The Inflation Reduction Act made a historic down payment on climate and clean energy progress across the economy, including new investments that take aim at a notoriously tough-to-decarbonize sector: industry. A key provision in this law is the $5.8 billion Advanced Industrial Facilities Deployment Program (AIFDP), which is intended to support early-stage demonstrations of technologies and processes that could cut emissions in the industrial sector. The Department of Energy now has the opportunity to design this program to maximize breakthroughs in technologies and benefit communities.

This new industrial program fills two important gaps to achieve our climate goals. First, a technical gap: Industrial sectors like steel, concrete and chemicals production are difficult to fully decarbonize with existing solutions, like energy efficiency measures, electrification, and the use of clean electricity. While these tools are all critical and should be deployed extensively where they can, they are not as effective at addressing emissions resulting from high-heat applications or chemical processes. We’ll need to innovate new solutions.

The second gap is about the innovation process: There’s a known phenomenon that our innovation pipeline, which converts ideas into solutions, is uneven. While public spending tends to support early-stage R&D and industry tends to fund late-stage scale-up and commercialization, there’s a missing middle — the “Valley of Death” — where neither governments nor industry provide sufficient funding for the early stages of piloting larger projects and demonstrations. Its where good ideas can fall by the wayside.

Enter the Office of Clean Energy Demonstrations (OCED), the new DOE office with $20B from the bipartisan Infrastructure Investment and Jobs Act (IIJA) with a focus on scaling up emerging technologies through demonstration projects. Through the AIFDP, OCED can help solve both problems, providing catalytic support for key solutions and positioning them for additional investment and commercialization in the next couple of decades. As a government entity, it can also set a high standard for best practices in community engagement and positive impacts on the ground.

We have a few pointers, based on EDF’s 2021 Climate Innovation Blueprint. In partnership with Evolved Energy Research, the Blueprint uses energy system modeling to project the emissions impact of potential cost- and performance-breakthroughs of 15 climate technologies under different climate policy scenarios, including one that achieves net-zero emissions in the U.S. by 2050. A key innovation in this work was that it captured interactions among technologies and analyzed the potential for breakthroughs. While data limitations allowed only a few industrial technologies to be included in the analysis, EDF’s Blueprint offers key lessons around targeting early-stage investments in ways that may maximize cost- and performance- breakthroughs for climate technologies, increasing the likelihood that industry adopts those technologies.

Identifying the front-runners and driving investment in solutions that are transformational is no small task. To get on the pathway to a safer, stable climate, we have to confront our toughest obstacles head-on.

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