Government Incentives for Low Carbon Construction Materials Are Great, but Not Enough • Propmodo

The global decarbonization movement continues to move forward despite the obvious setbacks it will face with the incoming U.S. president. Slashing building emissions is one of the top priorities. Cities like New York passing landmark legislation to sharply reduce the greenhouse gas emissions its one million buildings produce every year. Other cities, like Boston and Kansas City, are implementing sustainable design into their building codes.

The Biden administration has made some big moves to advance decarbonization in buildings, and its incentive programs have focused on low-carbon construction materials used in projects in the transportation sector. The construction sector is an often overlooked but important part of the decarbonization movement, especially given the amount of embodied carbon that construction contributes to global emissions, and it could certainly help make a difference in reducing the industry’s carbon footprint. But experts say while these new incentives are a step in the right direction, there’s a lot more that could be done.

The U.S. Department of Transportation (DOT) has been making a big push to reduce the environmental impact of the transportation sector. As part of that initiative, DOT has promoted the use of green construction materials on transportation development projects in an effort to slash greenhouse gas emissions created during the construction process. “We often talk about the amount of GHG that is produced by our transportation system, but our construction system produces a lot of GHS as well,” said Federal Highway Administrator Shailen Bhatt, who added that nearly 10 percent of GHG worldwide is produced by the construction sector. “And so for us to be able to introduce low-carbon materials that perform at the same level as regular materials is a huge opportunity.”

Earlier this year, the Federal Highway Administration (FHWA) announced it would be designating $800 million through the Low-Carbon Transportation Materials Grants Program for state DOTs and other agencies that engage in transportation projects and activities to reimburse road builders for using low-carbon materials. These kinds of materials—like green concrete and steel—often come at a higher cost and are more difficult to procure due to having to set up a supply chain. The program is meant to help incentivize and help those who want to use low-carbon materials. Funding for the program comes through the Inflation Reduction Act, which was passed in 2022 and is being administered by the FHWA. Grants are provided to agencies to cover the cost difference of using materials with significantly lower levels of embodied greenhouse gas emissions than traditional products.

In a related move, the Environmental Protection Agency (EPA) recently announced a new plan to add labels to green construction materials in order to help buyers of the products be able to more quickly discern climate-friendly construction materials for federal projects. It’s part of the Biden administration’s Federal Buy Clean Initiative, a policy created in 2021 aimed at using the federal government’s enormous purchasing power to expand and grow the market for American-made green building materials. Around the same time, the EPA announced close to $160 million in grants to support the clean manufacturing of steel and other construction materials in the U.S. The grants support the Buy Clean Initiative,

The market for low-carbon construction materials has grown by leaps and bounds in recent years, driven by momentum toward clean energy and reducing carbon emissions. Some of the most commonly used construction components are even going green. Green steel, which is steel produced using renewable energy or by other methods with a lower carbon footprint, has gotten a lot of attention lately, especially as some of the country’s largest steelmakers, like Nucor, are electrifying their furnaces in an effort to slash energy use. Concrete, another staple of many construction projects, has also been the subject of innovation lately. There are a handful of companies that are creating low to zero, even carbon-negative concrete. Under the right conditions and when building at scale, prefabricated modular construction systems use less waste and contain less embodied carbon than conventional construction materials.

Programs like the Buy Clean Initiative and the EPA’s labeling program, as well as the new funding for low-carbon materials in the transportation sector, are good news for the construction and building industries, but many in the sector believe there’s so much more that can be done. “It’s rapid change, yet frustratingly slow,” said Sara Neff, Head of Sustainability for Lendlease Americas. The obstacles to more widespread adoption of materials are centered around the supply chain for these products, awareness and understanding of the materials, and, of course, costs.

Neff’s firm has been working on a major residential project along the Brooklyn waterfront in New York City. The development, 1 Java Street, which will have 934 mixed-income rental apartments and 13,000 square feet of retail space, has a slew of sustainable features, including its own geothermal heating and cooling system built underground. Low carbon concrete was used to build the project and was made possible by removing 40 percent of the Portland cement in the concrete with recycled glass “pozzolan,” glass that would have otherwise been discarded but is instead ground up and used in a concrete mixture. Pozzolan also reduces the permeability of concrete, further strengthening the foundation and allowing developers to remove an expensive additive called silica fume that would have been added to decrease the permeability. Using the pozzolan allowed Lendlease to offset the cost of the silica fume and significantly reduce the embodied carbon emissions of the project.

In many places, connecting developers to low-carbon materials isn’t happening because the supply chain doesn’t exist yet to supply the products. However, there is demand for the materials, and Neff and others in the industry hope that the Department of Energy’s Loan Program Office and Industrial Grant program can help. Both provide funding for the materials manufacturers, but Neff sees the loan program as mostly going to solar and wind companies. Those on the development side are trying to connect the federal funds with manufacturers in the low-carbon materials sector. “For example, pozzolan is great, but I can’t get it in California because it’s not made here yet,” Neff said. “Funding from the DOE Loan Program Office for a recycled glass pozzolan manufacturer would allow me to use pozzolan in California for my next project.”

Whether Trump rolls back some of the decarbonization laws in the U.S. or not, moving the needle on getting developers to use more low-carbon materials will create more awareness of the products on the development side and strong demand. It will also take a lot of capital in the form of investment by the material manufacturers. That means they need to know they will see a return on their investment. Increased demand for low-carbon materials might end up being the most impactful lever going forward. “What the Department of Energy Loan Program Office folks have said loud and clear was that in order to get loans, companies need to have the demand on the other side,” Neff said. “The people who are making low-carbon concrete need to know that there’s a company on the other side willing to buy it.”

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