The following blog post was authored by BlueGreen Alliance Policy Advisor Charlie Martin.
In April, the White House Office of Management and Budget (OMB) released new guidance on the application of the Build America, Buy America (BABA) policy in the Bipartisan Infrastructure Law (BIL) signed by President Biden last year. This new policy strengthens Buy America—a policy that aims to ensure that taxpayer dollars support domestic manufacturing jobs, not corporations that outsource production to countries with lower labor and environmental standards. When the federal government funds infrastructure projects, Buy America requires or prioritizes the purchase of iron, steel, and other products and materials from U.S. manufacturers.
The basic principle behind Buy America policies is that taxpayer dollars should be used to support domestic job growth.
For years, Buy America has supported the U.S. industrial and manufacturing sectors by prioritizing domestically made materials and products. The application of these policies has been limited, however. Over time, Buy America has been eroded by loopholes and weak federal enforcement, restricting its effectiveness. As a result, every year billions in U.S. taxpayer dollars go to corporations overseas—often in countries where they can pay workers lower wages and take advantage of lax environmental and labor protections—instead of supporting U.S. workers and communities.
BABA begins to address this problem by not only harmonizing and modernizing Buy America rules, but also expanding them to more infrastructure programs and projects. While waivers are still available in select circumstances, this is the broadest expansion of Buy America since its inception decades ago. Its strengthening fulfills the overwhelming demand of taxpayers to close loopholes, provide more oversight—through a new Made in America Office—and better support U.S. manufacturing and good-paying jobs for workers across various sectors.
Not only is this welcome news for workers, it is also a step forward in our fight for a livable climate. That’s because U.S. factories are among the cleanest in the world in critical manufacturing sectors like steel. That’s the conclusion of a recent report authored by Global Efficiency Intelligence (GEI)—commissioned by the BlueGreen Alliance in partnership with the American Iron and Steel Institute—which compares the carbon intensity of steel production in major steel producing countries.
Taking on emissions in industrial sectors like steel is an essential piece of the climate puzzle. The International Energy Agency (IEA) has calculated that the global industrial sector is the largest source of global greenhouse gas (GHG) emissions—over 40%—after accounting for electricity and heat use. Steel production alone is a major source of global climate emissions. The GEI report found that the steel industry accounts for around 7% of global GHG emissions and around 11% of global carbon dioxide (CO2) emissions. The steel industry also is often a source of air pollution—such as particulate matter and sulfur dioxide—that contributes to asthma, heart disease, and other severe health problems in communities near certain steel mills.
The GEI study finds that the United States produces the second cleanest steel in the world in terms of GHG emissions, trailing only Italy—the second smallest steel producer included in the report). Among the six largest steel producing nations—China, India, Japan, the United States, Russia, and South Korea—which account for 75% of global steel production— the United States has the lowest CO2 intensity by far.
Yet despite producing some of the lowest-carbon steel in the world, the U.S. also imports more steel than any other country. More often than not, the steel arrives from countries with lower environmental, health, and labor standards and higher-polluting facilities. Much of this imported steel used to be made here and could be made here again, with lower emissions. This report underscores an important fact: sourcing more steel from domestic manufacturers—using tools like Buy America—is good for American workers and good for our climate goals.
An expanded Buy America policy that prioritizes domestically-produced infrastructure materials and products, particularly steel, is a good foundation to spur demand for cleaner products. Building on that foundation, we also should explicitly channel taxpayer dollars to manufacturers that work to be among the cleanest in the world.
Buy Clean, a groundbreaking policy spearheaded by the BlueGreen Alliance and labor and environmental partners, promotes spending taxpayer dollars on materials that are manufactured in a cleaner, more efficient, environmentally-friendly manner—reducing industrial pollution and health impacts, supporting good-paying jobs and a stronger manufacturing base, and advancing climate action.
In December, President Biden launched the nation’s first-ever federal Buy Clean program with his Executive Order (EO), “Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability,” and the accompanying Federal Sustainability Plan. In his EO, President Biden outlined pathways for the federal government to use its vast purchasing power to help achieve net-zero emissions across the economy by no later than 2050. Buy Clean is a central component of this strategy.
The federal launch of Buy Clean marks an incredible opportunity to build on the strengthened Buy America foundation. Done right, Buy Clean will boost transparency in reporting industrial emissions, invest in clean manufacturing innovation, and direct our public dollars to support low-emissions materials, many of which are made in U.S. factories. The combination of Buy America and Buy Clean can help us to transform some of the world’s most heavily-emitting sectors, allowing us to confront climate change while reinvesting in manufacturing and rebuilding the middle class.
American steel manufacturers are poised to lead this industrial transformation with the support of Buy America, Buy Clean, and other clean manufacturing investments. The BlueGreen Alliance applauds the Biden administration’s work to strengthen Buy America, launch Buy Clean, and lead by example in supporting climate action, the creation of good jobs, and the development of a stronger, cleaner, and more resilient manufacturing base.