Heavy industry and transport are responsible for nearly 30 percent of global carbon emissions, which is why bringing clean solutions to these industries is a must if we are to avoid the worst effects of climate change. It means making significant progress across critical sectors such as steel, aluminum, cement, chemicals, aviation, shipping, and trucking. Massive scale is needed: meeting the Paris Climate Agreement goal of holding global temperatures below 1.5°C requires building more than 700 net-zero industrial projects by 2030 and purchasing 7 million zero-emissions trucks by 2030.

That’s why RMI and the Mission Possible Partnership, in collaboration with the Bezos Earth Fund, are working to create clean industrial hubs. Clean industrial hubs bring together project developers, policymakers, financial institutions, and community-based organizations to support regional clusters of industrial decarbonization projects.

The United States is a leader in industrial decarbonization, with 90 commercial scale net-zero aligned projects in various stages of the global pipeline from publicly announced to reached final investment decision (FID) to operational, plus an additional 100 plus projects in the pilot or demonstration phase. While the status of future funds are unclear, grants and other federal funding mechanisms have already played a major role in catalyzing US decarbonization. For example, the Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) provided substantial grant funding, loan programs, tax incentives, and subsidies for clean energy and low-carbon technologies. These resources directly support project development across heavy industries.

The success of US industrial decarbonization relies on technological advancements, particularly in electrification, green hydrogen, and carbon capture, utilization, and storage (CCUS). The market need for these innovations is driving momentum within the United States. Of the combined 200 announced projects across heavy industry and transport sectors in the United States, the majority are currently in the early development stages. Bringing these projects to FID and driving meaningful emissions reductions requires supportive regional policy, infrastructure, and financing.

In the United States, approximately 65% of identified projects being monitored are concentrated in California and the Gulf Coast (specifically Texas and Louisiana), two regions with distinct advantages driving their decarbonization efforts. In California, favorable policies and an abundance of renewables drive the success of decarbonization in the cement and heavy transportation industries. Meanwhile, the Gulf Coast benefits from a robust hydrogen infrastructure that enables significant advancements in decarbonizing heavy industry and transport sectors like steelmaking. The scale and success of these projects demonstrate the potential for broader implementation across the country.

California – Leading with Policy, Renewable Energy, and Investments

California’s robust policy framework, abundant renewable resources, and strategic investments in emerging technologies set the pace for industrial decarbonization in the United States. These factors have positioned California to be a leader in aviation, cement, and hydrogen, with more than 10 industrial decarbonization projects in the global project pipeline already reaching FID or Operational and 20 more in early-stage development.

California’s supportive policy is a key factor in its growing decarbonization project pipeline. The state’s Net Zero by 2045 commitment provides a roadmap for reducing emissions to 85 percent below 1990 levels, with the remainder neutralized by carbon sequestration. Industry-specific legislation, such as SB 596, supports this ambitious goal by mandating that cement producers reduce their emissions by at least 40 percent below 1990 levels by 2030.

California accounts for one-third of all current and planned US cement decarbonization projects, aligning with these ambitious goals.  For example, in April 2024, Forterra opened North America’s first green cement facility in Redding, California. This facility captures carbon emissions from cement production and sequesters it into usable cement through mineralization, effectively locking away the emissions in a stable product. Additionally, there are four other California-based cement projects focused on innovations including carbon capture and storage and alternative binding materials to lower the carbon intensity of clinker — the most emissions-intensive component of cement.

Renewable energy also plays a pivotal role in California’s decarbonization efforts, supplying 58 percent of the state’s electricity. This clean power supports the electrification of energy-intensive industrial processes and enables green hydrogen production through electrolysis, a process that splits water into hydrogen and oxygen using electricity.

California is making strategic investments in hydrogen infrastructure to decarbonize industrial sectors. A key initiative driving this effort is the California Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES), a $1.2 billion public-private partnership focused on building networks of hydrogen producers, consumers, and connective infrastructure. Among the projects supported by ARCHES, there is a notable partnership between Cadiz and RIC Energy to build the largest green hydrogen facility in the Mojave Desert, positioned to fuel zero-emission transportation and industrial operations.

California’s holistic approach — integrating policy, renewable energy, and strategic investment — positions the state to meet its ambitious goals and serves as a model for future decarbonization efforts.

US Gulf Coast – Building on Hydrogen

The US Gulf Coast, specifically Texas and Louisiana, approaches decarbonization differently from California, capitalizing on its existing hydrogen infrastructure and end-use assets in heavy industry and transport sectors like steelmaking, green ammonia production, and chemicals refining. Texas and Louisiana are home to one-third of US hydrogen production and more than 1,000 miles of hydrogen pipelines. It is estimated that this region could provide around 60 percent of the US hydrogen supply in the coming years. More than 100 clean industrial projects have been announced in Texas and Louisiana, primarily focusing on decarbonizing chemicals, aviation, steel and aluminum, and cement. The recently designated HyVelocity Hub in Texas, one of the DOE’s regional clean hydrogen hubs, will further the region’s role as a leader in hydrogen production and help support these sectors reduce emissions.

The region’s network of hydrogen pipelines, storage facilities, and industrial clusters facilitates the decarbonization of industrial processes such as iron and steel production. The Department of Energy’s Industrial Demonstrations Program (IDP) funded six iron and steel projects in March 2024, with four based in the Gulf Coast. One project, led by Vale USA, aims to build a first-of-its-kind low-emissions iron ore briquette facility in Louisiana. It will use an innovative, alternative feedstock that is estimated to help the facility reduce carbon emissions by up to 60 percent and reduce sulfur oxides by roughly 99 percent, improving the air quality in the surrounding areas. The US Department of Energy is cost-sharing with Vale USA up to $282 million.

While the Gulf Coast demonstrates significant potential for decarbonization, persistent challenges highlight the complexities of scaling these efforts. A project led by SSAB and Hy Stor recently withdrew from negotiations with the US Department of Energy. These types of projects face obstacles to reaching FID, including high hydrogen production, storage, and distribution costs, and uncertainty around IRA hydrogen tax credits. These obstacles are not unique to the Gulf Coast — they reflect the broader, systemic challenges hindering industrial decarbonization across the United States, including prohibitive capital costs, permitting delays, and insufficient policy support.

Amplifying Industrial Decarbonization

Despite an unclear policy environment ahead, policymakers, financiers, and industry leaders must collaborate to address key obstacles to US  decarbonization, such as an aging, fossil-fuel-dependent grid and insufficient demand for green industrial products. Amplifying California’s and the Gulf Coast’s success across the country will require supportive policies at all levels, strategic investments in renewable energy resources, and tailored regional strategies that capitalize on local strengths. Tracking progress and expanding these efforts nationwide will enable the United States to drive the rapid, transformative change essential for global climate goals to secure a sustainable low-carbon future.

About Clean Industrial Hubs

The insights above come from RMI and the Mission Possible Partnership’s Clean Industrial Hub work in Los Angeles, California, and Houston, Texas that accelerates industrial and heavy transportation decarbonization in the region. Clean industrial hubs bring together policymakers, financial institutions, project developers, and community-based organizations to enable groundbreaking decarbonization projects in heavy industry and transport sectors. RMI and MPP’s analyses, convenings, and tools support stakeholders working to advance zero-emissions trucking, low-carbon cement plants, clean hydrogen, sustainable aviation fuel, and decarbonized ports, by increasing the size, scale, and speed of critical climate investments that benefit the environment, the economy, and communities. This work is done in partnership with the Bezos Earth Fund.

Interested in learning more? Check out these resources:

• About Clean Industrial Hubs
• Mission Possible Partnership Global Project Tracker insights
• Report: Capturing the Benefits of Industrial Decarbonization for Houston and Beyond
• Article: Delivering Equitable and Meaningful Community Benefits via Clean Hydrogen Hubs
• Article: Three Federal Funding Pools Every Industrial Project Developer Should Know About
• Tool: Decarbonizing Industry Resource Tool (DIRT)