California Governor Gavin Newsom Signs Legislation to Decarbonize the Cement Industry

On Sept. 23, California Governor Gavin Newsom signed legislation that directly targets greenhouse gas emissions associated with the cement industry. This Cement Decarbonization legislation is the first law of its kind in the nation and is focused on achieving net-zero emissions from the industry by the end of 2045.

The Cement Decarbonization legislation (Senate Bill 596) requires that the California Air Resources Board (“CARB”) promulgate a comprehensive strategy to achieve net-zero emissions from the manufacture of cement in California as soon as possible, but no later than Dec. 31, 2045. The legislation mandates several interim targets, including a 40% reduction compared to 2019 levels by July 1, 2035. However, the law requires that CARB evaluate the feasibility of – and potentially adjust – the interim targets by July 1, 2028.

The Cement Decarbonization law also requires CARB to:

• Define a metric for greenhouse gas intensity;
• Monitor emissions data;
• Set a baseline to measure emissions reduction progress;
• And evaluate measures to support market demand and financial incentives to encourage the production and use of low-carbon cement.

The legislation takes effect Jan. 1, 2022. The bill’s sponsor, Senator Becker, is also working on additional legislation (Senate Bill 778) which would add low-carbon concrete to the state’s Buy Clean law, helping to increase demand for the low-carbon cement produced under the new legislation.

California is the frontrunner in the decarbonization of the cement industry, which is the first industry directly targeted by the State for mandatory decarbonization. Worldwide cement production accounts for 7% of global greenhouse gas emissions and in California alone, cement contributes approximately 8 million metric tons of CO₂ each year- equivalent to emissions from 1.7 million cars. Cement production is considered the second-largest industrial source of greenhouse gas emissions in California, behind the oil and gas sector. California is likely leading the way for the adoption of similar national legislation. To ensure feasible and equitable precedent for national decarbonization policy, the cement industry and infrastructure-scale cement users should advocate before CARB as it develops the initial “Comprehensive strategy,” in the promulgation of adjustments in emission targets, and should take active roles in related national legislative process and resulting rulemakings.

Please contact Clark Hill’s legislative, energy, and rulemaking team to discuss questions and strategies to address the risks and opportunities presented by the move toward decarbonization of the U.S. industry.

The views and opinions expressed in the article represent the view of the author and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is intended to be a substitute for professional legal advice.