Inflation Reduction Act - Chemistry laundry list
Any day now, Joe Biden will sign the Inflation Reduction Act, the thing that used to be the Build Back Better bill till Joe Manchin decided to strip huge swaths of much-needed reform and aid out it for his own financial, ego, and political gain, into law. I wrote a large-ish piece about it for Chemical & Engineering News, where I work, analyzing the impacts of the soon-to-be law on chemistry business and research. You can check that out here:
What’s in the Inflation Reduction Act for chemistry? - Read on at cen.acs.org
Getting ready to write that, I read a lot of statements from corporations, think tanks, advocacy groups, and industry groups, as well as a decent chunk of the actual bill itself. One result of that effort was a big list of provisions that scientists, engineers, and business people in chemistry and allied fields would care about. That list didn't really fit in the article, and it would have been painful to edit it to C&EN standards.
So here it is! Don't yell at me if it isn't perfect. A known weakness is some of these items may overlap some in the actual text of the bill. And even if this looks like it'd be exhaustive, it probably isn't. It's a large bill with a lot of manufacturing and advanced industry incentives in there. And I didn't even touch all the health care stuff.
I was unable to express how big of a deal this bill is for carbon capture/direct air capture and for bioeconomy/biofuels people.
The boost to the 45Q tax credits, both for point source capture and direct air capture, WILL push many projects over the line into economic feasibility. The credits for carbon capture are now pretty well in line with the costs of carbon capture for a lot of technologies on a lot of specific sites.
And the SAF tax credit along with other supports for biofuels and "advanced manufacturing" will similarly translate directly and quickly into more bioeconomy projects in the US, I expect.
Jessie Jenkins of the REPEAT Project, a policy analysis shop (A report full of lovely data projections about the full carbon impacts is here: https://repeatproject.org/reports) also made a great point on a recent podcast: It's not just these dollars we're talking about. Project developers will leverage each and everyone one of those dollars with various financing- and insurance-related lenders.
Jenkins says the Inflation Reduction Act will eventually add up to 1 billion metric tons of greenhouse gas emission reductions. That's billion with a B. We're finally seeing some action in the right order of magnitude to meet the moment.
Okay, enough ramble, here's my list of ...
Boons for chemistry and chemistry-aligned industries:
Transportation
Clean fuel tax credit worth up to $1.75 per gallon for sustainable aviation fuel (SAF)
Tax credits and grants for biofuels infrastructure
$2 billion in grants to convert auto manufacture to clean cars
$20 billion in loans for new clean car plants
$4,000-$7,500 clean vehicle tax credit
$9 billion in federal clean tech procurement, including $3 billion for zero-emission postal vehicles
$1 billion to support clean heavy-duty vehicles such as school buses and garbage trucks
$3 billion for zero-emission port equipment
Carbon Capture
Boosts to 45Q credits: industrial (min 12.5kt/year) and power (min 18.75 kt/year) point-source capture raised to $85/ton for storage, $60/ton for utilization including enhanced oil recovery; direct air capture (minimum 1kt/year) raised to $180/ton for storage, $130/ton for utilization including enhanced oil recovery
Direct pay for CC, DAC, and Utilization;
Efficiency and emissions reduction
$27 billion for a Greenhouse Gas Reduction Fund
Consumer energy efficiency: Home appliance and heat pump subsidies ($9B in rebates, 10 yrs of tax credits), which will boost the market for refrigerants and solar panels
More than $3.2 billion in federal procurement for green and low-carbon materials and equipment for new federal buildings and upgrades to existing federal buildings
$2 billion in support for domestic manufacturing of low-carbon and carbon-sequestering materials for the Federal highway system
More than $6 billion in grants and tax credits for industrial decarbonization, the chemical industry called out specifically in addition to steel and cement
Methane reduction program; $1.55 billion to EPA to issue loans, rebates, contracts, and grants to help the oil and gas sector reduce methane emissions from petroleum and natural gas systems and directs EPA to charge a small per-ton fee on methane emissions above project-specific thresholds starting in 2025.
$8 billion in grants for planning and implementation of local GHG reduction and air quality projects and programs
$40 million boost in EPA funding to address staffing and resource shortfalls for environmental reviews
Energy
Estimated $3 billion in production tax credits for domestic production of solar panels, wind turbines, batteries, and critical materials;
$2 billion in funding for clean energy research at National Labs
$10 billion investment tax credits to build manufacturing for clean energy tech;
Est $30 billion in subsidies for existing nuclear power plants over 10 yrs - 0.3 to 1.5 cents per kilowatt-hour depending on wage practices;
Clean energy production tax credits, $30 billion in grants and loans for local utilities to decarbonize
Agriculture
$20 billion in support for sustainable agriculture, applicable to cover crops that can become biofuels, carbon farming
Also check out this excellent analysis by ICIS
https://www.icis.com/explore/resources/news/2022/08/05/10792910/insight-us-inflation-reduction-act-to-boost-chems-going-to-sustainability/