Editor’s note: This post was co-authored by Maren Taylor, former head of corporate climate leadership at EDF+Deal.
The Inflation Reduction Act is the largest investment in the fight against climate change ever passed by Congress.
The nearly $369 billion in climate and clean energy provisions in the new law include grants and tax credits that will reduce emissions and provide businesses with the certainty they need to make long-term investments in clean energy .
Business voices have been instrumental in securing passage of this landmark legislation, with example after example of companies showing real climate leadership.
Now that the Inflation Reduction Act has been signed into law by President Biden, here are three business benefits worth celebrating.
1. Investments from the Inflation Reduction Act will help companies achieve ambitious net zero goals, igniting the market for clean energy, clean manufacturing and zero-emission transportation.
Every company with climate goals counts on the availability and affordability of clean energy. The Inflation Reduction Act puts a modernized grid within reach and paves the way for companies to meet climate commitments by expanding tax credits for things like new wind turbines, solar panels and batteries.
These credits, combined with investments in new clean energy innovation and transmission infrastructure, will accelerate the accessibility of renewable energy in the private sector, particularly in rural areas.
For companies that own and operate medium and heavy-duty vehicles such as trucks, the electrification of these fleets is a high-impact opportunity to reduce emissions. The Inflation Reduction Act will unlock critical investments and tax credits for the production and purchase of vehicles that will facilitate electrification of the fleet.
Additionally, tax credits for charging infrastructure such as charging stations will complement major investments in the bipartisan infrastructure law passed last year.
2. The Inflation Reduction Act gives businesses the assurance of making long-term investments in the clean energy transition.
The new law provides the stable, long-term incentives needed to drive clean energy investment by both producers and buyers.
For example, the landmark legislation extends investment and production tax credits for renewables and storage for a decade.
These credits were previously limited to one to three years, making future planning difficult. Additionally, the law transitions to technology-neutral tax credits in 2025, giving utilities and energy operators stability and options to maximize the long-term clean energy potential of their facilities.
3. Inflation Reduction Act investments will increase American competitiveness, strengthen domestic supply chains and create millions of jobs.
The law protects American supply chains by investing in new and retrofitted manufacturing facilities.
The law supports domestic production of technologies from batteries to heat pumps and positions American businesses to compete in the global energy economy. The byproduct of this support: an opportunity for businesses to create millions of jobs across the country.
Continued climate leadership from business
The Inflation Reduction Act is a transformative investment in communities and businesses and a historic step forward in achieving national and corporate climate goals.
However, the work isn’t done. The private sector has shown how powerful it can be in shaping climate policy.
Corporate voices will continue to be instrumental in supporting the additional policies needed – from executive agencies and state and local governments – to put U.S. and American businesses on the path to rapid decarbonization over the next decade and beyond.
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