U.S. Department of Energy Workshop on Transforming Industry: Strategies for Decarbonization Text Version (2024)

AVI SCHULTZ: Good morning. Thank you. Thank you, Ali Zaidi. I really appreciate those inspiring remarks. And let me first actually start off by saying, of course, I failed to introduce myself at the beginning of this workshop. I am Avi Schultz. I am the director of the Industrial Efficiency and Decarbonization Office. And I’m really, really excited to be here to talk about the future of industrial decarbonization work at the Department of Energy and, of course, broadly speaking, for the entire U.S. government and for the country.So, before we turn it over to an introductory panel to dive a little bit deeper into what we’re doing in DOE and how we’re leveraging our expertise in DOE to enable industrial decarbonization, I thought it would be helpful to spend a few minutes overviewing really where DOE is today in terms of industrial decarbonization work. Of course, so much has changed with the historic new investments that we’ve received from the Bipartisan Infrastructure Law and the Inflation Reduction Act. That has really made a difference in what we’re able to do in DOE.

And I’ll say that I’ve been in DOE for a little bit more than 10 years now, about 10.5 years. And DOE today looks entirely different from the DOE that I joined about 10 years ago. So, I thought it would be helpful to help everyone here understand where we are in DOE today. And let me start off by saying, while we have a lot of offices working on industrial decarbonization—and I’ll talk a little bit about what that looks like in a minute—we are highly coordinated within the department through what we call a Joint Strategies team, particularly the Industrial Technologies Joint Strategies team, which is chartered directly by the Secretary and Deputy Secretary in the department, giving us the mission to develop a coordinated strategy. We’ll develop a strategy for the country, coordinate that with all of the offices that have activities and equities in that space, and then engaging externally in a single coordinated fashion. This workshop is exactly an example of that effort. So, while we and IEDO—we’re taking the lead on this specific effort, this is building very closely off of previous efforts, including the Industrial Decarbonization Roadmap, the Pathways to Commercial Liftoff, reports on industrial decarbonization.

And we have representatives from all of the offices involved in this effort here attending the workshop today. And this really is a strategy that we’re going to be talking about for all of DOE. What this Joint Strategy team is really focused on is developing that strategy and then turning it into execution. So, how do we leverage what we’re working on in this strategy? How do we map out what we need to do as a country in terms of the technology, research, development, deployment, and adoption of all of these technologies? And how do we actually translate those into things that are actually going to make a difference in terms of how DOE operates and what we’re doing?

So, multiyear program plans, our funding opportunities, the actual projects that we’re selecting, the execution and monitoring and coordination of those projects—all of that is being informed by the strategy we’re developing through this Joint Strategy team and this high-level DOE coordination. So, what are we coordinating? So, I mentioned that DOE looks very different than where I started about 10 years ago. And the way I always think about that is, when I first started at DOE, we spent a lot of time thinking about valleys of death.

It was kind of ingrained in the culture of DOE that, well, we’re really good at funding research and development. We’re really good at funding analysis. We have these tools that we can use to help support and accelerate activity in the private sector. But we don’t really have the tools or funds available to directly encourage and support deployment and large-scale demonstrations. And so, we had to be really, really clever in thinking about new programs that could get a lot of those activities a little bit indirectly.

That’s an entirely different story today, of course. So, what I really like to show on this slide, we now have offices in the Department of Energy that touch every single one of these steps of technology development and deployment through to full adoption of these technologies. And we have really clear lanes and areas that these offices can work on. So, we have offices, like IEDO and the other technology offices, that have the core subject-matter expertise in the specific technologies that we need to deploy. Of course, for IEDO, that’s in the industrial technologies for decarbonization.

And then we work really closely with our colleagues in the Office of Science on the early technology and on the early discovery side to discover what is out there that can be developed for the goals that we’re setting out for the actual applications. And then we’re working really closely with our colleagues in the OCED (the Office of Clean Energy Demonstrations), MESC (the Office of Manufacturing and Energy Supply Chains), and the Loan Programs Office to actually shepherd those technologies through the full piloting and validation, large-scale demonstrations, and actual deployment to the market.

And then that’s where we, again, on the other side of that, work closely with our colleagues in those demonstration deployment offices to utilize the resources that we’ve been developing in the technology offices on technical expertise. So, using the analysis, the partnerships, the resources that we develop and having that core technical expertise, and working with those offices to understand how we can accelerate adoption of these technologies. We also, of course, work closely horizontally across the different technology areas. While we are the Industrial Efficiency and Decarbonization Office, we are not the only office that is relevant to industrial decarbonization.

In the Industrial Decarbonization Roadmap that we released a little bit less than 2 years ago now, we laid out four pillars that are really going to be needed to the cover the technologies that are going to be needed for industrial decarbonization. This slide is showing those four pillars in addition to a fifth pillar, the manufacturing technology that underlies all of those new technologies that we’re going to need to develop and deploy and commercialize. And we’re working closely with these other applied technology offices, as well as the Office of Science and ARPA-E in a coordination mechanism that we’ve been calling TIEReD (Technologies for Industrial Emissions Reduction Development program).

So, we’re working very closely with our sister office, the Advanced Materials and Manufacturing Technology Office (or AMMTO) on the manufacturing technologies that we need to develop; offices like nuclear energy, bioenergy, hydrogen and fuel cells, solar; and then the Office of Fossil Energy and Carbon Management on the carbon capture and utilization side. And then, of course, we’re working very closely, as I mentioned, coordinating with the demonstration deployment programs: OCED, LPO, MESC, and others. And in order to … I mentioned that part of the role of this coordination is having a coordinated external-facing engagement mechanism.

And one of the key ways we’ve done that is by putting all of the resources from all of these offices up in a single point on our website on energy.gov. So, the website there, energy.gov/industrial-technologies, is a single point where everyone can go to find all of the work that’s being done by all of these offices. So while I’ve spent a few minutes here talking about internal DOE bureaucracy and org. charts, you don’t need to understand any of that to understand what we’re doing and what opportunities we have available for the folks working in the industrial sector.

To give just a couple of examples of what we’re actually executing through these programs, on the TIEReD side—so the applied technology offices and science side—one of the really important initiatives that we’ve launched is what we call our Energy Earthshots™, which are all of DOE efforts to coordinate work across … It spans across technology offices to make sure that we are all rowing in the same direction, making sure that our research and development efforts are all really geared towards those really tough problems that we need to coordinate to solve.

In the industrial decarbonization space, there are two of the eight Earthshots in particular that really touch what we’re working on. One, the first is the Industrial Heat Shot™ that’s really focused on developing technologies and commercializing those technologies by 2035 that are going to enable 85% reduction in CO₂emissions from industrial process heating. And so, in particular, what we’re focused in that effort is through three thrusts: electrification of heating, integration of low-emissions heat sources, as well as innovative low- or no-heat technologies.

And then the second Energy Earthshot that is really bringing together a lot of our industrial decarbonization efforts is the Clean Fuels and Products Shot™. And this effort is really focused on decarbonizing the feedstocks that are required for the chemical sector, particularly the organic chemicals manufacturing sector. And so, there are two specific avenues of work that are being pursued through the Clean Fuels and Products Shot: mobilizing renewable carbon resources, where we’re working closely with our colleagues in bioenergy; and then carbon-efficient conversion technologies.

And of course, as Ali mentioned just a few minutes ago, we’re really, really excited on the demonstration and deployment program side to have some really, really big announcements that we just came out with in DOE around the Industrial Demonstrations Program. So this is a huge, huge effort. And I’m sure you’ll hear more about this on our next panel as well about covering a $20 billion total investment, including cost share, enabled by $6 billion from the Inflation Reduction Act for large-scale demonstrations of transformational industrial technologies.

And then in addition, of course, we recently announced a few months ago the clean hydrogen hubs, which of course are also going to be integrally essential to ensuring that we have hydrogen as a key low carbon feedstock for input into the industrial sector. So, with that, let me now turn it over to our next panel. And I’m going to introduce our moderator and our honored speakers that we have today. And so, I’d like to start out by introducing our moderator. We’re really excited to have another representative of the White House here with us today, Andres Clarens, who’s the assistant director of industrial decarbonization from OSTP (the Office of Science and Technology Policy). And he’ll be having a brief conversation with two senior representatives of DOE: first, our deputy secretary, David Turk, who we’re really, really excited to have with us today, as well as Carolyn Snyder, our deputy assistant secretary for buildings and industry. So, with that, let me introduce Andres, Deputy Secretary Turk, and Carolyn up on stage.

ANDRES CLARENS: Good morning. Deputy Secretary Turk, I’m going to start with you. We heard a moment ago from National Climate Advisor Ali Zaidi about how this is a critical moment and that we are going to have a difficult time achieving our 2050 decarbonization goals if we’re not able to make some progress on the industrial sector. And so I’d love it if you could start us off by talking a little bit about how DOE is thinking about this moment and decarbonizing the industrial space.

DAVID TURK: Let me just start, Andre, with a big thanks for you coming to join the team over at the White House at OSTP. And great that you all heard from Ali Zaidi, who’s always a tough act to follow, and incredible passion and commitment to what we’re all trying to do. And I have to thank our own DOE team as well. Carolyn’s been such a phenomenal champion and leader in our department, and Avi, I’ve had a chance to work with several times in my career, and just an incredible partner, Carolyn, with you and with the rest of the team. So, thanks to our DOE team for stepping up at this critical moment.

I think this is such a—it’s a challenge, but there’s a real opportunity for all of us here. I don’t need to get into the 38% of our overall emissions come from a variety of industrial technologies. You all know that. You’re all living and breathing that. And I also don’t need to use the word hard to decarbonize or harder to decarbonize. To me, when you say words like that, all it means is we need to do everything we can with every passing day because it’s not going to solve itself. And we just need to do the hard work from the government side, from the industry side, and work in intense partnership going forward.

As I think of this space, it’s both diverse, but we’ve also been optimizing for literally generations in terms of our industrial processes. The challenge, of course, is we’ve optimized for a certain set of factors, and now, we need to reoptimize, we need to think differently to make sure we’re avoiding carbon emissions and other greenhouse gas emissions. So, I know it would have been better if we would have optimized at the start to take that into account. But that’s just not how history and how everything worked.

I also know it’s going to come down to an awful lot of people stepping up, making careers in this space. Whether you’re working in the government, whether you’re working in industry, whether you’re working in academia, or other stakeholders, we’re going to need a lot of folks putting their sweat and ingenuity into what we need to get done. And so, I just wanted to start this session, this panel, with a big thanks for all of you making your career choices to be part of this team.

That’s what this whole spirit is about with this new analysis, this new report that we’re trying to put together to figure out how we can work hand in hand, put some pathways together. And then, of course, everything in life is execution. I know we’ll get into that as well.

ANDRES CLARENS: Great. And I just want to say that, about 2 years ago, I was at a conference of all the university and energy institute leaders. And you basically said, we need you to come and help us execute on this and come take some time in the government. And here I am. So it’s exciting to be sharing a stage with you.

DAVID TURK: It worked. Someone listened to me.

ANDRES CLARENS: It works. That pitch works.

DAVID TURK: I’ve been deputy secretary now for 3 years and now have proof that one person listen to me during that time. That’s great.

ANDRES CLARENS: It can happen to one of you. So, Deputy Assistant Secretary Snyder, I’d like to ask you the question of how the U.S. industrial sector meets this moment that Ali Zaidi talked about.

CAROLYN SNYDER: Thanks. I want to focus our attention in the next 2 days on a really humbling finding from our recent analysis. And it’s consistent with other IEA and other analysis. Which is the emission reductions that we need to achieve across the industrial sectors, as you all know—a very diverse space that you represent—more than 60% of those emissions reductions are from technologies that are either earlier stage in the innovation process or still in the minds of potentially people in this room.

And as much as we are going to continue to celebrate the historic investments that Avi called out earlier and work together, as the deputy secretary said, to be get the most we can out of that public investment, and it’s a remarkable moment of history, we also need to look forward and really focus ourselves on: How are we going to get those large emissions reductions? Where are the innovations going to come from? How do we need to be working together in new and different ways?

Avi showed that we mean it in saying, it’s an all of federal government approach. Apologies for our acronym soup. We just couldn’t do it. We’re DOE we got to put all the org charts up there. But it’s one of the elements where, under the deputy secretaries leadership and support for this space, we were able to create an entire office focused solely on industrial efficiency and decarbonization. It built off the strength of history from our industrial technologies office and advanced manufacturing office.

But as Avi was walking through those different elements, we have an office now centered in that innovation challenge, working on, yes, efficiency and electrification. But then partnering with our supply side offices, as Avi walked through, carbon management. And then also the foundational science and materials and manufacturing work done by our Office of Science and our Advanced Material and Manufacturing Technologies Office. So we really do mean it when we say, it’s an all of DOE approach. But it really needs to be an all of the United States approach.

And that’s why the people in this room, the organizations you represent … One of my hopes is we’ve got a new version of that framework that works for all of us. We’re you see yourself driving that innovation that’s needed to achieve those ambitious 2050 goals. And I also want to call out the fact that in addition to the historic deployment funding, the agency continues to do historic funding in innovation as well. We estimate around $1 billion a year through our annual funding is going to industrial decarbonization innovation, as Avi represented up there. In our IEDO office alone, we funded $500 million of new research in the last 2 years that directly came from our work with many of you on the Industrial Decarbonization Roadmap.

So, when you think about these daunting challenges ahead, know that the resources are there and we continue to get support to drive both the deployment challenges of today, accelerating commercialization. But also the innovation and science that you are dreaming in your head and that you’re working on in your organizations.

ANDRES CLARENS: Great. Thank you. Deputy Secretary Turk, I’d like to focus for a moment on the 40% of emissions that are more near-term because we just heard about the innovation pipeline and how DOE is thinking about that. How is DOE thinking about the opportunities for decarbonization that are more immediate?

DAVID TURK: Yeah, so I’m going to be really direct and clear. We are in the midst of a grand experiment in our country right now. And I’m not sure we’ve ever tried what we’re trying to do with the demonstration side. We obviously need to keep focusing on the innovation piece. We need to keep focusing on all the levers Carolyn was talking about. But if we’re going to make progress on our decarbonization path, as well as doing the kinds of things in terms of revitalizing manufacturing in our communities that President Biden has spoken about, we’re going to just need to do things differently.

And I like to call this the clean energy industrial strategy that we’re trying to execute on. The volume of the funding that we’ve got for some of these demonstration programs, some of the loan programs, some of the tax incentives is just far and away above and beyond anything that we’ve had before. Certainly in recent times over the last few generations. So Avi got into some of the numbers. We announced $6 billion—that’s billion with a B—for a variety of demonstration programs, industrial demonstration programs all across the country.

I’ve had a chance to visit a few of those. I was in Kentucky a few weeks ago visiting a copper recycler. And just super impressive, not only to see what they’re going to be doing in that particular facility, but what that means for the community in Kentucky in which that facility is located. And not only the leadership of the company, but the workers in that company. And this is going to make them—the thing that I took away from that—I think this is true for a lot of these other programs and efforts that we’re supporting—is this not only reducing emissions—and it is reducing emissions significantly.

It’s putting that company and that employer on a pathway for success for generations. Now, that’s not assured. Nothing’s assured in the private sector. A lot more work needs to go in going forward from the private sector, and certainly from the government side. But that’s just huge. And we’ve not done that before. We certainly at the Department of Energy have not had $6 billion to do demonstration programs for industrial decarb. That’s just not what we’ve had in our tool belt. And that’s just one example.

I’ve mentioned the $7 billion that’s going for hydrogen hubs. That’s a big amount of money going to hydrogen hubs across the country. There’s other funding going for hydrogen, including on the demand creation side. We just announced four billion or so dollars. We’ve got $10 billion total for something called 48C, for those who are following that. That’s a tax credit, but it operates more like a grant. And I can go on and on. For this experiment to be successful, we’re going to need to have intensive conversations and intensive partnerships.

We’re not going to do industrial strategy like the old Soviet Union did it, or what China is doing it. We’re not going to have 5-year plans where someone as smart as Carolyn is, as smart as Avi is, as smart as Andres is—this is not going to be a D.C., like we know everything and everybody just needs to step in line and salute. What this is going to be successful is if we’re listening to folks who are doing this in the real world. And I’m not just talking the C-suite folks; I’m talking the actual people who are doing things in the real in the real world.

And we need to have that guidance. We need to have that direction. We need to have that feedback all along. So that when you as taxpayers, and your friends, your families invest money in America, we need to channel that. We need to get the very most out of all those tools that we’ve been given on that front. So this is a grand experiment. It’s only going to be successful if we all have incredibly candid, real world actionable conversations. And certainly, our job from the government side is to listen, to change, to reflect, to make sure we’re getting the very most out of this phenomenal opportunity that we’ve all been given.

ANDRES CLARENS: Great. Thank you. I just want to follow up on some of the remarks you just made and ask how DOE is thinking about bridging the divide between the immediate opportunities and the large scale demonstrations for those that are in labs thinking about innovation. It can be daunting to think about these OCED announcements that are very large. And so how’s DOE thinking about bridging that divide?

DAVID TURK: Yeah, I guess the way I think of it is very organizational. One of my favorite founding fathers—I think my favorite founding father was James Madison, who was the architect of the Constitution and tried to figure out: How do you channel individual incentives of people—not just companies, or individuals, or government agencies, but individuals in government—so that we get the most out of all the phenomenal ingenuity? All this creativity, all this innovation that makes our country so strong and such a leader for years and years and years and years to come—or decades to come, I’d like to think. And quite confident in that regard.

And so, I think what we need to do, first and foremost, in the government is get our own act together. We need to be synced up. Carolyn’s leadership, Avi’s leadership is incredibly important. You mentioned OCED. We could give a whole acronym soup of GDO and SCEF and ERE and any number of other parts of our organization. The important part, and Carolyn mentioned this, is we are trying to make sure we’re all synced up as a DOE team. So we created something.

We’re not making a lot of headlines about this. A Joint Strategy team, specifically on industrial technologies, on industrial decarb to make sure—I don’t know. Carolyn, you might know how many offices are part of that Joint Strategy team. It’s a lot.

CAROLYN SNYDER: It’s most of DOE.

DAVID TURK: It’s most of DOE. And I think it ends up being about 60 or 80 point people, but all with some accountability, with some organizational coherence to it. So, we need to do that in DEO just to make sure that the left hand knows what the right hand’s doing on the innovation side, on the demonstration side. It’s all furthering a common objective. We also need to do that across the government. With White House leadership, of course, we need to work with the Department of Commerce, and Transportation, and Department of Defense, you name it. That is incredibly, incredibly difficult.

Taking a turn in government, working in the interagency is incredibly challenging, incredibly difficult. But if we’re going to do industrial strategy and we’re putting out all this money for demonstration programs, we better have a really well thought through and coherent trade policy. So, we need to work with U.S.TR, we need to work with Treasury, we need to work with the full flotilla. You’ll hear from the president later today announcing some 301 tariff adjustments.

Instead of just putting tariffs on everything, you’ll see that our approach, our strategy is being very thoughtful industry by industry, sector by sector. What’s it going to take in order to get our industry where it needs to be to producing and working with our allies around the world as well? So, we need to have our own DOE act together. We need to have the interagency act together. And then even more importantly, we need to have the public-private, the private-public. What are we doing again to support you all, your ingenuity full all along? And adjusting all along as well because no matter how good the plan is, no matter how good this pathways report is going to be, we’re going to need to make adjustments. We’re going to need to learn as we go along. And again, we’ve done this. This is how we’ve operated. But we just need to do it more intensively, all of those partnerships going forward.

ANDRES CLARENS: That’s great. Before coming to the White House, I was a professor at the University of Virginia, and I believe you’re an alumni. And we’re contractually not allowed to say that Jefferson is not our favorite founding father. So we’ll circle back on that later.

[LAUGHTER]

DAVID TURK: Jefferson’s pretty good, too. Washington was good, too. Hamilton gets a lot of press these days.

ANDRES CLARENS: Yeah. Dr. Snyder, I want to give you an opportunity to talk about where you see gaps in that innovation pipeline for industrial decarb.

CAROLYN SNYDER: Thanks. So, as Avi mentioned, and many of you were part of this, the DOE decarbonization roadmap really has been something that many of you were involved in creating. And has served as that foundational framework behind what the deputy was talking about. It’s not a single office framework. It’s really become our national framework of how we’re talking about and approaching these problems. Avi showed that different Earthshots, which are incredibly exciting.

Again, they have followed from the insights in the Earthshot—I mean, in the roadmap, very clear that those four key pillars of strategies continue to be the most important opportunities that we need to focus on. So from a perspective of earlier conversations, your feedback is incredibly impactful. Our conversations are impactful. Our entire office structure of IEDO came from the roadmap itself. So, those of you who worked on that with us, thank you. It inspired several Earthshots, an entire new office, and our research since then.

But it’s really clear that there is so much more we don’t know. I think of the roadmap and the other research, or the commercial liftoff reports as well, as this kind of landscape foundation to then have a sophisticated conversation about exactly what the Deputy just said. What we don’t know. And I’m so excited about the RFI that we released this morning and the structure of these two workshops. Our focus has been to gather what people think we know so far and to provide new structures for us to be able to hear from you and for us to work together on what we mean by the word pathways.

So, I’d love to take a minute to explain that word because everyone uses it in lots of different ways. What became really clear to us in our conversations with you and many across industry, so there’s no single answer to any subsector. There’s no single answer to any subsector in any single region. There are a series of decisions that you’re going to be making inside your facilities, across your companies that researchers and innovators are going to be making across the country that need to be unpacked because there are long timelines for many of these investments. There are large capital infrastructure investments involved and coincident transformations in our system, a lot of the amazing infrastructure investments that the deputy was just talking about. So, this vision study is not a study. It’s not a report to sit on a shelf. It’s … How do we work together to create those analytical structures, those data structures, so that you can have data-informed decision making along that time series? And it’s really challenging. And that’s exactly what we want to talk about today. And it’s not just today and tomorrow. In the coming months with you, how do we grapple with those really tough challenges? When do you need to look forward and say, you know what? That is not a no-regrets investment. I need to now appreciate that there’s a fork in the road in my decision making for my facility or for my industry. And how do I have data-informed decision making to know which pathway we’re going down? How do we prioritize the funding that we’re investing federally? How do you prioritize the funding that you’re investing in your own company? How are we looking at the right metrics to have that conversation?

The inspiration today was a conversation around climate and greenhouse gas emissions. But we know that is not the only or even the prime optimization framework you’re looking at. We’re looking at competitiveness. We want American companies to grow. We want to add high-quality jobs in our country. We also want to acknowledge the environmental impacts and public health impacts that our industrial systems have on communities and on Americans and on the global community.

We need to look at what the national security implications will be, what the supply chain implications will be, what the economic benefits could be to communities and to states. So, all of that seems like a lot and a daunting task. But in conversations with many of you and our best minds in the national labs, who are represented here today, we’ve been working on finding ways to structure that conversation so it’s manageable. The conversation’s manageable. The task ahead is remarkable. And that’s what we want to talk about with you.

We also want to hear from you in the next 2 days. Carolyn, we get the inspiration point, but what you’re doing is not helpful. That’s not how we think about it. That’s not how we approach it. I totally don’t agree with your vision for the cement industry. No, it’s not those four things. It’s this one and that one. And it’s going to be driven by completely different drivers, the barriers. Yeah, the ones you listed are great, but these are the ones we’re really focused on.

Don’t be shy. Please tell us we’re wrong. Tell us we’re asking the wrong questions, or tell us what’s most useful to you. We need to have that conversation. As the deputy said, we don’t have the answers, but we know we all need to work together to make the best decisions we can because the clock is ticking and time is running out. And if we do it right, we create a remarkable economic opportunity for our country. It’s not just a climate vision I think about. It’s what our country does for our own citizens, but also for global citizens, if we are able to make these investments in a strategic way in the coming decades.

DAVID TURK: Can I just come in there real quick? I think Carolyn just put it incredibly well about the way we do things and need to do things in the U.S. And I think it’s such a contrast to our main competitor right now, economic competitor in the world, and how China does things, just to be very clear and explicit. The fact that we actually can have good back and forth, and someone who’s in the government, we not only want you all to tell us when we’re doing things great, that’s fine. But especially to tell us when we’re not doing things right. You know what I mean?

You guys know the industry in and out, whether it’s cement or steel or you name it. And if we do something or say something that’s like, well, that doesn’t seem right. That’s not going to work in the real world. We need that feedback. In fact, the only way this whole thing succeeds in an American context is to have that very candid back and forth going on. And we make adjustments and we improve and we learn. I’m not sure that same feedback cycle is built into the way China does things in terms of, oh, if the party leader says something, everybody just has to say, yeah, that’s right, even if it doesn’t make any sense whatsoever.

So I think that’s our secret weapon, if you want to think about it, or our hidden talent. And we just need to lean in and really live up to all our roles in that way.

CAROLYN SNYDER: One piece I would jump on from that as well is, and Adi had this in his slide, and people use different words, accelerating deployment, market transformation. But I love the partnership component of our portfolio as well. Because that’s where you get the brutal feedback of whether we’re being helpful or not. And so for those of you who participate in are Better Plants Program, our Better Climate Challenge, our Industrial Assessment Centers, our Onsite Energy Taps, they’re a critical part of our portfolio of getting that real-world feedback of, what are the challenges you’re facing? How can we be helpful?

And then how do we take those insights of barriers up the innovation chain? So thank you for that as well. And I think that’s another example of how we approach government very differently than other countries.

ANDRES CLARENS: That was great. Thank you so much. I’d like to ask you how—what you think the industrial sector is going to look like in 2050. Because the discussion we just had, thinking about outside fence line of facilities, thinking about the larger international implications of industrial decarbonization, and how it relates to our trade partners, and so on, was really fascinating. And I think you guys made some really compelling points.

But I think now we have to think forward in time. And what changes do you anticipate coming? And how will the industrial sector look when we are at net zero at midcentury?

DAVID TURK: Yeah, first of all, we just don’t have that much time. We are talking about what we’re going to do in next year and 5 years and 10 years. The goal that President Biden has put on the table, the challenge that’s been put on the table in front of all of us is to get to net zero by 2050. I’m not sure I have—so 2050. If 2024, that’s 26 years—26 years ago, I still don’t think I had hair.

[LAUGHTER]

So, 26 years is not that long a period of time. And so, we need to transform in very significant ways. Now, maybe some industries, there’s a drop in fuel that works. Maybe other industries, if we’re going to be true and get to the net zero, it’s going to require a very fundamental way of doing things. And I know it’s challenging for those who have worked decades in an industry to optimize for a certain set of requirements that we’re now saying, “Wait a minute. To save our planet for our kids and our grandkids and to avoid all the worst consequences of climate change, we need to readjust. And we need to really put a priority on the decarbonization piece.”

And what we’re seeing all around us in terms of the harms coming from CO₂already … We have 17 national labs that’s been mentioned several times. There may be some folks here from some of our national labs. One of our national labs recently did an analysis of hurricanes and the wind speed and how quickly they’re developing and found out that, well, we’re probably going to need a Class 6 hurricane rating because Class 5 is not going to be enough. That should cause all of us to say, “Holy crap. We need to work with some urgency and get our acts together.”

So, the thing that I’m … If we’re successful, and we need to be successful, even with AI and other kinds of things, it’s going to be a lot of people showing up day in and day out, working it, being problem solvers, whether from the engineering side, from the finance side. Even lawyers have a role here, as someone who actually went to UVA for law and just had my reunion this past weekend. We’re going to need all sorts of folks just stepping up day in and day out and making it work. And I’d like to see an industry that is at the cutting edge, is pushing the boundaries, is stepping up and proud of what you’re all doing.

There’s nothing more … And the President speaks about the dignity of a job. I think a lot of that dignity is coming home, looking your kids in the face and saying that you did something today, and yesterday, and you’re going to do something tomorrow that was not only good in terms of earning a paycheck and good for your company and community but good for the world as well. And I think that’s the thing that makes me most excited and proud, and what we’ll need to have from here until net zero and even beyond that.

ANDRES CLARENS: Great. Thanks. Dr. Snyder, how will industry look in 2050?

CAROLYN SNYDER: I love the deputy’s vision, and couldn’t agree more. I would also challenge ourselves—I hope we break the projections around the growth of U.S. industry. I want us to become a thriving and growing new sectors. And I think, as the deputy said, some of those will be substantial tweaks, minor tweaks to what we have today. Some will be ways of making things that we don’t even know—we can’t even imagine yet. But the clock’s ticking and time’s running.

And then also to be a major global exporter of those technologies, of that intellectual property, of being that brain trust for the globe in how we’ve achieved our goals. And then the last reflection I would share is: This is not a this or this kind of conversation. And you see the scientists up on the stage. We really resonate with the optimization function. I know there’s a lot of scientists and engineers in the room. To me, it’s a yes and challenge in front of you. It’s not: How do we decarbonize but also lose industry? Or how do we address communities but economics?

Really challenge yourself to, how do we optimize with all of those goals in mind? Because I think they can be quite aligned if we have the right innovation behind the problem.

ANDRES CLARENS: That’s great. Thanks. So to close, I’d like to ask each of you to share one word of what you hope the thought leaders that are in the room today will bring to this workshop effort over the next two days.

CAROLYN SNYDER: I’ll cheat. And I really liked when Ali said imagination. And that word really resonated with me. So, I’ll add one to his, which is pragmatic imagination. We want you thinking big and bold but grounded in the realities of today and the 26-year timeline.

DAVID TURK: So, I’m going to use the word momentum. It is incredibly challenging once you have inertia setting in and like, well, we’ve done this. This is how we do things, etc. It feels like we’ve got a lot of momentum. We’ve got a lot of momentum with all these new tools, all this new funding in the federal government, just one number for you on that. 3.5 years ago, we were projected in our country to be about at a 20% emissions reduction, greenhouse gas emission reductions by 2030 off a 2005 baseline.

Now, that’s a decrease but kind of a stagnating decrease just over the last few years and certainly with the Inflation Reduction Act, the other acronym pieces of legislation that I could mention as well, and all that we’re trying to do in executing from the private sector side with leadership from the public sector side, the tax incentives, the grant programs, the loan programs, we’re now on a trajectory, if we execute, to be at least at a 40% reduction.

So, just over the last few years in terms of policy, in terms of funding, we went from a 20% emission reduction to 20, 30, to 40%. That is remarkable. That’s a remarkable amount of progress. That is a remarkable amount of momentum. We can clap for that. That’s OK. I would just urge all of us: Let’s lean into the momentum. When you have momentum, the last thing you want to do is stall that momentum. We just need to keep at it. We need to keep that momentum. We need to all do our parts and keep pushing to keep that momentum going and even building on it.

ANDRES CLARENS: Wonderful. I want to thank both of you for being here and for kicking us off this way. And I look forward to the conference and working with all of you over the next 2 days. Thanks so much.

AVI SCHULZ: Thank you so much to our panel, a really inspiring panel that we just had. Andres, Deputy Secretary Turk, Deputy Assistant Secretary Snyder, really appreciate those words and that framing for the discussion that we’re going to be having today and tomorrow. So with that, what I’d like to do next is dive into a little bit more detail of what we are actually gathered here today to discuss. So I’m going to spend a few minutes talking about the framing for this effort. Which, again, as you’ve heard today, really is going to be a foundational effort for us, certainly in IEDO, but for DOE overall. And how we’re thinking about the next steps for the country for industrial decarbonization. So, as we’ve already heard from just in the panel today, the industrial sector is beyond critical for our country—for the health of our country. Manufacturing contributes a foundational part of our economy, of our workforce, and for the functioning of every other part of our country. The challenge, of course, is we need to grow the manufacturing sector while decreasing CO₂emissions.

As, again, everyone here is fully aware, the industrial sector represents about 38% of total U.S. greenhouse gas emissions. So that’s a big challenge that we need to address. But we need to do that, of course, without affecting—and in fact, as Carolyn was just talking about—while in fact growing the industrial sector. And so let me be perfectly clear as I dive into my next few slides that when we talk about an a decarbonization strategy for the U.S., we are not talking about a deindustrialization strategy for the U.S.—quite the opposite. We are working on developing strategy that is going to both enable the growth that’s already projected, as well as enabling new kinds of industrial opportunities and subsectors for the country. Of course, this is a pretty big challenge. This is a challenge, as we all know, when we talk about the industrial sector, is that there isn’t really any such thing as the industrial sector. There are a whole bunch of industrial subsectors. There are also a whole bunch of different kinds of emissions sources.

There are, of course, the energy emissions directly related to activities like combustion of fossil fuels or other use of fossil carbon feedstocks. But there are, of course, the nonenergy emissions. And these come from a wide variety of sources, whether we’re talking about agricultural emissions from a variety of sources, or whether we’re talking about fundamental carbon dioxide releases from activities like cement manufacturing. And so when we talk about a strategy for industrial decarbonization, we need to talk about all of these different sources and all of these different heterogeneous manufacturing processes.

And I’ll spare you the way that I sometimes talk about this to go into a huge amount of detail of all of the different heterogeneities that exist in the industrial sector. But just to, again, reinforce what we all in this room is this slide, of course, just shows not a comprehensive, but a but a pretty long list of all of the different industrial subsectors that we’re talking about. And so this really reflects, I think, one of the key challenge that we have.

The other really key challenge that we have—systemic challenge that we have in the industrial sector is, of course, the economic challenge in terms of what kind of scale of investment we’re going to need in order to fully decarbonize the industrial sector. And so to this, we’re really, really grateful for our colleagues in the demonstration and deployment offices who recently led the effort to release this Pathway to Commercial Liftoff report, which really laid out both the challenge that we see in the industrial sector but also the near-term opportunities.

But these challenges are significant. So just for the eight industrial sectors that are particularly called out in the Inflation Reduction Act, we estimate that an investment on the scale of approximately $1 trillion is going to be needed to fully decarbonize this. But then, of course, the challenge is, as you heard from the panel just a few minutes ago, that even if we wanted to fully decarbonize and we were able to mobilize that trillion dollars right now, we don’t have all of those technologies that we’re going to need, that at least that are commercially, viable to be able to fully achieve this decarbonization.

And so again, that liftoff report really laid out the challenge in terms of saying that about 40% of emissions from the industrial sector can be achieved, can be mitigated today with available technologies. And that’s great news. In one way, that’s 40% of the challenge that we can be working on right now. But of course, that means that there’s 60% of the challenge that we can’t do right now, that we just we just don’t have the technologies. Or if we do have the technologies, technically speaking, they’re not cost effective. And that’s the same thing.

Again, I don’t need to tell folks the private sector if it’s not cost effective, that’s the same thing as saying that we don’t have them, that they’re not available to be deployed. Again, we are not asking the private sector to take the economic hit for decarbonization. So what we really, really need to do and what we’re really laying out the strategy for here today is, how do we develop those technologies? And how do we focus our efforts, both in DOE, but how do we focus the private sectors and the national laboratories and the universities efforts on those key technologies that are really going to enable the reduction of the full industrial sector?

And so the scale of this challenge really calls out for targeted investments. And I say targeted investments, again, I want to really reinforce that our strategy is not to do everything everywhere, all at once, as Joe likes to say. That’s not going to be a successful strategy. So, what we really need to do in this effort that we’re starting with all of you today is figuring out where we need to focus in our efforts so that we can actually turn this into an achievable goal for the U.S.

As was already mentioned, as already mentioned, and as we talked about just a few minutes ago on the panel, we really started this discussion with the industrial decarbonization roadmap that we released, again, just under about 2 years ago. That really laid out the scope of the technologies that we’re going to need to develop for full decarbonization. And the roadmap lays out the challenges in terms of four categories, or pillars, of technologies.

Energy efficiency … So how do we reduce the total amount of energy that we’re going to need to decarbonize?

Electrification … How do we leverage the progress that we’re making on decarbonization of the grid through the really rapid deployment of technologies like wind and solar, low-carbon fuels, feedstocks and energy sources? So how do we replace those inputs, those current fossil-based inputs into the industrial sector with low-carbon ones, either for fuel usage or for feedstocks, like what I talked about with the clean fuels and product shot? And then finally, that fourth critical pillar is carbon capture utilization and storage.

So how do we leverage technologies either for residual fuel use that we’re going to require? Or for those technologies that just fundamentally require carbon dioxide production, like conventional cement production? So we were really, really excited about releasing this Industrial Decarbonization Roadmap 2 years ago. And again, as you heard, this is not a report that just sat on a shelf in DOE, and we just kind of looked at it and patted ourselves on the back. What we did with this is said, “Wow. This is a really, really challenging program. We need to create an office that is just focused on industrial decarbonization.”

And so that led to the creation of the office that I lead, the Industrial Efficiency and Decarbonization Office, IEDO. What we really have as our mission to be that central technical resource within the department and for the country on the development of these industrial decarbonization technologies. And we meet this mission that’s laid out on the slide through three primary thrusts in our activities, or three teams that we’ve organized. The first is our Energy- and Emissions-Intensive Industries team. And they’re really focused on the particularly the five highest emitting subsectors that are really going to require systems-level thinking and systems-level approaches to fully decarbonized: iron and steel, chemicals, food and beverage, forest products, cement and concrete. And you’ll hear more, of course, about our thinking about these sectors as we get into the breakout sessions tomorrow. We also have a team focused specifically on the cross sector technologies. So how do we develop thermal processes and systems that are going to be required across industry? Low-carbon fuels utilization, emerging efficiency challenges. So how do we utilize progress in technologies like smart manufacturing or digital manufacturing to enable industrial load flexibility?

And then water and wastewater treatment, as well, is a key part of the industrial sector that we’re looking at in our cross-sector technologies. And then finally, the third pillar of our team is our Technical Assistance and Workforce Development team. And so you actually already heard a little bit about this in the panel just a few minutes ago from Carolyn. And I also talked a little bit about it when I talked about how we work together in offices across DOE. That the work that we have in bringing together partnerships and networks like what we have here today, but formalized through programs like our Better Plans and Better Climate Challenge, our Onsite Energy Technical Assistance Partnerships, our energy management programs.

How do we utilize that expertise that we have access to, that we’ve convened in DOE? How do we make that available to the private sector to help companies accelerate the adoption of their own, your own, energy reduction and emissions reduction goals? So this is what we work on in IEDO. And as you already heard about, while this office was created, again, less than 2 years ago, we’ve done a lot over that year and a half. So this is a little bit of an eye chart. I don’t expect you to read all of the bullets here.

But I want to emphasize that just over two years, these are announcements of actual project selection. So these aren’t just announcements of funding intention, of open solicitations. These are projects that we have actually provided funding to. And that amounts to more than half $1 billion over the last 2 years. Then in the first two bullets there, new research and development projects, there are funding opportunities. So that’s nearly 100 projects, nearly more than $300 million just in new research, development, and demonstration projects.

We had a FOA specifically focused on decarbonizing water a resource recovery facilities, a huge source of emissions from the nonmanufacturing industrial sector. We were really happy to announce the selection and renewal of two new—of a new and a renewed manufacturing U.S.A institutes. They’re our EPIXC Institute, focused on process electrification, and our RAPID Institute focused on decarbonization of chemical process industry. And then we were really excited most recently to announce the renewal of NAWI, our National Alliance for Water Innovation hub. And so they we announced that renewing them for another 5 years of work at $75 million to really focus the nation’s energy on energy-efficient and decarbonized water treatment technologies.

So what are we working on? What are the next steps? What are we here today to think about? I already talked a little bit about the roadmap that we announced 2 years ago. And that was a really, really fantastic start. You’ve already seen what’s come out of that and how that has really mobilized efforts in DOE. That roadmap, as great as it was, didn’t cover everything. It really focused specifically on six heavy-emitting subsectors and analyzed those subsectors in part and had some extrapolation in order to really scope out the technologies that we were going to need to develop.

What we’ve been working on since the roadmap is fully building out the models for those six subsectors, and then including the whole rest of industry. And when I say the whole rest of industry, that’s about half of the full energy-related emissions from the industrial sector. So what you’re going to be starting to hear about today and tomorrow is what our initial results are looking like from that expanded modeling, from our initial roadmap effort. And starting to think about, OK, now that we’ve done this full modeling, one, does this make sense? We want to hear from you again.

Does this make sense? Are we modeling these processes and these sectors in the right way? In a way that’s useful? And then, does this help us map out the path forward? And so what we really want to be working towards, as you heard Carolyn talk about a few minutes ago, is a really new holistic vision study for all of DOE that we’re talking about as the pathways for U.S. industrial transformations. And again, this really goes back to the point that I was making about prioritization. What we really want to be able to do as DOE and help all of you do is understand where we need to be putting our efforts, focusing them most effectively.

So we want to identify the cost-effective and industry-specific strategic pathways that are going to enable a thriving U.S. industrial sector with net zero greenhouse gas emissions. But we don’t want to look at that in isolation from all of the other factors that we are going to be important, including all of the technological, economic, societal, and environmental, and health impacts that are going to be associated with that huge scale and rapid-pace industrial transformation that we’re talking about. And then what we really want to get to in this effort is to be able to present and really have a discussion and an iterative feedback cycle with all of you on the strategies, the targeted pathways, the metrics, and targets we need to be laser focused on to overcome these challenges and barriers that are associated with this effort.

In other words, what we need to do is really reimagine the industrial sector of the future. And I really, really want to emphasize a point that Carolyn made earlier on this panel, which is that we know—we absolutely know that there is no single pathway to decarbonization that will work for any single industrial subsector. And so when we talk about the pathways that we need to focus on, we need to be pursuing multiple pathways in parallel for each industrial subsector. So when we think about the future of industrial facilities, we’re thinking about: How do we attack this challenge from multiple different angles? How do we think about the onsite energy technologies that are going to be required for facilities, maybe with thermal storage for some kinds of applications? How do we improve process efficiency for manufacturers to ensure that when we do deploy capital assets, we’re doing those most efficiently and not trying to take on more of an energy challenge than we need to? How do we integrate carbon capture, both onsite carbon capture technologies and carbon capture networks and CO2 transport pipelines into this vision? How do we think about this at the economy level? How do we think about circularity of the feedstocks and the materials that are going into the manufacturing sector?

So this is the conversation that we’re really excited to start today. We’re not going to complete it in two days, for sure, but we’re going to start it. And one of the things we’re really excited to announce, as of this morning—so I think Carolyn already mentioned it, but just this morning, we released a new RFI, request for information, that really is going to be following on with all of the conversations that we’re starting today in this room, but of course, opening it up to everybody in the country, anybody who wasn’t able to make it to this event today, folks who may be listening to the live stream of this on the internet, and folks who may just need a little bit more time to digest and think about what we’re talking about. We just released this RFI. It’s going to be open for about a month. But really, the conversation is going to continue for more than a month even. So we know 2 days isn’t enough. We a month isn’t enough. But we’re really, really excited to start this process of getting feedback exactly as, again, you heard from today, does this make sense what we’re proposing in terms of strategies, in terms of analysis? So with that, let me just start to the next few minutes before we take a break.

I want to take a few minutes just starting to introduce the framework that we’re using for this effort that we present in the RFI, that we’re going to talk about today. And you’ll hear a little bit more in more detail about after the break. What we really want to lay out in this effort and what we’re starting to think about is, what are the primary challenges and barriers to industrial decarbonization? And that’s the way that we believe we’re going to start to break down this challenge of, how do we retire these challenges and barriers?

So there are six primary things that we’ve called out here. Of course, there are different ways you can break this out. But these six barriers and challenges are the ways that we think it’s particularly helpful for us to address the effort in front of us: first, of course, thermal systems emissions. So how do we reduce the usage of emissions from primarily fossil fuel usage, which is about 90% of the heat provided to industrial processes today, which in turn, represents about half of all of the emissions from the industrial sector? How do we address the process emissions? So again, these are from sources like cement manufacturing, where it’s intrinsic to the industrial process that you’re talking about to release CO2, the constraints within industrial entities. So what are the structural challenges involved in either the way incentives are structured within companies, within markets, within company government interactions that limit the way zero-emission technologies can be adopted and material and energy efficiency improvements can actually be accelerated within companies?

Infrastructure … We talk about electrification as one of our primary pillars. We talk about low-carbon fuels with a focus on, of course, hydrogen and other low-carbon fuels as well. But what does that infrastructure actually going to look like? What are going to be the regional and temporal limitations on being able to access that infrastructure in a way that’s actually decarbonized to ensure that we’re not just offloading emissions from one category to another? Information flows. This is something that we can really help with in DOE. To what extent is just lack of data availability inhibiting decarbonization adoption?

This is something that’s very much in our wheelhouse that we can help with in DOE. And then, of course, critically, how do we address underrepresented social criteria? So when we talk about decarbonization, we really, really, really don’t want to make the same kinds of—I’ll say, mistakes that have been made in the past in terms of the not appreciating the impact that industrial technologies can have on wider communities. So how do we fold that in really effectively to our strategy so that we can ensure that when we talk about industrial decarbonization, the transformation of industry, we are enabling that for the betterment of everybody in the country?

So when we talk about the specific pathways that we’re focused on, what do we mean by a pathway? And a pathway is a set of specific actions needed to achieve progress in and across decarbonization pillars, while remaining informed and supplemented by RDD to advance viable solutions that will need to be adopted at scale in the marketplace. So we really want to map out what these pathways look like while taking into account, of course, the major production routes.

So what are these pathways look like in terms of production of these critical materials that are coming out of the industrial sector? How do we prioritize these pathways in terms of emissions reduction, in terms of the factors that are going to impact how facilities are going to actually evaluate these technologies? The timing of these deployments? The uncertainties, risks and barriers and the prioritization thinking about retrofits versus greenfield facilities. So these are all of the inputs, the factors that we want to be considering as we map out these pathways and really prioritize them.

And then, of course, as I mentioned before, we really want to think in this framework as we prioritize these pathways, how do we make sure we’re prioritizing them such that we’re taking into account the right metrics, the right criteria? And these criteria are going to cover both the environmental and health criteria, economic, societal and technological. So something we’re going to be talking about today, and we’re asking about in the request for information is, what are the right criteria in each of these categories for us to be using as we prioritize these pathways?

And so, of course, we know that this is intrinsically thinking about beyond the plant bounds. So in terms of environmental and health, how do we appropriately measure the direct and indirect CO2 emissions when we are in the context of this effort? How should we be layering on and quantifying the impact of criteria, air pollutants, other potentially toxic waste products? How do we evaluate the associated health impacts of different technologies, different pathways towards decarbonization?

The economics are critical here, of course. Again, what I said at the very beginning of this, we’re not talking about deindustrialization. So what we’re talking about are economically successful companies that are actually deploying these technologies. As we evaluate technologies and all these pathways, we need to understand what are the right economic criteria to use to really ensure that we’re, again, putting our investments in technologies that are going to be useful for actual deployment.

What are the right societal metrics? How do we make sure … How do we really, really ensure that we’re not having these unintended benefit, unintended impacts of societal impact? So how do we think about the metrics for equity and environmental justice, for energy costs for Americans, for ensuring that we have high quality jobs and a trained workforce for these sectors? And of course, how do we layer on national security, critical materials, and resilient supply chains into this overall industrial sector?

And then finally, we really want to think about the technological impact. So it’s, of course, not just thinking about what the overall emissions are from these technologies, but how do these actual technologies integrate with existing technologies? So we don’t want to totally recreate everything from scratch. As much as possible, we want to leverage existing capital assets, existing expertise, existing production routes to enable really as—basically, have as targeted an investment as we need so we don’t need to recreate everything from scratch. So how do we think about, what are the metrics we need to use to evaluate whether the technologies we’re investing in are really going to enable rapid adoption by industry?

The way we are thinking about this really is in terms of helping enable a clearer way for industry, for the private sector to be able to make decisions. And so as we think about decisions for sectors, for companies, for facilities, the way we naturally thought about laying this out is in terms of a decision tree. And really laying out the key choices that we need to make at each point of this decision tree, and what criteria we need to layer into this to help enable the rapid decision making so that we can fully get to the end of this decision tree, continue in an iterative process, and ensure that we’re actually going to be achieving the goal that we’re setting out for in terms of decarbonized industry.

What I’m showing on this slide is just a fairly generic version of this decision tree that, I’m sure, is probably a little bit difficult to read in this room. It’s in the RFI, it’s in the material that we’ve that we’ve provided ahead of this workshop. So please take a look at this. And what you’ll be hearing of about after the break is some more specifics of what this looks like for each sector and the way we’re mapping this out. So please take a look at that and, again, give us feedback.

So with that, I will pause. Again, strongly encourage you to take a look at the RFI. There’s more information up on all of the detail that we’re talking about. And then we will really have opportunity to dive into this and get the feedback from all of you today and tomorrow, and over the next month, over whether any of this makes sense. So with that, thank you for your attention. Not sure if we have time for questions. Maybe we can take a few minutes. Happy to take a few questions.

Everybody’s been very patient listening to a lot of talks for the last hour and a half. So let me open it up for some questions from the audience.

[Silence]

SPEAKER: How about now? Hey, there we go. I just had to be patient. I want to start off—and this isn’t a question. But this is a great example of how awesome our federal government is, that they’re willing to put money into stuff like this. And we are on a steep learning curve. I don’t know. When I sit next to people on the plane, I’m the one guy out of 20 who thinks the U.S. federal government’s a good thing. And it is. And it’s this think tank stuff that I’m excited about that’s going to help us get there.

So kudos to the directors who left and everybody else at IEDO for making this happen.

AVI SCHULZ: Thank you. I appreciate it. It’s always good to get that positive feedback. Any other questions from the audience?

MARIA CURRY NKANSAH: Hello. Maria Curry Nkansah from the National Renewable Energy Laboratory. When you talk about the environment and the intersection with health impacts, how do you envision us collecting that data related to the health impacts when there’s another agency that appears to have oversight of that—of the health impacts?

AVI SCHULZ: Great question. The short answer is that we talk to those agencies often, so there are a number of other agencies. So I think Deputy Secretary Turk talked a bit about the extent to which this is a whole of government approach. And so we have strong connections with our colleagues in EPA and other agencies that are really focused on that. So what we’re really looking at doing is certainly not replicating any of that data collection in any of the analysis that’s happened in other agencies but coordinating that and putting it within the framework that we’re presenting here today, ensuring that we are thinking about it in the right way so that it is directly connected. It’s not something that’s happening over there. It’s bringing that data into our analysis and making sure that in our decision making, that is a key part of how we’re prioritizing, so explicitly laying out those metrics. And to the extent where we see gaps in the analysis, we have the resources to either work with those agencies or work with the experts that those agencies are working with in order to fund additional research to fill in those gaps.

And in all honesty, as we dive further into this and really kind of lay out the metrics that we need, the metrics that we want to prioritize, we probably will find gaps in the data. And so that’s where that’s very much in our wheelhouse, of course, in terms of funding, data collection efforts, funding research to help round out those resources.

ED RIDER: Hi. Ed Rider, independent consultant. Question: How do you push and pull a rope at the same time? So many of the technologies that are out there relative to low carbon to industry look like pushing a rope. The question is, how do you create value that’s going to inspire industry to pursue some of those low-carbon technologies where they see it’s really going to be advantageous to them, market development, new markets, competitive advantage, new properties, etc.? Just a thought question.

AVI SCHULZ: Yeah, no. That’s a great question. So I have two things that I guess I’ll emphasize in answering that. The first is that I think what you’re highlighting on is a key reason that we’re talking about pathways for the industrial sector. We’re not talking about replacing unit processes as our focus area. We’re not talking about just decarbonizing existing production routes, and that’s all we’re doing. What we’re really trying to discover and our hypothesis is, in a lot of areas, is that as we think about a fully decarbonized vision for a lot of these industrial sectors, what that likely will mean in many cases is discovering and developing entire production routes that aren’t just layering on cost to existing production routes and making those economically nonviable.

But thinking about where we can find value—in fact, create value for the private sector by, again, kind of circuiting existing production routes. This is an area in particular in the chemical sector that we’ve really focused some efforts on. Instead of just thinking about, OK, we’ve got our petroleum feedstock, we crack it into ethylene and BHT and all the other building block chemicals. How do we just figure out how do we replace—if we’re going to use, for example, CO2 as a feedstock? Well, OK, we’re just going to focus on making ethylene BTX from CO2 and just put it exactly in the same chemical feedstock.

Quite the opposite. What we really see opportunities for is, how do we jump over some of those process steps by thinking about decarbonized feedstock? So maybe new electrochemical technologies with CO2 that really can provide much higher value building blocks. Or using bio feedstocks that already have a lot of the oxygen and nitrogen embedded in those molecules. That’s really where a lot of the cost comes from, from existing petroleum feedstocks.

The second thing I’ll say is that what we’re really working to enable in the U.S. is a globally competitive industry. And so we’re seeing all of the signs globally that these market transformations are happening no matter what. We’re seeing markets develop in the U.S., in Europe, in Asia, in other countries for decarbonized materials. I’m sure there are a number of folks in the audience today who have worked on a market analysis and decarbonization plans for their companies that are happening regardless of any additional activity that’s going to—regulatory activity that’s going to come out of the U.S. government.

So those markets are moving. And what we really want to do as the U.S. Department of Energy is help U.S. industry create products that are going to be competitive in those markets globally. So that’s really what we’re focused on, and what we’re hoping to enable. So with that, I think we’re out of time. I don’t want to eat any more into the break. Thank you very much for your attention. We will reconvene at—10:30? 10:30. 10:30, we’ll reconvene with some really valuable context setting presentations for our strategy. Thank you very much.

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SPEAKER: Check. Check, check, check. Mic check. One, two. Check.

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JOE CRESKO: All right. All right, folks. All right, everyone. Let’s try to think about working our way back to our seats so we can get started on the next session.

All right, everybody. Let’s try to get our take our seats so we can get going again. All right. Thank you very much. Great morning so far. Hands raised if you think this has been a good conversation so far. With the break, anybody get a chance to meet somebody new? If you haven’t tried that, during lunch, we really want to make sure we’re communicating across with the folks that are here.

So I really want to do a quick introduction. We’re going to have a next session on broad trends and ideas shaping industrial decarbonization. I will introduce myself. My name is Joe Cresko. I’m the chief engineer in the Industrial Efficiency and Decarbonization Office. I’ll be moderating this session. We’ll really have a couple of speakers here, and then we’ll move into some remarks that I’ll have regarding some of the pathways analysis work that we’ve been doing.

But to set that up, I think this is going to be particularly interesting. And we’ll have two speakers today. We actually had three speakers, and unfortunately, Professor Benjamin Sovacool had to withdraw at the very, very last moment. Really disappointed he couldn’t get here. But we have two really great speakers. I think each might have a little bit more time then to slow down and take their time through this. It’ll be Perry Stephens from EPRI (the Electric Power Research Institute). And Dr. Lauren Ross from DOE.

And so we’ll start with Perry. I’ll ask Perry to come up now. Perry Stephens is a senior principal technical leader at EPRI. He assists utilities in the evaluation, development, and implementation of electric end-use technologies for residential, commercial, nonroad mobility, and industrial customer segments. In addition, Perry currently co-leads the end-use technical subcommittee of the low-carbon resources initiative. It’s more acronyms than DOE. LCRI, which is a collaborative effort with the GTI energy and more than 50 sponsor companies and organizations aimed at advancing low-carbon fuel pathways on an economywide basis to achieve deep decarbonization goals.

Previously, Perry worked at Duke Energy and the Timken Company as an expert in manufacturing, thermal processing, energy efficiency, energy business strategies, and engineering project management. And with that, I’ll turn it over to Perry to give some remarks. Thanks, Perry. Perry.

PERRY STEPHENS: Thanks, Joe. I’m going to try that there. Can you hear? Maybe I need to hold it? OK, I’ll hold it. Yeah, thanks. First of all, thanks for inviting us to participate today, Joe and team. Just kind of humbling with the brainpower in this room that you’d ask us to come and give you a little bit of table-setting exercise here. But that’s kind of my goal. I want to walk through some of the work that EPRI has been doing within our own team.

I’m part of an electrification program. So we look at electric technologies economywide. Everything except on road transportation within my group, and another group within EPRI takes care of that. But all nonroad transportation, all industrial and commercial applications, and buildings. We’re looking at electrification. That led us into—obviously, with our end-use focus, a lot of interest in what are the difficult to electrify end-use applications. And so we’ve been doing a lot of work in our low carbon resources initiative as well. So we’ll talk a little bit about EPRI and the LCRI initiative.

I’m going to start small and get bigger with the information I’m going to try to convey, and the work that we’ve been doing thus far. And so it’ll be a little bit granular to start with, and then we’ll expand out and talk about what the implications are of even policy matters going forward. So EPRI, over 50 years ago, got started in the great blackout—Northeast blackout. It was a big problem. Electric utilities said, we can’t solve this ourselves. It’s a multi-state, multi-utility issue. And it worked. They figured it out.

They said, you know what? We’ve got other big problems, challenges that we face. And so EPRI was formed, and we’ve been solving problems for the electric and energy industry in general since then. You can see we’re in 450 countries. We represent the generation that is represented by our members as about 90 plus percent of the generation in the U.S. And so we cover soup to nuts research from basic fundamental physics and chemistry all the way to market behaviors and everything in between.

And then our sources initiative. This is a partnership between ourselves and our sort of sister institute, the Gas Technology Institute, where we have joined forces with, as Joe mentioned, a number of parties, over 50 entities who have pooled our funding together to do research. And I want to point you to the horizontal list there: hydrogen, ammonia, synthetic and dry fuels, biofuels. These are the low-carbon resources. These are the energy carriers that will be—we have focused our attention on in low-carbon resources initiative.

And we’re looking at how they are produced, how they may be stored and delivered, how they integrate with the grid in terms of resiliency and demand response, and those sorts of things. And in my piece has been the end-use application. It’s a very broad piece of work that involves all sectors of the economy. Quite a lot of correlation and interrelationships between how those sectors will behave as we start to look at other final energy sources. And so we’re looking at all sorts of options and technology, emerging and existing technology.

And of course, our goal is to do this in an independent and comprehensive way. We have an objective to provide analysis, provide information and insights, and let the policy makers take that and do with it what they need to do to make informed decisions, as well as end-use customers. And of course, we want those to be high impact in as much as possible. And so what we’ve been doing, there’s a high-level economy-wide model, very complex. Some amazing techno-economic researchers at EPRI developed this model. It’s called U.S. region model.

And I’ll point you to the little QR code in the corner. If you can grab that. I would commend that to you to go take a look at the lowcarbonlcri.com. And there’s a net-zero analysis there that I think you’re going to want to take a look at. It’s a very comprehensive report on the analysis we’ve done for economywide modeling. That has provided the backdrop for understanding various low-carbon fuel pathways, and what those implied market clearing costs may be in our techno-economic analysis. And that’s the piece we’ve been involved with.

We want to understand the technologies at end use that would apply these low-carbon fuel pathways, or as mentioned, carbon capture and other sources of fuels, biofuels, and so on. Not only what are the costs of the fuels and how they are used within the systems—these industrial systems, and other systems—but also what is the performance from an energy efficiency standpoint, energy input standpoint? And what is the cost to either retrofit or a purpose built equipment? And then sort of play that out in terms of an economic competitive scenario, will these things adopt or not? What is the likelihood of them moving forward?

And so we look at these real-world sort of end-use applications to really develop that competitive understanding and how the market may behave. So one of those is industrial boilers. So this is usually the point where a lot of people will go to sleep. It’s like, why boilers? They’re pretty pedestrian, mundane but ubiquitous. They are everywhere. And there are a lot of them. This is, I think, an Oak Ridge study, a graphic that they produce at Oak Ridge National Labs.

And you can see that with the exception of areas where population and industrial activity are relatively low, they are very widespread, industrial boilers. And the densities are where you would expect them to be, certainly in areas of heavy industrialization. But again, pretty wide spread. And the graph on the left is the number of boilers, and on the right, is really the energy intensity, or how much energy is sort of being consumed by those boilers in their operations, of course, boilers, heat water, primarily, other fluids as well, but primarily water. And that water then is an energy carrier within the facility, either as steam or as heated water. And so we’ve done a study—completed a study on the conversion of existing gas-fired boilers to hydrogen. And we say hydrogen here. We’re not exclusive to hydrogen. There are other fuels. There are challenges with those other fuels, ammonia being one that’s certainly worthy of consideration, alcohols of different types.

So these are all sort of hydrogen-based and derived from hydrogen-based molecules. But in the end, kind of hydrogen’s the benchmark fuel gas that we work with. And so we’ve looked at all of these different boiler types. And I know there’s a bit of an eye test, but there’s a whole list of the NAICS codes for the various industrial sectors. And so I want to point you to two things on this chart. One is that—and this is the total current MMBTU per hour sort of capacity is what’s represented by the colors.

And so the darker colors on the right are the really big dogs. They’re sort of 50 million BTUs per hour and above. The interesting thing is, with the exception of a few industries, pretty much not the big opportunity here in terms of decarbonization. So we really look at 50 million BTUs and below boilers, small- to mid-sized boilers, as being the real large opportunity in terms of decarbonization. That’s good news and bad news. It may be a little bit easier to think about how you would deal with a small boiler.

But when you start to look at pathways like carbon capture, a whole bunch of small boilers doesn’t seem like the best approach, perhaps. Maybe something we could do on the larger end of the scale. So that’s one attribute of what we see about the stock of boilers today, is that it’s dominated by small- to mid-sized boilers, less than 50 million BTUs per hour. Those other boilers, the larger ones, tend to be in combined heat and power scenarios, and a few industries like petrochemical, pulp and paper, some in food processing.

And then this is the same list of NAICS codes on the left. And this is looking at those 2.5 to 50 million BTUs per hour. By the way, 2.5 is sort of a benchmark. We look at below that. It’s sort of a package boiler, fairly straightforward to think about. Either electrifying or some other sort of approach to being able to replace those. And so this is more of an appliance-type boiler in those applications. And so we sort of bookended the analysis between those 2.5 and 50 million BTUs per hour.

The main point here is that it’s kind of an even split between above 10 and below 10 million BTUs per hour, in terms of the number of boilers to work with. And so we went out and did some work with the boiler manufacturers and other equipment manufacturers in the industry. And you can see here just kind of a listing of the number of entities that we did research on. So we did a lot of internet-based research and secondary research to find these companies and find out who’s actually working in the decarbonization space and had any sort of literature or work at all going on. And what boilers did they kind of work with.

And it turns out that not that many entities are really that interested or working in decarbonization activities. They just want to make boilers and sell them. And so we did find some that are working for decarbonization and hydrogen capable boilers and other fuels. And we asked them a lot of questions regarding what kind of boilers, what size, what do they think about the future with respect to decarbonization? And so this is a kind of a summary of—kind of two chunks. On the left side here is what about blending?

So we think, we believe that there’s a pathway toward beginning to blend hydrogen within the existing natural gas networks. And that is certainly a pathway to begin to build demand for hydrogen, and be able to begin to produce hydrogen at lower cost. And so that’s sort of a first necessary step. And then what about 100% hydrogen? What about operating a boiler on 100% hydrogen? And the issues that you get into are similar, whether you’re looking at ammonia, which you might crack into hydrogen and release the nitrogen and burn it as hydrogen in the boiler. So there are different approaches to this. But in the end, what do you think about this?

And so on the left-hand side, burning a blend—even up to 30, 40, or higher blends up to 70%—most of the boiler manufacturers said, “Hey, very likely to somewhat likely that we’ll be doing that soon.” The burner manufacturers’ a little more optimistic there. They’re more involved in the technology of actually what happens in the burner with respect to hydrogen and a little more optimistic but very likely to somewhat likely. So there’s some consensus there with the folks that are working toward decarbonization of boilers, that that’s going to happen—100% hydrogen, a little different story. And it’s kind of interesting that the optimism shifts. And I think this is a function of how much work is ahead of them to make it happen, honestly, for us to make burners that are hydrogen capable for a little bit of hydrogen or a blend. The burner manufacturers feel pretty good about that. The boilers manufacturers are less sure about what that does to the rest of their systems, and they integrate. So they have a controls piece. And they’re a little more pessimistic.

When you look at the other side of the story going 100% hydrogen, the burner guys are now like, “Well, I’m not quite as sure about that. I think it’s less likely that we’re going to be doing 100% hydrogen in the near term to intermediate term.” And so this is the opinion of where the industry is right now, where the work needs to happen. To what extent will the design be affected? So this is the next sort of important question. What do you think about the design?

Again, when we look at blends, none to minor design changes required. And that’s from the valve train through the burner, even the emissions and refractory. They feel fairly confident about that. But a big shift when you start taking a look at 100% hydrogen capable boilers. There’s a lot of work that has to be done on the controls. The flame management, the flame behaves a lot differently. There are safety risks with respect to management of the flame, a phenomenon known as flashback, where the flame will actually go out, and then reignite on its own, catastrophically.

So there’s some issues there that they get more concerned about. And specifically, what are they concerned about? I can’t even read it here. So I’ll explain to you what we’re seeing here. In the center, we have a couple of categories of concern. And one is the turndown capability. So when we look at hydrogen, we know boilers have some phenomenon that sort of limit their turndown. They get really concerned about how far you can turn down a boiler. And so that’s going to affect its cost effectiveness in the end.

How efficient is it on turndown? And when boilers have to turn down—and they do—then we’re going to potentially have some risks. So there’s a lot of uncertainty about the turndown capabilities. And then the other major concern boxed in red here is the emissions, so combustion of pure hydrogen with air starts to become an issue with respect to thermal NOx formation. And so these folks are beginning to do the research to understand what actually happens in that environment and whether or not emissions are going to be a major concern. Other concerns that they pointed out is the gas nozzles themselves, materials for the nozzles, for the valve train, for the refractory may have to change. So these are all pieces of research that need to happen: certifications and testing of the processes, testing of the products, so what happens in products and so forth. And so there are a number of other areas of concern that they would point out. So what we did was we looked at these boilers, and we said, “OK.” We looked at three different scenarios. And what we did … I mentioned we took … So our U.S. region model is a top-down analysis looking at an economywide demand for all sorts of end-use fuels. I mean, everything you can imagine. And they evaluate the trajectory of cost performance, the learning curves on the equipment, and ultimately, on various decades of time or time frames, year by year, understanding what those cost trajectories are. And the various sectors of the economies that are going to demand that. Their willingness to pay. All these things go into this model, ultimately, drops out a demand for everything from methanol to ammonia to hydrogen to existing fossil fuels.

And we end up in each of these dates, we can peg what we think the market clearing price of each of those commodities is going to be. We feed that into a bottom-up model, basically say, “If this is what the market clearing price for methanol is going to be, or for hydrogen is going to be, then this is what the cost, based on what we understand of the cost of conversion of the equipment and the cost of the fuel and an operating and capital costs, or for new equipment. What is likely to be the conversion to the commodity? What’s going to be adopted?”

And so we run these scenarios. The first scenario on the left is the reference case and is business as usual. It assumes energy efficiency is taking place at the current rate. And basically, the thing that’s causing the growth there is just growth in industrial demand. We’re going to continue to grow population. We’re going to continue to grow industrial demand for products. The second table—we ran three different scenarios. This is an energy chart, by the way. This is not emissions. So this is looking at energy.

And it says, “Look. If whether we’re doing maximum achievable energy efficiency alone, the third scenario is the progressing towards 70% hydrogen natural gas blend.” And then the last scenario is maximum achievable energy efficiency plus 100% hydrogen demand. It’s the same amount of energy because it’s the same industrial demand. So it doesn’t change. And what we see in that forecast is the total final energy sort of relatively flat across that time frame because we’re sort of assuming the same energy.

We end up sort of overcoming with an energy efficiency work, the maximum achievable energy efficiency. We’re sort of overcoming some of that demand issues. And then energy consumption forecast with a widespread electrification, we see that sort of down turning.

Two minutes? OK. All right.

So what we find here is that these will convert. And then we model what the emissions effects of that would be. And so we can see that with natural gas transition to 100% hydrogen, we have some impacts, some benefits. But it’s not that much greater than a transition to 70%. We see that electrification and the combination of electrification and hydrogen, we think we can get significant emissions reductions. We had a similar approach to industrial. The thing I want to point out here is that the industrial processes furnaces, we had a good bunch of different potential companies that we looked at. But on the U.S. side, very few companies—only about 11%—really looking at conversion. And international business is a little bit more.

And I want to take you to this chart here. Let me back up one. So this is looking at industrial decarbonization and the same scenarios that we talked about before. And so you can see that if we … The three lines on the right are the emissions impact of industrial decarbonization through hydrogen adoption. And the bottom line, the lowest line, is with the application of 100% hydrogen. And so the interesting thing here is that we do see tremendous reduction potential, something like 300 to 400 million metric tons per year of reduction.

And if we do electrification at the same time, there’s another 150 or so reduction potential there. So the combination of those two strategies are very important for us to consider. And so the last message I want to leave you with … And I’ve got more slides that we could go through in the future in some of the other sessions. But what we find is that we really need to focus on optionality. We need to make sure we keep all of these options open.

We find that, in general, there is opportunity to potentially deploy hydrogen in high-temperature applications where the hydrogen may have other value, such as reduction properties for different metals and concrete, that sort of thing, where hydrogen has additional value directly. And those would be the early adopters. But later on, we really have to come up with strategies on blending, and then decarbonization through both carbon capture. So we’re also taking a close look at carbon capture in the industrial setting is.

It’s an economic challenge to do that in these ubiquitous number of units of production that we have in the industrial setting. So that’s what I have. I’m going to stop there. For now, we can talk about the economywide stuff at some other time. All right, thanks.

JOE CRESKO: Thanks, Perry. I mean, it’s particularly important. You think about boilers, they’re so ubiquitous. But being able to get this kind of input from a range of stakeholders doing this detailed work is really … We really appreciate the depth of this work. And these slides will be available. There’s a lot of content here that I think people are going to want to dive into later. And I know it’s very difficult with the length of this room to see on the screen, but it is a wealth of information. Thank you very much, Perry.

Next, I want to introduce Dr. Lauren Ross. Lauren is the deputy director for energy justice in DOE’s Office of Energy, Justice, and Equity. In this role, Lauren leads EJE’s research and policy efforts to support a more just energy economy. Previously, she was part of DOE’s State and Community Energy Program (SCEP) at the U.S. Department of Housing and Urban Development and was at ACEEE (American Council for an Energy-Efficient Economy). Dr. Ross holds a B.A. in public policy from the University of Delaware, an M.A. in sociology from GWU, and a Ph.D. in sociology from Temple University. So I’d like to bring up Lauren right now. Thank you.

LAUREN ROSS: OK. I might be short enough to make this actually work. Can you hear me OK? Great. So, hi, everyone. And thank you, Joe, for that. I don’t know if I touched something. Thank you for that introduction. As Joe mentioned, I’m Lauren Ross. I’m deputy director of energy justice within DOE’s Office of Energy, Justice, and Equity. This is week three on the job, but I’ve been with DOE for the past year.

And so just a quick overview of our office for those of you who may be unfamiliar … We were formerly known as the Office of Economic Impact and Diversity and founded in 1978. So we’re almost as old as the department. Our mission is to help ensure that everyone is afforded an opportunity to participate fully in the Department of Energy’s programs, opportunities, and resources. We have led the implementation of the Justice40 Initiative across DOE, and have identified over 140 covered programs.

Among many activities, we advise the secretary on the effects of energy policies, regulations, and other actions on the department, and its components on minorities and minority business enterprises, disadvantaged communities. And on ways to ensure that these groups are afforded an opportunity to participate fully in the energy programs of the department. We also conduct research and policy analysis to determine the socioeconomic impacts of DOE’s programs and policies.

The office has engaged in recent years quite closely with IEDO, and we certainly look forward to continuing that engagement. And so my talk today will be also somewhat of a level-set conversation. I plan to discuss some of the key ways in which energy justice is being pursued across the department and some of the direct implications and opportunities for industrial decarbonization. But before we jump into the conversation and about energy justice, why it’s important, and its context in the energy space, I thought it’d be helpful to establish what I mean by the term energy justice.

What exactly is energy justice? And why does it matter? Simply stated, energy justice means ensuring equitable access and participation in the energy system while minimizing or eliminating any harm. Energy justice means deploying our energy in ways that are more affordable, clean, and benefits everyone. So I’m sure that—or at least I hope so, that this concept seems agreeable to many of you. But why now? Why is the emphasis on accessible, clean, and democratically managed energy happening now? Why have several states, the federal government, and countries across the world taken up this concept and made it a priority across recent legislation? In its simplest form, how our energy infrastructure was built and is fueled has had major consequences for certain communities across our country. And it’s imperative that we begin to make the progress on this front—not tomorrow, not in the next legislative session, but now. To explain some of this urgency, I’ll walk through some recent developments and then follow up what I consider to be the light at the end of the tunnel, some concrete ways to help us tackle some of these deep, deep disparities.

So first—and as I’m sure everyone is quite aware, in this room—in 2021, the federal government kick started this transition with a once in a generation investment in our nation with the Bipartisan Infrastructure Law that will invest over $1 trillion in our nation’s infrastructure over the next 10 years for the national electric grid, industrial decarbonization, clean energy, environmental remediation, and electric vehicle charging, among many other investments. The legislation also means that for the next 5 years, DOE programs will be standing up over 60 new programs, including 16 demonstration and 32 deployment programs and will be expanding funding for 12 existing research, development, demonstration, and deployment programs. This funding was then followed by the IRA that invested even more in residential efficiency and clean energy demonstrations. So we have a lot of money. We have a lot of investments and funds to help kick start this clean energy transition. But as we’ve learned from history, if we’re not intentional about our planning, or don’t actively seek to redress past harms, then we may inadvertently leave communities behind.

So how do we ensure we’re braiding energy justice into our government investments going forward? One major response to this has been the Justice40 Initiative. On January 27, 2021, the president issued the executive order on tackling the climate crisis at home and abroad. At the bottom of this executive order was a reference to the Justice40 Initiative. And it directed O&B in collaboration with other agencies to publish recommendations on how certain federal investments might be made toward a goal of 40% of the overall benefits flowing to disadvantaged communities.

Now, this was truly a monumental and first of its kind directive for the federal government that caused a lot of anticipation, excitement, and compelled DOE to get to work. We had to identify the covered programs, define what a disadvantaged community was, and begin to track and measure the benefits of J40 investments. We’re still very much in those stages. The goal of the Justice40 Initiative is for at least 40% of the overall benefits of federal climate and clean energy investments, including investments in clean energy, energy efficiency, clean transport, affordable and sustainable housing, training and workforce development, The remediation and reduction of legacy pollution, and the development of clean water infrastructure must all flow to disadvantaged communities.

This target—or rather requirement, helped further operationalize equity for many at DOE, and provide pathways for real accountability. Some of the desired benefits of Justice40 include decreasing household energy burdens, increasing clean energy jobs, job pipelines, job training for individuals and disadvantaged communities, decreasing environmental exposure and burdens for disadvantaged communities, and increasing parity in clean energy technology access and adoption. For many of you, the concept of Justice40 may seem a bit still abstract.

But one tool that I wanted to really emphasize today that really kind of grounds this concept of Justice40 and helps at least provide a pathway of achieving those outcomes is through furthering community benefits planning and plans. The Department of Energy now requires community benefit plans as part of all bipartisan infrastructure law and Inflation Reduction Act funding, opportunity announcements, and loan applications. CPBs are based on policy priorities and incorporated into projects to help ensure broadly shared prosperity of clean energy investments.

CPBs are intentionally flexible for program needs, but must be specific, actionable and measurable. Community benefit plans are scored as part of technical merit reviews. Typically, they make up 20% of the total score, so they’re real. For selected applicants, their community benefits plan will be part of their contractual obligation and will be evaluated at budget renewal periods or go/no-go decision making. Community benefit plans are based on a set of four core policy priorities as intended to drive successful implementation of programs.

And what’s the real end result? What’s the kind of why behind why we wanted to institutionalize these across the department? By facilitating real meaningful community input, social buy-in, and accountability, such engagement can substantially reduce or eliminate stalls or slowdowns, litigation, and other risks associated with project implementation. The core priorities that I just referenced of community benefit plans include engaging communities and labor, creating good-paying jobs to attract and retain skilled workers, and ensuring workers have a voice in the job and the job that affects them.

Advancing diversity, equity, inclusion and accessibility through recruitment and training, and equitable access to wealth building opportunities like business and contracting opportunities. Implementing Justice40 is also a component of community benefits. Plans, which, as I described, directs 40% of the overall benefits of certain federal investments to flow to disadvantaged communities. Through these key principles, when incorporated comprehensively into project proposals and applications can lead to these anticipated outcomes, both at the community level and project level.

Community benefit plans are meant to be intentionally flexible to generate the best approaches from applicants and their partners. Yet, we anticipate specific agreements between communities and labor resulting from these planning processes. Community and labor engagement should lay the groundwork for the negotiation of more formal workforce and community engagement agreements, which could take the form of one or more kinds of negotiated agreements with communities, labor reunions, or ideally both.

Registered apprenticeship programs, labor management, training partnerships, quality pre-apprenticeship programs, and local and targeted hiring goals are all examples of provisions that you can find in workforce and community engagement agreements. So how can we think about this framework in the context of industrial decarbonization? As we all know, and what brings us here today, the U.S. industrial sector will play an essential role in a successful clean energy transition, both by producing the materials needed to generate clean energy, and by decarbonizing a major source of emissions.

This provides a major opportunity to address long-standing environmental injustices, preserving and creating good jobs, and ensuring the energy transition is just and equitable. Especially when it’s designed to respect and address community concerns, especially fence-line communities, those directly impacted by what happens on site. Decarbonizing industrial facilities provides a critical opportunity to remediate the social, economic, and health burdens experienced by fence-line communities disproportionately harmed by industrial sector emissions.

In addition to emitting large quantities of greenhouse gas emissions, industrial facilities emit other pollutants, waste streams, and byproducts that may be harmful. Decarbonization efforts can include, and should include, measures to address these impacts. This is critical as the legacy of pollution runs long and deep in communities of color. Black households are more likely than other communities to live in the shadows of fossil-fuel generation. Members of these groups are disproportionately exposed to elevated levels of pollution, both from industrial and other sources. And consequently, experience higher rates of adverse health impacts.

Not only are disadvantaged communities more likely to have industrial facilities located within their areas, but they’re more likely to have multiple industrial facilities in their communities. We see this playing out, especially i-in the Gulf Coast. So for these reasons, industrial decarbonization is and will continue to be salient for disadvantaged communities, both from an economic and environmental standpoint. But beginning with community engagement is really key.

Engaging with and garnering the support of surrounding communities who have effectively challenged many of these developments or projects in the past is important across nearly all decarbonization pathways. How technologies are deployed can both combat or exacerbate existing inequalities. And some, as we’ve already discussed, do both at the same time, thinking here about carbon management and hydrogen. So I’m getting the cue to wrap up. Let me just leave you with some key questions about how you might consider the equity and justice as you’re thinking about those critical pathways for industrial decarbonization.

What are the environmental impacts on the grid? How do we relate to—how do they relate to community health, grid reliability, and safety? How can you pursue the pathways that you think will have maybe the greatest impact on the environment while safeguarding the public at the same time? How can you ensure energy efficiency as part of the solution, and reducing load and really maximizing community benefits? How do local jobs and other wealth building opportunities factor in? And so importantly, how do you lean into those community tensions surrounding many of these newer technologies to which industrial decarbonization must rely on?

This is going to be messy in this space, but you have to do it deep with the communities in which your projects reside. And remember, you may be addressing one problem but creating another. And often communities aren’t up to speed on these issues. So you need to be transparent and disclose this information to really have that meaningful engagement. So in closing, we cannot talk about saving the Earth without talking about its people, especially those who have been borne the brunt of the climate crisis, such as low-income communities and communities of color. We cannot advance technical solutions to the climate crisis without centering disadvantaged communities in the narrative and talking about equity and justice. Thank you.

JOE CRESKO: OK. Thank you, Perry. Thank you, Lauren. I think this was a really interesting perspective. We can think about how difficult change can be. Change can be hard from a technical perspective. And when it relates to other vectors, people, impacts and assessing all of this is really part of what we’re— [INAUDIBLE] —do and better understand. We’re going to try to do some questions, but I think in the interest of time, we want to try to move forward.

And my goal before lunch is to peel the layer of the onion back one or two more layers to get a little bit into some of the details with this pathways thinking, the vision study. The vision, actually, that we have for a future U.S. manufacturing and industrial sector. And to really set us up for the fun part of this workshop this afternoon and tomorrow as we get into breakout sessions and really discuss a lot of the issues that we are all collectively interested in.

So a quick show of hands. Who had a chance to read through the pre-read that we sent out? That is fantastic. And with the RFI that went out today, about 50 pages, the pre-read, who had a chance to reference the analysis summary document that was referenced out of the pre-read? Not too many yet. Another, I think, pushing 200 pages of content. There is a lot to cover. I want to try to—I have quite a few slides. I’m not going to get to all of them. This will be a resource for folks afterwards with the other resources that we have. I’ll spend a little more time at the front end to really try to set the stage, and I will probably fly through some of the slides a little bit later, showing decision trees for each of the industrial subsectors. And I will really keep in mind that, for people that are even in the front row, it may be a little bit challenging to see some of this content. But don’t worry, you will be really diving into those, for example, decision trees in tomorrow’s sectoral breakout sessions.

So a little bit of context for our thinking behind our pathways to U.S. industrial transformations … We want to ensure that we have alignment. You heard from Avi earlier and others about Energy Earthshots. And from Lauren, for example, on our EEJ priorities. And when we think about this, with inside of DOE, you’ve heard quite a bit about that. But we are also highly aligned with our U.S. governmental goals. And for example, we provide our nationally determined contribution to the world in terms of how much our emissions reductions are needed by midcentury.

And I think everyone in this room is probably well aware of the 1.5c target. In the Paris Climate Agreement, you can take a little bit further read. So as to achieve a balance between our human emissions by sources and removals by sinks of greenhouse gases in the second half of the century, our ultimate goal is to find ourselves in balance with our production and consumption with the industrial sector, which is perhaps the biggest pressure on our planet. Our approach at is to coordinate industry with academia, with NGOs, national labs, and all public and private stakeholders.

This is number one. This is why we are here, to identify potential technological solutions, to consider the impacts and opportunities, and to map out the pathways that you’ve begun to hear about today to overcome the barriers to achieve net-zero industrial emissions by midcentury so that we can put ourselves on a real path to be in balance in the second half of this century. This is particularly important. Our work, historically, has fed into the U.S. long-term strategy of the U.S. for the industrial sector.

You can barely see some of these graphics, but that work that is done every 5 years, we update those NDCs is particularly important. This work we’re doing sets us up for even deeper and more detailed input into our future long-term U.S. strategies for the U.S. Our approach for this vision study is to elucidate these pathways to decarbonize the sector by 2050. You’ve heard a lot about the Industrial Decarbonization Roadmap. We are extending and expanding the work that we started, actually, four years ago.

We published that report 2 years ago, but the homework on that started 4 years ago. It was quite a lot of effort that went into that. We wanted to make sure we did this work in a very detailed manner. We are really building out upon that. And I will touch on that this morning. You will see a little bit more today. I’ll introduce, and you will hear more. You saw a snapshot of a decision tree. I’ll try to talk about that a little bit more. And you will see a lot more about this in the breakout sessions.

Our goal is to increase the resolution of the analysis and to chart our pathways options. There is no one pathway. Pathway dependency is part of what we really want to understand. What are those pathway dependencies, depending on sector, depending on technology, depending on company and location in the country? Decarbonizing industry is also a [INAUDIBLE] challenge. I’m going to try to maybe switch to another microphone if that works, because this one might be cutting in and out. Might need to charge it. Not sure.

From unit operations to the facility level, and beyond the plant bounds is the scope and scale of the work that we’re doing. We’re trying to understand across sectors, and even across economy, the implications of decarbonizing the industrial sector. These multiple pathways require coordination, and we’re attempting to engage with a much broader cross-section of stakeholders than we did for even with the roadmap, which was relatively extensive. So for those that are familiar with the Industrial Decarbonization Roadmap and some of the content that we put out there, we take a look at technologies by pillar that you’ve heard of. And we think about business as usual.

If we keep kind of doing the same old, same old progress but not aggressive and intentional progress. And then scenario work, that leads us to full and plausible technology investments that can have significant and substantial change. And we plot that out typically in what we refer to as waterfall charts. So where we are today in terms of emission by subsector, where we expect to be based on demand in 2050, and then the levers that we need to push on to get down to near to net zero for those sectors.

30% of our energy-related emissions are attributable to the industrial sector. 38% of all emissions, energy-related and process emissions are attributable to the industrial sector. That’s a big footprint. And as you’ve seen in a number of charts, we can continue to slice the industrial sectors finer and finer and finer and to see more and more granularity as you go from NAICS codes down—from high-level NAICS codes two- or three-digit NAICS codes down to ultimately six-digit NAICS codes.

We’ve done homework in a number of ways. We do analysis with this pathways industrial decarbonization modeling. We also use input-output modeling, for example, to really begin to think about and disaggregate scope 1 and scope 2 emissions, and how they relate to scope 3 emissions through supply chains. And this beyond the industrial subsector approach is particularly important for us to understand the holistic view and the systems approaches that are needed.

Again, in terms of the Industrial Decarbonization Roadmap, when we think about this as a systems challenge and you take a look at this technology landscape diagram around the perimeter between now and 2050, we have technology levers that we can push on that can give us progress. And looking at technology solutions and additional solutions in the near term, mid term, and beyond to reach our goals is what we are really interested in thinking about. Beyond these sort of specific technology levers inside of pillars, we really need to take a systems approach.

We want to look at things like the core process. For example, thinking about the use of hydrogen in steelmaking, iron making, other industrial sectors. What are the implications at the facility level? And what are the implications beyond the plant bounds? What it means is we have different pillars, but all of these pillars are important to achieve our goals through our pathways. We need to think about specific questions.

What are the implications of expanded hydrogen generation and use? What are the implications of new thermal energy sources and systems? What are the implications of smart manufacturing, automation, data analysis, and this transition to clean electricity between now and 2050 and beyond? This is a true systems approach, and it takes systems thinking. These impacts and interactions are complex. I think, historically, inside of DOE, we tend to think and focus a lot on unit operations and the facility level, and the technology complexity that exists there.

But that technology complexity extends beyond just the products in those sectors. And that complexity of interactions that occurs with respect to resource flows and exchanges becomes particularly important. We need to think deeply about resources and their impacts on emissions, and also the economics of all of this. So what are the collective anticipated impacts? Where do those impacts occur? And when will these impacts occur? These are some of the questions that we are trying to address with our vision study, with our modeling.

I think there’s some really useful work for us to think about, to point to. For example, the United Nations Environment Program talks a lot about an equitable transformation. They actually define energy transition. They define the transformation. And our approach to resource consumption, historically, has brought the level of economic wellbeing of the world up. But the implication on the Earth have been detrimental.

We really need a systemic transformation to begin to decouple our resource use and our environmental resources and impacts implications from the continued improvement in well-being and economic activity that we’ve heard of this morning within the U.S. and globally. This is particularly important. So our strategy builds on prior DOE work. You’ve heard a lot about the roadmap, but we’ve also more recently put out—DOE’s put out pathways to industrial decarbonization. Those near-term opportunities.

And you’ve heard about this. Carolyn specifically mentioned that 60% of emissions where cost effective solutions do not yet exist is really important to us to really begin to understand that entire picture. So our new vision study is looking at the pathways for U.S. industrial transformation that will expand for those 60% of emissions where cost-effective technologies do not yet exist, provide frameworks to pursue multiple pathways in parallel, to identify the barriers to pursuing the pathway, and to address the impact of health on workforce and on environment.

So this little snapshot of a table kind of lays out a little bit of the extension and expansion that I mentioned earlier with respect to the roadmap. The roadmap, we identify pillars for energy- and emission-intensive industries. In our pathways work, we’re expanding that, looking more deeply at production routes and core technologies. Cross-sectorally, we’re extending that with our pillars work. And with production routes and core technologies that have implications across sectorally is new work in this pathways vision study.

[INAUDIBLE] thing that we’re trying to do expands upon the bottom-up analysis. It identifies and standardizes inputs and assumptions for transparency now and future proofing going forward. We are adding resolution in terms of fuel sources, process emissions, which is new. Adoption rates in a more sophisticated way, electrification, onsite generation, and more. And you’ll hear a lot more about this in the breakout sessions.

We’re refining the pillar breakdown calculations to more accurately capture the adoption of technologies and separate electrification from LCFFES (low-carbon fuels, feedstocks, and energy sources). For those of you might remember, in the roadmap, we treated those together. We had a challenge disentangling them at the time, and we are doing that with this work. And we’re developing these decision tree frameworks to capture and communicate technology and production options that are represented in the models.

So I’ve mentioned decision trees a couple of times. What are these decision trees? We have taken a bit of liberty in the ideas of decision trees. Decision trees are often used for more specific applications, maybe citing of a particular industrial facility. We are taking this decision tree approach and using them to represent the framework options available to industry that we have in the models. So they, in some ways, are a graphical representation of the models—the Excel spreadsheet models quite sophisticated that we have for each industrial subsector.

Our goal is to ultimately make those available for folks to be able to use for their particular use cases. It’s a starting point. These decision trees and these models are a starting point for more targeted case studies that depend on the factors applicable to the user of the decision tree. They are adaptable. While the outputs of our models use assumptions about, for example, anticipated changes and aggregated uptake of technologies over time for a given industrial subsectors, decision trees can be expanded and adapted and build upon.

And these are iterative over time. These decision trees need to evolve. You’ve heard this. We cannot think about this as a once and done, wash, rinse. It’s going to be wash, rinse, repeat, wash, rinse, repeat. It needs to be iterative over time. So here’s a generic kind of decision tree. If you take a look at the left hand side, we think about this with a starting point. There’s going to be questions about, where do you start in your journey—in one’s journey to achieving net zero over time?

And one of the things that we know at DOE, historically—especially because we spend so much time over the years with energy efficiency—is that energy efficiency is the first and highest value approach. It is particularly important. But what we also know is that if we think about making improvements by improving the processes, the technologies that we have, exclusively doing it that way, it won’t get us to where we need to go. We may be able to achieve maybe 30% of our total emissions reductions. It’s an important and primary, but insufficient approach to industrial decarbonization.

We really need to think about all of those other levers in a disciplined way. And thinking about decisions on our journeys and the barriers that exist to being able to reach those ultimate goals, such that we can overcome those barriers with our targeted investments. So in this case, as I mentioned, we’re really thinking about this as an iterative process, over time, where these decision trees that represent the models that are flexible, that are based on exogenous inputs. There are too many technologies and too many industries to do this down to the granular level that industry needs for their specific application.

We’re trying to aggregate that up and understand and estimate the total emissions impacts reduction potential by industrial subsector. So here’s a few charts. Again, this is going to be a little bit hard to see. We have had to adapt our approach for modeling by industrial subsector. In some cases, we’re looking at alternate production routes, but we are always looking at fuel demand, fuel mix, electricity demand, electricity sources, the process emissions, and the potential for carbon capture.

We also may have to take a look at higher resolution in a way that we are collectively summing up unit operations and their contributions in a balanced way where we’re not overcounting the potential when some technologies come in and the timing of those technologies. Our models are designed to be able to try to do that and estimate those subsector emissions. So chemicals, cement, iron and steel are treated a little bit differently than petroleum refining, pulp and paper, and food and beverage.

So these models, we start with a baseline of 2018. That’s when the most recent, deepest Energy Information Administration data from the Manufacturing Energy Consumption surveys are available. It gives us the most detailed information about technologies that are used, for example, process heating or other types of systems, so not only the type of energy that’s used but where that type of energy is used within different industrial subsectors. It’s a good starting point.

These Excel-based models estimate energy, number one, and now new process related emissions for select industrial processes based on things like the assumption for feedstocks, the manufacturing technologies, energy intensities, and energy sources that are tailored for each subsector. We have had over three dozen experts inside of DOE in our national labs and externally have been involved to date in the development of these models, and our initial inputs and assumptions.

We really want to see the feedback, hear feedback from everyone at this workshop and beyond. And especially through our RFI on how we have set this up and some of the assumptions that we have going into these pathways estimates. So the outputs and the results, you can think about them as not a bit more than a calculator. It’s a bit of a solver. It is not a general equilibrium model. It depends on expert elicitation and input. That’s in large part why we’re here to get that expert input and elicitation.

So we do calculate the aggregate subsector and emissions impact based on adoption rate on energy source and in context with those other technologies. So that we’re not, for example, overcounting the contributions of any one technology. And as these technology characteristics evolve over time, the models can easily run new scenarios. This is done in annual increments between now and 2050. You will see sometimes 10-year increments, but it is actually done in annual increments, which is another extension from the roadmap work, which the calculations were done in 10-year increments.

So quickly, I’ll touch on our approach. We have customized spreadsheet templates, models for each of these industrial subsectors you see on the left, the scenarios that we run and we show in our work and you will see in the, ultimately, the vision study that we come out with are a baseline. We always want to start with a baseline. We tend to think that EIA is more conservative. We actually think our baseline is a bit more aggressive than what EIA’s forecasts are.

We can go from moderate to advanced to net-zero emissions studies. And with that, what you will see during this workshop are only really representations. When you see waterfall charts, they will represent the most aggressive [INAUDIBLE] studies scenarios [INAUDIBLE] emissions reductions between 2018 and 2050. And as I mentioned, the first bar that you will see on any waterfall chart is the 2018 footprint. The next bar shows with increased demand. We’re not reducing emissions by reducing demand, or assuming some demand reduction.

This is a forecast for demand and reductions from that point in 2050 to net zero. So Avi introduced and talked about the pillars. I mentioned this earlier. You see that red box that we addressed, industrial electrification and low-carbon fuels and feedstocks in the roadmap collectively and together. In our current study work, we are using a more tiered approach where the first tier are the pillars. The second tier is this subcategory disaggregation. For example, we’re looking at things and questions—have the ability to look at things like carbon utilization versus carbon storage. What does that balance begin to look like or potential look like? What about thinking about low-carbon sources used as feedstocks versus as fuels? And then tier three, a greater amount of specificity for specific technologies. So here’s an eye chart, six waterfall charts for six industrial subsectors. You can perhaps see the magnitude of some of the bars are larger.

We aggregate up, and we’ll continue to show output by pillar. We also have deeper information about that disaggregates inside of pillars. So some of the major decarbonization approaches for the six subsectors model modeled, I will not read through this. This is, for example, a starting point that you will see in the sectoral breakout sessions that we have tomorrow for each of them. But some important context. For example, I’ll just hit on a couple of them. Two-thirds of U.S. steel is already electrified through electric arc furnaces. This makes the U.S. very different than other parts of the world, where more traditional primary production routes are used. However, primary production is important. We need some of that types of steel by that route for certain reasons. But this really also exemplifies the importance of thinking about resources and materials flows in context with emissions reductions. It’s part of the entire ecosystem.

In cement, CO2 emissions sources, 60% are [INAUDIBLE] related and 40% are related to the energy. Food and beverage has a wide geographic diversity. And in the chemicals, this is the largest single sector with the largest footprint. But there are over 70,000 chemicals, very different than the 90-some cement plants in the country. And the fewer industrial manufacturing sites for iron and steel. Pulp and paper has substantial existing use of bio-based fuels. And petroleum refining is an evolution of end-use fuel demand and impact on refinery products [INAUDIBLE].

What does the refinery sector of the future look like? Some of these are particularly challenging questions. So I promised that I would fly through some slides quickly. We have decision trees for cement, and associated waterfall charts. Again, you’ll see this context. You’ll have these resources to take a look at later. All of this data is preliminary and based on initial runs. The information we get and the expert input is going to be important for some of the scenarios that we run subsequent to this workshop, and after the input that comes in through the RFI.

I just wanted to use this to highlight that not only are we able to show emissions reductions by pillar category, energy efficiency, low-carbon inputs, electrification, carbon capture utilization and storage, we have now broken this down into more specific production pathways by share. And in this case, you’re seeing this by decade. So as certain production pathways come into play, how do they contribute to our emissions reduction? And I think this level of granularity is particularly important.

And again, we begin to think about this through a decision tree process, thinking about: What are the options that exist at a particular point in time with the information we have, the state of technology, and the economics that are associated with that? These are not easy questions. We wanted to provide this as a starting point for this workshop and beyond. Net-zero pathways for chemicals. We looked at a number of chemicals. I think nine high-volume, high-emitting chemicals because of the use of—our deep look at ethanol, for example, and the potential to capture carbon from those emissions, because they’re relatively clean and concentrated.

There’s a large potential for those chemicals that we’ve looked at. So I do want to recognize that this work is hard. For some sectors, we cover them relatively completely. In others, we still haven’t necessarily completely modeled all of the complexity of all of the materials in those industrial subsectors. We’ll continue to plow forward. But with that, you can think about looking at those specific chemicals, like ethylene, by production [INAUDIBLE], by technology investments. How might we be able to reduce emissions from the production of, for example, ethylene? Food and beverage decision tree … Quite a lot of emissions reduction, if you can see that. Well, you really can’t see the 72%. But just kind of imagine it there on the screen from bounded by energy efficiency and low-carbon fuels and feedstocks. We see, because of the relatively low-temperature of heat, the potential to use electrification for heating operations and heat pumping, we see a lot of electrification potential. We model a lot of technologies in this sector.

And you can sort of see with energy efficiency, with low-carbon inputs, with electrification an eye chart. But just take away that the level of granularity that exists inside these models is quite deep. And thanks to a lot of really hard work over the last year and a half to 2 years from the team that’s been putting effort into this. Net-zero pathway for iron and steel and production pathways. We see six different key production pathways. And you can begin to aggregate them into groups of three, the carbon capture part, use of hydrogen, the use of electrification, as levers for thinking about the solution space for reducing emissions from iron and steel. A lot of complexity with all of these. Pulp and paper, in particular, very challenging. A lot of operations. Similarly, an eye chart of all of the technologies that are modeled and what is available inside the depths of the model. And finally, petroleum refining, challenging. Taking it as far as we can.

A lot of emissions that would need to be captured by alternate sources outside of what we are addressing in the industrial sector. The transformation of the petroleum refining is—it’s a big challenge as we think about the future of transportation fuels, and how we’re going to process those. OK. This afternoon—I’m going to do this very quickly—we have some cross-sectoral approaches. We can think about hydrogen, carbon capture utilization and storage, the grid itself, and material efficiency and demand reduction as levers. There’s a lot going on with those. We’re going to get into some of that content this afternoon. We have estimates. When we think about current hydrogen production, we’re at about 10 million metric tons in the U.S. In 2050, we estimate the demand for the industrial sector to be at about 12 million metric tons. Most of that is going to be going into feedstocks for chemicals and petroleum refining—we see that—some amount for fuel. But the value of making that really magical molecule, we see more of the value in that going into the use of—as feedstocks, carbon capture utilization in the pathways model, time series of capturable CO2 emissions. A lot of thought and diligence has gone into thinking about where and how to apply carbon capture utilization and storage in the models. Emissions from auxiliary plants are also captured, and these consist of things like boilers and steam turbines that can provide low-pressure steam and electricity or direct heat from combustion.

Eye chart—not going to point to it other than you can see that for different subsectors kind of contained in those boxes, a different balance of electricity demand. So we’re seeing high increases of electricity demand for some applications in some industrial subsectors. And far less so potential currently in others. And we can aggregate that up in terms of total electricity demand for the modeled subsectors. And lastly, as I begin to wrap this up—and I mentioned this before, and I think this is an area that we have been really wrestling with, and we need a lot of input and assistance from—what people are thinking about with respect to resources flows. Industrial decarbonization means we need to lean on that lever of greenhouse gas emissions. When we produce steel, some of the cleanest in the world, and we still put almost a ton of CO2 into the atmosphere for every ton of steel we make, we’re moving a lot of material into a place that’s not being used and captured in a way that’s valuable. That’s a challenge. And you can think about extending that everywhere.

We have a lot of tools and approaches that allow us to take a look at materials efficiency and demand reduction approaches. And we care about this because of supply chain security for things like critical materials for the long-term sustainability and availability of resources that we need as a country and as a world. We are thinking and working a lot on circular economy initiatives to be able to use end-of-life materials for the most effective ways. But we have a linear economy in which we make, use, and dispose of materials.

That is a resource that we are not putting to good use. And the carbon and environmental impacts of materials extraction and processing have implications with respect to scope 1, scope 2, and scope 3 emissions. So we have a lot of other tools. You’ve heard today, I’ve talked a bit about these Excel spreadsheet models, these very detailed models that we have. And a lot of the input that goes into this, we are leveraging resources and models from across the Department of Energy, some of which we’ve developed inside of the industrial technologies program and the Advanced Manufacturing Office and now IEDO to look at everything from the unit operation to the facility to the product level and kind of at the national scale in supply chains modeling. And so I’m going to leave you with a few closing thoughts. About a year ago, Professor Doyne Farmer gave a talk at the REMADE Conference, and he highlighted a few things that I think really ring true to for us at DOE.

Number one—and this is after a career of looking at technology adoption and deployment and the importance thinking about investment priorities. One, investment strongly influences outcomes. We see that with some of the new forecasts that you heard Undersecretary Turk mentioned earlier. We are anticipating a need to continue to apply pressure. These investments are important.

Two, too much diversification can be a bad strategy. We have to think about the right investments.

And it’s essential to make those targeted investments. And we should be putting a few eggs in the right basket. So our mission, our job, if you wish to accept, is to figure out which eggs and which baskets so that we can make these best investment decisions for our industry and nation.

Thank you very much. I know that was a lot.

SPEAKER: All right. All right, so we’re going to move on. Yep. Thank you, Joe. So I understand that I stand between you and lunch, so I will give a very quick overview to our breakout sessions. And then we’ll go to lunch. So I think as we heard this morning, we’ve had a lot of context and background for the work that’s been presented so far. And so now, the fun part starts. I think, as Joe mentioned, we’re going to engage in discussion for the rest of the workshop.

And so this is really a time for you to lend your voice to the discussion, provide your feedback, and provide context as well. And so the crosscutting strategies breakout session will start after lunch. We are a little bit behind on schedule, so we might shorten them a little bit. But some of the discussions are going to include key challenges and solutions to overcome them, I think, as we’ve discussed many times, as well as some topic-specific questions.

And so the format, we understand that the crosscutting strategies cross cut across sectors. And so we wanted to give a chance for everybody to participate in more than one. And so we made this kind of in a rotational fashion. So we’ll have three probably 45-minute sessions in the breakout rooms responding to a set of focus questions. And again, these are just questions to guide the discussion. We really want to generate discussion amongst yourselves. We want to encourage you to build off of each other in those rooms as well.

And so we will have topical breakout rooms. For those that registered a while ago and you don’t remember which ones, if you take a look at your name badge, it should say which ones. And so the first choice will be on the top, followed by the second and third. So for the first rotation, just go to the first one you chose, and then so on and so forth. And then at that time, once we go through all three, we’ll come back here, we’ll do a quick report out session. And then we’ll end our day.

So just a super high-level overview of some of our topics. And I think Joe touched on a lot of these, so I won’t go through them all. I’ll just put them up here. But really, I think they follow the pillars as well as the material efficiency that Joe just touched on. And then this bottom right here, natural resources, it wasn’t really touched on too much during any of the talks today. But I think is also important is the implications of decarbonization on our natural resources and vice versa. So this would include water, minerals, land availability, those kinds of things.

And so it really starting to begin to think about very much outside of the facility and trying to understand, if we were to decarbonize, what technologies might constrain our natural resources? Just some ground rules just at a very high level. This will have no attribution. We want everyone to talk freely. One person, one idea at a time, and 1 minute per idea. So this is the rule of one. I do want to say that, with our 50-minute rotations, possibly 45, and there might be upwards of 30 or 40 of you in a room, we’re not going to potentially get to everyone’s ideas.

But we will have note cards, and we do encourage you to write on them so we can capture your input. Reserve judgment. Again, we want everyone to talk freely. This is a brainstorming-type session. We want your feedback. And so there are no bad ideas. Hitchhiking is OK and even encouraged. We want people to build off of the conversation. If you have a thought based on what someone said, we want you to raise your hand and speak up.

Also, be creative. This is a time for you to provide feedback. Again, I think we’ve heard that a lot throughout our morning session. And then finally, mute your electronics. We want this to be a very engaged conversation. And so if you do have to take an emergency call, you get a text, just please take it outside. And then in closing, I will just show the room assignments here. So CCUS will be in Arlington, that’s on the third floor. Energy Efficiency is Washington B, over to the right here, to your left. That’s this floor. Natural resources is Tidewater, on the second floor. Material Efficiency is on the third floor, as well as Electrification. And then Hydrogen is in Washington—I’ll have to change that. But it’s in one of the Washington rooms. I’ll make sure to change that and leave this up while we go to lunch. So it is 11:55, and lunch was going to end around 12:40. Maybe we’ll go to 12:50, give ourselves 55 minutes. And we’ll adjust the timings of the breakout rooms.

So we’ll see you there. Thanks. And lunch should be outside. Collect yourselves, and we’ll get started soon.

[BREAK]

SPEAKER: Everybody, we’re going to get started here in a minute. All right. Everybody, let’s get started for our crosscutting strategies report out. Before I do that, there was a phone that was found just left in the ballroom area. Is anyone missing a phone? OK.

All righty. So let’s get started on the report out. Have some of the report out slides for some of the rooms, for others, I don’t. But again, this is just a quick high-level report out that we’ll do for each room. I will show the slides for the speakers who will be giving the report out. And then we can bring a mic to the speaker so you don’t actually have to come up here if you don’t want to. So with that, I’ll start with the natural resources breakout room.

And again, this is just to give the folks that weren’t involved in the conversation a little bit of a taste of what we discussed. But again, this is not comprehensive, just kind of highlighting some key points here. So for the first one, for the natural resources breakout, our first question was around, what decarbonization technologies or strategies will create a significant increase in demand for natural resources? So really thinking about as we try to decarbonize and try to develop and implement new technologies, whether there are some natural resource concerns.

And so some of the technologies that were discussed were battery dependency or energy storage, specifically on cobalt and lithium but also other minerals. As well as a lot of our discussion had surrounded around biomass or bio fuels or bio-based energy sources. And again, reliance on these energy sources may constrain land use as well as crop production and those kinds of things as well, mass electrification and carbon capture significantly increased water demand, as well as the quality of water.

So we’re not just thinking about the availability, but also the quality of our natural resources. So even though we may be able to recycle water if the quality degrades, specifically for CCUS, apparently the capture efficiency and those types of things degrade. And so we had a good discussion around this question around trying to think about some of the constraints that we have with our natural resources. In terms of what the primary concerns with these resources are, so kind of a follow on to that question, so EJ concerns, human rights violations in Congo, resource extraction on indigenous lands, so really thinking and learning from our past about whether we’re going to mine minerals, what that does to the local community, and some of those concerns as well. Increase in demand for biomass could lead to diminishing biodiversity, and so really having monocultures of certain crops and also environmentally conscious methods of extraction are needed.

And then this third point here, availability and quality of water, are of equal concern in relation to water demand. I think I mentioned that in the previous slide. And then inconsistency in natural resource availability. So I think there was a lot of discussion about the regionality. And so certain resources may be more prevalent in a certain area. And so having access to that across a country may be difficult. And so that kind of gets into the thought of industrial clusters or whether there’s siting and permitting that we could do that makes sense for a region instead of individual facilities having to do this and also compete for the natural resources. And then benefits don’t always stay local to the communities the resource is extracted from. So this also kind of again touches on the EJ aspect but also community aspect, so making sure that the benefits are staying local and within the communities, lack of understanding education around LCA. I think also, when we develop technologies or these things are first starting to be developed, we don’t necessarily think about some of the long-term system-level impacts. But also having a better understanding of some of these LCA type concepts could also, I think, help with this as well.

I think these last two are very interesting. And it came up a couple times. It’s competition between industries and resources. And so if you think about water or other natural resources, biomass, for example, one industry might be trying to use it for a specific application. You might have another industry trying to use it for a different application. And so if we’re all trying to decarbonize at the same time, because we have a limited number of natural resources, the competition becomes fierce. And where and how and who gets it could also be of a concern.

And then market dependencies … This specific example was based on mining. So trying to mine for certain natural materials. I think the example was mining for a certain mineral actually also provided access to a separate mineral. But because the mine was opened for the first one, there’s some sort of market dependency or intertwining that may make things difficult. And then, the third question around, are these concerns sufficiently considered as we develop new technologies?

I think it was a resounding no. But I think there was a general consensus that we’re trending in the right direction. So even though, in the past, we might have considered natural resources and their availability and some of those concerns more broadly previously, we are starting to think about it. And there are efforts around energy justice, education, open access data, and supply chain literacy. And then finally, what solutions are needed to account for and address these concerns for natural resources?

There is an interesting sort of perspective of, high demand is sometimes a good thing, and its own solution. So leading to more rapid replenishment for the forest products industries. You might be saving a forest instead of turning it into developed land or something along those lines. As well as replication of resources, demands for reforestation to support forestry. And then also some things that could help was ESG disclosures and guidance, as well as some data availability and granularity.

I think there was pretty strong consensus in the room that just more data is available. We don’t know how much of our natural resources exist. We don’t know where it’s going. We don’t have a good way to track it. And so starting to develop some of those tools and methodologies and data sources, I think, would go a long way for natural resources. Does anyone in the room want to touch on anything that I may have missed, for those that were involved in natural resources? All right.

The next is energy efficiency. So who is the report-out person for that? Ethan. OK, sure.

[BREAK]

SPEAKER: We’re back to half the room. It doesn’t make sense. So we had three great sessions and collected a lot of great ideas. Our main question, which started off each session, was: What are your motivations for improving energy efficiency to get you on your pathway to net zero or decarbonization—whatever your goals are? And a lot of customers—well, people felt that customer demand, that they have to take this journey because their customers are demanding it, whether they’re selling to another business or they’re selling actually to end-use customers, that they need to do so. And the scope 3 supply chain issues were also part of that equation. A lot of interest in the non-energy benefits of decarbonization, whether it is water, raw materials, improving throughput. If you have less waste, generally, you have higher throughput ratios and quality of your product. You can even have flexibility in where you locate your facility in some instances if you have a lower carbon footprint.

Energy efficiency is an easy win compared to some of the other capital investments. So it’s a good way to get started on your pathway. And of course, everybody’s like, the number one thing that you make any investment for is to reduce costs. It’s an economic decision. And often enough, some of these investments have a good economic payback. Or there are incentives available, whether it’s utility or through the government, that make that an economic decision.

There’s also discussion about mitigating future risks, improving reliability and resiliency. One of those future risks was a potential of a carbon tax, and then global competitiveness both in the U.S. and internationally, and an opportunity to be a leader in the market and demonstrate leadership. And then also, if an organization was going to electrify, being more energy efficient would open up capacity on their existing electric infrastructure within the plant, like a substation.

And then we asked people to list the challenges they had. And then after that, we selected some of those challenges, and we discussed possible solutions. So inadequate return on investment was a big one that was identified, I think, in all three groups in one form or another. And so, as we talked about, the solution to that is essentially quantification of the other benefits that accrue from these investments. And actually having information on how to quantify that would be beneficial.

There’s also discussion about greater awareness of other project financing options. Not every company out there is aware of performance contracting or the Loan Program Office or things like that, scaling up our technologies as a technology comes in. Not everybody wants to be first to market. They don’t want to incur all the risks of adopting the technology, so developing pilots that are closer to system level and size, more easily transferred to actual operation, develop case studies during first-of-kind deployments, and share information on that. So there’s greater awareness of proof of concept.

And then another challenge was inadequate awareness of energy efficiency measures, incentives, and resources. And of course, the solution to that is just greater awareness, understanding. There was a clever idea about putting university professors in manufacturing plants so that they get actually more field knowledge and maybe some of the advice that they would then provide afterwards would be a little bit more anchored in the realities of day-to-day production. Is that buzzer for me? Have I run out of time?

Let’s see. Engineering constraints in existing processes. Figure out how to modularize certain parts of equipment and demonstrate smaller plug-in solutions that can move the needle. A mechanism for improving older technologies. Cost of capital is high. So right now, it’s more expensive to get capital than it might have been a few years ago. And so as you’re looking at new projects, it limits the scope of it. Because you can only borrow so much. And this is, I guess, a big issue if you’re doing a greenfield site because you might want to put in best available technology, most efficient technology, cleanest technology.

But of course, sometimes that’s more expensive. Actually, it’s probably more expensive a lot of the times. And so what a couple of people said is they tended to scope down as a result of the availability of capital. And so, in terms of solutions, what do we have here? Having more information and resources that can help them, again, justify the investments and whatnot. And I think that was it. I think I just have two slides. Yep. So I’ll turn it over to the hydrogen and LCFFES folks.

SPEAKER: Yeah, so this is the report out for hydrogen and other low-carbon fuels. We had a great session, some really great feedback. So I appreciate everyone who participated in that. First question was, in addition to the challenges identified, are there other key challenges for utilizing hydrogen and other low-carbon fuels, feedstocks, and energy sources, or LCFFES?

The first point is the socialization aspect. There’s low confidence currently in industry for hydrogen because there’s less confidence that there will be clean hydrogen—abundant, clean hydrogen in the future. And industry, therefore, doesn’t see it as a meaningful solution today. There are future markets, but procurement is an issue. Intermittency is a major issue. Industry needs hydrogen in large quantities on demand. And so this requires expensive and high-risk solution—storage solutions—excuse me—so high-pressure underground or high-temperature storage.

A major challenge is water and water access. So hydrogen problem is really a water problem, whether it’s clean hydrogen produced through electrolysis or it’s steam methane reforming that consumes, currently, quite a bit of water. And this impacts, in particular, water-stressed areas. And so there’s water management concerns. And that the more hydrogen you use, the more water you use. The handling of water has its own cost and its own emissions footprint.

Land and land access following on this natural resources type topic is a major concern. Because hydrogen itself is an industrial product, chemical product. It’s an industrial gas. And it needs dedicated space to deliver reliable on-demand hydrogen to industrial customers. And it won’t just be solved with on-site hydrogen production that has lower transportation costs. There’s a need for workforce development that was addressed, a need for more knowledge of the energy, emissions, and cost impacts of hydrogen, particularly related to biofuels, the need to source feedstocks. The sourcing of feedstocks is a challenge, even if that feedstock is waste to reduce costs. There’s a challenge in that if you’re retrofitting from a natural-gas-fired systems to hydrogen-fired systems, there’s significant equipment retrofits and upgrades that are needed to accommodate 100% hydrogen.

And I will add that—I think it’s probably on the next slide—but that there’s major safety concerns—and we’ll touch on that a little bit more—replacing natural gas with hydrogen affects the balance of the plant. So if your plant, for example, generates self-generated fuels, how does substituting existing fuel sources with hydrogen affect the balance of the plant? Second page for this particular question. Infrastructure is a major challenge, and in particular, the infrastructure necessary to supply clean electricity to produce clean hydrogen.

Impacts on product quality … I thought this was a really interesting kind of two-part challenge. The first part is product quality, so how hydrogen may have direct contact with the product but also on the process. There was an example given in the iron and steel sector where, for example, blast furnaces are lined with refractory ceramics, and the hydrogen can affect the material properties of that refractory ceramic as well as the higher amounts of moisture that’s in the exhaust when you’re combusting hydrogen. Early adopters … I think this is a continues on the discussion we’ve had with the other report-outs that early adopters shoulder risk; they shoulder the capital burden of hydrogen build out, particularly transportation infrastructure to get this all built out.

I had mentioned earlier safety concerns. This was a major, major discussion topic. Hydrogen is a very small molecule. It likes to leak. And so there are fugitive emissions. Detection is a major challenge. And it results in safety concerns. Storage and transportation of hydrogen from the standpoint of resilience, and ensuring that high clean hydrogen matches demand. Standard methodologies and definitions for accounting production of hydrogen and usage of hydrogen. So how can we track?

And that was it. What do you guys want to talk about now? I’ll wiggle some chords until Kenta comes and saves me.

OK. So that we can account for hydrogen as it flows through the value chain and is incorporated into products. So standards and methodologies are important. Question number two: Solutions that are needed to overcome these challenges … And how can the particular solution pathway be achieved? Demonstrations … Hydrogen distribution at the scale we have for natural gas. We have hydrogen available at scale. Today it’s gray hydrogen. We have equipment for hydrogen. So we need to chart a path for more green alternatives. Multiphysics modeling and simulations to troubleshoot without having to do a full demonstration. Investing in LCA modeling for those standards and methodologies for accounting. Figuring out how to separate hydrogen from existing fuel streams, whether it be in the iron and steel sector, whether it be in the petroleum refining sector. Using hydrogen carriers instead of hydrogen directly. And thinking of the whole supply chain, the whole value chain where hydrogen is most used most effectively. So, for example, could we use hydrogen at mines directly to reduce iron ore rather than using hydrogen on site at iron and steel facilities? Figuring out solutions to hydrogen embrittlement. Specific electrochemical pathways were referenced. Alternative geological storage options. We hear a lot about salt caverns. But are there other geological storage options that we could investigate?

Let me see. In the interest of time, I think I won’t cover any of those. We’ll just go to number three. Question number three: Under what circ*mstances would you use hydrogen and other low-carbon fuels, feedstocks, and energy sources? And when would that become attractive as a decarbonization pathway? Are there co-benefits that could incentivize us to use hydrogen. So we could consider the least cost for avoided carbon as a potential metric. Look at the whole cycle, not just the—including not just the technical benefits but non-technical benefits, like health benefits for the community.

It was referenced that IRA incentives are really focused on the supply side, but we need adjacent demand-side incentives. Producing hydrogen with curtailed green electricity. Loosen requirements to allow industry growth. Leveraging our existing partnerships, like our partnerships with CHP plants, to really understand how they utilize hydrogen. And see if that can be—those best practices could be implemented more broadly across industry. Make valuable co-products from hydrogen production, like oxygen or carbonaceous byproducts.

And turn byproducts from any biomass pathway into hydrogen and reduce fire risk that is associated with hydrogen. Safety concerns. We talked about that. Availability and distribution. Treat hydrogen like a utility, like you would any other gas or electricity. And consolidate information around the supply chain. More data is better. I think that’s it. Thank you. And for the CCUS report out …

SPEAKER: We had a great three-session discussion. And one of the things that really stood out was how consistently some similar themes kept coming up. So here, I’m summarizing some of those consistent themes that came up. So we actually changed the order of our questions a little bit. So that’s why you’re seeing questions three and four here. And they are tied together. That’s why they are on the same slide.

So our first question was, in light of recent policies around CCUS investment—or in light of recent incentives, sorry, how has decision making around CCUS as a potential decarbonization strategy shaped up in your organization? So coupled with that question was this question of, when you’re making those decisions, what kind of metrics are you thinking about in making those decisions? So we saw several examples of—we heard about several examples of DOE funded projects that are now exploring CCUS through demos and essentially trying out how CCUS may be part of their decarbonization portfolio going forward. And that they [INAUDIBLE]. And that those projects would not have happened without the significant incentives around, not just the capital costs but also the costs around 45Q, for example—or the incentives around 45Q. What that’s really done is that it’s reduced the uncertainty and provided some clarity on the value of CO2 for these projects to become viable for exploration. And so it was really great to actually hear some good number of examples around CCUS demo projects because of these incentives.

In terms of metrics that have been used by industry, it’s the usual metrics that we are accustomed to seeing—ROI, payback periods, marginal cost of abatement. But some other ones that were identified that were really helpful were the fact that, even if incentives can make some of the CapEx burdens lower to explore CCUS, at the end of the day, what industry really cares about is this the OpEx, which right now is significantly higher. And in markets that have very thin margins for their products, that additional OpEx would need to potentially be offset by adequate production tax credits. Or we need to come up with technology improvements that would significantly reduce that OpEx. So that was really interesting to understand. And again, this is an even bigger factor in markets that the increased OpEx cannot be passed on to customers. Some of the other things that we talked about was how, in CCUS, the cost structure of the CC part is different from the US part. So when we are talking about cost metrics, it was suggested that we talk—that we sort of have a separate quantification of the carbon capture side of things.

And then a separate quantification of the transportation, storage, and utilization side of things. Because there’s a significantly large number of confounding factors, or variables, on the utilization and storage that could make the cost estimations seem either overly optimistic sometimes, or overly pessimistic. So that coupled with the fact that if you’re in the business of making X, and now you suddenly have to be responsible for carbon capture and having the engineering figured out, the permitting figured out, you’re suddenly being asked to take care of a whole ’nother sort of side business.

There’s accounting for that separately, and potentially even talking about third parties taking ownership or helping with some of the capture technology and administering of the capture plant was something that we also discussed. On the CO2 utilization side, especially for CO2 to fuels and chemicals using low-carbon sources of energy, the cost of intermittency and how to mitigate it was something that came up as another metric that is looked at often.

Carbon offsets … We talked about how the market price for those is often treated as a benchmark. That’s another metric. And then some other metrics that were included, time to implement a carbon capture project, and things like the cost of and availability of land. And then the second question that we had was about: What technical advancements are needed to enable a broad implementation of CCUS as a decarbonization lever? So again, really interesting discussions on this. I’ve tried to boil it down to just a few bullet points in the interest of time.

So one of the biggest things that came up was process intensification, both in terms of reducing the number of steps that it takes to go from CO2 to a to a valorized product. And also another example is using reactive carbon capture combined with some other production of useful products. So the example there was construction aggregates. Effluent cleanup at elevated temperatures of CO2 was, again, identified as a technical area that could help reduce the energy penalty of carbon capture.

Small modular carbon capture units for combined heat and power installations. And then this was an interesting one that came up is, whether there could be technology and a sort of verification framework that could help with tracing and tracking the CO2 that’s captured from anthropogenic sources? And somehow there’s accountability that could be maintained through some innovative carbon tracking techniques. I think that’s probably about it.

SPEAKER: We have a couple more. Just going to do the electrification. Ryan?

RYAN: So electrification … Unfortunately, we don’t have slides for electrification. We structured ours a little different. We had very good feedback with our sessions. We had challenges identified. But what we then did is we prioritized those challenges. We really went through and we tried to then identify solutions for those top-level challenges. And so there’s a recurring theme there on those top-level challenges. We had quite a lot of feedback and engagement around the infrastructure, just the build out of the electrification system, and where electrification is going to fit in for an industrial decarbonization solution. And that fit in with, obviously, you’re going to have the regulatory side of it. We had the permitting, we had FERC come up. We also had the NIMBY aspect of it, where just the buildout and the scale of what we’re looking at is something that is going to set a challenge that we have. And then moving beyond that, another one that came up in all of our sessions is the cost.

We have what can be referred to as the spark spread. We have a fundamental challenge where you compare the cost of electricity to the cost of natural gas. And then lastly, we had some very specific technology challenges that we identified. And when we went through a few of those. Now, I know we’re running short on time, and unfortunately, there is a little bit of trouble getting the slides over here. But we can run through just a couple of these real quick here.

So on the cost one, I think that we really saw that there was a very policy kind of oriented solutions that came up. We had the carrot, we had the stick, where they were going to have pricing for carbon. Or whether we can have incentives for the clean technologies. On the technologies, we saw that there was definitely some solutions that were possible on the lower temperature. We have some challenges on the higher temperature side.

But there was definitely some key examples that we came across. And I think, overall, we had some very good feedback that we captured here on where electrification fits. Now, I think keeping it short, I might just keep it at that. And then I’ll ask, is there another one that we have as well? Or have we gone through all six? Did we get to material efficiency? And we have not? That’s the other one we’re missing?

SPEAKER: Did we go over?

SPEAKER: All right. Thank you very much, everybody. I’ll try to be as brief as possible. I know we’re running close to schedule here. So for the material efficiency crosscutting session, we had lots of really good input. And I definitely can’t cover it in these few minutes. But our primary question about challenges was, what are those challenges to recirculating materials and products in the economy at the system level as a decarbonization lever?

One of those comments that kept coming up is how difficult it is to process those waste streams based on existing regulations and policies. There’s definitely a need for a lot more of those mechanisms to enable that. We also heard from different folks and different manufacturing sectors. And they have different approaches to considering this, and how they even attack that challenge. There’s also logistics challenges both upstream and downstream that need to be considered.

One technological challenge, also, that was noted was the separation of waste streams is quite costly. We don’t necessarily have the sufficient technology to do this cost effectively at scale. One other item to mention was in terms of favorable policies, where is the level of incentive to repair items? And also, where’s the level of incentive before we repair an item versus throwing it away? Is there an incentive there? These are challenges, again, that just show the kind of gaps in some of the policies that would help enable a stronger material efficiency approach.

In terms of the solution pathways to address these challenges, one concept that was introduced was a materials passport. A way of identifying the history of a product so that it can be used with knowledge of its history. Consider blockchain as an example of that. Let’s see. Obviously, there’s capital constraints. We need a lot of money for a lot of people to be able to do this at the scale we need. And we also need performance-based metrics for using recycled materials.

We need to ensure that those recycled materials meet the durability and other performance specifications to be reused, again, at the scale we need. And to meet specs for the applications that are required. We also noted that those solution pathways better include internalizing those costs of waste products and not recycling. Externalities were probably the most common concept that came up in this session. And they’re not appropriately accounted for in existing mechanisms.

Lastly, in terms of how we can quantify the emissions impacts of recirculating materials, one concept that came up was third-party verification as a way to help standardize. And standardization, I think, would be key and could really help enable the scale of what we need in terms of improving material efficiency across the U.S. industrial landscape. And in addition to life cycle analysis, we’d also benefit from materials flow analysis. And standardizing those to get real good granularity around the whole systems approach.

And then overall, I probably don’t have to say this, but we need improved data availability and alignment of metrics so that we can actually do this not just on a piecemeal basis, but across the entire industrial sector. There was a lot more to cover, but I don’t have much time left. Thank you very much.

AVI SCHULZ: It is 4:53. We started before 9 a.m., and this room is almost completely full. Even after the report out of the amazing conversations that we had. I take that as a fantastic sign of the interest, the excitement, the engagement that you all are really eager and excited to have with us. And I’ll say, frankly, I also take it, hopefully, as a good sign that we’re not totally on the wrong path with what we’ve been talking about and presenting here today. That at least, we’ve been able to keep your interest, that we’re on the close enough and correct enough path to at least keep your interest today, and really inspire your engagement. So let me say thank you for that. All of the conversations that I have been part of today have been fantastic and amazing. We are absolutely getting great feedback from all of you. Really useful feedback from all of you that is going to be really, really helpful as we continue to refine this effort. I’m really looking forward to the conversations that we’re going to have tomorrow.

Starting at 8:45, we’re going to meet back in this room, I believe, to cover the agenda for today, provide some instructions on the breakout sessions that we’re going to have. Covering, in the morning, the non-technical factors that we’re going to be considering in industrial decarbonization, and then in the afternoon, the sector specific pathways that we’re going to be identifying through the models that we’ve been talking about today.

So I don’t have too much more to say. Let me just close by, first of all—I don’t think he properly got introduced—but properly introducing and thanking Kenta, Shimizu, who has been shepherding us through these fantastic breakout sessions today. As well as all of the facilitators, and note takers, and co-facilitators that we’ve had in all the sessions. Thank you so much. Really, really appreciate everybody’s involvement. And of course, all of you for the content and discussion that we’ve had today.