Treasury
Summary
Today, the Internal Revenue Service (IRS) announced $6 billion in tax credits for the second round of the Inflation Reduction Act’s (IRA) § 48C Qualifying Advanced Energy Project Tax Credit (§ 48C Program).
The § 48C Program, managed by the IRS with assistance from Department of Energy’s (DOE) Office of Manufacturing & Energy Supply Chains (MESC), was originally established by the American Recovery and Reinvestment Act of 2009, and subsequently expanded with a $10 billion investment under the IRA. Of this $10 billion, 40% is reserved for projects in designated § 48C energy communities—communities with closed coal mines or coal plants. The § 48C Program is a competitive funding program, meaning that companies have the opportunity to apply for infrastructure project funding which is awarded to the most meritorious projects in the form of an investment tax credit. The objective of this program is to fund critical projects that:
- Expand US clean energy manufacturing and recycling capacity;
- Expand US critical materials processing and refining capacity; and
- Drive process efficiency and reduce greenhouse gas (GHG) emissions at US industrial facilities.
Selected Projects represent a diverse set of sectors, including, for example, chemicals, food and beverage, district energy systems, pet products, aluminum, ceramics, and building materials. The selected projects reflect adoption of heat pumps, electric boilers, and thermal storage technologies, amongst other solutions to decarbonize industry and once implemented will eliminate roughly 2.8 million tons of CO2.
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