The State Industrial Policy Playbook  A Policy Guide for Low-Emission Heavy Industry

The report outlines a comprehensive toolkit for U.S. states to decarbonize heavy industry, emphasizing a combination of financial incentives, demand-side market policies, and regulatory reforms. It identifies four critical subsectors—petroleum refining, chemicals, cement, and iron and steel—which together account for approximately 40 percent of U.S. industrial emissions. The guide details technology pathways including electrification, CCUS, and alternative production processes, while providing case studies from Missouri, Louisiana, and Colorado to illustrate effective state-level implementation of these strategies.

• The U.S. industrial sector is a significant source of pollution, responsible for approximately 12 percent of harmful air pollutants and 23 percent of greenhouse gas (GHG) emissions, a figure that rises to around 30 percent when indirect emissions from electricity use are included.
• Four industrial subsectors—petroleum refining, chemical manufacturing, cement, and iron and steel—are identified as critical targets for decarbonization because they account for about 40 percent of total U.S. industrial emissions.
• Deep decarbonization requires a portfolio of technologies: electrification (mature for steel EAFs but emerging for cement/chemicals), CCUS (critical for process emissions), alternative production processes (such as H2-DRI), feedstock substitution, alternative fuels, and energy/materials efficiency.
• Federal investments via the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) catalyzed $142 billion in projects, but recent legislative actions like H.R.1 have rescinded unobligated funding and accelerated the phase-out of certain tax credits, increasing the importance of state-level leadership.
• States can drive innovation through financial tools including property, payroll, or income tax credits, investment tax credits, accelerated depreciation, and state-backed insurance guarantees to de-risk high-risk technologies.
• Demand-side policies such as Environmental Product Declarations (EPDs), Contracts for Difference (CfDs), preferential bidding, and embodied emissions standards are essential to create viable markets for low-carbon materials.
• Regulatory streamlining, including the establishment of 'one-stop' permitting offices and the creation of energy corridors or industrial development districts, can reduce project delays and attract investment.
• Louisiana has leveraged regulatory primacy over Class VI underground CO2 injection wells to attract $23 billion in announced CCUS investments and project 4,500 new jobs.
• Colorado's industrial policy portfolio, which includes a mandate to reduce industrial GHG emissions by 20 percent by 2030 and $168 million in refundable tax credits, resulted in $1.7 billion in project announcements and 4,900 new jobs between 2022 and 2024.
• Missouri is utilizing the U.S. EPA’s Climate Pollution Reduction Grant (CPRG) program to target cement decarbonization through a framework that encourages public-private collaboration for clean heat and fuel-switching.

APA

Bailey, S., Tarr, J., & Phillips, L. C. (2025). The State Industrial Policy Playbook  A Policy Guide for Low-Emission Heavy Industry. Clean Air Task Force. https://www.catf.us/resource/the-state-industrial-policy-playbook-a-policy-guide-for-low-emission-heavy-industry/

Chicago

Bailey, Sam, Jeremy Tarr, and Lindsay Cooper Phillips. The State Industrial Policy Playbook  A Policy Guide for Low-Emission Heavy Industry. Clean Air Task Force, 2025. https://www.catf.us/resource/the-state-industrial-policy-playbook-a-policy-guide-for-low-emission-heavy-industry/.

Wikipedia

{{cite report |last1=Bailey |first1=Sam |last2=Tarr |first2=Jeremy |last3=Phillips |first3=Lindsay Cooper |title=The State Industrial Policy Playbook  A Policy Guide for Low-Emission Heavy Industry |publisher=Clean Air Task Force |date=14 October 2025 |url=https://www.catf.us/resource/the-state-industrial-policy-playbook-a-policy-guide-for-low-emission-heavy-industry/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bailey2025state, author = {Bailey, Sam and Tarr, Jeremy and Phillips, Lindsay Cooper}, title = {{The State Industrial Policy Playbook  A Policy Guide for Low-Emission Heavy Industry}}, institution = {Clean Air Task Force}, year = {2025}, month = oct, url = {https://www.catf.us/resource/the-state-industrial-policy-playbook-a-policy-guide-for-low-emission-heavy-industry/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }