The Biden administration’s sprawling climate agenda may have a significant crack: concrete used for roads, buildings and water systems.
While Inflation Reduction Act tax credits are spurring breakneck growth in battery and other clean energy projects, a lack of incentives is hobbling plans to boost low and no-emissions cement production, according to some next-generation cement companies.
Leah Ellis, CEO of Sublime Systems, is aiming to produce first-of-its-kind cement with renewable energy and electrolysis, a chemical process that has garnered popularity in hydrogen production.
But new IRA tax incentives aren’t helping Sublime defray its operational costs. That’s because key industrial credits in the U.S. code don’t deliver for new “greenfield” manufacturing processes that avoid carbon emissions and instead prioritize retrofits to existing facilities, according to Ellis and other companies in the sector.
“There’s so much in this wave of clean tech 2.0 that’s coming out, and I think some of the most exciting things, in my opinion, are carbon avoidance technologies,” said Ellis, a battery scientist by training. “Legislation and policy are evolving, and it’s an active discussion. Some of the work around technology-agnostic carbon credits will be super important to level the playing field.”
In 2020, Ellis launched Sublime with Yet-Ming Chiang, a clean energy entrepreneur and materials sciences and engineering professor at the Massachusetts Institute of Technology.
The Sublime team tried — but was discouraged by the Department of Energy, according to the company — to seek a manufacturing tax credit called 48C rolled out by the Biden administration last year. The credit largely targets companies that want to expand or modify an existing facility, but Sublime’s planned cement plant in Holyoke, Massachusetts, is an undeveloped property and does not involve retrofits on existing infrastructure.
More tax credits for cement are also being pushed by the new Decarbonized Cement & Concrete Alliance (DC2), which includes Sublime and nine other startups. The alliance, launched earlier this month, backs credits that award “per dollar per kg of CO2 abated.”
Members of the group have begun to talk to congressional offices about tax policy, according to Simon Brandler, vice president of policy and public affairs at Brimstone, another DC2 firm.
A DOE spokesperson declined to comment on whether greenfield projects qualify for the 48C tax credit.
The department said in a statement that cement decarbonization is “one of the priorities identified” by the Biden administration, pointing to its industrial decarbonization program and grants for innovative projects.
High emissions
Since ancient Roman times, concrete has been one of the key building blocks of human progress. Historians say the Romans built the Pantheon dome with concrete more than two millennia ago.
In the past century, construction crews used concrete to build the interstate highway system and the skyscrapers that tower over U.S. cities. A recent study by the U.S. Geologic Survey found that New York City contains more than 750 million tons — or 1.68 trillion pounds — of concrete, glass and steel, causing the iconic metropolis to sink 1–2 millimeters a year as sea-level rise threatens low-lying areas.
But the concrete sector, which relies on cement production from carbon-rich limestone, is a major obstacle in the global effort to curb climate change. The sector is responsible for roughly 8 percent of global carbon emissions, a figure that’s set to balloon as much as 50 percent in the coming years if decarbonization efforts fail, according to the Global Cement and Concrete Association.
Despite the tax challenges, Ellis is bullish on her technology. She hopes Sublime will produce cement commercially by early 2026 by using electrolysis powered by renewable energy and noncarbonate rocks in place of limestone. Her company is one of a wave of new no- and low-carbon cement firms now sprouting up in the U.S.
“I do think that what we’re doing will be obvious in retrospect,” she said.
Experts say, however, the cement industry is lagging behind other parts of the broad industrial sector — traditionally referred to as “hard to abate” — in decarbonizing operations.
With some industrial operations, carbon capture is being positioned to slash emissions; hydrogen companies are aiming to fuel long-haul trucking; sustainable aviation fuel is gaining steam after a carbon-free commercial flight crossed the Atlantic last month; and the U.S. and Europe are moving ahead with a pact on green steel and aluminum.
Johanna Lehne, an expert with the environmental group E3G based in London, said although there’s “been a sense of movement” in many industrial sectors that have been hard to decarbonize, the “same can’t really be said about cement.”
‘Really tricky’
Concrete and cement — often used interchangeably by the public — are different but closely linked materials. Cement acts as a key ingredient in concrete and is produced with limestone, a rock that’s present in thousands of deposits across the United States.
To make traditional cement, limestone is mined and heated in a high-temperature kiln to form “clinker,” which is mixed with gypsum to create a powder known as cement. Then the cement is mixed with other materials like water and sand to form the concrete that provides stable foundations for infrastructure.
Cement kilns are powered by fossil fuels like coal that can achieve sufficiently high temperatures. As carbon-rich limestone breaks down, it releases CO2. All told, concrete production is 1 to 2 percent of economywide U.S. emissions, according to the Department of Energy.
“This is the really tricky thing with cement: You are talking about expansion that is, in many ways, a really positive thing from a development perspective and from a human livability perspective,” said Lehne. “But it’s incredibly dangerous from a climate perspective.”
The Biden administration wants to be a global leader in industrial decarbonization.
The Inflation Reduction Act offered $5.8 billion for industrial decarbonization demonstrations, a public investment figure that top DOE official David Crane recently speculated is unmatched worldwide.
Yet it’s unclear how much cement might benefit, as the funding is earmarked for the broad set of industrial technologies — including steel, glass and paper production — that account for nearly a quarter of all U.S. emissions.
A DOE spokesperson, Aaron Morales, said the department plans to make the award selections from the $5.8 billion industrial decarbonization program public early this year. Morales did not respond to E&E News requests for comment about the awardees.
The main cement lobbying group in Washington, the Portland Cement Association, is championing the demonstration program, which is designed to provide government seed money for commercial-scale demonstration projects.
“That industrial demonstration program at DOE and the money available there has the potential to be a real game-changer for us,” said Sean O’Neill, senior vice president of government affairs at PCA, which includes industry leaders like Argos and CRH.
In 2022, 98 U.S. cement plants produced nearly roughly 95 million tons per year of cement, according to a DOE report last year. That year, the U.S. used a total of 120 million tons. Studies show concrete is the most consumed material on Earth after water.
O’Neill said the industry is doing what it can to reduce emissions with the investment resources it has, including using alternative fuels to power production like natural gas, biomass and plastics — all of which emit some carbon, but less so than coal.
Meanwhile, Ellis said Sublime applied for grants from the demonstration program.
“That program is gonna be critical. It’s gonna have a legacy for creating made-in-America technologies that are going to spread globally,” she said. “We’re waiting eagerly to see if we’re one of the projects that are selected.”
Christina Theodoridi, an industrial sector expert with the nonprofit Natural Resources Defense Council, said because of the industrial decarbonization program, “we’re now starting to think about the opportunities that exist in very low-carbon cement production.”
“That’s not to say that what the IRA did for cement is enough. We definitely need a lot more,” Theodoridi said.
Carbon capture cash
Applications for the 48C credit, which is competitive and capped at $10 billion, were due late last month.
The credit is available for companies that reequip and expand a clean energy industrial facility, as well as those that “establish” such facilities. Some energy experts say that language in 48C — despite industry concerns — may still be an option for decarbonizing cement production.
According to DOE, selections for the credit will come by March 31.
Meanwhile, some startups like Fortera, which has a small pilot plant in Redding, California, are angling to produce low-emission cement this year with carbon capture equipment. After capturing the carbon, Fortera reinjects it back into the limestone, creating more end-use cement by weight, according to the company.
Despite industry concerns about 48C, Fortera’s operation makes it eligible for a different tax credit supported by the climate law. The company’s CEO, Ryan Gilliam, says it will be able to use a $60-per-ton carbon capture tax credit known as 45Q at a large commercial plant in the Midwest that is currently being designed, although it is unclear when it will be operational.
“We know that we can compete with traditional cement without a green premium,” said Gilliam. “The green premium really helps for early adoption to give a good enough return to take that tech risk to do these new plants.”
Gilliam said he’s “engaged” with all the major cement producers, which can install Fortera technology on existing infrastructure.
“The U.S. has really become the place to be if you want to bring a new clean tech to market. The IRA has really done that,” he said.
But many energy experts view carbon capture skeptically and O’Neill said the technology is still distant for the cement sector.
“45Q is critically important. For us in the industry, are we ready to take advantage of 45Q today? Not likely. We’re some years out,” said O’Neill.
Big cement producers in the U.S. like Cemex, a Mexican multinational and PCA member, are similarly cautious on carbon capture.
“It’s going to challenge for these projects to be economically feasible,” said Jerae Carlson, senior vice president of sustainability, communications and public affairs at Cemex. She pointed to permitting challenges for CO2 storage in underground caverns.
In 2022, Cemex partnered with European firm Coolbrook to electrify cement production. But Carlson is also skeptical on that front. “We would eventually love to see electrification come to the cement industry,” she said. “We do think there are challenges with it, in terms of the amount of electricity it would require, the sources of that electricity and whether or not they are clean sources, and also grid infrastructure.”
New policies for the sector are starting to emerge in the United States. NRDC’s Theodoridi touted the Concrete and Asphalt Innovation Act of 2023, a bill introduced last month by Sens. Chris Coons (D-Del.) and Thom Tillis (R-N.C.) that would increase research and development for low-emissions technologies in the sector. She also said government procurement programs will prove critical.
For now, Sublime appears to be the only U.S. company with the capacity to produce cement without fossil fuels.
There’s still a long way to go before that prediction becomes reality — if ever. But energy analysts say emerging technologies that cut cement emissions are vital for mitigating climate change.
“There’s a whole bucket of really exciting, really groundbreaking technologies around what you can do with electric kilns, electrolysis [and] completely new cement chemistries. Those are all at a much lower level of technology readiness,” Lehne said. “They definitely have to be part of the mix.”
