Going Green: Biden Administration Kick Starts Green Procurement Efforts
On February 15, 2022, the Biden-Harris administration took another step towards its goal of achieving a net-zero carbon emissions economy by 2050, announcing a slew of new initiatives to support "clean" manufacturing and reinvigorate the American industrial sector. The administration believes these initiatives will "clean up industrial processes that have long been challenging sources of pollution; create good-paying, union jobs across American manufacturing; and use domestic procurement and global trade policy to reward clean, American-made materials." Government contractors in the industrial sector will want to consider how their businesses may be impacted by the federal government's prioritization of low-carbon materials and technologies and how they can remain competitive in light of these new initiatives and policies.
Below we highlight some of the key new efforts including policies aimed at accelerating the production and use of clean hydrogen, Buy Clean procurement efforts, trade policies to reward clean manufacturing, and investments in technologies that can reduce greenhouse gas emissions from heavy industry. Some of these new initiatives seek comments from industry stakeholders.
Accelerating Clean Hydrogen
The administration views clean hydrogen as an integral part of its plan to reduce emissions in many sectors of the American economy and is particularly important "for hard-to-decarbonize sectors and industrial processes, such as steel manufacturing." To bolster the use of clean hydrogen, the Department of Energy (DOE) is launching three new clean hydrogen initiatives of the Bipartisan Infrastructure Law (BIL) by issuing Requests for Information (RFI). These RFIs seek public input from industry players and impacted communities on "future implementation and priorities" for DOE to consider when implementing the clean hydrogen programs of the BIL:
- $8 billion for Regional Clean Hydrogen Hubs: The BIL authorizes appropriations of $8 billion for the development of regional clean hydrogen hubs that demonstrate "the production, processing, delivery, storage, and end-use of clean hydrogen." DOE will support the development of networks of clean hydrogen hubs and prioritize hubs that can "provide significant training and long-term job opportunities." The deadline for comments is March 8, 2022.
- $1 billion for a Clean Hydrogen Electrolysis Program: The BIL authorizes appropriations of $1 billion to reduce the cost of clean hydrogen produced using electrolyzers. This program seeks to lower the costs of electrolysis technologies by supporting the entire innovation chain, from research to deployment. The deadline for comments is March 29, 2022.
- $500 million for Clean Hydrogen Manufacturing and Recycling Research, Development, and Demonstration Activities: The BIL authorizes appropriations of $500 million to DOE for Clean Hydrogen Manufacturing and Recycling Initiatives. DOE is launching the Clean Hydrogen Manufacturing program to support domestic manufacturing of clean hydrogen equipment and the Clean Hydrogen Recycling Research, Development, and Demonstration program to "support innovative approaches to increase the reuse and recycling of clean hydrogen technologies." The deadline for comments is March 29, 2022.
Launching "Buy Clean" Procurement Task Force
As outlined in our previous alert, the administration is creating a Buy Clean Task Force to provide recommendations on policies and procedures to promote the purchase of construction materials with lower embodied emissions and pollutants. The Task Force is established by the Council on Environmental Quality and White House Office of Domestic Climate Policy. It includes as members the Departments of Defense, Energy, and Transportation, the Environmental Protection Agency (EPA),. the General Services Administration (GSA), and the White House Office of Management and Budget. The now-established Buy Clean Task Force is convening to develop recommendations on how to increase the use of low-carbon construction materials.
GSA and the Department of Transportation (DOT) are also undertaking new Buy Clean efforts to support the use of low-carbon materials in federally funded construction projects. GSA issued two RFIs to gather information from industry on sustainable, low-emission concrete and asphalt to shape standards for upcoming land port of entry projects funded by the BIL. DOT is creating a new pilot program that will target key products and services to incentivize the use of low-carbon materials and increase the use of Environmental Product Declarations on federal transportation projects.
The administration is also expanding the coverage of the First Movers Coalition — a public-private partnership led by the State Department through the U.S. Special Presidential Envoy for Climate which was created to secure corporate purchasing commitments for low-carbon materials beginning with "steel, shipping, trucking, and aviation." According to the administration's February 15 announcement, the First Movers Coalition will expand to cover four additional sectors in 2022: aluminum, cement, chemicals, and carbon removal.
Using Trade Policy to Reward Clean Manufacturing
The administration's announcement reiterates its plan to use trade policies to reduce carbon emissions and support domestic manufacturers of clean steel and aluminum. In October 2021, the United States and European Union announced their plan to negotiate the "world's first emissions-based sectoral arrangement on steel and aluminum trade by 2024." Currently, the United States and EU are working to align their trade policies to "restrict access to their markets for dirty steel and limit access to countries that dump steel in both markets" with the goal of increasing investment in green steel and aluminum production in the United States, Europe, and beyond.
Responsibly Advancing CCUS Technologies
The Council on Environmental Quality (CEQ) is issuing new guidance on the responsible use of Carbon Capture, Utilization, and Sequestration (CCUS) technologies that can reduce emissions and help fulfill the administration's goal of achieving a net-zero emissions economy. The guidance covers the following issues:
- Environmental reviews for CCUS projects
- Environmental justice and equity considerations to protect communities from cumulative pollution impacts
- Public engagement and Tribal consultations from early in the contracting process
- Opportunities to create union jobs and training programs
- Life cycle analyses of carbon capture and utilization and carbon dioxide removal projects
This guidance, directed at the federal agencies responsible for implementing more than $12 billion in CCUS investments, will help ensure that the advancement of CCUS technologies is done in a responsible manner that considers "community perspectives" and is aligned with the best available science. The deadline for the public to submit comments on the guidance is March 18, 2022.
Supporting Equitable Innovation Across the Industrial Sector
The administration is launching a new Initiative for Interdisciplinary Industrial Decarbonatization Research to ensure that innovations in the industrial sector support the needs of diverse stakeholders and equitably advance innovation. The Initiative will be focused on ensuring a "just transition to clean industry, with new, good-paying jobs for American workers and health and economic benefits for communities."
The announcement also details how DOE is working to establish the Industrial Technology Innovation Advisory Committee (ITIAC) to bring together entities from across the industrial sector to "find viable decarbonization pathways that will equitably benefit the industrial workforce and surrounding communities." DOE has issued an RFI that seeks information on emerging technologies to reduce emissions and increase competitiveness. Responses are due by February 28, 2022.
Conclusion and Takeaways
The February 15 announcement outlines an ambitious and far-reaching plan across agencies to create a cleaner industrial sector. The administration sees the industrial sector as "central to tackling the climate crisis" and believes that its support of "cleaner industry" will create the "next generation of products and materials for a net-zero economy." Many of the new initiatives could significantly impact federal contractors in a number of ways, including increasing supplier reporting requirements and creating new opportunities for manufacturers offering low-carbon materials and technologies.
Contractors will want to carefully consider how their businesses fit into this new procurement landscape to put themselves in the best position to compete for future contracts. Contractors, industry groups, and trade associations should also consider submitting comments in response to the recently issued RFIs to ensure that their views on these new policies and initiatives are considered. We will continue to monitor and report on any developments in climate-centric procurement policies and initiatives. In the meantime, if you have any questions about the announcement or how it will impact your company, please contact the Miller & Chevalier attorneys listed below:
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