WASHINGTON – Today the U.S. Department of the Treasury and Internal Revenue Service (IRS) released proposed guidance on the section 45X Advanced Manufacturing Production Credit established by President Biden’s Inflation Reduction Act (IRA), which is already creating good-paying American jobs by spurring a U.S. manufacturing boom in communities across the country, strengthening America’s energy security, and incentivizing onshoring of clean energy components and critical minerals in the U.S.
Under President Biden, businesses have announced investments of more than $600 billion in clean energy and manufacturing, with more than $140 billion announced for the manufacturing of clean energy technologies, electric vehicles, and batteries since the President signed the Inflation Reduction Act into law—nearly double the total investment in those sectors in the two years before the bill’s passage.
“These new investments across industries and throughout clean energy supply chains are creating good-paying jobs and driving down the cost of clean energy for Americans,” said Secretary of the Treasury Janet L. Yellen. “New manufacturing investments are disproportionately going to communities that have lacked opportunity and are key to increasing long-run growth and the productivity of our economy.”
“President Biden’s Investing in America agenda is doing just that: helping onshore clean energy supply chains and deliver economic prosperity to every pocket of America,” said Secretary of Energy Jennifer M. Granholm. “The Advanced Manufacturing Production Credit will supercharge a new era of American manufacturing and bring good paying clean energy jobs back to American communities.”
“The Inflation Reduction Act has already fueled a clean energy manufacturing boom in America,” said Senior Advisor to the President for Clean Energy Innovation and Implementation John Podesta. “Today’s guidance from Treasury on the Advanced Manufacturing Production Credit gives the clean energy industry even more clarity and confidence to continue their momentum.”
“Today’s announcement creates the framework for investing in a clean energy future here in America in ways that create good jobs for American workers,” said National Economic Advisor Lael Brainard.
“President Biden has turned crisis into opportunity, harnessing the imperative to combat climate change as a chance to spark an American manufacturing renaissance,” said National Climate Advisor Ali Zaidi. “Because of the President’s leadership, on factory floors across our country, the nuts and bolts needed to build a new clean economy are being manufactured and stamped ‘Made in America.’”
New analysis by Treasury economists using data produced by the Massachusetts Institute of Technology and the Rhodium Group demonstrates how the IRA has significantly accelerated clean energy investment, including in the manufacturing sector.
Manufacturing investments announced since the passage of the IRA have primarily gone to economically disadvantaged counties with below average wages, household incomes, employment rates, and college graduation rates, following through on President Biden’s commitment to invest in communities that have been left behind.
- 76% of clean investment dollars in manufacturing announced since the Inflation Reduction Act passed have been for projects in counties with average weekly wages below the U.S. average weekly wage.
- 66% of clean investment dollars in manufacturing announced since the Inflation Reduction Act passed are landing in counties with college graduation rates below the U.S. aggregate rate.
- 54% of clean investment dollars in manufacturing announced since the Inflation Reduction Act passed are in counties where a smaller share of the population is employed than the average share in the U.S.
- 69% of clean investment dollars in manufacturing announced since the Inflation Reduction Act passed are in counties with median household incomes below the U.S. aggregate median income, which reflects an increase relative to the share in prior years.
Treasury’s Notice of Proposed Rulemaking (NPRM) for the section 45X Advanced Manufacturing Production Credit proposes clarifying definitions and confirms credit amounts for eligible components, including solar energy components, wind energy components, inverters, qualifying battery components, and applicable critical minerals. It also proposes definitions for key terms to incentivize production in the United States and to clarify the circumstances under which taxpayers can claim the credit.
The NPRM includes important safeguards to prevent potential fraud, waste, or abuse, including safeguards against duplicative crediting of the same component, crediting of activities that are not value-added, or extraordinary circumstances in which components are produced but not put to productive use.
The NPRM will be open for public comment for 60 days and Treasury will carefully consider public comments before issuing final rules.
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Official news published at https://home.treasury.gov/news/press-releases/jy1989
