New York legislation establishing the country’s highest standards for reducing greenhouse-gas emissions has companies scrambling to determine how much it will cost to comply.
Executives at Revere Copper Products Inc., a manufacturer in Rome, N.Y., wonder if potential energy price increases will make the company less competitive globally. Paper-mill operators, which use wood chips and other timber byproducts as fuel, are worried they will need to find a new way to power their facilities. And cement companies, whose manufacturing process creates emissions, wonder if the bill has the potential of upending the industry in New York.
Manufacturing executives have said that they were pleased by last-minute amendments to the bill that will give them an increased say in its implementation. A great deal of uncertainty, however, remains.
“The final solution isn’t something you can reach out and grab,” said Brian O’Shaughnessy, the chairman of Revere Copper. “It depends on what the state ultimately expects for each industry. And that answer may be different for each industry.”
State lawmakers in June passed the Climate Leadership and Community Protection Act, which by 2050 requires an 85% reduction in greenhouse-gas emissions from the 1990 level. A spokesman for Gov. Andrew Cuomo has said he plans to sign the bill into law.
New York would be the only state with an 85% reduction target based on 1990 levels across all sectors of its economy, according to the National Conference of State Legislatures.
For all its sweeping changes, the legislation is light on details. It doesn’t specify how reductions will be tracked or what potential penalties noncompliant companies face. And it doesn’t say which businesses will be eligible for a yet-to-be-created carbon-offset program, which will be reserved for 15% of the economy’s emissions.
The details will be hammered out over the next few years as the state creates committees and advisory boards to help implement the law. In the meantime, the state’s manufacturing industry is left in a holding pattern that has companies pondering worst-case scenarios. Across the state, more than 400,000 people are employed by the manufacturing industry. On average, they earn $14,000 more than those in nonmanufacturing, private-sector jobs, according to Public Policy Institute of New York State Inc.
The industrial sector is the state’s fourth-highest emitter of greenhouse gases in the state, accounting for 13% of all emissions, according to the New York State Greenhouse Gas Inventory. For industries including paper, cement and copper, most of those emissions come from the processes that create their products.
State Sen. Todd Kaminsky, a Long Island Democrat and sponsor of the bill, said he understands the challenges businesses in those industries face.
“They’re in a globally competitive marketplace where every penny matters and they’re just trying to keep their prices down, and I get that,” he said. “But I think everyone needs to be rolling in the same direction.”
Manufacturing industry representatives say the legislation will raise the cost of doing business in the state and make it more likely that businesses will close their doors or move to another region to avoid potential increases in electricity costs or the capital investments necessary to reduce emissions.
“If we raised our prices one cent, we would start losing market share,” Mr. O’Shaughnessy said.
While the concerns of the business community are valid, it is unlikely that the law will lead to a mass departure of manufacturing from New York, said Janet Peace, the senior vice president of policy and business strategy for the environmental not-for-profit Center for Climate and Energy Solutions.
“Fear of trade exposure is real,” she said. “But in a lot of cases, it’s been overblown.”
In such states as California, which has pledged to reduce emissions by 80% compared with 1990 levels, manufacturers have begun to work with companies such as Canada-based CarbonCure Technologies to help make progress in reducing emissions.
CarbonCure, which licenses carbon-capture technology to cement companies for a monthly fee, has developed a method to capture emissions from factory smokestacks and inject them into cement mixes, which strengthens the concrete while also trapping the emissions from being released into the atmosphere. In 2018, Central Concrete, a northern California company that helps build infrastructure including roads, worked with CarbonCure to install the technology at seven of its plants.
Whether similar initiatives can work in New York will depend on how the bill is implemented, said Ms. Peace, who expects companies can adapt.
“You give people a reason to innovate, and people do,” she said. “But you kind of have to push and pull people over time.”