The Importance of Investing in American Industrial Innovation

If you are unfamiliar with the U.S. manufacturing sector, then you may not know that America already produces some of the cleanest steel in the world, boasting the lowest amount of carbon dioxide (CO₂) emissions per ton of steel produced. This is largely because about 70 percent of U.S. steel is made with recycled scrap-also called secondary steel-and processed using electric arc furnaces (EAF), a typically lower carbon-intensive process than the other most common method relying on blast furnaces or basic oxygen furnaces.

Additionally, the U.S. relies largely on natural gas to power its processes, unlike many other steel-producing countries like China, which rely mainly on more carbon-intensive coal. With growing global demand for raw materials such as steel needed for construction, transportation, machinery and the energy transition, countries like the U.S. must continue to lead global trends toward decarbonization.

Using an electric arc furnace (EAF), as shown here, to produce steel results in a lower carbon intensity product compared to traditional blast furnaces, because scrap steel can be directly melted down as opposed to other methods which rely on chemically reducing iron ore. Credit: Nucor

Clean manufacturing under fire

Through the Biden Administration's Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), programs like the Department of Energy's (DOE) Industrial Demonstration Program (IDP) were funded. IDP specifically, deployed through DOE's Office of Clean Energy Demonstrations (OCED), provided $6.3 billion to "[accelerate] projects in energy-intensive industries and provide American manufacturers a competitive advantage in the race to lead the world in low- and net-zero carbon manufacturing."

The program included a focus on steel, cement and concrete, aluminum, chemicals and refining, process heat and pulp and paper-all sectors facing growing demand and difficult-to-abate emissions profiles. In March of 2024, the Biden administration selected 33 projects across 20 states-in both Democrat and Republican jurisdictions-to receive funding from the program. Unfortunately, in May 2025, the Trump administration terminated 24 of the selected projects totaling $3.7 billion.

As of August 11, 2025, a watchdog probe into OCED reported that it "found that the clean energy demonstrations office had failed to document internal control policies for the program, did not conduct a program-level risk assessment, did not have a plan to mitigate conflicts of interest, did not have a plan to assess the program's performance, and failed to properly track community benefits plans."

This probe was one of several targeting DOE spending allotted under BIL and IRA, following reports issued in May and June 2025. The IDP probe in particular was started under the Biden administration but finished and shared publicly under the Trump administration by an interim inspector general, given the Trump administration fired the DOE inspector general at the beginning of his term in January 2025.

Going forward, it will be up to Energy Secretary Chris Wright to determine if and how the remaining awards will be implemented, while the survival of OCED itself may prove difficult given ongoing targeting from Republicans hoping to shut the office down completely.

The Ohio River Valley is one area that has the potential to benefit from investment in decarbonizing industries like steel. Ohio's $670 million in investments from the BIL, IRA, and DOE Industrial Demonstrations Program remain frozen. Credit: Aaron Yoder

Innovation under limited federal support

With global temperatures now predicted to meet, if not exceed, limits that scientists say would avoid irreparable climate harm; a predicted global demand for raw materials like steel set to increase by more than 33 percent through 2050; and development of carbon border adjustment policies like the European Union's CBAM that would tax imports relative to their carbon intensities, one thing is clear: America must continue to seek innovative ways to decarbonize heavy industries, in spite of the administration's rollbacks.

Lowering emissions in these necessary sectors is going to mean the widespread adoption of new technologies, like using green hydrogen to make iron, and both public and private investment in them. States that rely on federal funding for project investment, like the Climate Pollution Reduction Grants from the Environmental Protection Agency (EPA), will have to advocate for the protection of these programs and publicly tout the benefits of them beyond emissions reductions for the purpose of protecting the climate.

Investing in greening U.S. infrastructure has economic and national security benefits by continuing to onshore raw materials production, both of which align with the Trump administration's overall goals related to energy dominance.

In order to meet the clean energy transition, bolster communities, and remain economically competitive, the U.S. has to continue investing in research and development, project deployment, and workforce development in difficult-to-abate industries. The future of American manufacturing requires innovation, not stagnation.