[Senate Hearing 118-364]
[From the U.S. Government Publishing Office]
S. Hrg. 118-364
OPPORTUNITIES IN INDUSTRIAL
DECARBONIZATION: DELIVERING BENEFITS
FOR THE ECONOMY AND THE CLIMATE
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HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 15, 2023
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Printed for the use of the Committee on Environment and Public Works
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-397 PDF WASHINGTON : 2025
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
THOMAS R. CARPER, Delaware, Chairman
SHELLEY MOORE CAPITO, West Virginia, Ranking Member
BENJAMIN L. CARDIN, Maryland PKEVIN CRAMER, North Dakota
BERNARD SANDERS, Vermont CYNTHIA M. LUMMIS, Wyoming
SHELDON WHITEHOUSE, Rhode Island MARKWAYNE MULLIN, Oklahoma
JEFF MERKLEY, Oregon PETE RICKETTS, Nebraska
EDWARD J. MARKEY, Massachusetts JOHN BOOZMAN, Arkansas
DEBBIE STABENOW, Michigan ROGER WICKER, Mississippi
MARK KELLY, Arizona DAN SULLIVAN, Alaska
ALEX PADILLA, California LINDSEY O. GRAHAM, South Carolina
JOHN FETTERMAN, Pennsylvania
Courtney Taylor, Democratic Staff Director
Adam Tomlinson, Republican Staff Director
C O N T E N T S
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Page
NOVEMBER 15, 2023
OPENING STATEMENTS
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 1
Capito, Hon. Shelley Moore, U.S. Senator from the State of
Virginia....................................................... 3
WITNESSES
Regitsky, Abigail, Senior Manager, U.S. Policy And Advocacy,
Breakthrough Energy............................................ 6
Prepared statement........................................... 9
Ellis, Leah, CEO and Co-Founder, Sublime Systems, Inc............ 31
Prepared statement........................................... 33
Responses to additional questions from Senator Sullivan.......... 154
Angielski, Shannon, President, Clean Hydrogen Future Coalition... 156
Prepared statement........................................... 159
Responses to additional questions from Senator:
Capito....................................................... 172
Mullin....................................................... 175
ADDITIONAL MATERIAL
New York Times Article: Bidento Target Industrial Pollution in a
2nd Term, if He Gets One....................................... 200
Letter from PAC American's Cement Manufactures................... 205
OPPORTUNITIES IN INDUSTRIAL DECARBONIZATION: DELIVERING BENEFITS FOR
THE ECONOMY AND THE CLIMATE
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WEDNESDAY, NOVEMBER 15, 2023
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
U.S. Senate Committee on Environment and Public Works
Washington, DC.
The committee met, pursuant to notice, at 10:01 a.m. in
room 406, Dirksen Senate Office Building, Hon. Thomas R. Carper
(chairman of the committee) presiding.
Present: Senators Carper, Whitehouse, Merkley, Markey,
Padilla, Fetterman, Capito, Cramer, Ricketts, and Sullivan.
OPENING STATEMENT OF HON. THOMAS R. CARPER,
U.S. SENATOR FROM THE STATE OF DELAWARE
Senator Carper. I am more than pleased, I am delighted to
call this hearing to order. Senator Capito will testify I do
not often say I am delighted to be chairing the hearing, but
today I am. This is great stuff and we are grateful to our
witnesses who are here, grateful to Senator Capito and her
team, and the folks on our staff as well.
Today's hearing is focused on the next frontier of tackling
climate change, decarbonizing the industrial sector of our
economy. Our hearing is timely, as some of you may know.
Yesterday, the Biden Administration issued the Fifth
National Climate Assessment, which underscored the urgency of
addressing climate change and the benefits of doing so. The
report found that, on average, adjusting for inflation, in the
1980's, the United States experienced a $1 billion disaster
every 4 months. Today, there is one every 3 weeks.
The report also found that if we are going to limit the
increase of global warming to 1.5 degrees Celsius, which is our
goal, our Country must reach net-zero greenhouse gas emissions
by 2050.
Why should we focus on reducing industrial emissions? To
answer that question, let me begin by sharing an age-old story
of Willie Sutton. I have told this story once or twice in this
room. Many of you will recall, he was a notorious bank robber
during the Great Depression. He robbed a lot of banks and
finally got caught and ended up in front of the judge who said
to him, ``Mr. Sutton, why do you rob banks?'' He replied,
``Your Honor, that is where the money is.'' I think that is a
story actually worth retelling today. Willie Sutton's logic can
actually apply to all of us as well.
Heavy industry makes products that are central to our
lives, including steel, cement, and aluminum. At the same time,
the industrial sector is responsible for nearly one-third of
global greenhouse gas emissions and represents the third
largest source of U.S. emissions, trailing only the
transportation and power sectors.
By 2030, the industrial sector is expected to become the
largest source of domestic greenhouse gas emissions. I will say
that again. By 2030, 7 years from now, the industrial sector is
expected to become the largest source of domestic greenhouse
gas emissions.
As many of us know, there are real challenges when it comes
to decarbonizing the industrial sector. For example, because of
the diverse industrial processes we use to make a variety of
goods and materials, there isn't a simple one-size-fits-all
approach. Instead, we must deploy a variety of different
technologies and process changes.
Yet, within these challenges also lies real opportunities.
In addition to helping us meet our climate goals, reducing
industrial emissions presents great opportunities for us to
invest in, among other things, American industry in order to
boost our Nation's economic competitiveness.
The benefits of decarbonizing key industrial materials go
beyond simply mitigating emissions at individual facilities. By
producing materials in cleaner ways, we can reduce emissions
throughout supply chains. By investing in the industries that
are producing lower carbon materials for our buildings, our
roads, and our electric vehicles, we can help support our clean
energy transition.
Fortunately, when it comes to decarbonizing the industrial
sector of our economy, we are already making progress. That is
thanks in no small part to the investments that Congress made
in the Bipartisan Infrastructure Law and the Inflation
Reduction Act, measures that were written, in no small part,
right here in this room.
For example, our Bipartisan Infrastructure Law established
the new Office of Clean Energy Demonstrations at the Department
of Energy, which included a new Industrial Demonstrations
Program. Last Congress, Congress provided $6.3 billion in
funding to this program to help deploy technologies to reduce
industrial emissions.
The Bipartisan Infrastructure Law also included $8 billion
for the development of regional clean hydrogen hubs throughout
our Country. I was especially pleased that the Department of
Energy awarded funding to the Mid-Atlantic Clean Hydrogen Hub
project which includes parts of Delaware, Pennsylvania, and New
Jersey. Our hub was one of seven clean hydrogen hubs, including
the Appalachian Hydrogen Hub which included the States of West
Virginia, Ohio, and Pennsylvania.
These clean hydrogen hubs will provide a reliable supply of
clean hydrogen for transportation, industrial processes, and
power generation across our Nation. They will create tens of
thousands of good-paying jobs in our regions. Let me repeat
that. They will create tens of thousands of good-paying jobs in
our regions across the Country.
As the largest purchaser of materials in the world, the
Federal Government also has a great opportunity to foster
demand for low-embodied carbon materials through Federal
procurement. We can and we are.
In our committee's title of the Inflation Reduction Act, we
provided over $5 billion for the Federal Highway Administration
and the General Services Administration to buy materials such
as concrete and steel for buildings, roads, and bridges made
with low carbon emissions. We also included funding for the EPA
to help us better understand the lifecycle greenhouse gas
emissions of various construction materials and products.
Supporting America's ingenuity and innovators is key to
creating cleaner goods here at home, and we will hear from our
witnesses about that today.
In closing, the United States can continue to manufacture
steel, aluminum, concrete, and other materials while reducing
greenhouse gas emissions. By doing so, we can make American
industry more competitive on the global stage while addressing
climate pollution and creating a lot of good-paying jobs.
To do this, we need collaboration across sectors and
stakeholders. Industry leaders, innovative startups, government
agencies, environmental organizations, and academia must all
work together. And so must we. I think we actually do that
pretty well here.
My hope is that today's hearing will help us further our
committee's understanding of some of the challenges and
opportunities associated with decarbonizing heavy industry. We
look forward to hearing from our panel of knowledgeable
witnesses and to having a productive and spirited discussion
today.
Before we do that, I want to recognize our Ranking Member,
Senator Capito, for her good work on this front. I am happy to
work with her and her team. Senator Capito, you are recognized.
OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. Thank you, Mr. Chairman.
I apologize in advance. I have something going on that is
causing my voice to disappear. A Senator's voice disappearing
is a dangerous thing. Anyway, Senator Carper, thank you for
holding this hearing today to examine innovative, bipartisan
solutions to manage industrial greenhouse gas emissions. We
have achieved the greatest success, I think, as a committee,
including on climate, which we have worked on in a bipartisan
way.
The Committee's Surface Transportation and Water
Infrastructure legislation served as the backbone of the IIJA.
The surface transportation portion of the IIJA included a
first-of-a-kind subtitle devoted to climate change featuring
two new formula programs, one for carbon, one centered on
carbon reduction and on resiliency. The IIJA served as a
vehicle for many provisions from other committees to address
emissions, including industrial emissions. Chairman Carper and
I managed that legislation across the floor and so we
negotiated many of these positions as well.
Particularly important to me, and the Chairman mentioned
this in his statement, the legislation included the Regional
Clean Hydrogen Hubs Program administered by the DOE. As you
mentioned, one of the seven hubs the DOE recently selected is
the Appalachian Regional Clean Hydrogen Hub, known as ARCH2.
This hub includes the States of West Virginia, Ohio, and
Pennsylvania.
ARCH2 will produce both green hydrogen, which is hydrogen
produced through the electrolysis of water, but also blue
hydrogen, which is hydrogen produced from abundant Appalachian
natural gas with carbon capture and storage technologies to
reduce emissions. When up and running, ARCH2 will supply
hydrogen to a broad mix of hard-to-decarbonize industries, from
energy to transportation to chemical manufacturing to steel
production.
It is no secret that carbon capture, which will be a
critical component of the ARCH2 hub, remains capital intensive
and has yet to be commercially viable for deployment.
Chairman Carper, I really appreciate your years-long
partnership with me in supporting carbon capture as a
technology. This is why I have been a longtime supporter of 45Q
to advance this technology that will be essential in preventing
emissions, and through direct air capture, to reduce
atmospheric concentrations of carbon dioxide.
ARCH2 and all other future CCUS developments stand to
benefit not only from 45Q, but also from prior legislation out
of this Committee, such as the USE IT Act, which Chairman
Carper, Senators Barrasso, Whitehouse and I led. Signed into
law in 2020, the USE IT Act, when implemented as intended,
would ensure all carbon capture projects at all types of
facilities can be permitted in a timely fashion.
I said ``when implemented as intended'' because some of the
Administration's recent actions suggest they are not dutifully
looking to expedite the permitting of these types of projects.
For instance, for broad deployment of CCUS to become feasible,
the EPA must approve Class VI injection well applications to
securely store the carbon underground. I believe your State is
one of only two that have been able to do this on a State
basis.
In the IIJA, I supported the inclusion of $50 million for
States to obtain primacy of this program, as well as $25
million for the EPA to process those permits at the Federal
level. The EPA needs the help because it has historically only
approved two of these permits, and it took an average of 6
years each to do this.
The IIJA was signed into law 2 years ago today, November
15, 2021, and only last week did the EPA finally announce the
money for States to apply for primacy. In addition to delaying
the application process for funding, the Administration has now
loaded up the primacy application process with new guidance and
directions to address environmental justice that seems designed
to slow projects down or suggest they are not safe. Meanwhile,
the EPA has not permitted any of the 169 well applications that
are now pending.
Instead of focusing on expediting permitting and
environmental reviews, the President's Council on Environmental
Quality has focused on changing the rules of the road for the
NEPA process. The Administration's recent proposal, instead of
simplifying the environmental review and permitting process as
Congress directed in the recent debt limit legislation, would
add hurdles to these processes and expand the scope of reviews,
opening projects up to increased delays and legal challenges.
I do not want to suggest hydrogen and CCUS are our only
tools for reducing industrial emissions, but I think we need to
take note of the regulatory headwinds we are facing. I support
other bipartisan solutions to reducing industrial emissions,
such as utilizing advanced nuclear for industrial purposes. My
bipartisan nuclear bill with the Chairman, the ADVANCE Act,
includes a number of important policies to deploy advanced
nuclear to do just that.
No matter how good the bipartisan solutions this committee
and others enact to address climate change are, our efforts
will never be realized if the projects they support are never
built due to permitting challenges and a slew of new EPA
regulations. Regulations such as the forthcoming Particulate
Matter 2.5 National Ambient Air Quality Standards, NAAQS, that
the Administration is rumored to plan finalizing at a level
that will plunge much of the Country into nonattainment,
requiring stricter permitting or offsets for new infrastructure
or industrial facilities.
Regulations such as the Clean Power Plan 2.0 will undermine
reliability and drive up the cost of power for manufacturing
with its unachievable short-term targets. Antiquated
regulations like the New Source Review will stymie upgrades at
existing power plants and manufacturing facilities. The list
goes on and on.
I urge my colleagues to continue to work with me on
permitting reform and updating outdated environmental
regulations, areas within this Committee's jurisdiction, so we
can ensure that emissions-reducing technologies can actually
get out into the market and make a difference.
Thank you to all of the witness here today and I look
forward to our discussion and learning more about your efforts
to reduce carbon emissions.
Senator Carper. Senator Capito, thank you. I thought you
sounded great. If Kevin and I end up coming down with this
tomorrow, I will know where it came from.
Senator Capito. I don't want to ruin anyone's holiday.
Senator Carper. Hopefully, you will be better really soon.
As you know, we all serve on a number of different
committees. In some cases, those committees are meeting right
now. One I serve on is a going to have a markup and I need to
be there to vote. In a little bit I will slip out and go vote.
I have to go out to a place called the swamp for a few minutes
before that for a quick presser. In the meantime I appreciate
that Senator Capito keeping the trains on schedule. I have had
a chance to read your testimonies and hopefully, I will have a
chance to hear most of it before you finish.
Now I want to turn to our esteemed panel of witnesses. We
are grateful to two of you for joining us today in person. I
understand one of the witnesses is also under the weather,
maybe with COVID or something. We hope she will be feeling
better soon.
First, we are going to hear from Dr. Abigail Regitsky, the
Senior Manager, U.S. Policy and Advocacy Team at Breakthrough
Energy, a network of investment funds, non-profits and
philanthropic programs and policy efforts, working together to
scale the technologies that are needed to achieve net-zero
emissions by 2050. In this role, Dr. Regitsky is responsible
for implementing Breakthrough Energy's climate policy
priorities with a focus on industrial decarbonization and
innovation.
She earned her Ph.D. in Material Sciences and Engineering
from the Massachusetts Institute of Technology, MIT, and brings
a wealth of knowledge of industrial de-carbonization. Our
oldest son is a graduate of MIT. I could barely spell MIT when
I was at Ohio State. Fortunately, we have sons who are a lot
smarter than me.
Our second witness is Dr. Leah Ellis, CEO and Co-Founder of
Sublime Systems, Inc., a Massachusetts-based company, beginning
to commercialize a breakthrough low carbon cement manufacturing
process. Dr. Ellis, how do you pronounce the university in
Canada you went to?
Ms. Ellis. Dalhousie.
Senator Carper. She started Sublime Systems with a
colleague at MIT during her tenure as a post-doc fellow there.
To date, Sublime Systems has begun to scale their technology
that eliminates the need for fossil fuels in cement production.
I am interested in hearing more about that.
Third, we will hear from Ms. Shannon Angielski, President
of the Clean Hydrogen Future Coalition. When my wife asks me,
what did you do today, I will say I met with the President and
she will be impressed.
She is President of the Clean Hydrogen Future Coalition, a
diverse group of stakeholders to promote clean hydrogen as a
critical pathway for decarbonization.
Ms. Angielski has spent her career developing and
advocating for clean energy and carbon management policies with
a particular focus on hydrogen as well as carbon capture
utilization and sequestration.
We thank you again for appearing before the committee
today. We will now begin our witness testimony.
We will lead off with Dr. Regitsky. Please proceed with
your statement when you are ready.
STATEMENT OF ABIGAIL REGITSKY, SENIOR MANAGER, U.S. POLICY AND
ADVOCACY, BREAKTHROUGH ENERGY
Ms. Regitsky. Chairman Carper, Ranking Member Capito, and
members of the committee, thank you for the opportunity to
appear before you today.
I am honored to represent Breakthrough Energy, a network
founded by Bill Gates to scale the technologies we need to
reach net-zero emissions by 2050. Following 8 years of work, we
just published our first State of the Transition Report to
share the progress being made and the challenges that remain
ahead.
Innovation is at the heart of Breakthrough Energy's
mission, and more than any other sector, industry cannot
decarbonize without innovation. The industrial sector is
responsible for transforming raw materials into the products of
our daily lives, like the cement in our buildings and bridges
and the steel in our cars and appliances. It has been the
engine of American economic development.
It also accounts for nearly a fourth of U.S. greenhouse gas
emissions and about one-third of global emissions. While
sectors like power and transport are expected to continue
reducing emissions, industrial emissions are expected to stay
flat and could even increase, likely making it the top source
of U.S. emissions in the future.
In part, the slow progress comes from industry's reputation
of being hard to abate. This is largely because the main
sources of emissions are essential to how industrial goods are
manufactured today, namely emissions from industrial heat and
process emissions from chemical reactions.
For example, steel making requires temperatures over 2000
degrees Celsius. The raw material for cement contains CO2 that
is released when it is made.
The good news is that many U.S. companies are actively
working on breakthrough technologies to address these
emissions, as well as reduce and eliminate air, land and water
pollutants. This will bring tangible health and quality of life
benefits for the workers in industrial factories and the
fenceline communities surrounding them.
Several solutions are cross-cutting and can be applied in
many sectors. These include energy and material efficiency,
electrification, the use of hydrogen and other low carbon fuels
and feedstocks and carbon management. One promising example is
thermal energy storage, which stores renewable energy as heat
and then delivers this heat for use in industry.
For every cross-cutting area, building enabling
infrastructure, like more transmission, will be critical, as is
robust community engagement on the risks and benefits of each
technology. In addition to cross-cutting technologies, each
sector can benefit from tailored solutions. For example, one
company is developing a fully electric process that reduces
iron ore and makes steel in one step. While promising, many of
these technologies are relatively immature and for those close
to market readiness, barriers still remain, such as high
capital costs, long factory lifetime, low profit margins, and
competition from other countries.
Smart policies that address the entire innovation cycle
from R&D to deployment will be critical to accelerating the
path to market. Policies must support the supply of clean
industrial technologies through investments in RD&D and
financial incentives. Congress recognized this in passing the
Clean Industrial Technology Act, introduced by Senator
Whitehouse and Ranking Member Capito as part of the Energy Act
of 2020. Then through the Infrastructure Bill and the Inflation
Reduction Act, Congress provided a historic $6.3 billion for
industrial demonstration projects.
Industry applied for nearly ten times the program's budget,
indicating the need for future funding. Complementary public
procurement or buy-clean policies can create sizable markets
for low emissions goods. The IRA included over $5 billion for
Federal procurement of low carbon construction materials. It is
critical that these programs target materials with the lowest
possible embodied emissions available today.
Furthermore, new policies will be needed to provide long
term offtake such as through advance market commitments or
contracts for difference, which will unlock further
investments. To maximize these domestic investments, climate
aligned trade policies must address potential emissions
leakage.
As a first step, policies must build the data
infrastructure to reliably measure and report embodied carbon
which underpins the effective design of all the above policies.
Fortunately, Congress is increasingly paying bipartisan
attention to these issues.
For example, Senators Coons, Cramer and several members of
this committee introduced the PROVE IT Act. On average, U.S.
industry already boasts lower emissions intensity production
internationally and decarbonization investments will only
strengthen this carbon advantage and increase global market
share. Others are also developing trade policies to address
carbon leakage and competitiveness. This includes Senator
Whitehouse's Clean Competition Act and Senators Cassidy's and
Graham's Foreign Pollution Fee Act.
Breakthrough Energy supports bipartisan discussions to
develop trade policy that bolsters the competitiveness of
domestic industries and puts a spotlight on manufacturing
emissions abroad to incentivize industrial decarbonization
around the world.
Addressing industrial emissions will also safeguard
manufacturing's role as a critical piece of the U.S. economy.
This year, the manufacturing sector employed 13 million
Americans. For every one manufacturing worker, 4.4 workers are
added to the economy overall. Thus, investing in this sector
will pay dividends in economic growth and revitalize
communities that have suffered decades of progressive
deindustrialization.
In summary, without intervention, the industrial sector is
set to become the highest emitting U.S. sector in the next
decade. Addressing industrial emissions depends on a full
spectrum approach of supply side investments, demand side
market creation, trade policies and data infrastructure.
Decarbonizing industry not only aids net zero goals but
enhances American competitiveness, retains and creates
manufacturing jobs and benefits worker and community health.
The world is on the brink of a clean industrial revolution,
and America is poised to take the lead. I urge the members of
this committee and Congress to not let this opportunity pass us
by.
The prepared statement of Ms. Regitsky follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Capito.
[Presiding.] Thank you. Thank you very much.
Now we will hear from Dr. Ellis.
STATEMENT OF LEAH ELLIS, CEO AND CO-FOUNDER, SUBLIME SYSTEMS,
INC.
Ms. Ellis. Chairman Carper, Ranking Member, Capito and
members of the committee, thank you for hosting today to
discuss the important role the Federal Government plays in
accelerating low carbon building materials.
I am the CEO of Sublime Systems, a company commercializing
low carbon cement. I am here to talk to you about the
extraordinary opportunities enabled by industrial
decarbonization. These include fostering innovation, attracting
talent, creating jobs, boosting domestic manufacturing, and
fighting global climate change. This is a win-win that
energizes myself and my colleagues, as well as my peers, in
many adjacent industries.
Today's cement manufacturing is responsible for 8 percent
of global CO2 emissions. If the industry were a country, it
would be the third largest emitter after China and the U.S.
Today's cement is made in massive fossil fuel kilns running
at temperatures up to 1,400 degrees Celsius to cook limestone,
which releases CO2 as it decomposes in the kiln. I started
Sublime Systems with the mission of having a swift and massive
impact in reducing these emissions.
At Sublime, we use electrochemistry instead of heat to turn
non-carbonate minerals into cement. Our process runs at room
temperature and entirely on electricity. This avoids both the
limestone and the fossil fuel emissions that I mentioned
before.
Our cement is fully compliant with industry accepted
performance-based standards and we can produce over 100 tons of
cement per year in our pilot facility, which we are scaling
quickly.
The public sector has a unique ability to accelerate
cement's decarbonization. Collectively, it deploys 60 percent
of all the cement used in America through the building of
public infrastructure. You have admirably responded to this
challenge in several ways, many of which we can't fit into my
allotted 5 minutes, but I will highlight a few.
Sublime has received Department of Energy ARPA-E funding
which enabled us to de-risk our technology as it spun out of
the university, which allowed us to attract venture capital
investment. Second, both the General Services Administration
and the Federal Highway Administration have recently allotted
billions to the use of low carbon construction materials.
Sublime has already noticed increasing customer interest in
response to these policies and we urge Congress to consider
making such initiatives permanent.
We have collaborated with other low carbon cement
developers to encourage further policy adoption. The
Decarbonize Cement and Concrete Alliance is focused on
procurement policy, demand support measures and early adopter
platforms, as well as another critical lever, production tax
credits.
The existing 45Q tax credit rewards technologies that
capture carbon, but it does not reward technologies such as
ours that avoid CO2 emissions in the first place. We encourage
technology-agnostic implementation of tax credits to create a
level playing field for all industrial technologies that avoid
CO2 emissions and address climate change.
I would like to acknowledge the DOE's Office of Clean
Energy Demonstrations, OCED, as a vital initiative for helping
technologies create products at scale and unleash the
transformational job opportunities in the process. Sublime is
currently engaged with OCED for potential funding of our first
commercial facility, and we are confident in our prospects.
However, if we are ultimately not selected, we believe this
will primarily reflect how many quality innovations are seeking
this money. I urge Congress to make this program permanent and
to generously fund it until the American economy is
decarbonized.
Decarbonizing industry offers an opportunity to spur an
American manufacturing revival, especially in communities that
have been left behind. We have used the Justice40 screening
tool and policy tools to identify the location of our first
commercial plant, a western Massachusetts site in a
disadvantaged community census tract. This city formerly housed
a booming paper industry. We are already collaborating with
city officials, community organizers, non-profits and unions to
ensure that our plant delivers maximum benefits to residents.
We have signed a strategic partnership focused on high
quality jobs with United Steelworkers, and we are exploring a
collaboration with the Smithsonian Science Education Center. We
expect to create 70 benefits-bearing jobs, and many of these
roles will not require an advanced degree, making them
accessible to those who have not gone to college.
We know that the clean energy transition can be a just
transition. It can also be a prosperous one, bringing an
industrial boom, the likes of which we have not seen in
hundreds of years.
The fact that you are hosting this hearing today is already
quite impactful in highlighting the climate and economic
opportunities within. I thank you for your work in this and for
your time today, and we look forward to your continued
partnership.
Thank you.
The prepared statement of Ms. Ellis follows:]
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Senator Capito. Thank you.
Ms. Angielski.
STATEMENT OF SHANNON ANGIELSKI, PRESIDENT, CLEAN HYDROGEN
FUTURE COALITION
Ms. Angielski. Thank you, Ranking Member Capito, also to
the Chairman and members of the committee for this opportunity
to discuss the role that clean hydrogen can play in industrial
decarbonization.
As the President of the Clean Hydrogen Future Coalition, I
represent a diverse set of stakeholders that came together to
promote clean hydrogen as a critical pathway to achieve global
decarbonization objectives. Our foundational principle is to
decarbonize the economy through technology neutral and resource
agnostic, or, as we call it, color-blind policy, that will
enable clean hydrogen to be a scalable decarbonization
solution.
Obviously, we know the international climate authorities
have identified clean hydrogen as a pathway for meeting global
climate targets, and that is really because clean hydrogen is a
game changer. It has the ability to accelerate decarbonization
across all sectors as well as transition existing and create
new skilled, high-paying jobs that underpin the clean energy
transition.
There is a thriving hydrogen market today that operates. It
is mainly used in petroleum refining and ammonia production,
which represents approximately 90 percent of total domestic
hydrogen production in use. Other hydrogen applications are
used in smaller quantities for synthetic fuels, chemicals and
plastics or other niche applications. However, we currently
produce hydrogen almost totally from natural gas, and that is
because we have low cost, abundant supplies that supported by a
vast network of infrastructure.
As Senator Capito already pointed out, there are
alternative methods to lower the carbon intensity of these
hydrogen production methods such as electrolytic hydrogen using
zero emitting electricity, as well as reforming of fossil fuels
with carbon capture and storage.
If the domestic refining industry were to convert their
existing production methods to produce clean hydrogen, that
process in and of itself would reduce industrial sector
greenhouse gas emissions by 5.5 percent. That is really not an
insignificant number, particularly after what Leah has already
said. There are other industries that do not currently use
hydrogen, as already has been mentioned, steel, concrete and
others, so we have several ways to decarbonize those industries
using clean hydrogen.
I really want to thank Congress for the work that has
already been done, both bipartisan and through the IRA. Many of
these programs Senator Capito already mentioned, and the
witnesses, so I will not talk about the hydrogen hubs, which
are critical at this point, as well as the Section 45E tax
credits and the industrial decarbonization funding. But there
has also been other legislation introduced by Senators Coons
and Cornyn that I want to raise that would enable clean
hydrogen to decarbonize the industrial sector and port
operations.
In the last Congress, Representatives Tonko and McKinley
introduced a bill that would establish a pilot program at DOE
to enter into contracts for differences to offset what are the
increased costs associated with the production or purchase of
clean hydrogen in industrial applications.
The Coalition is also recommending that Congress consider
funding a new program in the farm bill. This would provide
grants for the production and use of ammonia that is produced
with clean hydrogen as a feedstock for domestic fertilizer
production and as a tool to lower, obviously, greenhouse gas
emissions in the industrial sector. There are a couple of
hydrogen hubs that are looking at that sector to provide their
clean hydrogen to offset those fertilizer production methods.
While groundbreaking and necessary investments made by
Congress will serve as a significant down payment to expand the
clean hydrogen economy, it is important to recognize that
additional policies will be needed to achieve economies of
scale and stimulate the use of clean hydrogen, particularly in
those industries where hydrogen is not currently used as the
incumbent fuel or feedstock.
DOE suggests that securing long term off-take agreements
for clean hydrogen is one of the key near-term challenges, as
well as the associated infrastructure buildout. The long term
off-take agreement is really due to the significant cost gap
between the cost of clean hydrogen and the incumbent fuels,
which are much cheaper, as I have already mentioned, as well as
the volumes of hydrogen that are needed to decarbonize these
industrial processes.
DOE has also indicated that in order to achieve their goal
of 50 million tons of clean hydrogen per year by 2050, the
entire clean hydrogen supply chain must scale rapidly. That
will only occur if new policy is adopted that incentivizes the
private sector investments that are needed.
There is precedent for Congress to enact policy support to
stimulate the creation of new markets when it deems it is
necessary to do so. Clearly the existing domestic clean
hydrogen market will need similar policy treatment. We look
forward to working with Congress to develop and design some of
those new demand use policies that will enable capital
creation.
As the Administration considers how to implement an
indirect booking claim accounting system for implementing the
45E tax credit, the Coalition wants to caution against adopting
principles such as additionality or hourly time matching as
those measures would delay investment and make clean hydrogen
unnecessarily costly.
The Coalition is pleased that Chairman Carper, along with
Senator Cantwell and ten of her Senate Democratic colleagues,
submitted letters to the Administration urging against adopting
overly prescriptive regulations that would make the use of the
45E tax credits largely inaccessible, and have the negative
impact of little private sector investment, and really delay
the ability of clean hydrogen to be an industrial
decarbonization tool.
I want to conclude my remarks by sharing the significant
benefits that have already been discussed through industrial
decarbonization and that clean hydrogen can bring. It can bring
a lot of benefits to communities across the Country in jobs, as
well as health impacts and reduction in environmental
emissions, and creating a new clean hydrogen commodity market
carries significant economic value and positions the U.S. to be
a global leader in the export of hydrogen.
Thank you again and we appreciate the opportunity to be
here.
The prepared statement of Ms. Angielski follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Capito. Thank you. Thank you, all three of you.
We are going to go to Senator Markey first.
Senator Markey. Thank you, Madam Chair.
Environmental justice cannot be an afterthought of
industrial decarbonization. It must be front of mind. For far
too long fenceline and frontline communities have borne the
brunt of industrial pollution, wreaking havoc on the health and
economic wellness of Black, Brown and low wealth individuals in
our Country, and creating environmental sacrifice zones in the
name of economic growth for others.
When it comes to industrial innovation, we need to be
better than before, not continuing with business as usual,
which created the climate crisis and environmental injustices.
That is why industrial decarbonization that depends on green
hydrogen needs guardrails and strong standards.
Ms. Angielski, will you commit to advocating for the three
guardrails of green hydrogen, additionality, deliverability and
hourly time matching, to help us deliver the greenest hydrogen
possible?
Ms. Angielski. Thank you for the question and I recognize
the issues that you are raising, Senator.
The Coalition is proposing that we adopt more restrictive
policies, as you are suggesting, these three guardrails of
additionality, restrictive or hourly matching, and regional
matching over time. Our recommendation is to begin to adopt
more restrictive measures beginning in 2030, which is a similar
approach to what the European Union has adopted.
The reason for that is we want to see significant
investments in the supply chain that is necessary to support
the scale of that industry and the growth of the industry in
order for clean hydrogen to deliver on that decarbonization
solution for industrial decarbonization.
Senator Markey. I would say that I am just going to urge
you to understand that we want your ambitions to be high for
innovation, but we also want ambitions to be high to ensure
that we are not perpetuating injustice and obscuring pollution,
which is what these industries have done historically.
That is a long timeframe and that is why guardrails for
hydrogen created with targeted new and renewable energy, as
well as continuous inclusive community engagement, will be what
spurs truly clean energy technologies.
Dr. Ellis, thank you for joining us from Somerville,
Massachusetts. You said in your testimony that Sublime Systems
tried to keep community needs in mind when selecting the site
of its first commercial plant in the Commonwealth, including
using tools like the Climate and Economic Justice Screening
tool, which is based on my Environmental Justice Mapping and
Data Collection Act.
Dr. Ellis, do you agree that it is important for deployed
clean tech solutions to provide strong benefits to the
surrounding communities through a transparent and robust
community benefits agreement process?
Ms. Ellis. Thank you, Senator Markey.
I agree. I believe that the energy transition can be a just
transition.
In the case of Sublime Systems, we have used the Justice40
Tool to look at where we might site our first commercial plant.
What struck me is that many of these disadvantaged communities
are the site of old manufacturing towns. In fact, what makes
these towns, what makes them left behind and disadvantaged is
the same reason why new manufacturing will come to these towns.
These are places where permitting is already sighted
industrial. There is already access to railroads. In many
cases, these sites already have access to hydroelectricity that
has been built decades and even hundreds of years ago.
We believe that coming back to the city is right for us,
but it is also right for the community. We hope to bring not
only jobs and training, but also to really integrate with the
community and be a good neighbor to the people who are
welcoming us into their community.
Senator Markey. Thank you. As you said, after China and the
United States, cement is third in terms of emissions. It is
responsible for 8 percent of all global carbon emissions. Even
once new technologies get developed to try to tackle that
problem, it can take two decades for the market to catch up.
How can the Federal Government further drive demand for low
carbon construction materials like cement?
Ms. Ellis. Thank you, Senator Markey. The U.S. Government
buys 60 percent of the cement that consumed in the United
States.
Senator Markey. Say that again. That is a crazy number.
Ms. Ellis. It is, in fact, a crazy number. The U.S.
Government buys 60 percent of the cement in the United States,
and that is a combination of the GSA, the Federal Highway
Administration, the Army, DOT, both at the State and Federal
level.
If there are no advance market commitments, if there is no
commitment to buy low carbon cement from the Government, this
makes my job, as an innovator in this sector, more than twice
as difficult as it should be. I believe the Government has a
responsibility to make these commitments to create bankable
contracts that will allow us to get project finance to build
these plants.
Moreover, that 8 percent of global CO2 emissions, it is not
mostly in the United States. It is global. These countries that
are going to be building more because of growing and urbanizing
populations, are undergoing a period of dirty growth. They are
going to be building cement plants that are based on legacy
fossil fuel technology unless we can move quickly to develop
American-made electrochemical technology, deploy this
internationally and export our technologies.
Senator Markey. So the faster we innovate, and that can be
driven by robust Federal procurement policies, because the
Federal Government consumes 60 percent of all cement. Then we
can export that new technology that gets developed because the
Federal Government had strong procurement policies around the
rest of the world.
I thank you. I know my time has expired. Thank you, Madam
Chair.
Senator Capito. Senator Cramer.
Senator Cramer. Thank you, Madam Chair.
Thanks to all of our witnesses for being here. I will try
not to jump around too terribly much. So much has already been
said that is intriguing to me.
I want to start with you, Ms. Regitsky. your testimony
referred to the United States' comparative carbon advantage. I
appreciate that terminology. It also points out appropriately
that the United States imported more than 1.2 gigatons of
embodied emissions, mostly from China.
I appreciate, Dr. Ellis, your referencing this is a global
issue. We tend to look inward and sort of beat ourselves up a
little bit, in my view, too much. By the way, I love the idea
of being the innovators and then exporting the innovation. We
sometimes forget that most of what we export is brainpower and
innovation as well as products.
That said, according to data that was compiled by the CRC,
goods manufactured in the United States are 40 percent more
carbon efficient than the world's average. But the U.S. imports
75 percent of its goods from less carbon efficient countries.
Again, getting back to this global issue, getting back to
trade policy as much as anything, is why I often say that so
much of our energy and environmental policy is inward. It is
punitive, rather than recognizing the global nature of all of
this.
I want to get to the PROVE IT Act, that is where I am
leading. I appreciated Ms. Regitsky bringing it up, because
without good solid data to demonstrate the statistics I just
used, I don't know that we can move forward as easily until we
start proving that we really are more carbon efficient than the
rest of the world.
We have actually done a lot to bring down CO2 emissions in
the United States. We really have been innovative. Rather than
buying more steel from China, how about more steel from West
Virginia, or Indiana or how about proving that a Bakken barrel
of oil is cleaner than a Venezuelan barrel of oil? In the
cement sector, especially, this probably is as obvious as it is
anywhere.
I am not saying we shouldn't always strive to improve. It
is not that. I think we beat ourselves up too much. What is my
point? I guess I would just like, Ms. Regitsky, if you would
talk a little bit more about the PROVE IT Act and what value
that could bring to the discussion.
I might ask you, Dr. Ellis and Ms. Angielski, on the same
topic of data collection, while we try to forward lean into the
production. Ms. Regitsky?
Ms. Regitsky. Thank you, Senator Cramer, for the question
and for your bipartisan introduction of the PROVE IT Act.
As you have mentioned already and I mentioned in my
testimony, data is really kind of the first piece of the puzzle
to start, as you said, proving that indeed much of U.S.
production is already more emissions efficient than other
countries, especially countries that we are importing our goods
from.
What the data allows us to really have this transparent
reporting of this emissions intensity and the competitive
advantage, the carbon advantage, of U.S. production. The other
thing it enables us to do is respond to when other countries
are starting to think about their own policies. For example,
the EU, as you probably know, is starting to implement their
own carbon border adjustment mechanism.
By folks looking at the existing carbon advantage of the
U.S., such as CLC, they noted that because of the U.S.'s carbon
advantage, looking at the U.S. imports into Europe, into the
EU, versus, say, China's imports to the EU, which are going to
be more carbon intensive, the U.S. actually stands to gain
market share in the EU market with the EUC ban in place.
Having things like PROVE IT will enable us to make sure
that when those types of policies that other countries put in
place come into fruition, we can really make sure that they are
fair and are accurately representing the low emissions
intensity of the U.S. market.
Senator Cramer. Very well said. Dr. Ellis, anything more?
Ms. Ellis. Yes, I would like to echo that. The Europe
Carbon Border Adjustment Rule is very important for protecting
against dirty imports.
I would also say that in the EU and in America, there is a
proliferation of EPDs, environmental product declarations. That
is the nutritional label for cement materials that list not
only the embodied carbon of that material, but also the
embodied energy. Many of the other pollutants that Senator
Markey mentioned affect the local communities in which these
materials are made.
Ms. Angielski. I can speak to you with respect to clean
hydrogen. Right now, the lifecycle analysis and accounting
methodology is already built into Federal policy to qualify for
clean hydrogen, whether it is tax credits or DOE grant funding.
That accounting system for tracking the emissions associated
with production and use is already built into Federal policy
that will catalyze this industry.
It is really important to recognize that if there are
industries that want to use clean hydrogen and that will
purchase it at a premium price, for example, the carbon
intensity value of that hydrogen is going to be the critical
aspect of that. Because there are industries that are going to
want to be able to say, look, I am using decarbonized hydrogen
and it is reducing my product emissions by X amount. That is
the selling point and the value add, I will just say for clean
hydrogen.
Senator Cramer. This looks to me like the PROVE IT Act is
at is sort of the low-hanging fruit in this group.
Ms. Angielski, I wanted to ask you, of course, about the
Heartland Hydrogen Hub. Thank you for your work on that.
Thank you, Madam Chair.
Senator Capito. Thank you. Senator Whitehouse.
Senator Whitehouse.
[Presiding.] Thank you. Thanks to Senator Cramer for his
interest in carbon border work and I look forward to making
more progress in that area.
Dr. Regitsky, we have a number of things on the horizon.
The first is the European Union's CBAM, Carbon Border
Adjustment Mechanism, which will begin counting carbon
emissions shortly and begin tariffing carbon emissions in 2026.
The United Kingdom, it has just been reported, will be joining
the EU on a similar schedule with a similar carbon border
tariff to neutralize any tariff obligations between the UK and
the European Union.
What effect will that have on decarbonizing America's
industrial sector?
Ms. Regitsky. Thank you, Senator Whitehouse, for the
question and the opportunity to build on my response to Senator
Cramer's question as well.
Yes, the new CBAM policies that the EU and the UK are
planning to put in place, already in motion, will certainly
have an impact globally and on U.S. manufacturing as well. As
we have already been discussing, U.S. manufacturers are often
already much more carbon efficient and energy efficient than
manufacturers in other countries. So they stand to gain
actually from being able to access more of these European and
UK markets because they have a carbon advantage to some of the
other countries that are importing into those places.
If we couple that with further investments in
decarbonization in our domestic industry, then that carbon
advantage is just going to keep growing and growing and
creating even more opportunity to take that global market
share. As other countries beyond the European continent are
thinking about border adjustments as well, then that just
furthers the opportunity even more.
Senator Whitehouse. The economic experts who advised the EU
and the CBAM note that there will be some economic headwinds
for America by virtue of having to pay a carbon tariff to the
EU, because we are more carbon intensive than the EU, but that
headwind will be more than offset by a massive tailwind as
manufacturing now taking place in China and supply chains now
beginning in China move to the United States because the
relative difference between the tariff that China would have to
pay and the tariff that the U.S. would have to pay would
actually be a huge economic value.
If we were to step up our own participation in the EU and
now potentially UK CBAM, we could reduce the tariff headwind
while also enjoying the tailwind. Is that not correct?
Ms. Regitsky. Yes, that is exactly right, Senator.
Senator Whitehouse. Then one other thing that I would
mention that is coming at us is the Administration's decision,
the Office of Management and Budget's decision, which I very
strongly applaud, to take the social cost of carbon that is
shortly to emerge from the Environmental Protection Agency's,
EPA rulemaking process and make sure that it is applied across
the board. We have heard testimony about buying cement. Into
that cement calculation would now have to fit $190 per ton
social cost of carbon.
I expect, Dr. Regitsky, that you also see that as a
positive influence on industrial decarbonization in America?
Ms. Regitsky. Certainly, having some kind of mechanism to
differentiate the emissions intensity of the products that the
Federal Government is buying will be able to advantage those
who are producing the more efficient product, as well as create
those markets for innovators like Sublime and others to really
see the potential of the market for the investments that they
are making into their net zero technologies. It will certainly
be able to increase the amount of innovation in really being
able to get to net zero in industry.
Senator Whitehouse. It is a fairly elementary proposition
of market economics that polluters should pay the cost of their
pollution rather than socialize the costs of their pollution
onto other innocent parties. Without that, the whole principle
of market economics, which is the principle of price signals,
is warped and degraded and doesn't work any longer.
Do you believe it is consistent with traditional economic
policies to have the social cost of carbon and the CBAM, and
other tariffs reflect the fact that there are harms from carbon
emissions?
Ms. Regitsky. I would say that I am certainly not an
economist, but my understanding is generally being able to
price in these negative externalities where the costs are being
brought on to somewhere in society and putting those in the
places that are causing the actual harm and the cost does align
with the idea of negative externalities in economics.
Senator Whitehouse. You may not be an economist, but you
know what negative externalities are. That is a pretty good
first step. I will take it.
Thank you, Chairman.
Senator Capito.
[Presiding.] Thank you.
Ms. Angielski, in my opening statement, I talked about
ARCH2, the Hydrogen Hub, and how excited we are to have that
coming to our region, particularly my State. But each hub has
selected different mixes of pathways for producing, and I think
that was written into the bill.
When it comes to build-out of our Nation's hydrogen
infrastructure, where do you think the initial demand will come
from and what will the associated emission benefits be?
Ms. Angielski. Thank you, Senator Capito.
I am familiar with the hub in West Virginia and the ARCH2
hub. The important attribute, I would say, about the hydrogen
hubs generally is that they will enhance that sort of network
effect that is needed by aggregating both the production, the
transport and use demand, and enable that infrastructure to be
shared, and the lower cost, at least initially, as the industry
grows.
One significant benefit of what the ARCH2 hub is looking at
is that they have a variety of end use sectors that exist
within the hub that can take advantage of it. If you think
about the existing markets, those are probably the lowest
hanging fruit in terms of emissions reductions and targets
where hydrogen can be adopted in those sectors. That is because
they already need hydrogen and use hydrogen.
But the other sectors as in the industrial, for plastics,
chemicals, whether we are talking about transportation fuels
outside of the industrial sector, or even in other industrial
end uses like cement or concrete, that is where hydrogen can
grow and expand. However, to do that we will need some
additional policy and price support, likely.
The industrial sector is the third largest emitting sector.
The sooner we actually use hydrogen in those sectors, the
sooner we will see those emissions benefits.
Senator Capito. I mentioned permitting and how there have
been some bureaucratic headwinds to getting these projects
approved. How concerned are you about the permitting process
that we are seeing on the Class VI wells? And then there is the
issue of permitting the transport of hydrogen as well. Could
you speak a little bit about that?
Ms. Angielski. As it relates to the Class VI permits, you
mentioned it in your opening remarks. I think there are almost
60 applications pending before EPA. One has a provisional
permit out of the 60. Many of these applications were filed
years ago.
You all obviously provided funding to EPA and the regional
offices to really try to help expedite the processing of
applications. The hope is that once EPA is able to staff up and
get the expertise, I think there is also a lack of expertise at
the moment to provide that resource and to serve the resource
needs throughout the Country.
Hopefully, those funds will catalyze that and really help
to accelerate processing of those applications. But it is a
concern because obviously, as you know, the longer permitting
takes, that is the time value of money for project developers.
The same is true when we are talking about any
infrastructure component of a project, including pipelines, as
you mentioned. I think probably the biggest concern is with
respect to siting of pipelines and the time it takes to site.
That is a permitting issue. It is also a local landowner and
other regional or community set of issues.
I think appropriate engagement in the communities but then
also a streamlined siting authority among the Federal agencies,
in particular, would be really critical to go a long way in
accelerating or processing those more quickly.
Senator Capito. Dr. Ellis, you mentioned that you are going
to site your first manufacturing facility in Massachusetts. How
far along are you on that project? Have you gotten into the
permitting parts of that yet?
Ms. Ellis. Yes, we have already gotten into permitting. We
were lucky to find a plot of land that was already zoned
industrial.
Senator Capito. Was it a brownfield?
Ms. Ellis. It was a brownfield site. However, I would share
your concern about permitting timelines. It is something where
you can be a startup to pool all these resources, but at a
certain point, you have to hurry up and wait if you are being
held back by permitting.
Especially with the enhanced scrutiny that comes with
taking government funding from the IPA, for example, from the
Office of Clean Energy Demonstration, if we were to win that
funding, we would be subject to NEPA. That could very much
create a situation in which we hurry up and then wait.
Senator Capito. So your permits now are just through
Massachusetts, your State permitting?
Ms. Ellis. That is right.
Senator Capito. Generally they go faster. All right. Thank
you.
Senator Merkley is going to question, but Senator
Whitehouse, I believe you are going to take the gavel from me.
I will pass it along.
Senator Whitehouse. (Presiding] I will gladly do so. Thank
you so much.
Senator Merkley. Thank you very much, Mr. Chairman.
Dr. Regitsky, I unfortunately was at a foreign policy
gathering, so I missed some of your presentation. As I
understand it, Breakthrough Energy is a network Bill Gates
helped set up, trying to find the innovative technologies that
are necessary to bring to scale to meet the goal of net zero in
2050. Is that a fair summary?
Ms. Regitsky. Thank you, Senator. Yes, that is a very good
summary.
Senator Merkley. In this process, building materials are
obviously a key piece of this challenge. Could you comment a
little bit about the role of mass timber as a substitute for
buildings that are, say, 1 to 14 stories high and the
comparison to traditional concrete and steel buildings?
Ms. Regitsky. Yes. Thank you for that question.
I will start by saying I am not a structural engineering
architect, a technical expert or anything like that. I have
really focused on, how do you reduce emissions from heavy
industrial producers.
That said, I think it is widely recognized that using
alternative materials such as mass timber could be one of the
solutions to be able to help decrease some of the current usage
of things like concrete and steel in places, in buildings and
structures where it makes sense.
But I believe it is also true that mass timber buildings
still use some amount of those traditional materials as well.
With the development that we expect globally, we still
anticipate needing quite a bit of those traditional materials
in order to really be able to develop these structures.
But yes, mass timber can certainly play a role in the
buildings where it makes sense and where it can perform.
Senator Merkley. Where it can, and there may well be much
taller buildings that are part of our world that require
concrete and steel, both of which consume a lot of energy.
I was intrigued when I first came to the Senate by a
company that presented me with a paperweight which was
essentially cement made in a different strategy in order to
capture carbon. Essentially, when this is put into a building,
you have locked up carbon forever.
The downside was that the energy required to produce it and
the massive amount of water required to produce it meant that
if you were looking at kind of the whole lifecycle of it, it
wasn't a solution. There were very few places you could use
that tremendous amount of water and of course the energy
required to make it meant that you were producing carbon into
the air to begin with.
But in terms of the investments that Breakthrough Energy is
making, do you see a pathway where there are significant
opportunities to greatly reduce the amount of energy that goes
into concrete and steel buildings?
Ms. Regitsky. Yes. I think there are multiple companies
within the Breakthrough Energy investment portfolio that are
trying to solve this exact problem. For one example, there is a
company called Brimstone. They are actually looking to be a
drop in replacement for current cement production today, so no
need to change the standards or the way that construction
currently occurs.
But the process that they use can entirely eliminate the
emissions from the cement manufacturing. It is an entirely
different process than the way cement is manufactured today.
They also create a byproduct that will capture carbon as well.
So if everything, depending on the types of energy they end up
using in their process, which they are compatible with clean
electricity, they could come up with a potentially carbon
negative cement alternative that is a drop-in replacement.
There are many other companies as well that are finding new
materials that substitute for cement as a binder so that you
can use less cement in concrete since cement is the most carbon
intensive part of concrete. There are many strategies out there
today within the investment portfolio as well as other
companies such as Sublime.
Senator Merkley. I think that is really important.
I am using that as a pivot to turn to you, Dr. Ellis, and
your company. I love the name Sublime, given that you have a
process to convert limestone to cement that consumes far less
energy, and I think that is at the heart of it.
Have you, in your kind of analysis, really looked at kind
of the whole cycle of the products so that you are including,
kind of apples to apples comparisons with other products in
terms of transportation, use of whatever source of energy is
engaged and so forth?
Ms. Ellis. Yes, that is right. We have recently done an
environmental product declaration with the industry's leading
provider of these lifecycle analyses, both on the production of
these materials.
I think what you say is very important, especially as it
relates to mass timber. There is not only CO2 emissions in the
production of these materials, but we also have to look at the
life cycle, the durability and the end use of these materials
to make sure that carbon is avoided throughout the lifecycle
and also that energy consumption is reduced in the production
of these materials. For example, today, without Sublime's
technology, the cement industry would have to decarbonize with
post combustion carbon capture, which would double the cost and
double the electricity consumption of cement making.
As it relates to cement versus timber, mass timber is a
great material. As the other witness said, it can be used in
many applications, especially in low-lying buildings.
But cement is unique in that it is very durable and strong.
I think a material like this will be needed more than ever,
especially in a changing climate where robustness and
durability is important and the lifecycle that you can get from
a building made with cement is unparalleled.
Senator Whitehouse. Senator Ricketts.
Senator Ricketts. Thank you very much.
I want to also thank Chairman Carper and Ranking Member
Capito for putting this hearing together and our witnesses for
sharing your perspectives with us here today.
We have talked a lot about carbon. One of the things I
think often gets overlooked in these conversations when we talk
about emissions and so forth, is that actually carbon is
valuable beyond just kind of the obvious that you need carbon
dioxide in the air for plants to be able to grow. There are
many uses for carbon that we need in our society. In fact, what
many people don't realize is that actually in Nebraska, with
our renewable fuels industry, specifically ethanol plants, we
create some of the cleanest carbon in the industry.
It has many critical uses across our economy. For example,
in our meat processing industry in Nebraska, carbon is used to
rapidly chill meat, to be able to use it in transportation, to
transport it, because we want to keep that food frozen as we
are moving it around the Country.
We also use it in water treatment. Carbon is used to be
able to take out, for the removal of organic chemicals during
the treatment process. Of course in medical applications,
carbon is used to sterilize medical supplies and development of
pharmaceuticals and so forth.
Ms. Angielski, how can we continue to promote innovative
uses of carbon which add value to our supply chain?
Ms. Angielski. I can speak at least to how carbon and
hydrogen could be used together. If you look at the sustainable
aviation fuels today, they need large amounts of carbon
dioxide. If you capture that carbon dioxide, even better and
they need hydrogen. So if you decarbonize the hydrogen, you can
produce fuels that can really help to decarbonize industries
like the aviation industry or some of these other maritime sort
of applications of what fossil fuels are using today. That is
certainly one way to use it.
There are a number of CO2 conversion pathways. Obviously,
putting it into processes like concrete is another way that has
already been discussed, but I think the innovation needs to
continue. Clearly, companies like Sublime and others that are
trying to find innovative ways to decarbonize, but also funding
provided by DOE to fund CO2 innovation and use is really
critical to continuing to find markets for the product.
Senator Ricketts. You mentioned hydrogen. Let's talk about
that for just a moment.
Nebraska has a long history of being an innovator when it
comes to the agricultural industry. We have a company you may
be familiar with, Monolith Materials, that has a patenting
process, a unique process, to be able to take natural gas and
crack it into hydrogen and carbon black. Carbon black goes into
things like mascara, your tires, and cases for cell phones.
Typically, it is a very dirty process to make it from
petroleum, but this is a clean process. Of course then we can
have that carbon black to be able to make these products we
just talked about that we need in everyday life. But also, you
get hydrogen out of that. One of the uses for that is to be
able to make clean anhydrous ammonia that then goes back into
agriculture. We also have another company, Project Meadowlark,
that is doing the same thing with regard to taking hydrogen and
so forth.
Can you talk a little bit about how hydrogen can make
agriculture and other industries more efficient, cleaner, and
promote economic development? What are some of the other things
we can do as we have some of these opportunities to be able to
use hydrogen in conjunction with carbon?
Ms. Angielski. Thank you for the question. You hit on a key
industry or sector that, for a State like Nebraska, could
really help contribute to decarbonization objectives for an
industry and the agricultural sector that really doesn't have
what I would say are very targeted solutions today that they
have available to reduce their emissions from their processes.
Even in the agricultural sector, you mentioned at least
Monolith and what they are looking at is to use decarbonized
hydrogen as one of the feedstocks to produce ammonia and
fertilizer. When you apply that, you could have agricultural
products that are now decarbonized. You could also use hydrogen
in many of the pieces of farm equipment that are needed to run
and obviously farm the land.
Obviously, that is another area where that sector can
really decarbonize from what they are currently using today,
which is fossil fuels typically. Water irrigation systems need
power. You can use hydrogen to power those. There is a lot of
opportunity, I think, for hydrogen to really help in the
agricultural sector and decarbonize those emissions.
Senator Ricketts. Have you seen some of these applications
for hydrogen being used in some of the hydrogen hub projects
people are talking about?
Ms. Angielski. There are at least two hydrogen hubs that
are looking at fertilizer uses and using the decarbonized
hydrogen that would be produced in that hub as the feedstock to
produce ammonia and fertilizer, so yes, definitely. I think
ARCH2 is looking at that. If it is not ARCH, it might be the
Midwest one, I believe.
Existing use cases for hydrogen are really what I consider
to be the low hanging fruit for adopting decarbonized hydrogen
in those sectors. It can really go a long way to helping create
and stimulate the demand that clean hydrogen really needs to
grow an industry in this Country.
Senator Ricketts. Great. Thank you very much.
Ms. Angielski. Thank you.
Senator Whitehouse. The gavel reverts to you.
Senator Carper.
[Presiding.] Thank you so much.
Senator Ricketts. Chairman Carper, as I promised, I did get
a chance to mention our ethanol industry in Nebraska in this
hearing.
[Laughter.]
Senator Carper. I knew we could count on you.
Thanks so much. It is a good morning, a full morning. This
hearing is off to a good start. I have asked people on both
sides of the aisle and they are very complimentary of the
witnesses and the tone you are helping us to set. I have a
couple questions and will jump right in. I appreciate Senator
Whitehouse filling in for me.
Dr. Regitsky, in the Fifth National Climate Assessment that
was released yesterday, I mentioned it earlier in my opening
statement, some 14 Federal agencies and hundreds of our
Nation's top scientists explained the urgency of cutting
greenhouse gas emissions. We know that Federal actions are key
to unlocking swift and sharp emission reductions from industry.
That is why the EPW Committee provided funding through the
Bipartisan Infrastructure Law and the Inflation Reduction Act
to support near-term actions and transformative technologies to
reduce emissions from heavy industry.
With that as a backdrop, let me ask this question of Dr.
Regitsky. Would you please describe ways in which the programs
enacted under the Bipartisan Infrastructure Law and the
Inflation Reduction Act are supporting our efforts to
decarbonize heavy industry?
Ms. Regitsky. Thank you, Senator, for the question.
What you relayed in your opening statement and has been
discussed by other witnesses as well, there are many programs
within the Infrastructure Law and Inflation Reduction Act that
are going to help industry progress on its way to industrial
decarbonization. Just to name a few that I think are really
important and to just highlight a key piece that the two bills
do together is really match supply support with demand support,
which is really important.
So on the supply side, as I mentioned in my testimony, over
$6 billion at the Department of Energy to support industrial
decarbonization demonstration projects. This is historical.
There has not been this amount of funding to industrial
decarbonization ever from the U.S. Government.
The fact that it is for commercial scale demonstrations,
first of a kind facilities, is really critical because that is
really going to be able to support the transformative
technologies that we really need to get to net zero, as well as
the incremental emissions reductions that we need as well.
This is a program that I am personally very excited about.
We are waiting now for DOE to make the selections, which I
believe will come out early next year.
I already mentioned, too, that the industry appetite for
this program has been immense. There were ten times the amount
of requests for funding than the $6.3 billion, which just shows
how much it means.
Senator Carper. Did that surprise you?
Ms. Regitsky. Maybe I was a little surprised, though maybe
I should not have been, because the investments that will be
required to truly decarbonize all of heavy industry is going to
be massive. Six billion dollars sounds like a lot, but it is
really just a fraction.
I think that the ten times initial need for this first
program to come out just gives us a glimpse of what industry is
really looking for. Then just to say, there are many other
pieces that witnesses and members have already mentioned. The
hydrogen hubs, of course, will be critical to using clean
hydrogen to decarbonize industry.
Also very many tax incentives in the Inflation Reduction
Act that will be relevant for industry; 48C, an investment tax
credit for reducing industrial emissions in existing
facilities; 45D for clean hydrogen, 45X could be really game
changing for thermal storage, which I mentioned in my
testimony, to really unlock the ability of those thermal
batteries to decarbonize industrial heat, and many more.
On the demand side, it is really great that these
investments were paired with the almost $5 billion to Federal
agencies for procuring low carbon materials. So the government
is helping companies invest to make their materials cleaner and
then creating the markets for those clean materials to really
match that supply and demand and show the industry that there
is a buyer for the clean goods that they are going to be
making.
Senator Carper. Thanks very much for that.
I have a followup question, then I am going to turn to
Senator Padilla for his questions.
You have already responded to this question in part, but I
am going to ask it again more directly to see if there is
anything you want to add. What role does public investment play
in the technology development life cycle? How can we, as
policymakers, ensure that technology developers can continue to
overcome the barriers to deployment?
Ms. Regitsky. I am happy to elaborate on that followup
question. The government support all across the innovation
cycle is going to be critical, definitely in the early stages
where really this isn't where private capital comes in at all,
where folks are still discovering their technologies in the
lab, and really kind of fine tuning these technologies.
The government really has a place to step in throughout the
development. So taking that lab technology to a pilot scale, to
then a larger scale demonstration, to then financing for even
further deployment. A big part of technology development is
risk. So where the government can come in is to really help de-
risk these technologies and accelerate their ability to go
through development and get to scale.
One quick thing to mention is just, innovation is messy. It
is a feedback loop. You make progress, you fail, you learn, and
then you eventually succeed. You can't really skip any of those
steps. So what the government support helps to do is de-risk at
every one of those steps, make sure that learnings are able to
be shared between entrepreneurs. It just accelerates the
process.
Senator Carper. Thanks for that response.
Senator Padilla, it is good to see you this morning.
Welcome.
Senator Padilla. Thank you, Mr. Chairman. Kudos to you for
having multiple witnesses today with affiliation with the
Massachusetts Institute of Technology, a brilliant move. You
can tell when there is 120 pages of testimony submitted, MIT
folks who are involved.
[Laughter.]
Senator Padilla. California prides itself in having one of
the lowest emitting cement factories in the Country located in
Redding, California. We also helped to forge startups in a
network of ten companies referred to as DC2 that are committed
to going even further by making cement and concrete with no, or
very low, emissions. However, as I have discussed at previous
hearings, most current tax credits reward companies that first
emit and then capture their emissions, but not as much for
companies that are lowering or eliminating their emissions
altogether.
My first question is for Dr. Ellis. As a member of the DC2
Alliance, can you speak to your company's experience with the
current tax incentives like Sections 45Q, which I think has
been raised already, and 48C, and the agencies that developed
and oversee them?
Ms. Ellis. Thank you so much. This is a really important
question.
Right now there is no tax credit available for technologies
that avoid the manufacture of carbon. Sublime Systems submitted
a concept paper for 48C and we were discouraged from the full
application.
And 45Q creates perverse incentives. Sublime Systems could
manufacture carbon and monetize it by using limestone as an
input material from our cement. But we believe that is wrong to
do. That is not very forward looking and it is the wrong use of
this tax credit.
Instead, the Congress and the Treasury should consider
technology agnostic tax incentives to reward the avoidance of
carbon as much as it does for carbon production, capture and
storage.
Senator Padilla. An ounce of prevention is worth a pound of
cure. That is my translation.
The second question is for Dr. Regitsky. You were involved
in the Sierra Club study of cement factories in California and
other States. What lessons did you learn regarding innovations
in decarbonizing cement and concrete at factory scale?
Ms. Regitsky. Thank you for the question, Senator.
This was a really groundbreaking study that was conducted
because of the facility level data that it provides. Of course,
these are just estimates. These are actually very difficult
numbers to get, to have production data from facilities.
But what these estimates are providing us is to really have
a granular view of the performance of different facilities, so
we can get an idea of what the average performance is, how well
the top performing facilities are doing, and how well the
bottom performing facilities are doing. These are all existing
facilities.
So by looking at that difference, you can see what is
already possible, even just using the best available technology
today and where those kind of near-term emission reductions are
possible. The study has really been able to showcase this in
cement as well as a handful of other sectors. It really
showcases the usefulness of this type of data.
To bring this back to a conversation we had earlier in the
hearing, I mentioned this is difficult data to come by. The
U.S. Government actually has all of the data to come up with
these numbers in existing reporting. The Census has these
production numbers from these facilities, but of course, it is
kept very confidential for good reasons. But the PROVE IT Act
discussed earlier would actually start enabling the sharing of
this type of data between government agencies so that the
government can start seeing what these emissions are, get the
averages, and all of that as well.
Senator Padilla. Thank you. One more question, Mr. Chair.
This builds on an item that Senator Whitehouse raised earlier
in the hearing.
Looking ahead to COP28 this month, it is important to
consider the global scale needed for industrial decarbonization
as countries around the world increase their demand for
concrete and other building materials.
Dr. Ellis, Sublime has a goal of producing a million tons
of concrete by 2028. That is very laudable, but in the United
States alone, our demand exceeds 100 million tons. How can we
help scale up low-and no-carbon emission concrete companies to
the level needed to effectively supply the national and global
market?
Ms. Ellis. Thank you, Senator.
The Office of Clean Energy Demonstration, combined with the
Low Programs Office, is an excellent first start. If we are
successful in applying these two programs, it will support us
through a phase of growth where we can achieve economies of
scale and reduce costs so we can compete on cost with today's
carbon intensive Portland cement. These programs need robust
support beyond these initial appropriations.
Also, as Senator Markey said earlier, if we move quickly to
create government advance market commitments, since the
government buys 60 percent of the concrete used in the United
States, if we move quickly with these advance market
commitments to bring these clean technologies to scale, we can
move to export these technologies to the rest of the world
where new greenfield cement plants will be built in a period of
dirty growth in India, Africa and places where the world's
population is growing and becoming more urban. We have an
opportunity to act now to prevent decades more CO2 emissions
from these carbon intensive industries.
Senator Padilla. Thank you so much. I appreciate your
leadership.
Thank you, Mr. Chair.
Senator Carper. Thank you, Senator Padilla.
We have been joined by Senator Fetterman, my neighbor
across the line in Pennsylvania.
Senator Fetterman. Thank you, Mr. Chairman.
Senator Carper. You are welcome. You are recognized.
Senator Fetterman. Thank you, everybody.
I am sure you probably don't know this, and it is probably
not very interesting as a fact, but I live right across the
street from a steel mill. Literally, it is the last functional
steel mill in all of western Pennsylvania, which is a
remarkable statement because that is where more than half the
world's steel was actually manufactured back in the middle of
the 20th century.
I have been in conversations with the leadership of U.S.
Steel over the years. One of the things now that just came onto
their screen about now is, we have a mandate to do decarbonize
our industry. I was like, wow, that is remarkable.
How can you possibly decarbonize steel? If anyone has seen
a video of it or is familiar with it, it is a very violent and
explosive kind of a process. It is very, very dirty. I know
that very well because you have to scrape it off the windows
and things at our home.
I asked the leadership, and said, to me decarbonizing the
steel industry would be like having a steak house that you
don't have a dead cow. It seems kind of incompatible. How is
that possible? Then they started saying, well, you know,
hydrogen with that as well.
Then I asked, where do we get the hydrogen from? Because my
understanding is that it comes from natural gas. Is that
accurate, to any experts? Is that accurate?
Ms. Angielski. I am happy to answer that question, Senator
Fetterman. Today, the majority of hydrogen that is produced
comes from reforming natural gas. You are correct. You can
lower the carbon emissions of that process by capturing and
storing the CO2. So you can still use natural gas, decarbonize
it and reform it so that way it can be used in the steelmaking
process. That is certainly one way to decarbonize the steel
industry.
Senator Fetterman. Of course, obviously, you are experts
and again, much smarter than I am, but I know natural gas is a
fossil fuel. It does have carbon involved. Of course fracking
is often very controversial, certainly within the Democratic
Party and in Pennsylvania as well.
My next question is, if it is coming from natural gas and
is turned into hydrogen or where it is made the way, it is
currently under the most stringent kind of environmental
requirements, is that really what is happening? Are we
decarbonizing steel or are we green washing that? What does
that mean to the average union worker who might be thinking, I
am going to lose my job because we are not able to meet some of
these standards.
Politically, those are the ones that are going to run to
the Republican side and the steel is going to go to the
industries all across the world that make steel without any
labor unions, without any kind of environmental kind of
restraints, or all these other kinds of things.
I would very much like to decarbonize steel, but these are
the kinds of industries that have I think a very truth that you
can't really make it without having carbon involved unless
there is some kind of super, next kind of a paradigm shift.
How is that possible? What can be really meaningful having
that conversation in industries like that which are a part of
the western Pennsylvania legacy? Is there a path forward on
that? I would open that to anybody.
Ms. Angielski. I would be happy to start, Senator. I want
to touch on your jobs component of this because I think the
unions and job market writ large, whether we are looking at
just the fossil fuel industry or a clean energy industry, I
think existing jobs are going to be the underpinning for the
transition. If we are going to transition to these clean jobs,
we will continue to need that union labor.
Again, I would say Congress and what they did in enacting
the IIJA and of course the IRA, all of these requirements to
make sure that we have apprenticeship programs to train and
skill workers in these new industries will be critical for
that.
But we will need that labor, as it relates to natural gas
and the use of natural gas to produce hydrogen and or to
replace the fossil fuels that are used in the steelmaking
process. As we drive toward zero emissions, a hydrogen profile
or an emissions profile, I should say, I think we are going to
need the natural gas industry with carbon capture and storage
to really help build out the infrastructure that is going to be
needed to get to that net zero emitting carbon intensity
hydrogen production method, so that way it can be used in
decarbonizing these industries, whether it is steel or other
industries.
Senator Fetterman. Mr. Chairman, 30 seconds?
Senator Carper. At least 35.
Senator Fetterman. Thank you.
I guess the final question on this is that perhaps you are
aware of how controversial natural gas and fracking is now.
Despite all that and the realities that are a part of that, and
I do support natural gas, are we being honest about
decarbonizing an industry like that? Is it meaningful? Is it
genuinely meaningful and all that? Is that dangerous because if
we just say we are not going to even make these in America
anymore, now we are running right into the arms of a foreign
kind of steel manufacturers?
Ms. Regitsky. If I may I take on this question, Senator, I
think that is a very fair question.
There are other ways of making steel, even primary steel,
that is being developed now that would altogether remove fossil
fuels from the process and still deliver that primary, high
quality steel we need in several industries today, and that
actually have the potential to grow the U.S. domestic steel
market share.
BCG came out with a study that the global clean steel
demand in 2050 is something like $1 trillion. The U.S. has the
ability, if we make investments now in a variety of
technologies, to be able to capitalize on that. So, things that
use clean electricity, and bypass fossil fuels altogether.
And just a comment on the natural gas pathway. While
natural gas and using carbon capture to create hydrogen is
certainly one way to create a form of low emissions hydrogen
that could go into steel making, the process that would use is
a direct reduction process that actually in Toledo, Cleveland
Cliffs had the direct reduction iron process with natural gas
already.
The way that you would introduce hydrogen into the steel
making process is through the same type of process. If you are
thinking about efficiency and energy efficiency, where the more
efficient you can be, the fewer your costs, the more product
you are making, the more revenue a company is generating. If
you actually start with natural gas, then make hydrogen, and
then put it into a DRI facility, you are adding an extra step
rather than just going straight from hydrogen in the facility
itself without that step.
I think that is where the importance of things like the
hydrogen hubs trying to stimulate the supply of clean hydrogen
from a variety of sources beyond just the natural gas dry
hydrogen, but clean hydrogen from electricity as well, can
really be what unlocks that ability for clean hydrogen to be
used in the steel industry to provide truly clean primary
steel.
Senator Fetterman. I genuinely apologize. I am sorry this
has gone so far. Thank you for the opportunity. Thank you,
everyone, for answering all my questions.
Ms. Ellis. Mr. Chairman, may I weigh in as well on Senator
Fetterman's prompt?
Senator Carper. OK.
Ms. Ellis. I want to commend you, Senator Fetterman, on
your point about using natural gas as a stopgap solution for
decarbonizing steel. This is something that we think of as
well. Sublime Systems has a true zero, not a net zero, way of
making cement. We don't emit CO2 in the first place. I think
that is very important.
The witness from Breakthrough Energy mentioned that there
are innovative technologies that are avoiding CO2 emissions in
the first place, both for cement and steel. I also want to add
that we have signed an agreement with the United Steelworkers
Union for labor for our first commercial plant to make this
true zero cement. The United Steelworkers Union employs 50
percent of the cement workers in the United States. We believe
it is very important for these workers to bring their skills.
We bring this new innovation and this electrochemical
manufacturing. They bring the knowledge, skill, expertise and
the safety skills to build this new plant. I do think that
together with our innovation and with the workers from the old
manufacturing, we can bring American manufacturing into a clean
energy future.
Senator Fetterman. I sure hope that is true, because the
union workers that I live next to and talk to see that as,
well, it might be the end of our career in making steel in the
Mon Valley.
I have gone way, way, way too long. I apologize. Thank you.
Senator Carper. Thanks so much for being here. Thanks very
much for your questions and for sparking a pretty darned good
discussion.
We may have another colleague or two to join us. More than
half of the committees are meeting right now. So people are
trying to be in several places at once.
I have a question I want to ask Dr. Regitsky. We do not
mean to be picking on you, ma'am. You are good to join us even
remotely.
I would like to talk a little bit with you about near-term
technology solutions. Many of the transformative technologies
that will enable deep decarbonization, such as entirely new
ways to produce clean materials, will require time to reach
commercial scale. I think we realize that.
As the just-released Fifth National Climate Assessment
makes all too clear, we don't have time to wait for these
solutions to come to market as the climate crisis progresses.
While those new technologies develop, many tools are already
available to make meaningful emissions reductions today. That
is good news.
Dr. Regitsky, in your written testimony, you discussed
various methods that can be deployed in facilities today to
achieve meaningful emissions reductions. Would you just take a
few minutes and share with us some specific examples of
existing methods that can deliver immediate results?
Ms. Regitsky. Thank you for the question, Senator.
There are definitely a host of available technologies today
that can be used to start reducing emissions now. I would say
at the top of the list is energy efficiency. In any sector,
that is always your go-to solution. Any time you are able to
become more energy efficient, you are saving costs. So really,
it is a win-win.
With new technologies like smart manufacturing, where you
can go in and add smart sensors to your different equipment,
really monitor the performance of equipment, and really
optimize that energy usage is really increasing the opportunity
for energy efficiency even more.
On electrification, especially of low temperature heating
process, for example, the food and beverage industry is one big
user of low temperature heat. Rather than using natural gas to
create that heat, electric heat pumps are a viable option today
to be able to generate that low temperature heat and reduce a
significant portion of those types of emissions across
industrial sectors. Of course, electrification will also
require infrastructure for that clean electricity and continued
cooling of the grid as well.
As a final example in the cement and concrete space, it is
really great to see the innovative technologies, the
transformative technologies like Sublime is developing. But in
the near-term, there are things called supplementary
cementitious materials, SCMs, that can be used to reduce the
cement content within concrete, so you are reducing the
emissions of your concrete mix.
Right now, a lot of these are sourced from current
industrial wastes, fly ash from coal, slag from steel
production, but we know that these things are not going to
always be in supply as those industrial processes start
decreasing.
So there are companies who are actually creating synthetic
SCMs from widely abundant sources near already existing
concrete infrastructure that can start supplying more of these
materials to reduce that amount of cement per unit of concrete.
That is something that can be done today.
Senator Carper. Good. Thanks a lot.
My next question I would like to direct to Dr. Ellis. This
question deals with keys to adopting clean cement.
We rely on a variety of materials that must meet our
rigorous standards in order to ensure safety and longevity. The
steel that reinforces our buildings and the concrete that
supports the transport of people and goods functions under a
variety of scenarios.
National standards organizations play a role in setting
performance standards for all kinds of materials, but local
entities are often responsible for enforcing those standards,
as in the case with building codes.
Dr. Ellis, my question is, how does the performance of
cement made from new processes compare to the traditional
cement production?
Ms. Ellis. That is a fantastic question. Thank you.
For many years, cement was defined by its chemistry and not
just the stoichiometry, the items and the elements present, but
the crystal structure of the cement. Today's Portland cement is
made in a large kiln and that crystal structure can only be
made in a kiln.
So if we want to decarbonize cement, if we want to employ
the supplementary cementitious materials, they can be swiftly
and massively deployed as the witness from Breakthrough Energy
just mentioned, it means we have to change the definition of
cement to be from a prescriptive-based standard, which
specifies the crystal structure of the cement, to a
performance-based standard.
The good news is that this change from a prescriptive to a
performance-based standard happened decades ago. In 1992, ASTM
International, the standards-making body, created this
performance-based standard. This is a standard that Sublime
cement applies to and we meet and, if not, exceed this
performance-based standard. This means that our cement reacts
with water, gel sets and hardens to make the same durable
concrete that we have been using for decades and millennia. It
is very important that the infrastructure that we are building,
especially with public funds, is durable and safe.
Senator Carper. Thanks.
I think you partly answered this question, but I am going
to ask it anyway and see if you would like to add any other
thoughts. This is for Dr. Regitsky.
Would you comment on the need to update specifications and
standards to help improve the marketability of clean products?
Also, what are some other examples of clean materials other
than cement that will require such updates? Dr. Regitsky?
Ms. Regitsky. Thanks for the question, Senator.
I can certainly build off of Dr. Ellis' response previously
that these performance-based standards exist today. The
standard-making bodies have created them and there are products
that meet these standards.
But the issue is that the standards and specifications need
to be adopted by the people in charge of creating whatever the
project is, infrastructure or buildings. For example, State
DOTs are one player that is really important in a regional
market. If a State DOT adopts a specific specification, then
most suppliers in that market will want to meet that
specification in order to be able to access the State DOT
infrastructure projects.
We saw that this change happened with a type of blended
cement called Portland Limestone Cement, PLC. It blends about
10 percent limestone into a cement mix, so can reduce emissions
largely that way. Now that is already accepted in a majority of
State DOTs today and has really impacted the adoption of this
new cement blend.
We are able to do that same kind of State DOT adoption to
just performance-based standards, as Dr. Ellis mentioned. That
will be a game changer for innovative technologies that don't
necessarily meet the strict definition of what cement is today,
but can meet the performance requirements of these structures.
Being able to partner with organizations like State DOTs,
with private sector and public sector building projects in
order to make people comfortable with these types of
performance specifications is going to be really critical.
Senator Carper. Thanks for that response.
I want to talk a bit about hydrogen and industrial
decarbonization. Ms. Angielski, how is the existing industrial
infrastructure adapting to incorporate hydrogen technologies?
Again, how is the existing industrial infrastructure adapting
to incorporate hydrogen technologies?
I understand that the industrial processes that are used in
the production of things like steel, cement, glass, and
chemicals all require high temperature heat. Currently, this
heat is produced by burning fossil fuels. For these processes,
hydrogen can play an important role in helping us reach net
zero goals.
How easily can hydrogen be integrated into existing
industrial processes without major modifications and how is the
existing industrial infrastructure adapting to incorporate
hydrogen technologies?
Ms. Angielski. Thank you for the question, Chairman.
I would say that at least in the industrial or the existing
industries that use hydrogen, they are looking at ways to
produce low carbon hydrogen at a cost that would be equivalent
to how they produce or use at the same cost of what is called
gray hydrogen produced from natural gas today. The industries
that you mentioned that are potential users of hydrogen are
waiting for hydrogen production costs to come down in price in
order for them to begin to adopt using hydrogen in those
processes.
The important thing to understand is that the cost of
hydrogen today is, on average, roughly about $1 per kilogram
and that is how it is measured. That equates to about $7.50 per
MMBTu of natural gas on an energy content basis.
So if you are looking at a price point of a dollar as a
replacement for natural gas as the incumbent fuel in many of
these processes, the price of hydrogen will also need to go
down in order for that natural gas to be substituted using
hydrogen.
Some industries, some steel-making industries here in the
U.S. are looking at becoming like hydrogen ready, is what they
call it, to make sure that they have the ability to adopt
hydrogen when the price comes down or there are sufficient
volumes to be able to use hydrogen.
Other industries are looking at utilizing, as I mentioned,
existing infrastructure, so there are some producers on the
Gulf Coast where there is a pretty thriving hydrogen industry
already. They are looking to produce hydrogen and try to do so
in a way that would be able to be cost effective for their
already existing industrial customers to be able to adopt the
hydrogen in those industries.
So everybody is moving toward or moving in a good
direction. Let's put it that way. We are waiting for the tax
credit policies and the guidance coming from Treasury that will
be really helpful in stimulating that activity and behavior.
Senator Carper. In terms of bringing down the cost of
hydrogen, what have we done in terms of policy, tax policy, the
legislation that we enacted, what have we done that is actually
going to help with respect to bringing down the cost of
hydrogen? What more could the government do or academia do, or
are there other ways that could help bring down the price of
hydrogen?
Ms. Angielski. Absolutely. I know Abigail and others, as
witnesses, can speak to this as well. I am happy to do that.
Senator, you led on the Section 45E tax credits, these
production tax credits. They are going to go a long way in
stimulating production of clean hydrogen.
I think if there are policies that can be implemented to
help offset that cost differential that I was just describing
in terms of the replacement cost of using hydrogen in those
sectors, that would go a long way toward stimulating the demand
in those industries and help really drive adoption of
decarbonized hydrogen in those processes.
Senator Carper. Do any other witnesses want to comment on
that with respect to bringing down the cost of hydrogen?
Ms. Regitsky. I am happy to add to that question, Senator.
I certainly think the policies that the government has already
put in place which Congress passed in the Infrastructure Law
and Inflation Reduction Act, as Ms. Angielski already
mentioned, will certainly help on that supply side in bringing
the costs down.
The Department of Energy certainly has this in its sights
with its Hydrogen Earthshot and really bringing down the price
of clean hydrogen to that $1 a kilogram figure. So these
policies are already in place.
A big important thing is getting them implemented. So on
the 45B tax credit, just to make sure that guidance is out
quickly. The lack of the guidance is really kind of stalling
investor investing into new clean hydrogen projects and
electrolyzers. That is definitely going to be a key piece of
ensuring that the policy is meant to do what it is supposed to
do and is able to bring those costs down.
Senator Carper. Thank you.
I am going to ask a couple of open-ended questions here and
ask you to think about them. I like baseball. There is a saying
in baseball about the pitcher telegraphing his or her pitch. It
means the batter, whoever is watching the pitcher or the way
the pitcher holds the ball, releases the ball and throws it to
the plate, the pitcher gives away what kind of pitch it is
going to be, fastball, curveball, or whatever.
We are going to turn to Senator Sullivan when he gets
settled.
The last question I will be asking you is to think about
out loud is where you agree. I think sometimes we have
witnesses that don't agree on almost anything. I try to look
for a couple of things where we can agree. I think there is a
fair amount of agreement here amongst the three of you. So
before we wrap it up, we will come back and ask, where do you
agree?
With that, Senator Sullivan. It is good to see you.
Senator Sullivan. Thank you, Mr. Chairman. Thanks for
waiting. Thank you to our witnesses. Appreciate you guys being
here.
I show this chart a lot. It is actually really relevant for
today because President Biden is meeting with President Xi
Jinping. There is a lot of talk about emissions globally since
2005 to 2020. This has been fact checked and everything.
The emissions of China, we all know, are kind of through
the roof. Nobody disputes that. Our emissions have actually
declined pretty dramatically. The reason is we had a dramatic
revolution in the production of natural gas. I think very few
people argue with the reason why that went down.
So my question for you, my question for the witnesses is,
to what extend do you think mandating, and very little of that
was mandated, it was the private sector that innovated on the
issue of hydraulic fracking and then kind of the extended reach
drilling, which we do in Alaska, which shrinks the surface
footprint and makes it much more environmentally sustainable.
To what degree do you think, in the industrial sector, the
Federal Government should be mandating issues? There is an
article I would like to submit for the record, from the New
York Times. Mr. Chairman, I don't normally submit articles from
The New York Times. The title is Biden to Target Industrial
Pollution in Second Term, If He Gets One.
Senator Carper. Without objection.
[The referenced information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Sullivan. A lot of this article focuses on mandates
to industry, you have to do this and you have to do that, to
industry. One of the challenges of that, of course, is that
sometimes you miss innovation. Again, nobody argues that we are
actually the leader in the reduction of greenhouse gas
emissions. China is the dirty polluter. I hope the President
brings that up in his meetings with Xi Jinping today.
That wouldn't have happened, in my view, which benefits
everybody, let alone jobs and the environment, had there been a
heavy-handed approach from the Federal Government saying, here
is exactly how you need to do this. That revolution in the
production of natural gas, nobody believed that could happen.
The story is quite remarkable, but it really is essentially a
lesson in the innovative capacity of the American private
sector.
So I am curious, for both the witnesses, this is kind of an
open-ended question for all the witnesses. When you go for
certain goals, if the feds come in and say X, Y, and Z has to
happen, a lot of times you miss the opportunity for the
innovation that can make things even better. Do either of you
have an opinion on that?
Ms. Ellis. I do, Senator Sullivan. I would like to thank
you for sharing that graph. That graph actually made me very
proud to be American and to see the leadership that we have
taken in adopting new technologies quickly and having an
impact.
I believe that what I am doing at Sublime Systems,
developing a new technology to make cement that is true zero,
not net zero, which means that we won't have to add additional
cost, additional energy, additional labor into decarbonizing
cement production, I think that is very important for us.
Senator Sullivan. Sorry to interrupt, but it is a great
point. Are you doing that because the feds or the Congress said
to do this or are you just saying, hey, this can be great for
my company, great for my community, great for my State, great
for the Country, and help the environment?
Yes, we are a capitalist society. Make some money. There is
nothing wrong with that. Why are you doing it?
Ms. Ellis. I am doing it because I think it is important. I
think it is important to move quickly. I see it as a tremendous
opportunity to develop new technology, and I think history has
shown that the U.S. Government has had a role in catalyzing the
development of new technology, be it through NASA or the
internet.
I know there are countless other monumental technologies
that have just had that partnership with the government to
bring new ideas that are made in America and to export them
globally. The U.S. produces 100 million tons of cement per
year, but we also import about 20 percent of our cement from
overseas.
Senator Sullivan. From where?
Ms. Ellis. From Turkey, Greece, Vietnam, Canada, really
from all over. I think this is a great opportunity to export
made in America technology to India, Africa, China, to these
places that have these incredibly polluting heavy industrial
assets, because we know that climate change affects all of us,
in the U.S. and elsewhere.
Senator Sullivan. That is one reason I am a big fan of
exporting American, clean, burning American LNG. It is the same
analogy. Thank you for that.
I know we have a witness virtually. Mr. Chairman, I would
like to hear from that witness.
Ms. Angielski. Thank you, Senator. Thank you for the
question.
I would say that many of our members right now are already
committed to innovative approaches to decarbonizing their
operations. Many of them are industrial sector producers and
users of their products.
Senator Sullivan. Do you worry about that article I just
cited?
Ms. Angielski. I haven't had a chance to look at it. What I
can say is that absent mandates at the moment, these companies
are committing and investing. They are looking at other policy
tools and levers, of course. We were very much advocates of the
clean hydrogen hubs and for the Section 45B tax credits.
Part of my testimony has also called for action on helping
to reduce the costs for adopting hydrogen as a replacement fuel
in many of these industrial sectors. That is not a call for a
mandate, but there will be a need for policy tools and levers
to continue to both produce and use decarbonized hydrogen.
Senator Sullivan. So more flexibility with tools versus
strict mandates. In Alaska, we always say, particularly with
regard to the feds, the one-size-fits-all approach just did not
work for our State. When D.C. is making rules, oh, we are going
to apply that to all of America, inevitably that does not work
in my State. So, flexibility and tools, but maybe not so strict
mandates? Is that kind of what you are saying?
Ms. Angielski. We haven't taken a position as a coalition
on mandates because there hasn't been a discussion about
industrial decarbonization and mandates for it. I hold the fact
that our members are already investing and looking toward a
future that is decarbonizing and making those investments
today. Then partnering with the Department of Energy in
innovative approaches to do that is going to be critical to
making sure that we are successful.
Senator Sullivan. Great. To the online witness, do you want
to take a crack at that if you are still online?
Ms. Regitsky. Yes, Senator. Thanks for the opportunity.
Certainly mandates are one type of policy that can reduce
emissions, but certainly not the only one. What is important,
which I think has already been discussed by the other
witnesses, is that what we care about is emissions and in
industry, a lot of time emissions intensity. How many emissions
are being produced every time you make a ton of cement or a ton
of steel?
That is really the factor that we care about. Policies that
are smart, that can target that kind of data point, emissions
intensity, but then allow industry to innovate and use whatever
tools are necessary to meet that target is really what is going
to help innovation the most.
It will help create this level playing field so that
innovators who are aiming for the most emissions intensity
savings stand to benefit the most because those are the
technologies that we are going to really need to transform the
heavy industry. Thinking about smart policies that incentivize
innovation is certainly helpful.
Senator Sullivan. Great. Those are great answers.
Mr. Chairman, thank you. I do think to the witnesses'
point, it is a great strategic advantage of America,
particularly relative to China. We can be doing that in a much
less carbon intensive way here and then exporting and beating
them at their own game.
Thank you, Mr. Chairman.
Senator Carper. Thanks so much for joining us and for your
questions. It will be interesting to hear what comes out of the
meeting today between President Biden and President Xi. We are
all ears.
We are about to wrap it up. Areas of agreement, a lot of
times folks in Washington, even in the Senate, focus on
disagreement. In this committee, we actually focus a lot more
on, where do we agree, or how can we find common ground and
build on that.
Let me start, if I could, with Dr. Ellis. What are some
major areas of agreement that you think you would like to just
emphasize for us in closing?
Ms. Ellis. Thank you. I think we can all agree that our
solutions are urgently needed and that they are very important.
This is also a massive opportunity for us to work together and
to really surmount this challenge and to create more jobs in
America, to reduce imports, to increase exports, and bring high
quality jobs back to old manufacturing towns with new
technology that is also clean and benefits the community more.
Senator Carper. Thank you.
Ms. Angielski.
Ms. Angielski. Thank you, Senator. I think what I would
like to say is that the time is now, especially as we think
about clean hydrogen. This industry needs to grow and it needs
to grow very rapidly if it is going to be able to play the role
that it needs to play as a decarbonization solution.
This is a very large, complex ecosystem. The industrial
sector is a very large, complex ecosystem. Clean hydrogen is
only one aspect of that, but it touches many industries and
many sectors.
For the solution to be able to be used and achieve
decarbonization objectives, I think much of the policy that we
have in place, thanks to you and others in Congress, that will
be a great starting point. We need to continue to work together
in looking at policy for making sure that ecosystem can grow
and enable clean hydrogen to serve the role that it is supposed
to.
Senator Carper. Good. Thank you.
Batting cleanup, Ms. Regitsky.
Ms. Regitsky. Thank you, Senator. I would certainly agree
with what Dr. Ellis and Ms. Angielski have already mentioned on
the opportunity that industrial decarbonization brings for
American workers, for the American economy, for really the
competitiveness of American industry internationally, as well
as all the community and health benefits as well that will come
along.
The time certainly is now, we have policies in place,
thanks to Congress, that are really getting the ball rolling
but we will need much more. This is really going to be a
collaboration between the private sector and the public sector.
Innovation is really at the center of it all and really being
able to propel that innovation for these technologies to get us
to a net zero industry.
Senator Carper. Good. Thank you.
In closing, I want to thank each of you, all three of you,
two in person and one remotely. Thank you for joining us today.
Thank you even more for sharing your insights and your
perspectives on what I think we all realize is a hugely
important topic for not just the Congress, but for our Country
and for our planet.
To put it simply, we are all experiencing climate change
now through and increasingly devastating extreme weather events
throughout our planet. To slow climate change, we need to slash
greenhouse gas emissions and one third of the solution lies in
our industrial sector, one third.
Today, we have heard some good news. We do not always share
good news here, but today there is some good news. By investing
in clean, low, and zero carbon manufacturing, we are growing
back good paying jobs, American competitiveness and our
economy, as well as cleaning up local air pollution and
fighting the climate crisis. Today's hearing gives us a game
plan for what we must do going forward.
Before we adjourn, we have a little bit of housekeeping.
Senators who were here or not here are welcome to submit
additional questions for the record until the close of business
on Wednesday, December 6th. We will compile those questions, we
will send them over to each of our witnesses and we will be
asking the three of you to reply to us by Wednesday afternoon,
December 6th. No, not really. You will have you have until
Wednesday, December 20th, two full weeks for some really good
answers. You have given us some really good answers already and
we applaud each you very much.
Thanksgiving is coming up. It is one of my favorite
holidays. I think it is one of our favorite holidays in
America.
I hear a lot of people say, it has never been this bad, it
has never been this bad on our planet, in our Country, or
whatever. I always remind them that things have been a lot
worse. We had a civil war. We lost a million men. We followed
that up with two world wars, the Great Depression, when one out
of every four people didn't have a job that wanted a job. We
took on communism. We have been through worse than this.
To the extent that we can pull together, share ideas, find
ways to harness technology, and really create economic
opportunity out of the technology that we are talking about
here with clean hydrogen, there is a lot to be happy about and
to look forward to.
So we will compile the questions and send them to you and
look forward to your responses to them by December the 20th.
With that, a very happy Thanksgiving coming up and I look
forward to seeing you on the other side. Thanks much.
With that, this hearing is adjourned.
[Whereupon, at 12:07 p.m., the hearing was adjourned.]
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