Senate Passes Inflation Reduction Act, Energy Incentives

(Credit: Pixabay)

The United States Senate has passed the Inflation Reduction Act, which includes more than $369 billion for energy programs.

While there were some adjustments made to the bill, the energy elements remained intact during a special weekend session that included 16 consecutive hours of debate ultimately resulting in the final vote. The Democrat-backed legislation, which includes the largest energy and climate investment in the nation’s history, passed along party lines 51-50 with Vice President Kamala Harris providing the tie-breaking vote.

The bill quickly moved through the Senate after being introduced at the end of July. It moves to the House where it is expected to be heard starting August 12, 2022.

The act aims to cut US emissions by 40% through 2030 based on a 2005 baseline, a number that several analysts say is accurate. They also say with additional national and local policy the US will be able to hit its emissions goals of 50% reduction by 2030.

Many of the energy elements are based on financial incentives to grow domestic renewable energy production and improve infrastructure and manufacturing. That includes tax incentives estimated to be around $30 billion to produce solar panels, wind turbines, and batteries.

It also includes $20 billion in loans for new manufacturing facilities for electric vehicles, as well as money to improve clean manufacturing of emissions-heavy industries such as steel, cement, and chemicals. Other elements include a methane reduction program, targets to increase domestic production of sustainable aviation fuels, and support for environmental justice.

Passage of the bill in the Senate was key to getting the energy programs signed into law. The House had passed the Build Back Better Act in November 2021, which included $555 billion toward climate goals, but it stalled in the Senate.

President Biden, whose energy targets have been a key piece of his administration’s work, said after the new bill was introduced last month that it was a compromise and the strongest Congress could pass. If the House passes the Inflation Reduction Act, which also includes tax policy and healthcare initiatives, it will go to Biden to sign into law.