• 5 MIN READ

How States Can Lead on Industrial Decarbonization

The United States has an unprecedented opportunity to take meaningful action on industrial decarbonization. Last year, Congress came together against all odds to pass a Bipartisan Infrastructure Law that includes billions of dollars for state projects to limit carbon pollution from industrial facilities. The law’s passage, along with the recent Biden-Harris Administration announcement on actions to reduce industrial and manufacturing emissions, mark a significant building of federal momentum. State governments must capitalize on this moment by enacting state policies to support industrial decarbonization, priming them to make full use of federal programs and funding.  

Including the decarbonization of this vital sector in state policies and planning will set a state apart as a leader in industrial decarbonization, preserve good industry jobs, and attract economic investment.  

Key Takeaways:

  • States have an opportunity and responsibility to support and attract industrial decarbonization projects. 
  • Industrial decarbonization has local environmental, community, and economic benefits that can be optimized through state programs.
  • Federal programs can be utilized and complimented by state governments and agencies.

State Policies to Support Industrial Decarbonization  

Industrial decarbonization doesn’t lend itself to one-size-fits-all solutions. The diversity of facilities, their processes, the sources of energy they use, and the products they provide means that we will need a robust portfolio of federal and state policies to support innovation, investment, and deployment of carbon mitigation solutions.  

The I3 Policy Blueprint is one such portfolio. The blueprint outlines a mix of nascent and established technologies, including carbon management, low- and zero-carbon hydrogen, electrification, energy and feedstock efficiency, and the financial policy mechanisms necessary to support them.  

Federal programs are increasingly supportive of these solutions, making it a critical time for states to attract and support industrial decarbonization projects at the local, state, and regional scale where the implementation of federal programs will take place.   

Carbon Management  

Carbon management is a general term for the carbon capture, utilization, and storage solutions necessary to cut the hardest-to-abate emissions from industry and manufacturing.  

To support carbon management solutions, states should clarify rules and regulations around carbon dioxide (CO2) storage, regional planning around transportation and storage infrastructure, and clarify agency responsibilities and rules around CO2 ownership. Financial incentives, clean product standards, tax policies, and state financing programs can be tailored or expanded to support this key solution. Such measures would ensure that necessary financial incentives are present and accessible for carbon management projects.  

Furthermore, carbon management market development can be supported with state procurement standards and offtake agreements to secure the purchase of captured carbon or credits. 

Clean Hydrogen 

Low- and zero-carbon hydrogen solutions are of growing interest. These solutions present a key opportunity for decarbonizing on-site fuel combustion for our harder-to-abate industries, especially those requiring high-temperature heat in the industrial or manufacturing process.  

Explicitly including low- and zero-carbon hydrogen use in state sustainability plans and granting state regulatory commissions the authority to include related infrastructure in their resource plans will provide a measure of certainty for prospective hydrogen projects. Establishing a regulatory framework for permitting can support efficient project development. A predictable and timely permitting process for hydrogen production, transport, and storage will help attract projects to states, as will offering financial incentives for hydrogen production and end use.  

Electrification and Efficiency  

Electrifying industry wherever possible presents a great opportunity to cut direct emissions associated with low- and medium-heat industrial processes by switching away from on-site fossil fuel use and taking advantage of an increasingly clean electric grid. Increasing energy efficiency further enhances all the solutions mentioned above, as increasing efficiency reduces the amount of energy needed overall.  

State governments are well-positioned to convene utilities, state regulatory commissions, and industrial customers to consider facilities’ electricity needs. For industry to effectively utilize increased levels of low-carbon electricity, additional infrastructure will be needed for conveying and delivering that electricity, providing economic viability, and making sure that it is reliable. 

State governments can provide additional financial incentives, such as tax credits or grants to complement those provided at the federal level, for technologies that require support for broader commercialization and deployment. These incentives can be particularly effective to accelerate the replacement of large capital investments at moments of equipment turnover, electrifying key processes and increasing energy efficiency. Additionally, improving permitting procedures to accelerate approval timelines will accelerate that beneficial electrification. 

Grid and Infrastructure Enhancements 

Scaling up electrolytic hydrogen powered by renewable or nuclear energy will require a vast expansion of available zero-carbon electricity. States should work with the federal government and regional grid authorities to enact policies that facilitate expansion and hardening of transmission and distribution infrastructure.  

In areas with abundant renewable resources, incentives that allow excess renewable capacity generation to be moved via transmission infrastructure to areas with less abundant renewable resources for hydrogen production via electrolysis would increase confidence in additional renewable resource development and the viability of low- and high-temperature electrolysis projects.  

The establishment of hydrogen hubs should allow for co-location of hydrogen production and renewable energy resources. However, to scale up this solution to the degree necessary for the midcentury decarbonization of this challenging sector, reliable transmission of low-cost, zero-carbon electricity will be critical. Additionally, regional transmission expansion can support affordable electrification of industrial processes by connecting regions of the US with ample and excess renewable capacity to large industrial customers.   

Procurement Policies  

Procurement is less of a technical solution and more a policy to support market development for low-carbon industrial products. A key place to start is to support information and disclosure policies.  

In order to procure low-carbon products, we need to be able to clearly compare the emissions intensity data across facilities and products. It can be extremely challenging for small and medium manufacturers to develop such reporting mechanisms, so technical assistance and state grants are critical to enacting procurement and disclosure policies.  

Procurement bonus policies are another tool states can use to encourage companies to outperform each other on low-carbon innovation. A procurement bonus provides a cost discount to a company’s bid if it has a lower carbon intensity than its competitors.  

Finally, public sector procurement standards could be established to create a required carbon intensity benchmark for public purchasing. To do this, states will need to set a threshold focused on specific product and material types that are somewhat more ambitious than the market average. States will also need to increase that threshold’s stringency over time to encourage continued innovation toward midcentury decarbonization. 

Collaborative Innovation 

The policy recommendations outlined here will get states on a path toward decarbonizing industry. Still, we need to do more if we are to achieve net-zero emissions by midcentury.  

States can address local challenges and capitalize on unique opportunities for industrial decarbonization by developing a state task force dedicated to exploring the technologies and policies that will help decarbonize a state or region most effectively. This group should be diverse, pulling from a variety of stakeholders and benefiting the industries most relevant and communities most in need. 

It is worth noting that these solutions only represent crosscutting mechanisms to support decarbonization. Switching feedstocks, increasing input efficiency, and using recycled materials in specific industries also provide significant opportunities to reduce negative climatic, environmental, and societal impacts from the industrial and manufacturing sectors.  

States have led the way in accelerating renewables and reducing emissions from cars and trucks. Now it’s time for them to do the same to increase efficiency and reduce emissions from smokestacks everywhere.  

State Resources 

The Bipartisan Infrastructure Law, while a federal law, has many opportunities for states to fund industrial decarbonization initiatives. Note that the Bipartisan Infrastructure Law’s formal title is the Infrastructure Investment and Jobs Act (IIJA). The following resources can help states navigate opportunities, eligibility, and key dates: 

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Senior Program Coordinator - Carbon Management, GPI

Carrie Danner joined the Great Plains Institute in 2023 and serves as the operations coordinator for the Carbon Management team. In her work, she supports all projects within the program to elevate operations, specifically in the grant making and event planning spaces. Carrie earned a bachelor’s degree from Knox College in environmental studies. Prior to joining GPI, she supported programs at the Conservation Corps of Minnesota & Iowa as their member experience administrator.

Carbon Management Program Associate, GPI

Alana joined GPI in 2024 as a program associate on the Carbon Management team, specifically supporting the Industrial Innovation Initiative, where she helps to advance industrial decarbonization through GPI’s consensus-building approach. Alana previously worked as an account executive at Jamf, where she helped current K-12 education customers improve and scale the management and security of their Apple device deployments. Alana has spent most of her professional years working with Minnesota nonprofits, including two years as an AmeriCorps member with Twin Cities Habitat for Humanity.  She holds a bachelor’s degree in community environmental studies from the University of Wisconsin-Eau Claire.

Ankita Gangotra, Associate, WRI

Dr. Ankita Gangotra is an Associate in WRI’s US Climate Program, researching avenues to decarbonize the industrial sector, focusing on cement and steel decarbonization, environmental trade policies and international cooperation. Prior to joining WRI, Ankita was a postdoctoral research fellow in the School of Foreign Service and the Department of Physics at Georgetown University. Her research looked at the readily available technology and policy options for upgrading low-carbon cement production in the United States. Ankita has an integrated Master's in Electronics Engineering with Nanotechnology from the University of York, UK (2015) and a Ph.D. in Physics from the University of Auckland, New Zealand (2020). During her time in New Zealand, Ankita interned at the Office of the Prime Minister's Chief Science Advisor looking into equity, diversity and inclusion policy options for New Zealand’s science, research and innovation workforce.

Carrie Dellesky, Program and Outreach Manager, Carbon Removal and Industrial Innovation, WRI

Carrie Dellesky is the Program and Outreach Manager for Carbon Removal and Industrial Innovation. She develops strategies to advance policies and practices for scaling up a suite of carbon removal approaches and decarbonizing the industrial sector. She engages allies and builds and expands partnerships to mobilize champions and enhance visibility, action and impact. She also leads communications to amplify research and thought leadership, including messaging, media relations, event planning, social media and digital strategy.

Zachary Byrum, Research Analyst, WRI

Zachary Byrum is a Research Analyst in WRI's U.S. Climate Program, where he provides technology and policy analysis for carbon removal and deep decarbonization. His work focuses on pathways to reduce industrial emissions as well as bolstering technological carbon removal. Prior to WRI, Zach was a research assistant in the Carbon Management Research Initiative at the Center on Global Energy Policy. In the preceding years, he served as White House Intern in the National Economic Council under the Obama Administration and then an assistant analyst at the Congressional Budget Office. Zach holds a Master of Public Administration in Environmental Science and Policy from the School of International and Public Affairs at Columbia University and a B.A. in Economics and Political Science from Goucher College.

Katie Lebling, Associate, WRI

Katie Lebling is an Associate in WRI's Climate Program where she works on research and analysis of technological carbon removal approaches and industrial decarbonization. Before joining WRI, she worked at The Asia Group, and interned at the Woodrow Wilson Center’s China Environment Forum and the Treasury Department’s Office of Environment and Energy. She holds a Master's degree from Johns Hopkins School of Advanced International Studies in Energy, Resources, and the Environment, where she spent one year of the program studying in Nanjing, China, and has a B.A. from Colby College in Biology and Chinese language.

Debbie Weyl, Deputy Director, WRI United States

Debbie Karpay Weyl is the Deputy Director for WRI U.S. She previously served as Manager for the Buildings Initiative at WRI Ross Center for Sustainable Cities. She led an expanding global partnership to accelerate building energy efficiency in cities around the world. She also contributed to program management and development, research, and knowledge exchange for urban energy efficiency and sustainability. Debbie joined WRI from CLASP, a global non-profit organization that improves the environmental and energy performance of appliances, lighting and equipment. From 2011-2016 Debbie managed and developed global programs, led research projects, and facilitated collaboration among international experts and other representatives in the public, private, and non-profit sectors. Prior to joining CLASP, Debbie worked at the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, where she was a contractor supporting building efficiency and other energy efficiency programs in the United States. Debbie holds a Master of Science in Environment and Development from the London School of Economics and Political Science, and a B.A. in Politics (Political Economy and International Relations) from Princeton University.

Angela Anderson, Director of Industrial Innovation and Carbon Removal, WRI United States

Angela Anderson is the Director of Industrial Innovation and Carbon Removal in the Climate Program. She leads WRI's growing portfolio of work in industrial decarbonization and carbon removal and aims to change narratives around “hard-to-abate” sectors and promote the natural and technological interventions required to achieve net-zero targets. Prior to joining WRI, Angela worked as a program director, coalition builder, international advocate, and campaign strategist. She led the Climate and Energy Program at the Union of Concerned Scientists for ten years; facilitated US-NGO engagement in the international climate negotiations while at US Climate Action Network and at the Pew Environmental Trust; and founded Clear the Air, a national coalition to reduce pollution from power plants. Angela holds a B.A. in political science from Colorado State University.

Patrice Lahlum, Vice President of Carbon Management, GPI

Patrice Lahlum is the vice president of the Carbon Management program at the Great Plains Institute. The Institute, headquartered in Minneapolis, MN, works with diverse stakeholders and communities across the country to transform the energy system to benefit people, the economy, and the environment. We strive to combine our unique consensus-building approach, expert knowledge and analysis, and local action to promote solutions that strengthen communities, shore up the nation’s industrial base, and enhance domestic energy independence, all while eliminating carbon emissions. Patrice oversees several initiatives including the Carbon Capture Coalition, Industrial Innovation Initiative, Carbon Action Alliance, and the Regional Carbon Capture Deployment Initiative.

Kate Sullivan, Senior Program Coordinator, Carbon Management, GPI

Kate Sullivan joined the Great Plains Institute in 2019. As Senior rogram Coordinator, Kate uses her analytical and design skills to provide research, writing, and logistical support across the Carbon Management team. Prior to joining GPI, Kate worked as an Energy Counselor in the Center for Energy and Environment’s residential department, assisting homeowners with their energy needs and providing resources for efficiency upgrades. Kate earned her BA in Biology from St. Olaf College with an emphasis in Environmental Studies.

David Soll, Industrial Decarbonization Manager, GPI

David Soll joined the Great Plains Institute in 2023 and serves as Industrial Decarbonization Manager. He oversees the Industrial Innovation Initiative, a coalition advancing decarbonization solutions for the Midcontinent region’s most important industrial sectors. Prior to joining GPI, he taught history and environmental studies at the University of Wisconsin-Eau Claire, where he focused on urban infrastructure and energy conservation. David earned a Master’s in government from the University of Texas at Austin and a PhD in history from Brandeis University.

Jill Syvrud, Senior Program Manager, Carbon Management, GPI

Jill Syvrud joined the Great Plains Institute in 2017 and serves as the program manager for the Carbon Management Program. In addition to overseeing the overall program, Jill directly supports the Industrial Innovation Initiative, a coalition advancing decarbonization solutions for the Midcontinent region’s most important industrial sectors. Jill earned a bachelor of science in biology from the University of Wisconsin–Eau Claire and a master of science degree in science technology and environmental policy from the University of Minnesota’s Humphrey School of Public Affairs. Jill’s past experience includes multiple graduate research assistantships concentrating on technology innovation and sustainable megacities along and a previous position as an administrative and outreach coordination intern with the Midwest Renewable Energy Association.