Clean Industrial Hubs

Tackling Emissions in the Hard-to-Abate Sectors

Heavy industry and transport, which include cement, steel, aluminum, chemicals, aviation, shipping, and trucking, account for 23% of US greenhouse gas emissions and 30% of global greenhouse gas emissions. 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. Most of these projects will occur in regional industrial hubs where the physical, social, regulatory and economic infrastructure is in place to support rapid scale up. However, while hundreds of projects have been announced since 2022, as of April 2024 only 68 net-zero aligned plants are online, and another 42 projects have reached a final investment decision (“FID”). That means there are only five years left for 600 industrial decarbonization projects to be built.

Clean Industrial Hubs – A Regional Approach

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

Our regional-based approach to industrial decarbonization brings together industrial assets with social infrastructure – a hub – leveraging first-of-a-kind and other cutting-edge projects to achieve economies of scale and tipping points for decarbonization. Our hubs support model concentrates efforts in a defined geographical region through a two-pronged approach of (1) supporting decarbonization projects combined with (2) building an overall ecosystem of subnational policy, finance, infrastructure, and community engagement to improve outcomes and accelerate progress.

A hubs approach ensures replicability of projects at sufficient scale and provides a framework for similar interconnected initiatives in future and additional geographies. The approach also ensures focused attention from regulators, communities, and broader civil society on the coordinated development of individual projects needed to make a hub successful.

We’re starting in California and the Texas Gulf Coast

RMI and MPP, in collaboration with the Bezos Earth Fund, supported the acceleration of clean industrial hub development in Southern California and the Texas Gulf Coast.

California

California is a national leader in climate action with state mandates to achieve net zero emissions by 2045. Yet, California is the third largest industrial emitter in the United States, driven by the state’s refineries, heavy duty trucks, airports, and ports. In 2022, industrial facilities in California released more than 80 million metric tons CO2, 6% of all industrial emissions in the United States. In Southern California, our team works on heavy transportation and ports decarbonization, cement plant decarbonization, and industrial electrification.

Texas

Texas is the number one industrial emitter in the United States. In fact, in 2022, industrial facilities in Texas released more than 330 million metric tons CO2, 23% of all industrial emissions in the United States. The good news is, Texas also home to the majority of proposed industrial decarbonization and clean fuels development in the United States. To help heavy industries in Texas decarbonize, RMI and MPP analyzed future decarbonization pathways for heavy industry and the impacts on the electric grid from industrial electrification. Our work also focused on production and adoption of clean hydrogen and its derivatives to enable decarbonization in the shipping, steel, and aviation sectors. 

Developing Enabling Ecosystems for Industrial Decarbonization

Policy

RMI leverages its extensive experience at both state and federal levels to study the impacts of policy and regulatory environments on industrial decarbonization projects. Our policy team has experience developing tools for project developers to evaluate available incentives across a wide variety of state and federal programs, as well as experience evaluating and identifying areas for potential improvement of industrial facility permitting and midstream carbon dioxide and hydrogen infrastructure across both Texas and California. The team contributes its findings via thought leadership, convenings and support to other programs within RMI.

Finance

RMI works with financial institutions and project sponsors to reduce the cost of capital for first-of-a-kind clean industrial projects, with an initial focus on project finance for hydrogen in the US Gulf Coast. Our work involves 1) increasing the supply of capital by widening and deepening investor engagement in the hydrogen market and 2) increasing demand for capital by sharing insights from financial institutions with project sponsors to improve asset-level bankability. Our team conducts bespoke research, facilitates multi-stakeholder convenings, and runs "project finance roadshows.”

Community Engagement

The Community Engagement team leads bespoke capacity-building trainings and workshops on strategies and best practices to embed equity and inclusive, two-way community engagement in decarbonization efforts by clean energy and infrastructure project developers. Our experts have authored innovative analytical tools and thought leadership to advance best practices and learnings from recent energy and industrial projects for advancing responsive and meaningful community benefits plans and agreements. The Community Engagement team also facilitates multi-stakeholder convenings for meaningful, inclusive engagement with community-based organizations (CBOs), frontline and fence-line communities, Tribal entities, labor groups, and low-income, BIPOC communities that have been disproportionately overburdened by legacy pollution and historic underinvestment.

solar panels and wind turbines at sunset

Industrial Electrification

As a prominent lever for industrial decarbonization, electrification of industrial facilities plays a large part in RMI’s strategy for achieving emissions reductions across facilities ranging from port terminals and steelmaking facilities to buildings and transport. Our teams work cross-functionally with RMI’s other programs to consider clean energy availability needed for increased power baseloads associated with decarbonization of heavy industry and the broader regional economy.

oil pipeline

Midstream Infrastructure (Pipelines, Transmission)

RMI is assessing the regulatory and built infrastructure landscapes of hydrogen and carbon dioxide midstream networks across the western and Gulf Coast regions of the United States for demand optimization. Our teams have mapped regulatory requirements, potential production and demand centers, and proposed infrastructure to enable hubs connectivity within and between regions.

First-of-a-Kind and Next-of-a-Kind Project Support

RMI works with project developers to catalyze ambitious industrial decarbonization projects reaching a final investment decision (FID). Our work focuses on reducing emissions from aviation, shipping, trucking, cement, and steel by scaling clean hydrogen, e-methanol, e-ammonia, SAF, and electrification. Our team supports project developers with techno-economic analysis, decarbonization pathways modeling, stakeholder convening, policy analysis, and financial modeling.

Tools

Decarbonizing Industry Resources Tool (DIRT)

Look up federal and state incentives by industrial sector, type of incentive, location, and other features.

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Stakeholder Analysis and Mapping Tool (S.A.M.)

Creates insightful visualizations of stakeholder relationships and power dynamics for projects in all sectors, communities, and regions.

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Global Project Tracker

Global map tracking announced industrial decarbonization projects and developer progress toward FID.

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Resources (Blogs, Videos, and Articles)

RMI is developing resources including blogs, videos, and articles to support project developers, policymakers, financial institutions, and community-based organizations advance industrial decarbonization projects.

External Resources

Partners

 

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