(800)479-0450

Last week, the US Congress passed the Affordable Care Act, a 730-page bill that addresses many areas of the US economy, including taxes, health care and climate change. Although the final bill is much smaller than the original vision of President Biden’s $1.7 trillion ‘Make Back Better’ plan, it still represents a huge step forward in addressing climate change and protecting the environment.

The $745 billion law contains grants and incentives to reduce the cost of clean energy and reduce carbon emissions by 40% by 2030. The main purpose of the bill is to replace fossil fuels in the transportation, electricity and industrial sectors.

Funding for climate change and energy conservation will reach $369 billion over 10 years. Another $4 billion is planned for rainwater recovery in western states. A minimum corporate tax of 15% will support the climate plan. The program of law starts in 2023.

Here are some key points.

The new legislation will invigorate the manufacturing of electric vehicles such as this BrightDrop delivery van for FedEx.

Rural energy

The bill provides incentives to promote rural clean energy through $14 billion earmarked for various grant and loan programs, including:

 

 Incentives for electric cars

Companies that buy light and heavy electric trucks – including long-haul trucks – can use tax credits from January 2023. The benefit also applies to the purchase and installation of battery chargers. The bill allocates money to promote the production of batteries and other electric vehicle components, thereby creating jobs. Many batteries and related components are now manufactured outside of the United States.

The tax credit for the purchase of an electric car covers either the added cost of the car – for example, the price difference between a diesel truck and its electric version – or 30 percent of the purchase price, depending on the lower price. . The incentive is $40,000 per vehicle. The facility credit provides up to $100,000 per shipper.

The new stimulus will boost the struggling US auto manufacturing sector. Last month, Amazon began shipping electric delivery vehicles made by Rivian to 12 US cities. Despite Rivian’s setbacks and disappointing financial results, Amazon (the investor) plans to have 100,000 Rivian delivery vehicles by the end of 2030. Rivian can only sell these vehicles to Amazon for the next four years.

Last month Walmart announced a deal to buy 4,500 electric cars from US manufacturer Canoo. Walmart also ordered 5,000 BrightDrop EV delivery vehicles. BrightDrop also sells electric cars to FedEx.

Another provision of the Cut Inflation Act makes available (until September 2027) $3 billion in grants and rebates to port and port authorities for the purchase and installation of emission control equipment.

Customers will also benefit. The law includes tax credits of $7,500 and $4,000 for single, new and used electric vehicles built in the United States. This benefit applies to trucks, vans and SUVs priced under $80,000 and cars under $55,000 – for high-income families under $300,000. Heat pumps, rooftop solar, electric HVAC systems and water heaters are also eligible for rebates.

 

It’s clean, reusable

To promote renewable energy, Congress extended the wind and solar tax credit for 10 years. Solar and wind installations that provide at least 50% of the energy in low-income communities are eligible.

The law takes a favorable position for nuclear power plants, reversing the history of shutdowns. It includes incentives to delay the shutdown of nuclear power plants, which are a carbon-free source of electricity.

Through incentives, the bill will lower the cost of carbon capture technology for power plants and industrial plants. Oil and gas companies that emit above a certain level of methane will pay increasing costs if they reduce their emissions below a certain point. This is the only provision that directly taxes.

 

Leave a Reply

Your email address will not be published. Required fields are marked *