IMPACT Act 2.0 Offers States 2% Bonus and $15M to Build Greener Roads with Low-Emissions Cement

The IMPACT Act 2.0 is essentially a major push to green up America’s highways. It sets up a new system within the Federal Highway Administration (FHWA) to financially reward states for ditching traditional, high-pollution construction materials—like standard concrete and asphalt—in favor of low-emissions alternatives. Specifically, the bill authorizes $15 million across fiscal years 2025 through 2027 to cover two big incentives: first, states get reimbursed for the extra cost of using the greener materials, and second, they get a 2% bonus on the cost of the materials every time they use them on a highway project (Sec. 2).

The Road to Greener Pavement: How the Incentives Work

Think of this as the federal government helping states overcome the “green premium.” If a state wants to use a new, cleaner cement mixture that costs 10% more than the old stuff, the FHWA will cover that difference and then hand them an extra 2% incentive just for making the effort. To qualify for this money and technical help, states need to show they’ve already updated their engineering standards to make it easier to buy these low-emissions products. The FHWA is also tasked with providing technical assistance, essentially helping state transportation departments rewrite their massive rulebooks to focus on performance—how strong and durable the road is—rather than just specifying a recipe for the materials (Sec. 2).

De-Risking Innovation for Manufacturers

Beyond just helping states buy existing green materials, the bill also creates an Advance Purchase Commitment Program to spur innovation among manufacturers. This is the part that speaks directly to the supply chain. States can now sign multi-year contracts with producers for a fixed amount and price of innovative, domestically-made materials like asphalt and concrete. This is huge because it gives manufacturers the certainty—the guaranteed customer base—they need to invest millions in developing and scaling up cleaner production methods (Sec. 3). For example, a company developing a cement that captures CO2 during production can secure a contract now, knowing they have a buyer in three years, making it easier to get financing for their new factory.

The Fine Print on Fixed Contracts

While this advance commitment program is great for innovation, the bill includes some necessary guardrails. These contracts are not a blank check. States are explicitly barred from paying producers until the materials are actually delivered. Furthermore, the contract rules are designed to prevent producers from getting paid for manufacturing costs related to units the state later cancels or decides not to order. Producers must also show real, documented progress toward commercial capacity—things like securing logistics and storage—or the state can terminate the agreement. This protects taxpayer dollars while still encouraging the industry to move toward cleaner options (Sec. 3).

Making the List: The Public Directory

To keep things transparent, the FHWA must create and maintain a public directory of all approved low-emissions materials. States have 180 days after the law passes to submit materials for review, and the FHWA has another 180 days to approve or deny the submission. This directory is critical: once a material is listed, it’s fair game for use in any federal highway project. This process ensures that the materials receiving incentives are genuinely cleaner than the current standard, though the definition of “low-emissions” is currently broad, focusing on cutting emissions “as much as possible” compared to current market options (Sec. 2, Sec. 3).