Carbon Forward: Advanced Markets for Value-Added Products from Coal
By Janet Gellici, National Coal Council
The Biden administration has advanced a number of initiatives geared toward creating jobs, revitalizing a COVID-impacted economy, curbing greenhouse gas emissions, improving our nation’s infrastructure and bolstering United States supply chains. Our country’s abundant coal resources and the potential to convert them to vital coal-to-carbon products provides significant opportunities to help achieve these objectives.
The Value and Opportunity of Coal-to-Carbon Products
In the 20th century, coal achieved prominence in the production of electricity generation and steel, helping to establish the U.S. as a global industrial powerhouse. Coal’s role in the 21st century “new carbon” age can be equally significant. Coal can be used as an economic feedstock in the production of a variety of critical goods and materials.
Coal-derived products have valuable applications in the aerospace, agricultural, automotive, consumer goods, construction, defense, energy, environmental and medical sectors. These high-growth market sectors, fueled by strides in advanced manufacturing, offer the U.S. opportunities to be a global leader in next-generation industries.
Many coal-derived products offer benefits vis-à-vis traditionally manufactured products:
- Improved Product Quality and Performance – stronger, more durable, lighter weight, corrosion and fire resistance, greater energy storage capacity
- Improved Economics – reduced manufacturing complexity = reduced costs, domestically abundant and affordable coal resource base, utilization of existing infrastructure
- Enhanced Environmental Stewardship – lighter weight, more energy-efficient production, shorter supply chains reduce emissions, carbon dioxide (CO2) sequestration potential, reduced water consumption, hydrogen production potential
- Enhanced National Security –improved supply chain resilience through use of domestic resources and diversified feedstock sources, reduced dependence on imports
Advancing coal-to-carbon products markets can also create a significant number of well-paying jobs. The U.S. Department of Energy’s (DOE) assessment indicates the potential for 280,000 to 480,000 manufacturing jobs in various carbon product industries. Many of these jobs can be created in economically distressed communities impacted by the decline in U.S. coal production and coal power generation.
It is important to distinguish that “carbon” used to produce carbon-based, value-added products is not the same as “carbon” in CO2 emissions. In fact, because many products made from or containing carbon have superior strength, weigh less and require less energy to produce than traditional materials, carbon-based products may have a substantially reduced environmental impact and contribute to efforts to reduce CO2.
Coal-to-Products Supports Biden Administration Priorities The many benefits associated with deployment of coal-derived carbon products align with Biden administration priorities.
The administration’s American Jobs Plan seeks to revitalize manufacturing and train Americans for the jobs of the future. The Plan highlights the need to build next-generation industries in distressed communities, especially those impacted by the recent energy transition. Established by a Presidential Executive Order, the White House Interagency Working Group has identified challenged coal communities as key locations for federal investment for job creation, for initiatives to strengthen manufacturing supply chains for critical goods and for remediation/redevelopment of brownfield sites into new hubs of economic growth.
It is precisely these communities in which jobs can be readily created through deployment of coal-to-products manufacturing. Investment for research, development and deployment (RD&D) of commercial-scale projects to produce coal-derived high-value carbon products will provide opportunities to train workers for careers in growth industries with attractive salary and benefit potential. It will also allow these workers to remain in their established local communities.
The American Jobs Plan calls for investment in RD&D, highlighting the need for public investment in breakthrough technologies to maintain the nation’s economic edge in today’s global economy. Recognizing the government’s buying power and ability to be a first-mover in markets, the Jobs Plan also calls for jumpstarting clean energy manufacturing through federal procurement.
Emerging high-value carbon product markets provide materials critical to clean energy industry sectors, including those for electric vehicles and renewable energy, and have significant economic growth potential. The National Energy Technology Laboratory (NETL) projects that these products will have a global market value of over $96 billion by 2023 and a compound annual growth rate (CAGR) of 9.2 percent.
Coal-derived carbon products offer numerous environmental benefits in support of the administration’s objectives to deliver clean drinking water, electrify the automotive industry, reduce energy consumption and emissions in manufacturing processes and in end-use applications and sequester CO2.
Additionally, the administration’s initiatives to advance hydrogen use for power generation, heating, transportation, fertilizer production and energy storage can also be supported by coal.
The administration’s Jobs Plan calls for investments in both the construction and repair of U.S. infrastructure. Many of the basic commodities and construction materials needed to bolster our nation’s infrastructure can be produced from coal at less cost, with enhanced technical performance, extended use life and environmental advantages vis-à-vis traditional materials.
The Jobs Plan also identifies the need to “reenergize America’s power infrastructure,” by creating a more resilient grid and “incentivizing more efficient use of existing infrastructure.” Co-locating coal-to-products advanced manufacturing facilities with existing coal mining, transportation and power station infrastructure will provide a more streamlined and cost-effective opportunity to deploy new manufacturing plants while simultaneously incentivizing mine, transport and power station owners to invest in upgrades to their operations.
Supply Chain Resilience
In an Executive Order on “America’s Supply Chains,” President Joe Biden directed the U.S. government to review U.S. supply chains to identify risks and vulnerabilities. DOE was specifically tasked with identifying risks in the supply chain for high-capacity batteries that could be used for electric vehicles and energy storage. In response, DOE recommended establishing government policies incentivizing every stage of the U.S. battery supply chain, including securing a domestic supply of critical materials for high-capacity lithium-ion batteries.
Many of the rare earth elements (REEs) and critical minerals (CMs) necessary for the production of these batteries can be sourced from coal, coal ash and coal residuals. Supporting RD&D to recover REEs and CMs from coal will enable the U.S. to reduce dependence on foreign sources for these and other materials that are critical components of the automotive, aerospace, defense, electronics and consumer goods industries.
Our nation would benefit from utilization of the well-established and wide-ranging supply chains for coal production, transport (rail, port, truck) and on-site storage.
Recommendations & Roadmap for Coal-to-Products Deployment
In response to former Secretary of Energy Dan Brouillette’s request, the National Coal Council (NCC)1 prepared a report assessing opportunities to enhance the use of U.S. coal for production of value-added carbon products. The report, “Carbon Forward: Advanced Markets for Value-Added Products from Coal,” was presented to Energy Secretary Jennifer Granholm in October 2021.
The report offered specific recommendations on how coal-to-carbon-products could support each of the referenced Biden administration’s priority objectives. NCC noted that DOE, in collaboration with other Executive Branch agencies, has a vital role to play in supporting the accelerated deployment of coal-to-products.
The Council called for a national strategic objective in support of coal-derived products to accelerate commercial deployment, including a national RD&D effort advancing a full range of technologies and markets. Funding for fundamental science is crucial to realize the full potential of coal as a feedstock for new, non-traditional uses.
Federal and state governments can support and accelerate the commercialization of coal-derived carbon markets through policies and investments in RD&D, and through partnerships with industry, academia and stakeholder groups. Support for common user facilities, easing of cost-share restrictions that effectively exclude viable participants and availability/extension of a variety of RD&D tax credits for coal-derived carbon products are among the potential initiatives.
Incentives are needed to minimize costs and risks associated with technology development. Grants, loan guarantees, floor pricing, long-term contracting, federal procurement programs, “Buy American” efforts and federal/state tax incentives could enhance opportunities for technology developers and investors. Expedited permitting for coal-to-products facilities and other efforts to reduce regulatory burdens would provide additional incentives.
NCC noted that transitioning from laboratory to small and large pilot projects is often a stumbling block for many technologies. The step from laboratory scale research to deployable technology is often underfunded. Investments that allow flexible, multi-user facilities to be used for development across a wide range of scales can help reduce risk, encourage collaboration and allow for rapid results while maximizing return on federal investments.
Federal government support for demonstration projects would help bridge the “Development Valley of Death” between research and commercial deployment. Government support for demonstration projects would also provide a level of reassurance for prospective financial investors.
Public acceptance and a trained workforce will be essential to successfully deploy coal-to-products and advanced manufacturing initiatives. Federal and state-supported education and training programs are needed in these early stages of “carbon age” industry commercialization. Complementing workforce development initiatives with visible government encouragement for these industry sectors will advance public acceptance of coal-derived carbon markets.
The Council’s recommendations include policies, business approaches and partnership opportunities requiring the participation of federal and state governments, academia, non-profit organizations and industry. Working together, these entities can forge a path forward for markets and technologies for value-added products from coal that will enhance our nation’s economic, environmental and national security interests.
Janet Gellici is former CEO of the National Coal Council.