Chairman Richard E. Neal, Carmichael Roberts, Co-Founder and Managing Partner at Material Impact, and Former Congressman Joe Kennedy III headed up climate tech discussions on Wednesday.
BOSTON – Former U.S. Rep. Joseph P. Kennedy III and Katie Rae of The Engine joined U.S. House Ways & Means Chairman Richard Neal in hosting members of the Massachusetts Congressional delegation and Bay State climate technology entrepreneurs for a roundtable discussion yesterday on climate innovation.
The former congressman, now managing director at Citizens Energy Corporation, led conversations between U.S. Reps. Neal, Jim McGovern, Jake Auchincloss, Katherine Clark, and Lori Trahan and over a dozen climate tech leaders and executives to discuss the prospects of recent federal legislation for expanding the climate tech ecosystem in Massachusetts.
“We hope this is just the start of the conversation between our leaders in government and our leaders in climate technology,” said Kennedy, who heads up business development at the Boston-based green energy nonprofit.
“Massachusetts is a hub of bright minds and innovation,” said Katie Rae, CEO and Managing Partner of The Engine, a Cambridge, MA-based venture firm built by MIT. “We’re here to catalyze what the Bay State does best.”
“This meeting couldn’t come at a more critical time,” said Congressman Richard E. Neal, Chairman of the Ways and Means Committee and U.S. Representative for Massachusetts’ 1st Congressional District. “Our House delegation put a lot of work into the IRA and we want to make sure it pays off for our Commonwealth and our country.”
In August 2022, congress passed the Inflation Reduction Act (IRA) with $369 billion to expand renewable energy production and the development of clean technologies. This bill, combined with the November 2021 $1.2 trillion Bipartisan Infrastructure Bill (BIB), represents the largest-ever federal investment in building a green economy.
The IRA aims to reduce carbon emissions by about 40% by 2030, an ambitious goal that will require a substantial acceleration of the climate economy. Clean technology leaders signaled during Wednesday’s talks that they’re ready, but they need more clarity and guidance on how to access the funds made available by the sweeping new legislation.
“I think the biggest question right now is how do we go about accessing the funding in each line item of the IRA,” said Heather Takle, President and CEO of PowerOptions. “I’ve never sold a climate tech product unless the economics work. Consumers will not implement something like air source heat pumps until the economics make sense. We need access to grants and incentives to make that happen.”
Kennedy echoed Takle’s remarks, adding that the design of these incentives will determine who those consumers are. “Right now in Massachusetts, the only people who can access air source heat pumps are those who can afford to wait on a $10,000 rebate,” said the former Congressman, referring to Mass Save’s rebate program. “Most families can’t afford to front an investment like that.”
Summit attendees also voiced that there is a lot of work left to do in determining whether the impact of the BIB will be carbon-positive or carbon-negative. With about $100 billion earmarked for renewable initiatives, there’s hundreds of billions more for major infrastructure upgrade projects on roads, bridges, rail lines and airports. Participants stressed that the guidance issued for these huge pots of money must include the climate technology industry if the U.S. is going to achieve Biden’s goal of a 50% reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030.
“A major barrier to success here is that we have a grid that is incredibly balkanized,” said Daniel Goldman, Co-Founder and Managing Director of Clean Energy Ventures. “We have 50 states and 50 CPU’s who don’t talk to each other. Right now we’re at 5% electric vehicles. Our current electricity system couldn’t sustain us getting to even 30% EVs. Through integrating innovation, new policies and finance, we can move to a decarbonized and more integrated grid that offers more flexibility and compatibility with clean energy solutions.”
In addition to requests for more guidance on existing federal initiatives, industry leaders asked for help from the Internal Revenue Service (IRS) in opening the floodgates on private spending and investment in climate technology companies.
“Underwriting the risks involved with new technologies and new markets will require new models compared to traditional approaches,” said Jeff McAulay, Co-Founder and President of Energetic Insurance. “Insurance can facilitate deployment of private sector capital by mitigating risks especially on the demand side including off-taker, market and incentive uncertainty. It’s difficult for private sector capital to flow into necessary projects without additional forms of risk transfer.”
“We all know that we don’t have the time we need to accelerate the rollout of climate tech,” said Leah Ellis, Co-Founder and CEO of Sublime Systems. “Right now [Sublime Systems] can make 100 tons of low-carbon cement. We need to be able to produce 100 million tons to make an impact on carbon emissions from the cement industry. We need a lot more money to bridge the gap between proving the economics and viability of a solution, and scaling to viable companies.”
The Massachusetts Federal Delegation was receptive and supportive of the industry leaders. “We agree with you,” said Congresswoman Lori Trahan, U.S. Representative for Massachusetts’ 3rd Congressional District. “My question to you is where has this been done well? What can we look to as a model for where to invest to have the greatest, accelerative impact?”
Echoing the Congresswoman, U.S. Representative Jim McGovern of Massachusetts’ 2nd Congressional District, Chairman of the Rules Committee, added, “We’ve got a bunch of money on the table—let’s make sure it gets here as quickly as possible.”