WASHINGTON (Reuters) – The Biden administration on Tuesday released guidance to help companies secure clean energy tax credits under the 2022 Inflation Reduction Act, completing a program to cut subsidies long available for wind and solar energy , expanding to other low-carbon sources.
The move is part of outgoing President Joe Biden’s actions aimed at boosting his administration’s broader efforts to combat climate change. They could prove vulnerable if President-elect Donald Trump takes office later this month on a platform of spending cuts and maximizing fossil fuel production.
Trump has said he will undermine the IRA, Biden’s signature climate bill, to save the US budget hundreds of billions of dollars, although that would require congressional support.
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U.S. officials announcing the guidelines Tuesday said the IRA’s technology-neutral clean energy program offers as much as 30% tax credits for production and investments in climate-friendly energy — a benefit that has been available for years for solar and wind projects.
The program identifies additional technologies that may be eligible, including marine and hydrokinetic energy, nuclear fission and fusion, hydropower, geothermal energy and some forms of waste energy recovery.
The administration said the program was critical for decarbonizing the energy sector, the source of about a quarter of U.S. greenhouse gas emissions, and for expanding electricity capacity as demand from data centers, industrial users and electric vehicle owners vehicles increases.
Deputy Finance Minister Wally Adeyemo said in a call with reporters that withdrawing the subsidies could lead to higher energy prices for consumers by slowing the pace of new energy projects and raising costs for developers.
“Given the increase in demand for electricity across this country, and the fact that one of the things the American people are most concerned about is rising costs, eliminating these tax credits would have significant detrimental effects,” he said.
A Department of Energy analysis found that the credits, along with other provisions of the IRA and the Bipartisan Infrastructure Law, are intended to save U.S. households up to $38 billion on their electric bills through 2030.
The Biden administration has taken other steps in recent days to strengthen its climate agenda. They include banning offshore oil and gas drilling in new areas of the Atlantic, Pacific and elsewhere, and finalizing guidance on how companies can secure credits for green hydrogen, produced from renewable energy and needed to power heavy industry and decarbonise transport.
(Writing by Richard Valdmanis; Editing by Barbara Lewis)
