Congressional Legislative Update: Clean Energy Tax Incentives, Biodiesel Tax Credit

Last week, U.S. Reps. Newman (D-IL) and Tenney (R-NY) officially introduced the Main Street Competes Act of 2022. This small business-focused bill empowers the Small Business Administration to have a role in studying and promoting competitive markets through federal antitrust law enforcement.

            Clean Energy Tax Incentives

On Wednesday, the U.S. Department of the Treasury issued an announcement seeking public input about how to draft regulations regarding $270 billion worth of clean energy tax incentives authorized by the Inflation Reduction Act (IRA).

“We have to get implementation right. That means we need to listen, engage and move quickly to translate policy into action,” John Podesta, a senior White House adviser overseeing the energy guidance, told reporters Wednesday. “We are trying to do this expeditiously. You will see some of this guidance out before the end of the year.”

Biodiesel Blender’s Tax Credit Extension

As a reminder, the IRA also includes a multiyear extension of the $1 per gallon biodiesel blender’s tax credit through 2024. At the urging of EMA and other industry groups, Sen. Maggie Hassan (D-NH) clarified in the Congressional Record that Section 13704 of the IRA — which addresses production tax credits for biofuels — includes residential and commercial heating fuel.

Treasury announced three core principles will guide IRA implementation:

— Robust Public Engagement: Treasury will engage a broad spectrum of taxpayers and stakeholders to inform guidance and rulemaking. With the release of the Notices, Treasury has begun the process of soliciting comments from the public on key provisions. Over the coming weeks, Treasury will be convening several initial stakeholder roundtables to hear directly from a wide range of voices.

— Clarity and Certainty: Treasury will work to provide clarity and certainty to taxpayers, so the climate and economic benefits of this legislation can “be felt as quickly as possible.” For example, in August, Treasury and the IRS immediately issued initial guidance on the electric vehicle tax credit and worked closely with the Department of Transportation and Department of Energy so taxpayers could easily find a list of eligible vehicles online.

— Sound Stewardship: Treasury will work closely with the IRS to put in place effective guardrails and reporting to ensure the benefits are delivered as Congress intended. Treasury is “committed to ensuring that as many eligible taxpayers as possible benefit from the incentives provided by law while protecting against fraud and abuse.”

EMA will respond to the request for information in advance of Treasury’s November 4, 2022, submission deadline.

The six Notices issued Wednesday can be found below.

Energy Generation Incentives

Credit Enhancements

Incentives for Homes/Buildings

Consumer Vehicle Credits

Manufacturing Credits

Credit Monetization

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