The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

Manufacturing is in the headlines, both as a major goal of current U.S. policy and a point of competitive tension with China. It’s a surreal moment, which could be summarized as the world’s biggest consumer picking a fight with the world’s biggest producer. 

In 2024, America exported $140 billion of goods to China, while China exported $440 billion of goods to the U.S. One doesn’t sensibly pick a fight with their biggest customer. Instead of counterpunching, China has worked to address any structural weaknesses it could find to minimize the damage if its relationship to its biggest customer were to change. 

While the current U.S. policy direction suggests that green technologies are a scam that force more expensive and unproven technology into the market, China is demonstrating that green technology is a huge boost to economic growth. This is evidenced by its dominance in solar, battery and EV technology in global markets — a point that became clear during COP30 in Brazil earlier this month. 

Automaker BYD, for example, is building an EV plant larger than the entire city of San Francisco and seven times larger than the biggest Tesla gigafactory. Green manufacturing isn’t a dead end; it’s a huge economic boom. But it’s not happening here.

How we got here

The economic order since the fall of the Berlin wall has been one of ever-expanding international trade and rising prominence of multinational corporations. Military conflicts have been more regional (as opposed to global), and most international competition moved into the economic sphere. While any system has room for critique, the economic efficiencies that came from global production both provided cheaper goods and a reason for ongoing international cooperation. 

This approach was very good for business, and generally good for world peace. What it was less good at was guaranteeing jobs in any specific country, as global trade also meant the ability to offshore labor at lower costs. Some industries and national policies advanced their manufacturing with technology, which drove more productivity and sustained living wages even at the higher cost of living in industrialized nations.

Still, over the past two decades, domestic manufacturers have steadily ceded market share to imports: U.S. producers now supply roughly two-thirds of the home market for manufactured goods, down from more than three-quarters in the early 2000s, a shift worth on the order of $600 billion–$750 billion in annual sales now captured by factories overseas. At the same time, a growing reshoring push and “make it here” industrial policies show just how eager voters, workers and local leaders are to bring more of that production back onto domestic ground.

My venture firm invests in deep tech for productivity improvements to the industrial sector that also bring along massive ecological improvements — so I have a front row seat to the effort to “bring back manufacturing” to America. We’ve set up several new manufacturing facilities in the U.S. in the past five years and for a time, those production lines were humming. But now, thanks to recent policies, the U.S. is one of the worst places to manufacture in the world. 

Tariffs have crippled U.S. manufacturing

Tariffs aren’t categorically a bad thing. When used wisely, along with thoughtful investments in education, infrastructure and cultural incentives, they can bring valuable industries back into domestic production. But there’s a bad way to implement them and the worst way to use tariffs, which is what’s happening now: to have them be unstable, large and arbitrary. 

The instability actively punishes folks setting up manufacturing domestically because they cannot predict input costs, nor the cost of production equipment. If your team was waiting on best-in-class equipment to arrive from Germany or Japan the same week that a 50 percent tariff is imposed broadly on those nations, then you may have just accidentally bankrupted the effort, as capital expenditure costs are huge project budget line items. 

Almost no country except China has the luxury of sourcing its entire supply chain within their borders. So when tariffs are imposed on inputs, the cost of domestic production can go up to the point where it is no longer workable. 

When tariffs are unstable, they don’t encourage investment, because bold moves that set up new production could accidentally kill your business. 

When tariffs are large, they create expensive discoordination arising from having to halt production or re-route sourcing to new vendors in other geographies to get you back to gross margin positive while you incur costs from supply chain delays and production uncertainty. 

When tariffs are arbitrary, one cannot predict whether your government is wanting to support your industry or abandon it. This makes life harder for investors, business leaders and entrepreneurs that are the main personnel that establish domestic production.

Getting back on track

If you live in a higher-income nation, the operating band for labor costs will be higher than labor costs in lower-income ones. Given this, the labor cost disadvantage either needs to be made up for via higher individual productivity, which lowers labor cost fraction per unit, or you need to make higher-quality goods that command enough margin to justify the higher labor costs. 

In either case, you need a highly skilled workforce appropriately trained for better productivity or exceptional craft that improves product quality. 

To get here, a thoughtful approach for governments would be to lower the cost and improve the quality of educational options — from advanced degrees and four-year universities to trade schools and support of regional craft guilds and maker communities. The people, places and tools that enable mass-upskilling need to be well-resourced and respected. 

In other words, you’ll need to pay teachers more. (Which, if you’re counting, would be another source of meaningful work.) While these adjustments may sound expensive and time-consuming, in countries where they have been applied, the efforts have shown fantastic ROI. Beyond education and re-skilling, infrastructure investments in roads, bridges and ports, lower-cost energy, and clear labor laws that simplify bringing the best talent are all huge boosts to establishing robust industry.

Tariffs can positively contribute to this effort if they are stable, low and principled. 

A 5 to 10 percent tariff that is stable for 10 years provides enough time for new manufacturing to be established. It also signals to the workforce that those industries will likely be growing and that engaging in re-skilling into that industry is a worthwhile career investment. 

When tariffs are low, it also means that when they eventually expire, the country maintains an industrial base that can still produce near the globally competitive costs. This greatly strengthens the likelihood of strong export markets making use of that newly developed production capacity.

The good news is that we know where to put our attention and investment, if the intent is more manufacturing skill: education, infrastructure, social respect and low-intensity, time-stable tariffs (if needed). The countries that do this well will pull ahead in the coming decades and become net drivers and suppliers of the waves of economic transformation to come.

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A system that uses artificial intelligence to sort municipal waste could soon be producing a new revenue stream for its owners: hundreds of thousands of carbon credits.

Colorado-based recycling company AMP removes organics and recyclables from trash using AI-powered sorting technology. Rather than being sent to landfill, where it would release the potent greenhouse gas methane, the organic material is processed into biochar, a form of carbon that stays stable for hundreds of years. Following a successful pilot, AMP said last month it had signed on to provide waste-processing services to 1.2 million residents served by Southeastern Public Service Authority of Virginia. 

Interest in biochar has surged in recent years, with Microsoft and other prominent buyers purchasing credits from companies around the world. The substance is created by heating organic matter — often residues from agriculture or timber production — in a low-oxygen environment. At around $150 per ton of carbon dioxide equivalent, the credits are relatively cheap compared to other methods for “durable” carbon removal, which is often defined as storing carbon for a century or more.

The world’s biggest supplier of biochar carbon credits is Exomad, a Bolivian company that processes waste from sustainable forestry residues and has contracted for 1.7 million credits, according to CDR.fyi, a provider of data on carbon removal markets. Biomass from municipal waste is a new form of input, however. Few municipalities require residents to separate organic waste; most is incinerated or sent to landfill. 

Thousands of items a minute

At the Virginia facilities, AMP’s technology scans conveyor belts of unsorted waste to identify recyclables, organics and landfill items such as plastic bags. As the items fall off the end of the belt, the AI fires compressed air jets that direct individual items to belts dedicated to specific waste types. 

AMP’s sorting units, which process thousands of items a minute, are typically set to create waste streams that are 90 percent pure. The system can achieve 95 percent or even 99 percent purity, added Matanya Horowitz, the company’s founder and chief technology officer, but that requires more time and is generally not necessary for biochar production. Once separated, the organic material will be transported to a nearby facility in Portsmouth, Virginia, for processing into biochar.

“The waste goes from being something really carbon intensive to something that’s actually pretty close to carbon neutral,” said Horowitz. “And we are showing it can fit into a lot of existing waste flows. You don’t need to sort of set up a new collection route and green bins.”

Price expected to drop below $100

AMP is currently considering which registry standard to use when it issues credits for the carbon that remains locked in the biochar. Horowitz said the project will process 540,000 tons of waste annually, a number that could grow to 700,000 tons of waste over time and generate hundreds of thousands of tons of carbon credits. The credits are expected to cost between $120 and $140 initially, with the price falling below $100 over the long term as future projects allow the operation scale, said Horowitz.

Some carbon credit projects have been criticized for failing to prove that the credit revenue was essential for implementation. If prevailing economics mean a wind turbine is going to be built, for example, the project should not generate credits. Horowitz said that the Virginia work passed this “additionality” test because diverting the organic waste from landfill is not required by regulation or supported by other revenue sources. 

The first use of AMP’s biochar will be as “daily cover” — a layer of material placed on top of a landfill to mop up odors, limit methane release and deter birds from feeding on the trash. Longer term, Horowitz hopes to add other uses, including as an ingredient in concrete.

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The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

With financial accountability for net-zero targets in the spotlight, the time has come for carbon pricing to reach its full catalytic potential. Done well, carbon pricing has the potential to rewrite incentives and motivate governments, corporations and individuals to be more responsible for their greenhouse gas (GHG) emissions.

The elegance of carbon pricing is that it provides a common denominator for GHG liabilities and investments. Carbon pricing enjoys broad, active promotion from decarbonization advocates across the political spectrum — more than some climate policies such as clean-energy or electric vehicle tax credits — and widespread use in the oil and gas sector. With fairly steady support over the years, carbon pricing has grown steadily since 2005, according to the World Bank’s annual roundup. Almost one-third of all global emissions are covered by a carbon price.

Moreover, the Science Based Targets initiative (SBTi) recently released its next discussion draft for the Corporate Net Zero Standard that included its first carbon pricing mechanism. Optional until 2035 and mandatory thereafter, the carbon price would mobilize more climate finance to address “ongoing” carbon emissions. 

Carbon pricing has had durable appeal, but could create a bigger impact in the years ahead. Here are three ways to unlock that potential and mobilize significant climate transition funding.

Tackle the terminology

Most of the World Bank’s report focuses on government policies for carbon pricing. In contrast, a report from the University of Oxford proposes that companies can use internal carbon pricing as a tool “for managing climate risk, incentivizing low-carbon investment, and preparing for emerging regulatory requirements.”

The difference and overlap between these two spheres are complex. One key to scaling outcomes from carbon pricing will be to resolve persistent confusion in the terminology, to disentangle the policy tools from voluntary measures and distinguish strong initiatives from weaker ones.

In practice, the term “carbon pricing” is used as a catch-all, because all carbon pricing initiatives share the goal of internalizing the external costs of GHG emissions. But a regional emissions trading scheme is vastly different from a corporate carbon price. In the simplest applications, carbon pricing is a symbolic and optional guidepost for budgeting decisions. In the strongest cases, it generates measurable financial flows from GHG emitters into decarbonization projects.

Words do matter and carbon pricing needs labels that distinguish one structure from the others. In the case of corporate carbon pricing, the persistent ambiguity lets companies blur the line between promises and progress. It risks letting businesses sound ambitious — claiming they are climate champions because they use carbon pricing — even if they have yet to invest a single dollar in solutions.

Apply it in value chains

Internal carbon pricing makes companies four times more likely to have climate transition plans in place, according to research from non-profit organization CDP. Big name brands and major buyers can use carbon pricing to underpin transition plans for their direct emissions as well as for their value chain climate initiatives, which are key to cracking the Scope 3 puzzle. 

Carbon pricing can create better understanding and alignment of goals up and down the value chain. Large buyers, for example, can establish a pathway for suppliers to slowly phase in carbon pricing, and offer pooled resources and practical implementation guidance. Retailers can use carbon pricing to create both carrots and sticks to accelerate investment in climate projects well up the value chain.

It’s important to make sure that value chain carbon pricing initiatives don’t simply tax and weaken supplier partners. To do this, buyers can use internal carbon pricing as a means to generate funding that, through procurement decisions and direct investment, flows into value chain partners’ decarbonization projects. Many exciting examples of net zero partnership between buyers and suppliers leave suppliers financially stronger and better positioned to serve all of their customers with low-carbon alternatives. 

Solve the interoperability puzzle

To scale up the adoption and success of both policy and corporate carbon pricing schemes, it will be necessary to get clearer on how they overlap. Frameworks such as the GHG Protocol, SBTi, the EU’s Carbon Border Adjustment Mechanism trade policy, the Corporate Sustainability Reporting Directive disclosure law and others will need a common yardstick to measure and value companies’ commitments to internal carbon pricing.

As University of Oxford professor Robert Eccles argued recently in Forbes, the next evolution of carbon pricing depends on prioritizing consistency and collaboration over competition. This applies equally to both policy carbon pricing and corporate carbon pricing schemes. “[The tool] can only function if built on reliable, comprehensive carbon accounting that assigns accountability appropriately while enabling market mechanisms to operate efficiently.”

Companies and governments have long used carbon pricing to create incentives for credible climate action, albeit inconsistently. Today’s renewed attention to net zero accountability offers an opportunity to make good on the full potential of carbon pricing. 

We should expect financial commitments to take center stage in corporate climate initiatives in coming years. To raise the accountability bar, advocates can coalesce around an expectation that companies disclose not just future net-zero intentions, but present day financial follow through.

That will require clearer alignment around the technical uncertainties of carbon pricing. Initiatives to sort out the terminology around carbon pricing, syndicate it across value chains and improve interoperability across corporate and policy schemes will help mobilize hundreds of billions of dollars in additional climate funding. With the right level of attention, carbon pricing may just be the highly practical—not flashy—tool needed to accelerate climate finance in the crucial years ahead.

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This may have been the year when a somewhat wonky component of sustainability strategy — the environmental attribute certificate (EAC) — went mainstream. The past 12 months have seen certificates for low-emission products minted in multiple sectors, including cement, iron and carbon capture. In parallel, standard setters are close to giving companies greater leeway to use certificates in carbon accounting and target setting. 

“It definitely feels like this year something really clicked across the board — with buyers and suppliers, but also the standard setters seem to be getting it, the environmental NGOs, even governments,” said Kim Carnahan, CEO of the nonprofit Center for Green Market Activation (GMA).

The approach is designed to unlock investment in climate solutions by separating the environmental benefit of a product from the product itself. Take sustainable aviation fuel, an area where EACs are well established. There are companies that are willing to pay a premium to have employees travel on flights that burn fuel derived from used cooking oil and other sustainable sources, but it’s impractical for an airline to respond to that demand by changing the fuel mix on specific flights. 

EACs solve the impasse by allowing airlines to deploy sustainable fuel wherever available and to sell certificates for the associated emissions savings. Companies that purchase the certificates deduct the savings from their greenhouse gas inventories, and retire the certificates so that they cannot be used again. The Sustainable Aviation Buyers Alliance, a project co-managed by GMA, Environmental Defense Fund and RMI that counts Amazon and Visa as members, has used the approach to aggregate $550 million in demand for sustainable aviation fuel certificates since 2021.

Tech giants lead the way 

The approach is now proliferating, with the tech giants — which are trying to balance ambitious emissions goals with data center build out — leading the way. “A major driver behind EACs today is thinking about how we decarbonize data centers,” said Katherine Vaz Gomes, a decarbonization engineer at Carbon Direct, a consultancy. “There was a demand beforehand, but the hyperscalers have really accelerated the need to bring this to market.”

This May, for instance, Microsoft used guidelines Gomes helped write when it purchased EACs covering more than 620,000 tons of emission reductions from Sublime, a startup that has developed low-carbon cement. Microsoft will use Sublime’s product in its construction projects when possible, but most cement is used within a few hundred miles of where it is produced, and Sublime is still building its first commercial facility. Purchasing the certificates allows Microsoft to support the startup — and claim the associated emissions savings — even when it cannot use Sublime’s product.

Other data center projects will also involve EACs. In October, Meta said it would use ones purchased from Electra, a startup that is building a facility to produce low-carbon iron, to cover emissions associated with its infrastructure projects. The same month, Google announced plans to use EACs in a deal to fund technology to capture 90 percent of emissions from a new natural gas plant in Illinois. The electricity from the plant will be added to the grid that serves Google data centers in Illinois and Arkansas.

Renewable energy certificates (RECs), another established form of EAC, have long been used to help pay for clean energy projects. But a new EAC was required in this case: Unlike solar and wind, which produce zero emissions after construction, the certificate needed to account for the fact that not all the emissions will be captured, said Iain Kaplan, a partner at NorthBridge Group, the consultancy that developed the methodology for the certificate.

Broader coalitions

Carnahan and colleagues are working to ensure these individual projects are followed by broader industry-wide efforts. In September, GMA teamed up with fellow nonprofit RMI to launch the Sustainable Concrete Buyers Alliance; founding members include Amazon, Prologis and Meta. The following month, Nevoya, an electric freight company, was announced as the winner of a request for proposals designed to kickstart work on EACs for road transport. The center is also consulting on plans to create a buyers alliance for low-carbon chemicals.

This momentum will likely be accelerated if, as looks likely, two influential standard setters incorporate use of EACs into their guidelines. The Science Based Targets initiative is revising its net-zero framework and the latest draft allows companies to use EACs to hit targets — albeit only for specific types of Scope 3 emissions, a restriction that Carnahan would like to see loosened. Over at the Greenhouse Gas Protocol, a nonprofit that creates carbon accounting guidelines, a working group focused on market instruments is due to publish a white paper later this month that is expected to recommend integrating EACs into future rules.

In addition to the flurry of new activity, 2025 also saw a subtler shift around EACs. The term is broadly used and encompasses two market instruments that are often criticized: RECs, which are faulted for doing little to add new renewables to the grid, and voluntary carbon credits, which, in the worst cases, have been issued to projects with no climate benefit. Other EAC projects have on occasion suffered from guilt by association, but the most recent crop has largely been evaluated on their own merits.

This and other factors point to an increasingly important role for EACs in climate strategies. “We’ll see broader adoption beyond tech and data centers, with chemicals, steel and cement increasingly using EACs to support decarbonization,” said Greg Matlock at EY Americas, who tracks use of EACs in heavy industry. “In many instances, EACs will move from being an add-on to being a core part of how projects are structured.”

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