by Frank Cioffi, President of the Greater Burlington Industrial Corporation, Betsy Bishop, President of the Vermont Chamber of Commerce, and Catherine Davis, President of the Lake Champlain Chamber
GlobalFoundries is a critical partner in meeting our goals to combat climate change. Their semiconductors drive innovation in mobile technology, electric vehicles, renewable energy, smart household appliances, healthcare, and national security. The mobile phone you use every day likely relies on a chip from GlobalFoundries’ facility in Essex Junction. We have all read about the global supply shortage and rising demand for these chips. GlobalFoundries is ramping up production to meet these challenges, but since taking over the semiconductor plant from IBM in 2014, they have also been an early leader in meeting Vermont’s goals to reduce greenhouse gas emissions.
Vermonters from all walks of life know that climate change is an unprecedented global crisis, including our anchor employers like GlobalFoundries, and have urged lawmakers to compel us to be part of the solution – to reduce our reliance on carbon-based energy technologies and reduce greenhouse gas emissions.
For an energy intensive company like GlobalFoundries this is daunting but also imperative. And they are not shying away from their responsibility. The plant here in Vermont has been doing its part for decades - long before our renewable energy goals were established in 2015, and before the passage of the Global Warming Solutions Act in 2020. In fact, the GlobalFoundries plant in Essex has reduced greenhouse gas emissions by 24% from 2005 to 2020 while increasing manufacturing output by 19.5%.
For a company like GlobalFoundries, energy reliability, resilience, and cost are essential parts of business management. The Essex campus uses more power than the City of Burlington, and energy costs are 50 percent of its total operating costs.
For the GlobalFoundries plant in Vermont to remain viable and ultimately grow in the expanding and competitive semiconductor market, innovation in how it sources its energy and how much it pays is critical. This is an opportunity, not an obstacle, for Vermont in our collective efforts to reach our greenhouse gas emissions goals.
GlobalFoundries has recently proposed to the Public Utility Commission the concept of becoming its own self-managed electric utility. From a regulatory standpoint, this would allow GlobalFoundries to procure its own power from the regional energy market including local renewable energy projects. Again, energy cost savings is crucial for their business growth – but it is shortsighted and incorrect to think the strategies the company will use to achieve savings conflict with Vermont’s climate change mitigation efforts. They do not.
As a self-managed utility, GlobalFoundries will not increase its greenhouse gas emissions. It will purchase its energy from renewable or carbon free suppliers, including renewable energy suppliers here in Vermont if it is competitively priced. It also plans to pursue the development of on-site energy projects such as commercial scale solar, battery storage, and hydrogen storage.
The greatest strides that GlobalFoundries can make in greenhouse gas reductions is to address those from their manufacturing processes which account for about 80 percent of their total emissions compared to 8 percent for electricity. The self-managed utility will have greater flexibility and resources to address the more significant sources of emissions in the manufacturing process and make the most meaningful progress for Vermont.
While many Vermonters are focused on our efforts to address climate change, we should not forget GlobalFoundries’ significant positive impact on the community and our state. Their wages alone are almost $200 million, some of the highest in Vermont. Adding in state income taxes, local property taxes, employment of Vermont vendors for goods and services, an employment multiplier effect of over 5,000 additional jobs, and 40% of all Vermont exports, their impact on the Vermont economy is tremendous. They are our largest private employer, and they want to grow responsibly. They have established partnerships with the University of Vermont, Vermont Technical College, and our other colleges and universities to create talent pipelines so that the next generation of Vermonters have incredible employment prospects.
As economic development proponents from groups who work daily with leading employers in our region and state, we enthusiastically support GlobalFoundries application before the Public Utility Commission to become a self-managed utility. This support is grounded in the fact that we see GlobalFoundries’ application for what it is, the opportunity to both support a key employer that is critical to Vermont in helping us meet and exceed greenhouse gas emission reductions and because they are a leader and willing to move faster than what has been prescribed at the state level.
Frank Cioffi is President of the Greater Burlington Industrial Corporation.