{"id":23065,"date":"2023-03-28T13:35:49","date_gmt":"2023-03-28T18:35:49","guid":{"rendered":"https:\/\/blogs.edf.org\/climate411\/?p=23065"},"modified":"2025-12-03T11:13:48","modified_gmt":"2025-12-03T16:13:48","slug":"doe-announced-its-largest-ever-investment-in-decarbonizing-industry-heres-how-it-addresses-key-challenges","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/climate411\/2023\/03\/28\/doe-announced-its-largest-ever-investment-in-decarbonizing-industry-heres-how-it-addresses-key-challenges\/","title":{"rendered":"DOE announced its largest-ever investment in decarbonizing industry. Here\u2019s how it addresses key challenges."},"content":{"rendered":"

This blog was co-authored by Natasha Vidangos<\/strong><\/a>, Senior Director, Climate Innovation and Technology.<\/em><\/p>\n

Decarbonizing industry is a critical step to stabilize our climate. The sector can be tough to get a handle on \u2014 it\u2019s on track to become the largest-emitting sector within the next couple of decades, and it involves the production of a wide variety of goods, from cement, steel, and chemicals to food and beverages. Historically, heavy industry is also a significant source of local pollution, often leading to direct harm to nearby communities, which tend to be communities of color. This complex yet critical piece of our economy needs a transformation \u2014 one that leverages cleaner and more efficient energy and processes while establishing mechanisms to ensure better outcomes on the ground. Identifying, developing and deploying transformative solutions is not an easy task: It requires innovative ideas, ambitious plans and investments, and coordination across a diverse set of stakeholders. Federal support is crucial for testing and validating these new technologies in a real-world setting, reducing the barriers to safe and effective adoption.<\/p>\n

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We recently discussed<\/a> a new DOE program \u2014 the Advanced Industrial Facilities Deployment Program (AIFDP)<\/strong> \u2014 that seeks to do just that, and we shared a number of recommendations about the program emphasis and structure in parallel with some of our partners<\/a>. Now is the moment of truth \u2014 on March 8, DOE\u2019s new Office of Clean Energy Demonstrations (OCED) published the Funding Opportunity Announcement (FOA)<\/a> for $6 billion in programming for industrial decarbonization. How did the office decide to set up the largest federal investment in the U.S. industrial sector in history? (And did they take our advice? On the whole, yes.)<\/em><\/p>\n

To get specific, the announcement marks the launch of two key federal programs \u2014 (1) a $500 million \u201cIndustrial Emissions Demonstration Projects\u201d program funded in the Infrastructure Investment and Jobs Act (IIJA) and (2) the $5.8 billion AIFDP. Both seek to transform emissions-intensive processes at industrial facilities across the U.S. by funding early-of-a-kind deployments of \u201cadvanced industrial technology\u201d like energy efficiency improvements, industrial electrification, low-carbon fuels, feedstocks (materials that can be converted into fuel or products) and energy sources. These programs have the broadest mandate that could handle different needs across multiple sectors. If implemented well, these programs may fill a major gap in the innovation pipeline, funneling a variety of promising solutions from the laboratory bench to the market.<\/p>\n

What do these programs do? And how do they address the key challenges we identified in our last blog<\/a>? Let\u2019s take a look.<\/p>\n

Challenge 1: Ensuring positive outcomes for communities.<\/h3>\n

On this point, DOE is taking community benefits plans seriously. Like in their Hydrogen Hubs programs, DOE notes that 20% of the proposal rating will be determined by the quality of a project\u2019s community benefits plan \u2014 requiring letters of support for the project from community members and valuing the inclusion of a binding community benefits agreement. Such concrete rating of community engagement is new territory for the Department. The program is also a part of the Justice40 initiative, which dictates that 40% of program benefits should accrue to disadvantaged communities. The Department is also seeking feedback from equity and justice experts as formal program reviewers.<\/p>\n

This is a welcome and necessary emphasis. But there are many devils in the details to get these plans right, and much more work is needed to ensure applicants develop authentic partnerships with local communities around these projects. It means the projects need to be iterative and responsive to community needs at an early stage \u2014 the one-way street of \u201clistening\u201d and \u201cengaging\u201d is not enough \u2014 project developers need to be responsive partners. It also requires recognition that community impacts will go beyond the community benefits plan \u2014 it’s not a box-checking exercise.<\/p>\n

High-quality community engagement is a complex undertaking, and DOE will be setting the standard on what is considered \u201cgood enough\u201d for these projects \u2014 a role that is unusual in DOE\u2019s history and an enormous responsibility. It will require a lot of new expertise, deeper partnerships and the ability to make project development more iterative and responsive from the very beginning. All this will require more transparency than DOE has historically shown in their project awards. This is a space to watch.<\/p>\n

Challenge 2: Getting the right balance between transformation and assured progress.<\/h3>\n

We believe the greatest value of this program is in delivering transformational, big-bet leaps forward. However, there is also value in these programs demonstrating low-risk, smaller wins, too. The FOA strikes a balance, designating three \u201cTopic Areas\u201d to be funded under these programs:<\/p>\n