New Report Calls for an Integrated National Strategy to Bolster US Clean Manufacturing and Avert Climate Change

June 21, 2021

WASHINGTON—Manufacturing may soon become the sector with the largest greenhouse gas emissions in the United States, yet national plans to achieve net-zero emissions have so far not focused on retooling manufacturing industries. A new report released today by the Information Technology and Innovation Foundation (ITIF), the Boston University Institute for Sustainable Energy (ISE), and Fraunhofer USA’s Center for Manufacturing Innovation (CMI), calls for an integrated national strategy to address the twin challenges of bolstering the U.S. manufacturing sector and averting climate change. Timely federal RD&D and deployment policies targeted to specific manufacturing industries could create competitive advantage, expanding domestic investment and employment.

“Manufacturing must play a central role in any successful climate policy, and the government should offer adequate policy support for domestic producers to innovate, reduce costs, and improve performance,” said David M. Hart, director of ITIF’s clean energy innovation policy program and co-author of the report. “If policies fall short, the nation may face difficult trade-offs, either lagging behind international competitors that can shift to cleaner, cheaper production more quickly, or bearing higher costs. These risks and costs could ultimately impact public support for policies driving the low-carbon transition.” 

The report identifies four examples of industries where the U.S. could unite manufacturing and climate policy to increase competitiveness while fighting against climate change:

  • Clean hydrogen production, which will become a core sector of the global low-carbon economy. Focused policies could enable significant domestic investment and job creation, both in the industry itself and in hydrogen-using industries like steelmaking.
  • Next-generation heat pumps, novel drying technologies, and related innovations, that will be in high demand worldwide to cut emissions from buildings and low-temperature industrial processes. Smart, targeted policies could bring more of their production onshore.
  • Clean chemical manufacturing, which will require innovations in recycling and bio-based production. A well-funded and coordinated national program could convert U.S. strengths in this industry into durable advantages and large rural investments. 
  • Biotechnology-based proteins, that could displace emissions from agriculture. The United States is a global leader in this emerging industry, and a robust federal policy could help secure that position.

“Success is not guaranteed in any of these industries, but they will all need support from the private and the public sectors, increased R&D and demonstration funding, and policies that maximize investment and stimulate demand,” said Henry Kelly, senior fellow at the Boston University Institute for Sustainable Energy and co-author of the report. “An integrated climate and manufacturing strategy, tailored to the opportunities and barriers that each industry faces, would give the United States a chance to claim global leadership on climate, strengthen its manufacturing base, and create rewarding jobs.”