Inflation Reduction Act of 2022

In late July Senate Democrats released proposed text of the Inflation Reduction Act of 2022 (IRA). Largely a reworking of the Build Back Better Act (BBB), the IRA commits over $350 billion to climate and energy transition related programs. We have highlighted some areas of interest below:

Extension and Modification of PTC for Renewable Electricity Production (13101)

·        Reinstates solar PTC, adds Geothermal

Extension and Modification of ITC for Renewable Electricity Production (13102)

·        Expanded tax credit now applies to energy storage, qualified biogas, and microgrid projects

Extension and Modification of Credit for Carbon Oxide Sequestration (13104)

·        45Q credit extende to projects beginning construction before 2033

·        Lowers capture requirements

·        Increases credit value for non-EOR and EOR uses

Extension of Incentives for Biodiesel, RD and Alternative Fuels (13201)

·        Extends existing credit through 2024

·        Along with the inclusion of qualified biogas in 13102, we see this as a positive for the sector and expect further extensions

Clean Hydrogen (13204)

·        Creates sliding scale per-kg credit system for qualified clean hydrogen

·        Credit determined by life-cycle GHG emissions in production

Alternative Vehicle Refueling (13404)

·        Extends existing credit to projects placed in service by end of 2032

·        Removes per-location limitation

·        Exciting for not only EV, but hydrogen and other alternative fuels

Advanced Manufacturing Production Credit (13502)

·        Per-kWh capacity basis credit for manufacturers of battery cells and modules

·        10% total-cost credit for production of applicable critical minerals

Technology Neutral Tax Credits (13701/702)

·        Technology neutral ITC & PTC

·        Facilities must be placed into service by end of 2024

Summary of Clean Energy and Climate Initiatives ($B)