How the US government is incentivizing greener manufacturing

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How the US government is incentivizing greener manufacturing

How sustainable is an electric vehicle whose manufacturing process depends heavily on natural gas? How "green" can a LEED-certified building be when it is constructed with materials with major carbon footprints such as glass and concrete?

Even when creating sustainable products, industrial activities like construction and manufacturing contribute greatly to pollution. These activities account for nearly a third of U.S. greenhouse gas emissions, according to the Environmental Protection Agency. Addressing climate change is one of President Joe Biden's top priorities, and his administration has taken aim at some of these unsustainable industrial practices in part of his executive order to achieve net-zero carbon emissions throughout the U.S. economy by 2050.

Machinery Partner researched the U.S. government's commitments to reducing carbon dioxide and other greenhouse gas emissions resulting from manufacturing industry processes over the past few years. Between the executive order and funding from the Bipartisan Infrastructure Law of 2021 and the Inflation Reduction Act of 2022, there has been substantial activity to reduce U.S. industrial pollution. This has taken the form of direct investments into research and technologies to reduce pollution in manufacturing, as well as using the purchasing power of the federal government to prioritize products with lower carbon footprints.

In addition to protecting Earth from the devastating effects of climate change, these efforts also support the U.S. manufacturing industry. By focusing investments in American-made low-emission products, the federal government can prop up domestic companies and grow jobs in an industry that has been struggling for several decades.

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Grants and direct investment

The Department of Energy allocated more than $6 billion in funding for clean manufacturing technology projects in March 2023. With this funding, the federal government will pay for up to half of the costs for the chosen early-stage, private-sector projects that would reduce emissions in industrial processes that utilize a lot of energy. The program, called the Industrial Demonstrations Program, will select projects and finalize awards by spring 2024.

In June 2023, a smaller DOE program provided $135 million for 40 projects to research, develop, and pilot-scale methods of reducing energy consumption and emissions in the industrial sector. The projects—taking place at national laboratories, universities, and companies across the U.S.—focus on reducing emissions in cement and concrete, food and beverages, chemicals, petroleum refining, and iron and steel.

The month after, the DOE also announced $100 million in grants for state and local governments and public utilities to procure and use products made with converted carbon emissions. These grants will cover up to half the cost of these materials for awardees, creating further demand for these low-emission products in the economy.

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Buying green for federal projects

In addition to these direct funding opportunities, federal agencies have begun to demand lower-emissions materials for their infrastructure projects.

Biden's 2021 executive order created the Buy Clean Initiative, which prioritizes using low-carbon, American-made construction materials in federal projects. Putting $630 billion in annual federal spending on the line—plus even more in state government spending—has pressured greener practices among U.S. manufacturing companies.

After years of developing and testing low-emissions material requirements, the General Services Administration released official standards in December 2023 for asphalt, concrete, glass, and steel. The month before, the agency also announced plans to invest $2 billion across more than 150 federal projects utilizing these lower-emission products. The GSA estimates that incorporating these lower-carbon materials will reduce the carbon emissions from these projects by tens of thousands of metric tons.

Throughout 2023, the GSA and other agencies announced several high-profile projects using low-carbon procurement standards, including the Department of Homeland Security's new headquarters and the Alexander Hamilton U.S. Custom House in New York City.

The GSA set the first "Buy Clean" standards for concrete and asphalt in March 2022; by December, it had awarded a concrete contract based on the new concrete standards.

GSA drafted more comprehensive requirements by May 2023, setting standards for carbon emissions for concrete/cement, asphalt, steel, and glass. Following the release, the agency ran a six-month pilot program applying the requirements to 11 federal projects, including new construction, land port of entry, modernization, and paving projects. The value of affected materials across these projects totaled around $300 million.

In fall 2022, the Department of Transportation released its Buy Clean policies, another major feat considering that transportation comprises another near-third of greenhouse gas emissions. By October, the department had distributed $7.1 million to state DOTs to identify ways to reduce emissions in highway construction, with a focus on sustainable pavements. Other agencies, such as the Federal Emergency Management Agency and the Department of Housing and Urban Development, have also readily incorporated low-carbon materials into their projects.

By encouraging green manufacturing and creating demand for low-emission materials, these federal programs are forging the way to greener U.S. industrial production.

Written by: Paxtyn Merten.

‍Story editing by Shannon Luders-Manuel. Copy editing by Paris Close.