EPA Seeks Input on Inflation, Emissions Programs
Last week, the U.S. Environmental Protection Agency announced that it would accept public input on developing new programs focused on lowering carbon and other greenhouse gases in construction materials and products.
The new programs have been made possible by a $350 million investment from President Joe Biden’s Inflation Reduction Act.
“The Inflation Reduction Act represents a historic commitment to build a new clean energy economy, powered by American workers and manufacturers in partnership with states, Tribes, communities and organizations,” said EPA Office of Chemical Safety and Pollution Prevention Deputy Assistant Administrator for Pollution Prevention Jennie Romer.
“These actions will immediately influence Federal procurement, drive significant emissions reductions over the next decade, and lay the groundwork for long-term decarbonization of manufacturing sectors. We’re eager to engage with stakeholders and experts to spur the development and adoption of more environmentally preferable construction materials necessary to build the infrastructure of the future.”
The Agency is planning to host three public webinars about the opportunities and will also be accepting written feedback on establishing new grant and technical assistance programs, in addition to a carbon labeling program for construction materials.
Inflation Reduction Act Background, Industry Response
In August 2022, Congress passed, and President Biden signed, the Inflation Reduction Act—also known as H.R. 5376—into law, creating the largest investment to combat the climate crisis in U.S. history. The legislation is designed to bolster U.S. energy security, help families save money on energy costs and prescription drugs, reduce the deficit, and create good-paying jobs.
According to reports, the $437 billion spending package is expected to raise $737 billion in revenue over the next decade. The outlined spending includes $369 billion for climate and energy policies, $64 billion to extend a policy under the Affordable Care Act and a 15% corporate minimum tax aimed at companies earning more than $1 billion per year.
The Act will also use $41.5 billion in appropriations of the allocated funds to develop and support 24 new and existing programs that monitor and reduce greenhouse gas emissions and air pollution, protect health and advance environmental justice.
Prior to the official signing of the bill, the Associated General Contractors of America (AGC) announced its opposition to the Inflation Reduction Act. Although the Association recognizes that many of the provisions from the original Build Back Better Act had been dropped, AGC members still share concerns over the remaining provisions and their impact on the industry.
In a news release, the AGC listed the following as significant concerns:
Similarly, the Associated Builders and Contractors (ABC) released statements prior to the legislation signing that were also unfavorable of the passing.
“While the Democrats’ reconciliation proposal has undergone changes over the recent days, the package unfortunately would still impose anti-growth tax policies that fail to address the rate of inflation, supply chain snarls and workforce shortages disrupting the economy and construction industry,” said Kristen Swearingen, ABC Vice President of Legislative and Political Affairs.
“Most critically, this bill penalizes employers that believe in fair and open competition and pay wages based on experience, quality and market rates, and also limits opportunities for the millions of construction workers who choose not to join a union,” Swearingen added.
“Though the bill provides $250 billion in incentives for clean energy projects, 83% of the value of these credits lies in projects ABC members will be largely prevented or discouraged from participating in due to these labor restrictions.”
After the bill passed the U.S. House, Swearingen issued an additional statement, promising that ABC would continue to work to ensure all qualified contractors are able to work on these new energy projects.
ABC was also reported to have sent a letter to the House highlighting the failures in the reconciliation package, urging lawmakers to oppose the bill because its tax hikes and restrictive labor policies “would be devastating for the construction industry and the recovery needed to restore our economy.”
In the same thread, National Association of Chemical Distributors (NACD) President and CEO Eric R. Byer issued a related statement, highlighting major concerns over the legislation. Most notably, the NACD believes that the package will only worsen inflation, ongoing supply chain issues, rising interest rates and the struggling labor market.
“The tax increases in the bill will lead to higher costs for chemical producers and distributors. Higher prices for chemicals will flow through nearly every other sector of the economy, leading to more job losses and increased inflation,” wrote Byer.
“Based on an analysis prepared for NACD, these price increases will result in reduced chemical sales. The lower sales volumes will ultimately lead to reduced jobs as distributors need fewer truck drivers, clerks, and warehouse staff. “
Not all construction-affiliated associations were against the new legislation, however. Unlike others in the industry, the American Institute of Architects applauded the Congressional passing of the Inflation Reduction Act.
In a press release, AIA touted the legislation’s success to its focus on building code provisions, climate tax incentives and affordable housing.
“I am proud of the work AIA has done to get Congress to include language addressing our legislative priorities,” said AIA EVP/Chief Executive Officer Lakisha Ann Woods, CAE. “AIA’s sustained commitment to advocating for legislation addressing greenhouse gas emissions from the built environment as well as resilient and affordable communities is evident throughout this bill. Though the climate crisis still requires our unrelenting attention, this legislation is a step in the right direction.”
Once developed, the EPA has shared that the new programs will provide grants technical assistance and tools to help states and Tribal Nations, manufacturers, institutional buyers, real estate developers, builders and others measure, report and substantially lower the levels of embodied carbon and other greenhouse gas emissions associated with the production, use and disposal of construction materials and products.
The new programs will be funded by the Inflation Reduction Act and will reportedly build upon the Agency’s work in both the Energy Star Industrial and Environmentally Preferable Purchasing programs, among others.
These latest actions are also reported to support President Biden’s Buy Clean Initiative, which leverages the Federal Government’s power as the largest purchaser in the world to advance low-carbon construction materials across its procurement and funded infrastructure projects.
Three public engagement webinars are scheduled where feedback will be solicited from experts and stakeholders, including institutional buyers, developers, builders, manufacturers and representatives from states, Tribal Nations, non-profit organizations, trade associations and others.
The schedule of webinars and topics are as follows:
The EPA has noted that it will also be issuing a Request for Information to solicit written comments on the design of these new programs. These comments can be submitted to docket EPA-HQ-OPPT-2022-0924 upon publication in the Federal Register.
The comment period will close on May 1.
The Agency also published an interim determination under Inflation Reduction Act Sections 60503 and 60506 that was provided in December 2022 to the Department of Transportation and the General Services Administration on their Inflation Reduction Act funded the procurement of construction materials and products with substantially lower embodied greenhouse gas emissions.