Low-Carbon Concrete Tax Incentives Signed into Law in New Jersey

New Jersey Gov. Phil Murphy (D) on Monday signed a bill that gives businesses tax credits for using concrete made with lower carbon emissions.

Other states have measures that recommend studies of tax credits, but New Jersey is now the first in the nation with incentives on the books.

The bill gives concrete makers within New Jersey a credit of up to 5% of a project’s total concrete cost if they deliver materials with low levels of embodied carbon. The measure also offers a tax credit of up to 3% of a project’s concrete cost to companies that deliver concrete made using carbon capture, utilization, and storage technology.

Corporate business tax credits would further be offered for the costs of doing environmental product declaration analyses to taxpayers who produce concrete, or a major component of concrete.

• Concrete is responsible for at least 7% of carbon emissions worldwide, according to clean energy research group BloombergNEF.
• The bill could “easily be adapted horizontally in other states” and spur action elsewhere, said Chris Neidl, a policy consultant for the Natural Resources Defense Council and cofounder of the OpenAir Collective.
• “This is an example of a win-win,” said Ed Potosnak, executive director, of the New Jersey League of Conservation Voters. “It’s good for the environment and good for business by positioning New Jersey at the forefront of a growing low-carbon concrete industry.”
• Last year’s climate law (Public Law 117-169) gives the Environmental Protection Agency $250 million to help companies create product declarations.
• The climate law also sets aside $2.2 billion for the federal government to buy low-carbon materials to be used in federal buildings.
• Most of the carbon emissions linked to concrete come from making cement, the glue that binds crushed stone together into concrete. Cement production releases carbon both from the chemical reaction that results when calcium carbonate is broken down, and from the enormous heat levels that must be reached.