Albemarle, Cummins, and Siemens Energy have been awarded substantial tax credits under the Inflation Reduction Act (IRA). The U.S. Department of Energy (DOE) announced these credits, amounting to $1.93 billion, supporting 35 projects aimed at improving the electrical grid, advancing critical mineral production, and developing electric vehicle components.
The Inflation Reduction Act’s Role
The IRA, signed into law by President Joe Biden in 2022, is a segment of larger $430 billion legislation. Its primary goal is the transition of the U.S. toward sustainable energy practices. Following this agenda, in March, the administration distributed $4 billion in tax credits across over 100 projects.
These projects are pivotal in accelerating clean energy manufacturing as dictated by the Qualifying Advanced Energy Project Tax Credit (48C). To qualify for these credits, recipients must adhere to specific U.S. wage standards and apprenticeship requirements.
Achieving the climate targets set during the 2015 UN Climate Change Conference in Paris is paramount, aiming to cap global warming. Yet, the advancement of clean energy projects has been slow due to high financing costs, expensive materials, and sluggish permitting processes. Despite achieving a record investment in U.S. wind and solar power last year, the expansion rate falls short of meeting the national climate objectives.
Key Recipients and their Projects
Albemarle is set to receive $9.4 million to boost lithium carbonate production at its Silver Peak Lithium Project in Nevada, enhancing the U.S.’s capability to produce essential minerals for battery production domestically.
Cummins will benefit from a $10.6 million grant to support the manufacturing and testing of large-scale proton-exchange membrane electrolyzers in Fridley, Minnesota, crucial for hydrogen production and clean energy technologies.
Siemens Energy plans to utilize its $18.3 million tax credit to establish the first manufacturing facility for Large Power Transformers (LPT) in the U.S., a significant milestone in strengthening the nation’s renewable energy infrastructure.
Other companies, including MP Materials and Ballard Power Systems, have also received tax credits under this initiative. These incentives underscore the U.S. government’s commitment to promoting clean energy technologies, aimed at reducing the country’s carbon footprint and spurring economic growth in green technologies.
This initiative is just one of many under Biden’s ambitious climate agenda, which seeks to not only address the environmental impacts of energy production but also bolster the U.S. economy through the growth of the clean tech sector. With companies like Albemarle and Cummins at the forefront of securing tax credits, the path to a cleaner, more resilient energy landscape looks increasingly attainable.
