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Today, the U.S. Department of the Treasury and Internal Revenue Service (IRS) introduced proposed guidelines concerning the section 45X Advanced Manufacturing Production Credit established by President Biden’s Inflation Reduction Act (IRA). This initiative aims to stimulate a robust U.S. manufacturing surge, bolster national energy security, and incentivize the localization of clean energy elements and essential minerals within the United States.
Since President Biden enacted the Inflation Reduction Act, businesses have committed over $600 billion to clean energy and manufacturing, with a staggering $140 billion allocated specifically to clean energy technologies, electric vehicles, and batteries. This investment nearly doubles the total funding in these sectors within the two years before the bill’s passage.
According to Treasury Secretary Janet L. Yellen, these investments are generating well-paying jobs and reducing the cost of clean energy for Americans. She notes that these manufacturing investments are notably benefiting communities that have historically faced economic challenges, marking a crucial step in enhancing long-term economic growth and productivity.
Energy Secretary Jennifer M. Granholm emphasizes that President Biden’s agenda is revitalizing American clean energy supply chains, fostering economic prosperity across the nation. The Advanced Manufacturing Production Credit is anticipated to ignite a new era of manufacturing, particularly in the clean energy sector, revitalizing communities with well-paying jobs.
This proposed guidance from the Treasury on the Advanced Manufacturing Production Credit is expected to offer clarity and assurance to the clean energy industry, fueling its ongoing progress, as per Senior Advisor John Podesta.
National Economic Advisor Lael Brainard sees this announcement as a framework for creating employment opportunities for American workers while investing in a clean energy future in the United States.
President Biden’s focus on combating climate change has spurred an American manufacturing resurgence, as noted by National Climate Advisor Ali Zaidi. This leadership has led to the production of components necessary for building a new clean economy, all bearing the label “Made in America.”
Treasury economists, using data from the Massachusetts Institute of Technology and the Rhodium Group, have revealed how the IRA has significantly accelerated clean energy investment, particularly in economically disadvantaged counties.
The proposed Notice of Proposed Rulemaking (NPRM) for the section 45X Advanced Manufacturing Production Credit aims to define eligible components, such as solar and wind energy components, inverters, qualifying battery components, and critical minerals, while outlining terms to encourage U.S. production. It also includes safeguards to prevent potential fraud or misuse of the credit.
The NPRM will be open for public comment for 60 days, with Treasury carefully considering feedback before finalizing rules. |
