How did the ‘Buy Clean’ Concept Transform into ‘Buy Dirty’?

The Inflation Reduction Act (IRA) granted upwards of $4 billion to the General Services Administration (GSA) and Federal Highways Administration (FHWA) for “Buy Clean” initiatives. These programs restrict GSA and FHWA purchases to those with significantly reduced emissions.

The Environmental Protection Agency (EPA) clearly defines “significantly reduced” as those products falling in the lowest 20% of embodied emissions when compared to like materials. Products that meet 40% or industry-average thresholds may also be considered, depending on available materials for a specific project. How does one discern which steel products are clean or dirty under this model using recently published environmental product declarations (EPDs)?

Here are the per-ton carbon intensities reported in EPDs from three of the largest American steel producers – Nucor, Steel Dynamics (SDI), and U.S. Steel (USS). These figures pertain to hot-rolled steel products, the most carbon-intensive part of the steelmaking process.

Which facilities meet the 20% EPA threshold? The correct answer should be Mills 1 and 2. The 40% cut-off? That would be Mills 1 through 4. The lowest emitting mills, however, which have “significantly reduced” emissions, are all electric furnace facilities: SDI Columbus (Mill 1), Nucor Decatur (Mill 2), Nucor Indiana (Mill 3), and USS Big River Steel (Mill 4). The highest emitting facilities are all blast furnaces.

The GSA started to dispute the IRA’s mandate when it didn’t like the results. The agency decided to implement a dual standard that calculates separate thresholds for steel products produced in electric furnaces and those produced in blast furnaces. Consumers don’t differentiate between these products based on the production process or materials used.

This unlawful differentiation effectively shifts the GSA’s program from “Buy Clean” to “Buy Dirty”. It does not encourage low emissions production and instead rewards high emissions products. This goes against the language of the statute, requiring the agency to only purchase materials with “significantly reduced” emissions.

The GSA’s framework applied to the hot-rolled carbon intensities above reveals the absurdity of their methodology. Under a dual standard, two blast furnace facilities – USS Granite City (Mill 9) and USS Gary (Mill 10) – would qualify as clean, despite emitting nearly double compared to electric furnace facilities like Nucor Indiana (Mill 3) and USS Big River Steel (Mill 4).

Unfair schemes like dual standards and sliding scales are proposed by some of the largest and highest-emitting steel producers in the world. They are not consistent with the IRA or the purpose of “Buy Clean” programs. Such policies disadvantage carbon-efficient producers, mislabel dirty steel as clean, and temper the ambition of the highest-emitting producers to decarbonize.

The FHWA can correct this and apply the Buy Clean provisions of the IRA as intended by Congress. Two tons of carbon is not “significantly reduced” compared to one. It’s bad math and harmful to the climate. The FHWA and other parties should not follow the GSA down this misguided path.