Embracing Sustainability: How Michigan Businesses Can Adapt to the Changing Regulatory Landscape
- July 30, 2024
The hottest four days in a row on record. The most petro-chemical and fuel production on record. More packages and plastic packaging are used than ever before. More coal. More gasoline. More Solar. More wind. Nuclear making a comeback.
More regulation. More supplier requirements.
The headlines above are only from the past six months. The amount of news, and noise surrounding climate change, and understanding how it impacts you and your business can be overwhelming.
At Centrepolis, we know this, which is why we continue to develop programs to help Michigan businesses move toward a NetZero future, like the one outlined in the MI Healthy Climate Plan. However, making progress toward our state goal of reducing GHG emissions by 52% from 2005 baselines by 2030 requires understanding the following:
- The climate impacts of your business
- The changing regulatory landscape
- Technologies that can make a difference in your business
- Funding that makes it feasible
Understanding the Climate Impacts of Your Business
Every dollar a company spends has an environmental impact. Quantifying this impact, and where your business exists in a particular supply chain can be a daunting task. Breaking down emissions into Scope 1 (direct sources), Scope 2 (indirect sources), and Scope 3 (upstream and downstream sources), is a great starting point to allow a business to understand their true business climate impact. However, running this simple exercise, let alone a true sustainability audit can be prohibitively expensive for many organizations, and for some larger Fortune 500 companies it can be almost too daunting for a company to get their arms around.
Thankfully there are a number of Federal and local programs that are available to help businesses, especially small and medium businesses, get a full picture of their environmental impact. One program, the Industrial Assessment Centers Program, is for qualified small and medium sized manufacturers, and provides acces to no-cost energy assessments performed by more than 50 Industrial Assessment Centers across the country. These assessments are conducted by Engineering Faculty and graduate-level students at participating universities and include a remote survey of the facility, and a one or two-day site visit to take engineering measurements. With the data in hand, the teams perform a detailed analysis and generate specific recommendations complete with cost, performance, and payback times. Additionally, any company that completes an assessment is eligible for IAC Implementation Grants of up to $300,000 per manufacturer (more details here).
At Centropolis, we have a similar program called RESTART that provides “state funded onsite energy and sustainability assessments and consultations to any Michigan business with less than 500 FTEs state-wide and public institutions of any size, including K-12 schools.” To date RESTART has conducted [insert number here] of assessments. The program has additional benefits including internship programs, events and training opportunities, and resources for employment and funding opportunities.
The changing regulatory landscape
Earlier this year, as part of a research project, our partner organization the i4.0 Accelerator looked into the Industrial Decarbonization business, and regulatory landscape across 13 states. The findings, while not surprising, did shine a light on a few key facts.
First, Greenhouse gas reporting requirements are working their way down the supply chain. The SECs updated requirements, paired with the European Union's Corporate Sustainability Reporting Directive, and the California Climate Accountability Package are creating an environment where even the smallest suppliers will need to understand their GHG emissions to satisfy requirements from their larger enterprise customers.
Two, state-level policy is not consistent. Only 24-states, including the District of Columbia, have adopted specific GHG reduction targets. What makes these targets and regulations even more difficult to assess is that many are executive actions that could be changed by subsequent administrations.
Three, state-level policy, while complex, is a testing ground for Innovation. States like North Carolina are leading the way in solar and wind energy adoption, and Michigan is leading in alternative energy development focused on electrified mobility supply chains.
The key take away, regulations are here to stay, and understanding how they impact your business is as much an opportunity as it is a requirement.
Technologies that can make a difference in your business
So you are armed with an assessment and know where you can reduce your carbon emissions in your business, and you have a grasp on the regulatory landscape, but what technologies will actually make a difference beyond replacing our lights with LED light bulbs? Programs like our Industrial Decarbonization Challenge and Industry 4.0 Accelerator source best-in-class technologies from across the world that are ready to scale, and make an impact on your business. In our most recent Decarbonization challenge we fielded 225 submissions from 44 countries, and down selected from those applications 60 that were evaluated by our expert team or reviewers.
This process has resulted in a number of promising companies across Direct Air Capture, novel heating and cooling technologies for the home, and virtual power plants on demand. Ultimately our partners Whirlpool Corporation and Gerdau focused on six pilots that are being scoped with companies tackling reusing industrial waste heat, electrifying greenhouse gas intensive curing applications, and creating circular pathways for hard-to-recycle products.
One great example is the company Kraftblock out of Germany. Their technology allows for the bi-directional storage and use of heat and electricity. This storage medium can pull green energy from onsite power generation, store it for up to two weeks, and deliver it as electricity or as industrial process heat up 1300C. In our partner’s pilot design the company is capturing both industrial waste heat from curing operations, and excess green energy generated onsite to reduce the GHG emissions resulting from industrial heating processes. This ability to shift heat sources and storage based on demand allows for true net-zero industrial heating. The impact more broadly for this type of application could be huge as Industrial Process heat accounts for 30% of the GHG emissions in the industrial sector across the United States.
Outside of the IDIC, the Industry 4.0 Accelerator is constantly updating their portfolio of proven technology companies, many of which deal with improving manufacturing efficiency and operations.
Funding that makes it feasible
Great technologies are only part of the answer. These projects still need funding. Thankfully, the IRA and many state programs have made more money available for Industrial Decarbonization projects than any time in recent memory. Since the signing of the IRA 280 clean energy projects have been announced across 44 states, totalling $282 billion in investment. Of that money $27 billion is allocated for expansion of manufacturing facilities dedicated to expanding current clean energy sectors including solar (50 projects), energy storage (15 projects), onshore wind (11 projects), and offshore wind (7 projects). These are estimated to provide over 50,000 jobs in 2024 alone. You can view a live-map of the invested projects on the DOE website.
So how can Michigan companies take advantage of this funding? First, we have programs like IDIC and Design for Michigan Manufacturing that can help pay for the implementation of pilot projects. Through our investment and support of early-stage companies leading the way in Industrial Decarbonization, we are able to match their technologies with companies small and large for pilot projects and scaled deployments. Programs like the Office of Future Mobility and Electrification Prototyping grant help deploy dollars to early-stage companies in need of product development dollars.
Second, we can help organizations navigate the state and federal funding landscape. There are numerous opportunities at the state level, from Grid Resilience programs, EV Charging installations, Manufacturing Retooling, and Clean Energy Workforce Development grants. At the federal level the Department of Energy has their Energy Earthshots program with Earthshots focusing on Industrial Heat, Hydrogen, Carbon Negative technologies, Solar and Wind, and more. These programs consistently update release funding requests.
Industrial Decarbonization Takes a Village (Ecosystem)
Centrepolis Accelerator operates as a state-wide smartzone, providing us a unique perspective on the Michigan Ecosystem. We work closely with organizations across the state like Spartan Innovation, Lakeshore Advantage, InvestUP, Start Garden, numerous state agencies like EGLE and numerous corporate partners. Each organization plays a vital role in helping hit our climate goals.
We have made it a point to integrate our efforts across the country with groups like the Wells Fargo Innovation Incubator Network, NREL and the Industry Growth Forum, and American-Made Network. Centrepolis even partnered with the MEDC and EGLE to bring a delegate of nine Michigan ClimateTech companies for the first time to NREL’s Industry Growth Forum to help them match with investors and potential customers.
Ultimately, achieving our Industrial Decarbonization goals is an ecosystem wide effort. Businesses need to understand their climate impact, federal and state regulations need to be easily understood and effective, best-in-class technologies need to perform, and we have to figure out how to incentivize these projects with state, and federal funding.
At Centrepolis we’re constantly looking for new and better ways to do our part, let us know if you would like to join the decarb-party.