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American Inflation Reduction Act Signed Into Law, Committing $370 Billion on Climate and Energy (Part 3)

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Energy Bulletin

Yesterday, we reviewed three of the American Inflation Reduction Act’s key climate and energy provisions. Today, in this third instalment, we address the rest of the Act’s key climate and energy provisions: Agriculture & Forestry, Electric Transmission, Advanced Manufacturing and Decarbonization, Alternative Fuel and Low-Emission Aviation Technology Program, Water Infrastructure, Other Climate Provisions, Environmental Permitting and Reviews, and Climate Resiliency.

D. Agriculture & Forestry.

The IRA includes multiple provisions targeted at the agricultural and forestry sectors, including programs aimed both at reducing GHG emissions from these sectors and promoting agricultural and silvicultural carbon sequestration. Unlike industrial facilities and vehicles, the GHGs associated with the agricultural sector are more diffuse and not readily controlled with technological requirements. The IRA would provide funding for several agricultural conservation purposes, including to improve soil carbon uptake and retention, to reduce nitrogen losses, and to reduce GHG emissions. The funding could also be used for capturing GHG emissions associated with agricultural production. Hundreds of millions of dollars would also be available to provide grants to increase the sale and use of agricultural commodity-based fuels. The IRA would provide over $2 billion for the National Forest System to support vegetation management projects and the protection of old-growth forests.

E. Electric Transmission.

  • The IRA includes major provisions aimed at expanding the nation’s electric transmission system, widely recognized as one of the keys to achieving deep decarbonization of the electricity sector.
  • Transmission facility financing and transmission line siting. The IRA would provide money for U.S. Department of Energy (DOE) loans to upgrade certain “national interest” electric transmission facilities and to site interstate or offshore electrical transmission lines. The transmission siting loans can be used for numerous purposes, including certain impact studies and analyses, reviews of alternate siting corridors, project negotiations, and participation in various regulatory proceedings before the Federal Energy Regulatory Commission or state regulatory commissions. Certain funds can also be used for economic development purposes in communities affected by transmission project construction or operation.
  • Interregional and offshore wind electricity transmission planning, modeling, and analysis. The IRA would provide funding for offshore wind electricity transmission planning. This includes research into using non-transmission alternatives, energy storage, and grid-enhancing technologies and for community economic development.

F. Advanced Manufacturing and Decarbonization.

The IRA would provide financial assistance to industrial manufacturers to install, retrofit, or implement technology designed to accelerate GHG emissions reduction at manufacturing facilities, like those that produce iron, steel, steel mill products, aluminum, cement, concrete, glass, pulp, paper, industrial ceramics, chemicals, and other energy intensive industrial processes.

G. Alternative Fuel and Low-Emission Aviation Technology Program.

The IRA would establish a grant program with nearly a quarter-billion dollars available for projects relating to the production, transportation, blending, or storage of sustainable aviation fuel, plus nearly $50 million for projects relating to low-emission aviation technologies.

H. Water Infrastructure.

  • Bureau of Reclamation domestic water supply projects. The IRA would provide funding to disadvantaged communities for projects to provide domestic water supplies to communities or households that do not have reliable access to domestic water supplies in a state or territory. [the United States Bureau of Reclamation is an agency of the federal Department of the Interior; it is the second largest producer of electricity in the western United States.]
  • Canal improvement projects. The IRA would fund grants to cover water conveyance facilities with solar panels to generate renewable energy, or for other solar projects associated with Bureau of Reclamation projects that increase water efficiency and assist in the implementation of clean energy goals.

I. Other Climate Provisions.

  • The IRA designates $250 million in Greenhouse Gas Air Pollution Planning Grants per state and $4.75 billion for implementation grants to carry out the plans for GHG reduction.
  • $100 million goes to EPA to develop and administer a low carbon labelling program for construction materials for federal buildings and transportation projects.
  • $250 million is made available to convert federal buildings to high-performance green buildings.
  • $2.15 billion is appropriated to the Federal Buildings Fund for the acquisition and installation of low-embodied carbon materials.
  • $975 million is appropriated to the Federal Buildings Fund for emerging and sustainable technologies.
  • $2 billion is made available for low-embodied carbon construction materials and products for transportation and infrastructure projects.
  • $3 billion is appropriated to purchase zero-emission Postal Service delivery vehicles and related infrastructure.
  • There is significant money for infrastructure related to research into nuclear energy, energy efficiency, renewables, and fossil and carbon energy.
  • The IRA would appropriate money to the Department of Housing and Urban Development (HUD) to address energy and climate issues in low-income housing, including improving energy efficiency, water efficiency, indoor air quality, and sustainability; to implement the use of low-emission technologies, materials, or processes, including zero-emission electricity generation, energy storage, or building electrification; and to improve climate resilience.

J. Environmental Permitting and Reviews.

  • Environmental reviews. In an effort to accelerate environmental reviews, the IRA appropriates $40 million for the development of “efficient, accurate, and timely” environmental reviews. This would be accomplished through additional hiring and training, improved information systems, engagement with stakeholders and the community, and the purchase and development of new environmental analysis equipment and other analysis tools.
  • Environmental and climate justice. Climate and environmental justice are key features of the IRA, primarily focused on directing funding to disadvantaged communities. The IRA would appropriate $2.8 billion in Environmental and Climate Justice Block Grants to community-based nonprofits and other partnerships for a range of climate-based activities, specifically for disadvantaged communities, including:
    • Community-led air and other pollution monitoring;
    • Investments in low/zero-emission infrastructure and workforce development to reduce GHG emissions;
    • Mitigating climate and health risks from urban heat islands, extreme heat, wood heater emissions, and wildfires;
    • Climate resiliency;
    • Climate adaptation;
    • Reduction of indoor air toxins; and
    • Greater engagement with disadvantaged community members during state and federal processes, including rulemakings.

In addition, the IRA funds a $1.893 billion “Neighborhood Access and Equity Grant Program” for the Federal Highway Administration to, among other aims, improve walkability, safety, and affordable transportation in disadvantaged or underserved communities. There is an additional nearly $1.1 billion allocated for projects in economically disadvantaged or underserved communities.

  • Council on Environmental Quality (CEQ) engagement. Another provision sets aside $30 million to the CEQ for, among other goals, improving stakeholder and community engagement during the environmental review process.
  • Endangered Species Act (ESA). Recovery plans under the ESA receive attention from the IRA, with $125 million appropriated to develop and implement recovery plans. Further, $121.25 million is designated to rebuild and restore units of the National Wildlife Refuge System and state wildlife management areas facing invasive species and increasing damage from weather events.

K. Climate Resiliency.

  • Tribal climate resilience. The IRA allocates $220 million to the Bureau of Indian Affairs for Tribal climate resilience and adaptation programs and $23.5 million for climate resilience and adaptation activities to serve the Native Hawaiian community. In addition, the IRA allocates $145.5 million to develop a “Tribal Electrification Program” focused on developing zero-emissions energy systems in homes, as well as $12.5 million for drought relief programs.
  • Coastal climate resiliency. The IRA would provide funding to the National Oceanic and Atmospheric Administration for the purpose of investing in coastal communities and climate resilience.

The fourth and last instalment to be published tomorrow will address the Act’s focus on Tax Credits, and provide a conclusion to this bulletin series.

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