$6B in Tax Credits Available for Clean Energy Manufacturing and More
Alex White, Co-Founder
Subcity, Inc.
A second round of 48C credits was just announced with up to $6B USD to be allocated this year. Concept papers (think of this like an initial proposal) are due by June 21st and promising papers will be encouraged to complete the full application.
What is a 48C?
The Qualifying Advanced Energy Project Credit (48C) was established by the American Recovery and Reinvestment Act of 2009 and renewed and expanded under the Inflation Reduction Act of 2022 (IRA). The 48C credit is a tax credit for investments in advanced energy projects, as defined in 26 USC § 48C(c)(1). The IRA provided $10 billion in funding for the expanded 48C(e) Qualifying Advanced Energy Project Credit Allocation Program (48C(e) program). To receive the full value of a 48C credit, projects must meet prevailing wage and registered apprenticeship standards. On March 29, 2024, the IRS allocated approximately $4 billion of 48C credits for over 100 projects across 35 states, with approximately $1.5 billion allocated to projects in designated energy communities.
The Department of the Treasury and the Internal Revenue Service, in partnership with DOE, have announced up to $6 billion for this second round of tax credit allocations for projects that expand clean energy manufacturing and recycling and critical materials refining, processing and recycling, and for projects that reduce greenhouse gas emissions at industrial facilities. DOE’s Office of Manufacturing & Energy Supply Chains (MESC) manages the 48C(e) program on behalf of IRS and Treasury.
Is My Company Eligible?
The Clean Energy Manufacturing in Appalachia program and partner organization, Subcity, have teamed up to offer a free Incentive Finder review for manufacturing companies for 48C and other grants/tax credits. Contact Tom Reed at tom@wemakeithere.org or visit Clean Energy Manufacturing in Appalachia to learn more.
What Type of Projects Are Considered?
Eligible projects:
- Clean Energy Manufacturing and Recycling Projects: A qualifying advanced energy project in this category involves re-equipping, expanding, or establishing an industrial or manufacturing facility. The facility must manufacture or recycle one or more of the specified advanced energy properties outlined in the Round 2 guidance. Production of energy-intensive materials that have a substantially lower carbon intensity when compared to an appropriate industry-specific benchmark are now eligible under this category. Please review the guidance for an updated list of program priorities.
- Industrial Decarbonization Projects (formerly named Greenhouse Gas Emissions Reduction Projects): An advanced energy project qualifies under this category if it involves retrofitting an industrial or manufacturing facility, particularly in energy-intensive sectors such as cement, iron and steel, aluminum, and chemicals. The retrofit must include the installation of equipment specifically designed to reduce greenhouse gas emissions by at least 20 percent.
- Critical Materials Projects: A qualifying advanced energy project in this category re-equips, expands, or establishes an industrial facility for the processing, refining, or recycling of critical materials:
- Aluminum, antimony, arsenic, barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, dysprosium, erbium, europium, fluorspar, gadolinium, gallium, germanium, graphite, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, vanadium, ytterbium, yttrium, zinc, and zirconium.
Concept papers and applications will be evaluated across multiple criteria and policy factors, including (1) commercial viability; (2) greenhouse gas emissions impacts; (3) strengthening U.S. supply chains and domestic manufacturing for a net-zero economy; and (4) workforce and community engagement.