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OPINION

How Massachusetts can lead the electrification revolution

The state should offer tax incentives or subsidized research and development spaces to encourage landlords to invest in clean renewable energy installations and offer flexible manufacturing space instead of converting facilities to biotech labs that rent at the highest price.

The GE-Alstom Block Island Wind Farm was seen in the water off Block Island, R.I., on Sept. 14, 2016.Eric Thayer/Bloomberg

The electrification revolution is going to fundamentally change the US economy, particularly as Americans decarbonize and speed up the transition to electric vehicles and renewable energy. As we realize a future with skyrocketing demand for batteries, chargers, power control units, and other key components for sustainable products, Massachusetts can be home to companies building that sustainable reality and creating good jobs in the process.

One little-discussed but crucially important facet of meeting the electrification demand while achieving environmental goals is becoming a powerhouse developer of rare earth materials like neodymium and dysprosium — essential for production of magnets used in electric vehicles and wind turbines.

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These critical materials will need to be produced sustainably, without direct carbon emissions or toxic chemical byproducts, moving away from the current manufacturing processes responsible for 25 percent of our nation’s carbon emissions. China currently controls over 95 percent of rare earth metal refining, but Massachusetts can position itself at the forefront of this transformation.

However, three challenges — real estate costs, industrial worker shortages, and overly strict permitting rules — imperil Massachusetts’ ability to lead in sustainable production.

I’m a cofounder of Phoenix Tailings, the only company in the world refining rare earth metals without carbon emissions or toxic byproducts. Our firm, the local economy, and our environment would be better served if I could focus on material science and digging rare metals out of mining waste — not outdated regulations written in a vastly different technological climate that are too often holding scientific entrepreneurs like our company back.

I’ve seen the impact of these challenges firsthand. While Phoenix Tailings started in a Massachusetts backyard, we quickly moved to a co-working space, and are now operating in Somerville and Woburn while searching for a permanent long-term research and development facility.

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It was challenging three years ago to find the initial co-working space we needed since lab space was expensive even during the height of COVID-19. If we were founded today, it would be impossible with prices tripling in that period.

Policy makers who have focused on easing restrictions for residential construction must do the same with commercial construction. The scarcity of flex manufacturing and commercial lab space raises prices and eliminates industrial production and progress. There are almost no options available for high-tech manufacturing and that shortage is only getting worse.

Massachusetts should offer tax incentives or subsidized R&D spaces to encourage landlords to invest in clean renewable energy installations and offer flexible manufacturing space instead of converting facilities to biotech labs that rent at the highest price. Keeping these spaces in Massachusetts means retaining well-paying sustainable manufacturing jobs.

While Massachusetts has the most educated population in America, its workforce lacks the skills needed to operate advanced manufacturing equipment. Decades of outsourcing, combined with a growing preference for college over trade schools, has led to an undersupply of these workers across the country.

The state must support expanding the pipeline of students through training partnerships. At Phoenix Tailings, we’re working with local community colleges to connect early with students interested in advanced manufacturing. These public-private job training partnerships should be a priority for economic development, with a focus on reaching people living near production facilities who are too often shut out of the economic activity in their own backyards.

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Finally, Massachusetts must update its antiquated permitting system and zoning regulations and streamline requirements for advanced manufacturing. Some cities fail to recognize research and development as a use for a commercial building, instead treating it with the same strict regulations applied to heavy industrial facilities.

It makes no sense to apply a lengthy process written for dangerous factories emitting large amounts of pollution to sustainable manufacturing facilities. The process we’ve developed produces zero waste and zero direct-carbon emissions. It’s not dangerous for the environment and, because there are no toxic byproducts, it’s safe for those around our equipment. Permitting requirements that are geared toward building cleantech research and development centers and ensuring these spaces go to manufacturing companies will help keep the good jobs created in Massachusetts.

There should be no better place than Massachusetts for a company that wants to change the world. The state’s exceptional educational institutions, commitment to corporate social responsibility, and tradition of producing successful startups set it apart from anywhere else.

But unless policy makers take proactive steps to address critical gaps in the system, the sustainable manufacturing revolution will take place elsewhere.

Michelle Chao is the co-founder and COO of Phoenix Tailings.