Boston Metal just landed a $50 million federal grant for an alloy factory in Weirton, W.Va., the same town where Somerville’s Form Energy plans to eventually hire at least 750 people to manufacture batteries. Meanwhile, Burlington-based metals recycler Nth Cycle picked Ohio for its first nickel and cobalt plant. And Ascend Elements in Westborough started building a nearly $1 billion battery factory in Kentucky.
Yes, when it comes to the fast-growing business of climate technology, Massachusetts punches well above its weight. By some important measures, such as VC funding, we’re second only to California. However, as our cleantech stars move out of the lab and into the real world, many are growing their operations elsewhere. With each announcement, is our dominance slipping away?
It’s somewhat inevitable, as this industry matures, that much of the work would shift to places with lower costs for real estate, energy, and labor. But Governor Maura Healey and economic development secretary Yvonne Hao want more of that action to take place here. And they’re willing to use the power of state government to help make it happen.
In short, they want to do for climate tech what then-governor Deval Patrick once did for biotech: make Massachusetts the epicenter of another world-changing industry.
To pull it off, Healey is expected to use her first economic development bill to supercharge the quasi-public Massachusetts Clean Energy Center. Doing so would follow a blueprint that Patrick laid out in 2008 when he worked with state lawmakers to pledge $1 billion over 10 years for the state’s life sciences sector.
MassCEC will need more than its typical budget of $30 million to $40 million, the thinking goes. Much more.
At Healey’s prompting, the Legislature already significantly increased MassCEC funding for this fiscal year. And Healey recently filed a bill that would set aside interest earned on the state’s rainy day fund for use in seeking matching federal infrastructure grants, including for clean-energy and climate projects.
Next up: Healey’s economic development bill. While the bill’s themes will likely reflect a blueprint of priorities Healey released last month, we may have to wait until it actually gets filed in the coming weeks for the details. To pull off something big for climate tech, Healey will likely turn to bonding. With tax revenues stagnant, there’s not much room in the operating budget. Nor is there much left of federal COVID-era stimulus funds.
As with life sciences, a blossoming clean tech scene means more jobs and other signs of economic growth, all while harnessing Massachusetts brainpower to solve global problems. Employment has flattened out in the state’s clean-energy sector, with just over 100,000 people currently working in renewable power and building efficiency, but the climate tech industry is much broader than energy-specific businesses.
A recent report from Deloitte on climate tech entrepreneurship offers encouraging signs: Eight percent of all US climate tech companies are based in Massachusetts, putting us in second place behind California — with New York, Colorado, and Texas close behind.
Kevin McGovern, Deloitte’s managing partner for New England, says Massachusetts still needs to form a strong regional cluster around climate tech, like the one in place for biotech. We do have important conveners — Greentown Labs, The Engine, and the Northeast Clean Energy Council, to name a few. But from McGovern’s perspective, the field remains too disparate. While climate tech companies often pursue different missions, they do face shared challenges, he said, most notably getting disruptive technologies into entrenched industries.
Although the MIT-backed Engine is among the region’s prominent private-sector conveners, vice president Ben Downing sees government playing an important role, too. To expand our leadership, the former state senator says, MassCEC funding should not only match the amount pledged for life sciences, but exceed it. With an unprecedented influx of federal funds for climate tech, powering up state initiatives in this area has probably never been more important. Plus, a big state commitment sends a signal to the industry at large, like the life-sciences pledge once did.
In October, Healey made an important move by tapping former Greentown chief executive Emily Reichert to run MassCEC. Reichert recognizes the state can’t keep all the manufacturing planned by homegrown companies, particularly as they move into mass production. But her agency can make a good case for smaller-scale pilots and tests here.
Reichert declined to say what kind of financial support she expects in the upcoming economic development bill, but she sees clean tech’s prominence in Healey’s recent economic report as a good sign.
It’s not just about money. Casey Bowers of the Environmental League of Massachusetts said state lawmakers should address the permitting and grid connection delays that plague energy projects big and small. These delays, she said, can prompt some promising companies to look out of state to grow.
That’s not the only reason. Woburn-based Boston Metal, for example, picked West Virginia to tap into a federal program for communities affected by closed coal mines or plants. Form Energy picked that same area in part because of its zoning, infrastructure, and steel manufacturing knowhow. Ascend executives liked southwest Kentucky for its access to hydropower. And Nth Cycle went to Ohio to get closer to its scrap-metal customers. Still, all four uniformly praised their home state and expressed hope for its burgeoning clean tech sector.
We have notched some key victories lately. Somerville’s Sublime Systems picked a Holyoke location where it will make climate-friendly concrete, for example, while Form Energy signed a nearly 100,000-square-foot-lease to more than double its space in Somerville, and Woburn car-battery maker Factorial Energy opened a production plant in Methuen.
In Factorial’s case, the quest involves batteries that last longer and cost less than the lithium-ion ones electric carmakers use today. Up to 100 people could work at the plant within two years. Chief executive Siyu Huang looked at a number of states and incentive packages before picking Methuen for the $50 million project. Being close to her engineering team was particularly important.
Eventually, Huang wants to bring these solid-state batteries into mass production. She hasn’t ruled out Massachusetts. What would she like to see from state government? Stronger support for fostering the next generation of workers at the state’s many colleges and universities.
Now, it’s time for Massachusetts leaders to figure out the most effective way to tap into the potential of innovative companies like the one Huang is building for the benefit of our state’s economy, and our planet — before other states beat us to it.