The U.S. Treasury Department has announced that it will be releasing guidance next week on sourcing requirements for electric vehicle battery tax subsidies under President Joe Biden’s climate change law. This guidance will be the first in a series of highly anticipated rules to determine how broadly the credits can be used. The auto, battery, and clean energy industries have been eagerly awaiting guidance on complex questions governing eligibility for hundrs of billions of dollars of incentives in the Inflation Reduction Act, signed into law last year.
Electric Vehicle Battery Tax Subsidies
The release of guidance on sourcing requirements for electric vehicle battery tax subsidies will be eagerly anticipated by the auto, battery, and clean energy industries. The guidance will determine the eligibility for hundreds of billions of dollars of incentives in the Inflation Reduction Act, signed into law last year. This guidance will be the first in a series of highly anticipated rules to determine how broadly the credits can be used. The Inflation Reduction Act is a key part of President Joe Biden’s climate change law, aimed at incentivizing the use of electric vehicles and reducing greenhouse gas emissions.
Bonus Tax Credits for Clean Energy Projects
Following the release of guidance on electric vehicle battery tax subsidies, the U.S. Treasury Department will be providing guidance in the next couple of months around bonus tax credits for clean energy projects sited in fossil fuel-dependent communities, those built with domestically produced equipment, and those paying workers prevailing wages and employing apprentices. These bonus tax credits are aimed at incentivizing the use of clean energy and creating jobs in communities that have been traditionally reliant on fossil fuels.
Conclusion
The release of guidance on electric vehicle battery tax subsidies and bonus tax credits for clean energy projects is a significant step in President Joe Biden’s efforts to combat climate change. The guidance will provide clarity for the auto, battery, and clean energy industries on the eligibility for hundreds of billions of dollars of incentives in the Inflation Reduction Act. This will incentivize the use of electric vehicles and clean energy, while also creating jobs in communities that have been traditionally reliant on fossil fuels.
