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The IRA's "final countdown"

Dec 19, 2023
Illustration of a stack of fifty dollar bills cut into the shape of a U.S. map

Illustration: Annelise Capossela/Axios

The Biden team has guidance for key IRA tax credits now — but could have trouble finishing implementation of the landmark climate law a year from now.

Why it matters: We're near the "Final Countdown" phase of the IRA, as officials try to complete as much guidance as possible before the president's first term ends … and they potentially pass the baton to folks who want to undo all their work.

  • Complicating matters: Some industries are unhappy with what guidance has been issued, as we explained last week.

Driving the news: We've gotten an onslaught of IRA guidance in the past few weeks — the consumer vehicle credit, advanced energy projects and "sustainable" aviation fuel.

Then in January, we anticipate Treasury will outline the next phase of its IRA implementation, including final rulemakings.

  • Treasury officials, requesting anonymity to speak candidly, acknowledged it'll be difficult to completely finish IRA rollout by the end of 2024.
  • They pointed to the historically long public comment process and a likely continued need to update guidance.

What's next: The Biden team will now navigate sticking points that industry wants resolved. They include the plane fuel credit and advanced energy projects credit.

For the plane fuel, the IRA's credit is dependent on measuring lifecycle emissions. The law states that emissions must be measured using an international tool or something considered "similar" under the Clean Air Act.

  • Industry wanted Treasury to say it could measure emissions with the DOE model, called GREET, which doesn't measure indirect land use impacts in the same way the international standard does.
  • Treasury insists some biofuels will qualify for the credit, and Agriculture Secretary Tom Vilsack said multiple "feedstocks" should qualify.
  • But land use considerations will be crucial to whether stuff like corn-based ethanol — a bane of environmentalists' existence — can qualify.
  • Officials say to expect a GREET update by March.

We also expect a fight over mineral production to consume Treasury's future efforts around the advanced energy projects credit.

  • Treasury said mineral extraction couldn't qualify, citing fears about potential fraud and misuse. This frustrated the National Mining Association.
  • Department officials explained to Axios that the extraction is something they want to include, and they're taking comments on how to make it happen.
  • "They have indicated extraction is still on the table," said Al Gore III, executive director of the Zero Emissions Transportation Association.

What they're saying: White House climate czar John Podesta told reporters Tuesday that he saw the advanced energy credit rollout as "largely a good-news story" and that he "hadn't heard" the mining industry complaints.

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