The Inflation Reduction Act of 2022 (IRA) makes an unprecedented investment in the solutions necessary to reduce emissions from the vital, yet challenging, industrial sector. Clear guidance for implementing these investments and getting cross-cutting decarbonization solutions to scale will be critically important to achieving midcentury climate goals. To do this, the General Services Administration (GSA), the Treasury Department and the Internal Revenue Service (IRS) have released formal requests for information and comment.
The Industrial Innovation Initiative (I3) submitted responses to four such requests, providing the industrial perspective on what additional guidance, clarity, or support is necessary for the effective implementation of the relevant provisions within the IRA.
Quick links to our responses:
- GSA RFI – Clean Construction Materials
- IRS/Treasury RFI – 48C, Advanced Manufacturing Credit
- IRS/Treasury RFI – 45Q, Carbon Oxide Sequestration Credit
- IRS/Treasury RFI – 45V, Clean Hydrogen & 45Z Clean Fuels Production Credit
Clean Construction Materials
Responding to the General Services Administration Federal Buy Clean Request for Information on Construction Materials with Substantially Lower Embodied Carbon, the Initiative provided feedback on decarbonization strategies, especially as they relate to the Tier 1 priority materials (concrete, steel, asphalt, and flat glass) identified by the Federal Buy Clean Task Force. The response emphasized the importance of clear and comparable emissions data, inclusive of health harming pollutants, and the critical role environmental product declarations will play in decision-making among products.
48C – Advanced Manufacturing Credit
Responding to the Treasury Department and IRS Request for Comments on Energy Security Tax Credits for Manufacturing Under Sections 48C and 45X, the Initiative calls for greater guidance related to how advanced energy equipment is defined, suggesting the inclusion of a suite of clean hydrogen production and carbon management technologies. Other recommendations include energy and materials efficiency considerations, waste reduction pathways, and the need for guidance related to feedstock efficiency.
45Q – Carbon Oxide Sequestration Credit
Responding to the IRS and Treasury Department Request for Comments on the Credit for Carbon Oxide Sequestration, the Initiative made suggestions to help clarify how “qualified facilities” should be determined under the tax credit, as well as the need to distinguish discrete functional production and emissions pathways from one another, regardless of their presence within a common fence-line. This response also calls for the explicit inclusion of in situ mineralization as an eligible carbon sequestration method.
45V – Clean Hydrogen & 45Z – Clean Fuels Production Credits
Responding to Treasury Department and IRS Request for Comments on Credits for Clean Hydrogen and Clean Fuel Production, the Initiative provided input on the emissions sources that should be included in lifecycle greenhouse gas emissions analysis and the allocation of emissions related to hydrogen produced as an industrial by-product. Among other recommendations, the Initiative calls for additional clarity around the definition of a facility, suggesting, similar to the response for 45Q, that a facility is defined by independent production streams, allowing for credits to be applied specifically to the relevant process. While third party verified emissions data is paramount for accurate calculations, the response outlines several opportunities to improve upon the commonly used GREET model, calling for greater specificity so that low-carbon fuel producers may get full credit for their emissions reductions.
Stay Up to Date
The information contained within these responses represents a small fraction of the collective knowledge and expertise of our participants. I3 will continue to seek out opportunities for formal input and comment in partnership with the GSA, IRS, Treasury, and other offices associated with the implementation of federal industrial decarbonization policies. Keep up to date with I3 news by signing up for our monthly newsletter. For more information on I3 or to get involved, contact Gabrielle Habeeb at email@example.com.