By Cal Dooley
November 21, 2018 at 5:00 am ET
This election season produced a lot of promises about the need to create and protect U.S. manufacturing jobs. Candidates in both parties promoted policies to boost the sector, and support for manufacturing was featured prominently in their ads.
Going forward, those post-campaign trail commitments should include smart policies to foster continued growth in our thriving chemical industry.
Some 96 percent of American-manufactured goods depend on products made by domestic chemical companies. The sector supports roughly a quarter of America’s economic activity and accounts for 10 percent of all U.S. exports. There are 529,000 Americans directly employed by the chemical industry and 4 million others supported by the sector.
Washington is debating major policies that will significantly impact the U.S. chemical industry, including vehicle-emissions standards and new tariff policies.
One such proposal has to do with vehicle fuel-economy standards and the elimination of mileage credits that provide incentives to use innovative new auto air-conditioning technologies. It turns out that getting rid of these credits could actually harm American chemical manufacturing. For years, automotive air conditioning was dominated by refrigerants produced by foreign manufacturers. Trade practices made it nearly impossible for U.S. manufacturers to compete.
But when the U.S. adopted new vehicle-emissions standards, innovative air-conditioning refrigerants — that others were unable to produce — became the norm. This provided an opportunity for the American chemical industry to innovate and develop new, next-generation refrigerants — and for the United States to regain lost market share in this area of manufacturing. Here at home, American manufacturers invested more than a billion dollars to develop and build new, world-scale chemical-manufacturing plants to produce the new refrigerants, which help carmakers meet the U.S. vehicle-emission standards and put hundreds of people back to work.
These fuel-economy standards helped re-establish the United States as the global manufacturing leader of advanced refrigerant products, and our country became a net exporter of them. We put hundreds of people to work in Louisiana and Texas, and we began planning for increased demand as more and more people worldwide began to purchase cars using these American cooling alternatives.
As the Trump administration weighs options for revised corporate average fuel economy standards, it remains critical that our advantage in refrigerant technologies is not undermined by a final proposal that eliminates appropriate credits. The Environmental Protection Agency’s refrigerant leakage credits are a critical lever to incentivize the use of, and drive the transition to, more environmentally friendly, innovative products.
Eliminating the credit will reward foreign manufacturers at the expense of American companies that have made significant investments in next-generation refrigerants. Without the credits, we would be effectively handing over a multibillion-dollar industry to a foreign competitor.
The refrigerant credit also provides automakers considerable flexibility to build vehicles Americans want to buy. Why would we willingly choose to relinquish our growing competitive position through self-imposed policy change?
Leaving the vehicle standards as they are would serve as a catalyst for a continued American manufacturing renaissance. Instead of letting others gain any sort of advantage, we should ensure U.S. policy allows America to retain its leadership position in innovative auto air-conditioning technologies.
With hundreds of billions of dollars and nearly a million jobs on the line in our industry alone, smart chemicals policy is smart manufacturing policy. Let’s retain vehicle-emissions standards that allow us to put American innovation and manufacturing first.
Cal Dooley is president and chief executive officer of the American Chemistry Council, which represents a diverse set of U.S. companies and manufacturers engaged in the business of chemistry.
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