New York continues to lead on climate action. In her State of the State address, Governor Kathy Hochul made significant proposals to cut emissions. Her address came quick on the heels of the long-anticipated approval of a final “Scoping Plan,” in December, which charts a path to implement the Climate Leadership and Community Protection Act—the groundbreaking climate and equity legislation enacted in 2019. As part of developing a credible pathway to realizing the state’s ambitious climate commitments, policymakers now have the opportunity to capture billions in new federal incentives, grow the state’s clean industrial economy, and save and create good jobs through investing in industrial decarbonization.
To make real progress in the fight against climate change, it is critical that New York take action to reduce industrial emissions. Heavy industry—notably the manufacturing of metals, such as steel and aluminum, cement, chemicals, alongside a small number of additional emissions-intensive industrial subsectors—is responsible for 30 percent of U.S. greenhouse gas (GHG) emissions nationwide and 9 percent of emissions from New York State. Under current clean energy pathways, which focus largely on decarbonizing power, transportation, and buildings, industry is set to become the top source of U.S. GHGs within the decade. Purchases of these commodities from jurisdictions with less stringent climate rules can lead to significant imports of embodied carbon—emissions related to the production of materials that may or may not show up as part of the state’s emissions totals.
At the same time, industrial materials like steel, aluminum, and cement are critical for economic activity, including the transition to renewable energy and clean transportation. Steel is used in wind turbines, aluminum is in transmission wires and electric vehicles, and concrete (of which cement is the key binding ingredient) is the second-most widely used material on earth after water.
New York has a proud tradition of industrial manufacturing. It is a legacy steel state and a current producer of cement at Holcim’s plant in Ravena and at the Heidelberg plant near Glens Falls, and of aluminum at Alcoa’s facility in Massena. In fact, the Alcoa facility is one of the few primary aluminum smelters left in the United States and the only operating smelter in the United States that operates on hydropower.
Outside of Manhattan, manufacturing jobs in New York pay more on average than other private-sector, nonmanufacturing jobs: In 32 counties, manufacturing jobs paid on average at least $20,000 more than the average private-sector, nonmanufacturing job. As the third-largest economy in the nation, New York is also a significant purchaser of industrial materials.
Yet this critical sector has atrophied in the state; between 2001 and 2019, manufacturing employment in New York declined by nearly 37 percent, a significantly steeper decline than the national average. This trend is continuing: Just last year, Lehigh Hanson announced that it will close its cement plant near Glens Falls, which has been in operation since 1893—a decision that will cost the state 85 jobs.
There is tremendous need for action, but tremendous opportunity too. New funding from the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act has the potential to be game-changing for the industrial sector, including in states like New York. These bills include billions in incentives and tax credits to facilitate deployment of emissions-reduction technologies at industrial facilities and incentives to promote Buy Clean procurement policies, which prioritize government purchases of low-emissions construction materials for infrastructure projects.
These new investments in the industrial sector can create significant economic benefits. The industrial investments and Buy Clean provisions in the Inflation Reduction Act alone have the potential to create nearly 180,000 new jobs nationwide. At the same time, demand for low-carbon materials is growing as customers, manufacturers, and governments push for increased sustainability. New York has the opportunity to revitalize its industrial base by attracting this investment.
As New York moves to implement the governor’s priorities and act on the Scoping Plan, the state is uniquely suited to leverage massive federal investments for green industrial manufacturing.
To make this a reality, policymakers must develop a comprehensive green industrial manufacturing plan as part of the state’s larger climate agenda. As noted in the Scoping Plan, New York should implement policies to invest in production of clean materials like steel, aluminum, and cement—attracting federal incentives now on the table and bringing to bear additional state incentives for clean manufacturing. The state should also stimulate demand for the decarbonized outputs of those industrial facilities, leveraging its enormous purchasing power, and potentially bringing along large corporate buyers as well.
This plan must, at a minimum, meet the ambition of new federal programs in BIL and the Inflation Reduction Act, like the hydrogen hubs program and the Advanced Industrial Facilities Deployment program. These programs were created to accelerate efforts to commercially deploy transformative technologies to dramatically reduce industrial emissions. With these federal incentives and investments, it is now possible to finance first-of-its-kind retrofits of existing industrial facilities or build greenfield facilities that use emerging technologies to manufacture zero-emission industrial materials, like direct reduction of iron for steel production using green hydrogen, and the use of inert anodes for aluminum production.
We have models for high-impact New York state action to complement federal incentives. The Green CHIPS program built on federal support for semiconductor manufacturing to facilitate in-state advanced green manufacturing. It has already been a remarkable success and could be a model for green materials manufacturing in the state.
The state can also take steps to increase demand for low-emissions materials. As a first step, New York should build on the Low Embodied Carbon Concrete Leadership Act to set guidelines for state agencies procuring additional low-embodied-carbon materials, including steel and aluminum. The state should also use incentives for new building development to create additional private sector demand for low-embodied-carbon materials, potentially as part of Governor Hochul’s ambitious program to build 800,000 new homes by 2030.
With its strong climate commitments coinciding with the rollout of new and significant federal funding, New York has a unique opportunity to build out a comprehensive green industrial manufacturing policy that will help the climate while creating jobs. It should seize the opportunity.