the passage last month of the Inflation Reduction Act (IRA), the federal government has taken its first major steps towards reducing greenhouse emissions from cars, houses and power plants by incentivizing the purchase of electric vehicles, solar panels, electric heat pumps and other existing technologies.

But after transportation and electricity generation, the next largest source of carbon dioxide emissions is the manufacture and refining of industrial products like iron and packaged foods. These processes all rely on the burning of fossil fuels in order to facilitate chemical reactions, emitting massive amounts of greenhouse gases as a result.

Collectively, industry accounts for 24% of annual U.S. emissions, according to the Environmental Protection Agency, compared to 25% for electric power and 27% for transportation, and lowering those emissions will be especially hard. Cutting fossil fuels out of industry is a more complicated task than switching to electric cars or replacing coal-fired power plants with wind farms, as it requires changing the way everything from plastics to cement are made.

Last week, the Department of Energy (DOE) released a four-part “roadmap” that lays out the possible pathways to decarbonizing the industrial economy.

“America’s industrial sector is critical to our economy and daily lives, yet it currently accounts for an enormous portion of greenhouse gas emissions, and is particularly difficult to decarbonize,” Secretary of Energy Jennifer Granholm said in a statement.

The roadmap tries to find ways that industry can reduce its carbon footprint, but it comes with no enforcement mechanism to make any companies adopt any of its suggestions. Many of the technologies it recommends are prohibitively expensive, so unless Congress passes big subsidies in the future, many of the ideas in the report may remain only ideas.

“The size of the transformation that we’re asking of industry is enormous,” Ed Rightor, director of the industrial program at the American Council for an Energy-Efficient Economy and a co-author of the report, told Yahoo News. Rightor noted that some of the technologies recommended in the report would cost manufacturers billions of dollars to install.

These are the four major categories of industrial decarbonization put forth by the DOE and how each of them could work.

Increasing efficiency and employing new technologies

There are ways of reducing the amount of energy needed to make products. For example, steel manufacturers can reuse steel from a torn-down building, the DOE says.

There are also new technologies. “We’ve got new tools in the toolbox: We’ve got smart manufacturing, we’ve got artificial intelligence, we’ve got systems efficiency,” Rightor said.

“Smart manufacturing” refers to using computer modeling and automation to improve manufacturing efficiencies.

“Let’s say a chemical manufacturer has a large manufacturing site, and they have thousands of heat sources,” Rightor, who co-chaired the team that developed the DOE report, said. “If they were to try to optimize all of those at the same time, it would be a crazy puzzle. But artificial intelligence and machine learning can help with the optimization, to help the manufacturer say ‘where is the best place to put those industrial heat pumps that is gonna have the greatest return, to use that heat most effectively, that is the most cost effective?’ To have the smallest amount of piping, to move the smallest distance: That kind of high-level computing is something that folks haven’t really done before, and they’re starting to use that.”

Electrification

Not every industrial process requires extremely high temperatures. Cooking foods, for example, can be done at temperatures easily attained through electricity. “If you look across all of industry, you can think about the fact that about a third of the process heat is below 250 to 300 degrees Centigrade, and there’s about a third that bumps it up to about 500 Centigrade or so, and then there’s about a third or that is really high temperature heat, above 600 degrees Centigrade,” Rightor said. “So the lower temperature, the stuff that’s under 300 degrees C, and typically under 200 degrees C, is readily electrifiable. So you can use heat pumps, for example, in the industrial space, or you can use microwaves, or infrared or induction heating. There’s a number of technologies that can be used in that low and moderate temperature range.”

The IRA contains $5.8 billion in tax credits for the investment in demonstration projects for industrial adoption of cleaner new technologies, and that can be used to show the private sector how switching to electricity is feasible for much of the sector.

Switching to lower-carbon fuels

For processes that require between 300 degrees C and 500 degrees C of heat, electrification may not be possible, but that doesn’t necessarily mean factories have to burn gas or coal. The DOE report argues for using lower-carbon fuels instead. For example, a lot of wood that is left over, often in the form of saw dust, when trees are cut down for paper or lumber could be gathered and turned into pellets that could be burned. That would, in theory, create no more emissions than letting the sawdust decompose in a landfill. (Some environmentalists, however, point out that once you create a market demand for the wood pellets, loggers may start cutting down virgin forest to create them, as has happened in the southern United States in response to Europe’s increased wood-burning for energy.)

Another possibility is burning “green hydrogen.” Hydrogen is created by splitting water into hydrogen and oxygen via a process called electrolysis, but electrolysis requires a lot of electricity. So hydrogen is only “green,” meaning low-carbon, if the electricity used to produce it comes from a clean source like wind or solar energy.

Green hydrogen is not yet a widely available technology. As the website Greentech Media explained in 2020, “The challenge right now is that big electrolyzers are in short supply, and plentiful supplies of renewable electricity still come at a significant price. Compared to more established production processes, electrolysis is very expensive, so the market for electrolyzers has been small.”

Industry leaders say that green hydrogen has potential, but note that they do not yet have access to it. “The possible approaches for a lower carbon steel industry include alternative iron and steelmaking, industrial electrification, hydrogen injection into blast furnaces, utilization of clean energy sources, increased use of ferrous scrap, and the integration of hydrogen into existing processes,” Philip Bell, president of the Steel Manufacturers Association, told Yahoo News in an email. “Some of these options, such as hydrogen, will need both technological development as well as a robust infrastructure and distribution build out before they can be utilized by the steel industry on a large scale.”

Carbon Capture and Storage

For the highest-temperature processes, the only way to eliminate emissions may be through capturing the carbon dioxide and reusing it or storing it underground. Carbon capture and storage, also known as CCS, typically uses a liquid to chemically remove carbon dioxide before it is emitted. The CO2 is compressed and transported to a storage site where it is pumped several thousand feet down below ground through wells into gaps like already extracted oil and gas reservoirs.

As with green hydrogen, the problem is that carbon capture and storage technology and infrastructure are not yet readily accessible and affordable in many cases. (For example, not every factory is near an empty oil reservoir and connected to it by pipeline.) The Infrastructure Investment and Jobs Act, signed by President Biden last summer, included $2 billion for carbon capture demonstration projects and $2.5 billion for grants to develop commercial large-scale carbon capture projects and infrastructure for transporting the CO2.

The DOE report also advocates for more research into alternatives for high-heat industrial processes.

Of course, the problem with carbon sequestration, electrification and switching to low-carbon fuels is that industry will make none of these changes unless they are cost-effective. Making them cheaper through subsidies, or making the alternatives illegal or more expensive through regulations, would be the work of Congress and the Biden administration.

In its own Roadmap to Carbon Neutrality released last October, the Portland Cement Association, a national nonprofit organization serving cement manufacturers, called for not just for research and development for CCS but for federal policy changes that would help the industry pay for its adoption. “More diverse tax code options, including enhanced capital cost recovery, expanded deductibility of financing costs, and access to tax-free bonds,” the group wrote.

“There’s going to be a continued need for resources,” Sean O’Neill, senior vice president of government affairs for the Portland Cement Association, told Yahoo News.

“This is a big puzzle to solve, that’s going to take a lot of different tools,” O’Neill said. “Once carbon capture technology does become scalable for the industrial sector, it is something that will be expensive. And obviously it takes investment from companies, it takes incentives from, in this case, the federal government, to help offset some of those costs.”

But at least one chamber of Congress is likely to be taken over by Republicans in the upcoming midterm elections, making it unlikely that Congress will be appropriating more money for addressing climate change thereafter. Meanwhile, some environmental and energy policy experts say that the DOE and the Environmental Protection Agency should set emissions standards for low-temperature industrial boilers to force them to switch to electricity, a move that would be sure to trigger backlash from manufacturers. Whether that will happen, and whether industry will decarbonize without being forced to, remains to be seen.