Inflation Reduction Act of 2022 - Implications for clean transportation
A few days ago, the Inflation Reduction Act of 2022 was introduced by Democratic senators in Congress. The hefty bill (over 700 pages long) included a long list of climate-related provisions that revitalized climate action activists. They include a number of incentives related to clean energy and transportation. Here’s a summary of the relevant provisions. Highlights from the summary:
$4,000 consumer tax credit for lower/middle income individuals to buy used-clean vehicles, and up to $7,500 tax credit to buy new clean vehicles
$500 million in the Defense Production Act for heat pumps and critical minerals processing
$2 billion in grants to retool existing auto manufacturing facilities to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them.
Up to $20 billion in loans to build new clean vehicle manufacturing facilities across the country
Tax credits for clean sources of electricity and energy storage and roughly $30 billion in targeted grant and loan programs for states and electric utilities to accelerate the transition to clean electricity.
Tax credits and grants for clean fuels and clean commercial vehicles to reduce emissions from all parts of the transportation sector
$3 billion for the U.S. Postal Service to purchase zero-emission vehicles
$1 billion for clean heavy-duty vehicles, like school and transit buses and garbage trucks
The extension of the EV Credit is good news for manufacturers like GM and Tesla. There are also provisions to ensure that the incentives enable a more equitable distribution. (There are MSRP and income limits.) There are hints that the incentives may actually be rebates vs tax credits. If so, this would be a boon for would-be owners without or with little tax burdens.
We’re supportive and hopeful that our senators will prevail. Assuming unanimous support of the Democratic senators, this can become law before the end of the year!
YOU CAN HELP
While our senators and representatives are likely supporters of this bill, it will help for them to hear from you. There are campaigns to enhance the political will to support the this bill. One such effort is Citizens’ Climate Lobby’s Take Action campaign. In just a few steps, you’ll be able to place your call or send an email to our senators (it must first be passed in the Senate). To take action, go to cclusa.org/take-action.
