The BIL and IRA provide an opportunity to catalyze the US journey, but the ability to tap into creative financing mechanisms will be a critical determinant to how it plays out.
Ongoing partnership between government and industry is needed to truly define the business models and market enablers required for continued development and scale. Open channels of communication are critical, for government to understand current and future challenges and put forward supportive policies, and for industry to communicate their ongoing needs.
As various clusters or hubs form, they should jointly define an optimal financing plan to support their vision which taps into public funds and existing financing mechanisms, but also identifies net-new mechanisms that would strengthen the business models they are shaping.
The partnership between the UK government and industry is one prime example. UK policy has been centered on creating an industrial decarbonization strategy as a whole—not just enabling project after project. This has required continued collaboration with industry to put in place a roadmap of emissions reduction and related government support programs to get clusters off the ground.
And they have continued this support by actively partnering with the private sector to get input on the business and financial models to support the scale-up of emerging technologies critical to industrial decarbonization, including hydrogen and carbon capture and storage. It is this partnership between industry and government that has created the appropriate conditions for increased market confidence and appetite for investment—making the most of the limited public funding available to create net-new markets.