08/12/2024 | News release | Distributed by Public on 08/12/2024 16:07
The U.S. Department of Energy's Office of Clean Energy Demonstrations (OCED) rolled out one of the largest federally funded climate programs in history earlier this year. With funding from the Biden-Harris administration's Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA), the new program, called the Industrial Demonstrations Program (IDP), tackles the notoriously emissions-intensive industrial sector.
Decarbonizing heavy industry is immensely important. It is not only a top priority for meeting climate goals, since industry lags behindother sectors in terms of reducing carbon emissions, but it can also accomplish important economic and environmental goals, like modernizing American manufacturing and addressing localized air pollution. We've previously writtenabout the IDP's formation and explained how the funding process will play out over time. Now, we take a closer look at the projects, identifying trends that will inform industrial decarbonization policy in the coming years.
Before diving into the projects, it helps to put the IDP in the context of other major clean energy programs. With $6 billion in funding, the IDP is the third-largest program funded by OCED, which manages a portfolio of about $26 billion from the BIL and IRA. The IDP follows closely behind the Hydrogen Hubs ($8 billion) and Carbon Management ($7 billion) programs, but unlike those, which are dedicated to specific emerging climate solutions, the IDP spans the existing industrial sector, funding projects across multiple manufacturing industries to demonstrate a range of novel decarbonization approaches and technologies at scale. Its approach is to co-fund with private industry a diversity of projects and technologies with the goal of finding successful formulas and setting the stage for industry-wide adoption in the future.
In total, there are 33 projects across eight industry groups.
After categorizing each of the projects by the decarbonization levers used-e.g., electrification; energy efficiency; carbon capture, utilization, and storage (CCUS), etc.-we found common themes among industries, promising trends, and notable gaps in funding where there is room for future investment.
While the IDP is just one step toward severely needed investmentin the industrial sector, the trends across projects show where there is momentum and where there are gaps. Clearly, future investment in industrial decarbonization is headed toward broad electrification, especially for heat. Energy storage is another growth area that could also solve some of the main challenges with industrial electrification, like continuous energy supply and reliability.
On the other hand, a major gap among IDP projects is eliminating process emissions. Only four projects deal with process emissions (two in cement, one in steel, and one indirectly in chemicals). This is not entirely surprising because the IDP is designed to fund technologies with high technological maturity, but the gap suggests that more research, development, and demonstration investments could be made in advanced technologies tackling process emissions, such as molten oxide electrolysis for iron and steel and pre-calciner capture for cement. Another area lacking in the IDP and ripe for future funding is electrification of the most emissions-intensive processes. These could include electric kilns and pre-calciners for cement as well as electric steam crackers for chemicals.
For now, the IDP has provided a much-needed spark for industrial decarbonization. We plan to stay engaged as projects develop, especially as they impact communities, and build the case for future investments.