Biden Administration Issues Guidance on How IRA Clean Energy Tax Credits Can Be Used

Proposed rules help clarify how companies can utilize the Advanced Manufacturing Production Credit
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Christopher Schuler, National Press Secretary, christopher.schuler@sierraclub.org 

WASHINGTON, DC — Today the Biden Administration filed a Notice of Proposed Rulemaking with proposed guidance on how companies can utilize the clean energy tax credits available through the Inflation Reduction Act, also known as the Advanced Manufacturing Production Credit or Section 45X. The notice kicks off a 60-day comment period with a hearing scheduled for February 22, 2024.

The 45X tax credit incentivizes U.S. manufacturers creating products crucial to the clean energy economy — including blades for wind turbines, wafers for solar panels, electricity inverters, and batteries, as well as minerals and metals critical for clean energy production.

In response to the announcement, the Sierra Club issued the following statements:

“The tax credit for U.S. manufacturers to produce goods in support of the clean energy economy is foundational to the Inflation Reduction Act. This investment redresses decades of policy blunders that moved industry and technical expertise overseas to polluting competitors with bad labor records. 45X signals to the private sector that the U.S. is best suited to be the production hub of the clean energy transition worldwide. It helps fulfill President Biden’s promise to create  good-paying manufacturing jobs that are here to stay, and delink U.S. energy security from oil-producing bad actors that don’t have our interests at heart,” said Harry Manin, Deputy Legislative Director for Industrial Policy and Trade at the Sierra Club.

“As the U.S. makes the necessary transition away from the gas-powered car for the sake of our climate and public health, the road to 100% electric vehicles must be one that encourages domestic manufacturing, increases good union jobs, and incentivizes manufacturers to clean up their supply chains. The 45X guidance will help to do just that, by offering incentives at different points in the EV supply chain that together promote the growth of a domestic EV manufacturing industry,” said Katherine Garcia, Sierra Club’s Clean Transportation for All Director.

“This tax credit helps fulfill the promise of the Inflation Reduction Act, ensuring that clean energy is both affordable and made here in the U.S. The low-cost deployment of clean energy will help buffer American businesses from international oil and gas prices. The 45X tax credit is already helping to ensure that wind and solar projects are able to tap into the domestic content adder, and will help regrow critical domestic industries like aluminum and steel, while cleaning our air and water,” said Dave Rogers, Sierra Club’s Beyond Coal Deputy Director.

About the Sierra Club

The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.