The bill, titled the Modern Steel Act, seeks to revitalize the U.S. steel and iron industry, create well-paying jobs, strengthen domestic manufacturing, and increase the country's industrial competitiveness on a global level.
The legislation is seen as an effort to build new steel and iron plants in cities affected by deindustrialization, using cutting-edge technologies such as direct reduction with hydrogen.
The bill was introduced by U.S. Congressmen Ro Khanna (D-CA) and Summer Lee (D-PA), along with 10 other lawmakers. It establishes new grants, tax credits and low-interest loans for zero-emission iron and steel plant projects.
The “Modern Steel Act” proposes that the International Trade Commission study and recommend the imposition of an ad valorem tariff on imported carbon-intensive steel that exceeds the U.S. emissions average, with the possibility of adjustments by the president. In addition, the use of funds for projects outside the US is prohibited and Chinese state entities are excluded from the incentives.
It also includes a $10 billion investment in matching grants, low-interest loans and other forms of financing to build modern facilities using cutting-edge technologies, such as direct hydrogen reduction, to produce iron and steel with near-zero emissions. In addition, priority will be given to communities historically linked to steel and iron, ensuring that the benefits of these projects are felt in areas that have been negatively impacted by the loss of industrial jobs.
This is expected to include provisions for modernizing existing steel plants to reduce emissions and improve energy efficiency. To do this, Matching grants, low-interest loans and other financing mechanisms will be offered. In addition, the project includes a 10% tax credit for building zero-emissions energy capacity in industrial facilities.
This project not only focuses on environmental sustainability, but also on social development by prioritizing domestic manufacturing projects, requiring the creation of community benefit plans and agreements to protect the health of local communities, and promoting strong labor standards that include cooperative agreements between management and workers, and covering up to $2,500 per worker for training in modern steel and iron manufacturing.
The proposal has received support from a number of organizations, including the United Steel Workers (USW), the American Iron and Steel Institute (AISI) and the Sierra Club. These organizations emphasize that the legislation will promote innovation in near-zero-emission steel production and help protect the health of local communities, while modernizing existing integrated mills and mini-mills.
