What’s in the Inflation Reduction Act — For Renewable Fuels?

August 01, 2022

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by Jim Lane (Biofuels Digest) ... Here are the details from the US Senate with markers to indicate items of definite or possible industry interest. More on the bill here.

Summary of the Energy Security and Climate Change Investments in the Inflation Reduction Act of 2022

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The Inflation Reduction Act:

1. Lowers energy costs for Americans through policies that will lower prices at the pump and on electricity bills, help consumers afford technologies that will lower emissions and energy prices, and reduce costs that would otherwise be passed on to them.

2. Increases American energy security through policies to support energy reliability and cleaner production coupled with historic investments in American clean energy manufacturing to lessen our reliance on China, ensuring that the transition to a clean economy creates millions of American manufacturing jobs, and is powered by American-made clean technologies.

3. Invests in decarbonizing all sectors of the economy through targeted federal support of innovative climate solutions.

4. Focuses investments into disadvantaged communities to ensure that communities that are too-often left behind will share in the benefits of the transition to a clean economy.

5. Supports resilient rural communities by investing in farmers and forestland owners to be part of growing climate solutions, and by ensuring rural and communities are able to better adapt to a rapidly changing climate.

American Energy Security and Domestic Manufacturing

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Decarbonize the Economy

The investments in this bill will reduce emissions in every sector of the economy, reducing emissions from electricity production, transportation, industrial manufacturing, buildings, and agriculture.

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Tax credits and grants for clean fuels and clean commercial vehicles to reduce emissions from all parts of the transportation sector.
Grants and tax credits to reduce emissions from industrial manufacturing processes, including almost $6 billion for a new Advanced Industrial Facilities Deployment Program to reduce emissions from the largest industrial emitters like chemical, steel and cement plants.
Over $9 billion for Federal procurement of American-made clean technologies to create a stable market for clean products, including $3 billion for the U.S. Postal Service to purchase zero-emission vehicles.
$27 billion clean energy technology accelerator to support deployment of technologies to reduce emissions, especially in disadvantaged communities.
A Methane Emissions Reduction Program to reduce the leaks from the production and distribution of natural gas.

Farmers, Forestland Owners and Resilient Rural Communities

This bill will make investments to ensure that rural communities are at the forefront of climate solutions. The investments affirm the central role of agricultural producers and forest landowners in our climate solutions by investing in climate-smart agriculture, forest restoration and land conservation. It also makes investments in clean energy development in rural communities.

More than $20 billion to support climate-smart agriculture practices.
$5 billion in grants to support healthy, fire resilient forests, forest conservation and urban tree planting.
Tax credits and grants to support the domestic production of biofuels, and to build the infrastructure needed for sustainable aviation fuel and other biofuels.
$2.6 billion in grants to conserve and restore coastal habitats and protect communities that depend on those habitats.

Reaction from the stakeholders

Michael McAdams, President of the Advanced Biofuels Association: “The Advanced Biofuels Association (ABFA) is pleased that the new Senate Inflation Reduction Act will provide extensions for renewable diesel and clean fuel production tax credits, as well as create a sustainable aviation fuel credit, which are essential to reducing greenhouse gas emissions from our nation’s highest emitting sector – transportation. Our low-carbon liquid fuels, which by law must exceed 50 percent emissions reductions, but frequently exceed 80 percent, are vital to propel the US into a cleaner, energy-independent future. We encourage Congress to support this historic legislation that will create much needed certainty for the production of the American-made, low-cost, low-carbon fuels of the future.”

Growth Energy CEO Emily Skor. “It’s very encouraging to see Senate negotiators continue to recognize key priorities we’ve pushed forward over the last year, including SAF, infrastructure, and other incentives aimed at maximizing the biofuel industry’s contributions to a low-carbon future. For the U.S. to meet its climate goals, we must quickly expand the volume of low-carbon biofuels available across the entire transportation sector – on the ground, in the air, and at sea. These provisions can jump-start that climate progress, while delivering more savings at the pump, greater long-term energy security, and a welcome economic boon to rural communities. We know from experience that this process is far from done, and we continue to review other details of the proposal, but we look forward to continuing our work with champions in the House and Senate to ensure our priorities are reflected in any final package.” READ MORE

INFLATION REDUCTION ACT INCLUDES CONSERVATION AND BIOFUEL FUNDING (Brownfield Ag News)

Inflation Reduction Act includes ag funding (Farm Progress)

Senate climate bill provides 'enormous' benefits for carbon capture -- The legislation hikes an existing tax credit to $85 per ton of carbon dioxide that power plants or industrial facilities capture and permanently bury underground. (Politico Pro)

Manchin Sets High Bar for Tesla and GM Electric-Car Tax Credits -- Content requirements could be difficult to meet depending on how Washington finalizes the fine print. (Bloomberg)

Minnesota's electric co-ops, biofuels stand to gain from Inflation Reduction Act (Hutchinson Leader)