‘The roof is lifting’ – US to pump $800bn into climate, energy sectors as 2022 IRA passes Biden for signature : Biofuels Digest

Huge and positive news is coming from Washington, the US House has passed the Cut Inflation Act and it is now moving to the White House for President Biden’s signature which is a foregone conclusion.

One of the Digesterati described the change in momentum: “The roof is being lifted widely in the renewables industry with the IRA and the Infrastructure Investment and Jobs Act 2021. The IRA and IIJA represent over $800 billion in climate and energy money. ”

At the same time, new details are emerging on the scope of ACT and the benefits it can bring to the advanced bioeconomy. Victory has a thousand fathers, but a tip to the Digest is in order: Kilpatrick’s energy and government relations practices, AFCC members, Advanced Biofuels Association members and management, the team Holland & Knight, Advanced Biogas Council, Clean Fuels Alliance America, Airlines for America, Coalition for RNG, Growth Energy and Renewable Fuels Association.

The law includes many new tax incentive provisions for SAF, hydrogen, Section 45 Q – carbon capture storage and use, energy storage, and more. A full summary on this is here. In today’s Digest, we’re going to focus on the $70 billion of new funding for the DOE loan program office, which has not received as much attention as it deserves.

The Loan Programs Office

Since January 2021, more than 85 files have been filed with the DOE LPO representing more than $80 billion in senior debt applications resulting from the “reopening” of the 5 LPO financing programs (4 loan guarantees – renewable , Clean Fossils, Nuclear and Native). American, as well as ATVM Direct Lending) as a result of Section 9010 that Kilpatrick/AFCC drafted and lobbied under the Consolidated Appropriations Act of 2020 (enacted December 27, 2020). These funds will help America’s clean energy and clean chemical industries introduce the important new technologies that help the United States maintain its leadership in developing our new clean energy, chemical and chemical industries. of the climate.

These early commercial funds are critical as many advanced bioeconomy companies are already in the LPO pipeline with applications or are in the midst of submissions – for SAF, Renewable Diesel, RNG, Hydrogen, CCS, Chemicals renewable, bio-based products, among the first of – the a-kind products of many clean energy and chemical industries.

Long duration Guru Mark Riedy, who together with Faegre Baker Daniels’ John Kirkwood has successfully led the ABLC Finance & Investment Summit since 2010, said: “These funds open up huge opportunities for bioeconomy companies to champion their commercial technologies, after the AFCC and Kilpatrick drafted Section 9010, which we also lobbied in the Omnibus Appropriations Act of 2020 to “reopen” the DOE LPO. (Note: Prior to OAA, the LPO had not had an initial close since 2014 and now has 5 conditional commitments and 2 closings completed in the past 6 months with many more on the way.) Riedy added. “Currently, there are approximately 85 applications filed with the DOE LPO to date for $80 billion+ in senior debt, of which Kilpatrick has filed 15 client applications of those 85 applications with another 4-5+ new applications being processed. preparation for filing – amounting to more than $20 billion of that rough $80 billion aggregate amount.

Stakeholder reaction

Michael McAdams, President of the Advanced Biofuels Association: “Congress passing the IRA is an important step toward realizing President Biden’s national climate ambitions. This is arguably the biggest piece of legislation ever passed by Congress to address climate change.

“This comprehensive bill offers a series of meaningful policy directives that will better enable the advanced biofuels industry to reach its full potential, including long-term fiscal policy, new funding and grants to the DOE, USDA and DOT, and increased federal resources for EPA to administer the Renewable Fuels Standard. We support all of these provisions. Together, they form the integrated strategy needed to achieve meaningful carbon reductions in the United States.

“Yet the ABFA will not rest on its laurels. Much more needs to be done to ensure that low-carbon industries reach their full emission reduction potential. We look forward to talking with the EPA about upcoming decisions on renewable volume obligations and related issues, such as raw material sourcing and emerging technologies, to ensure a cleaner, more sustainable future for all. .

Clean Fuels Alliance America“Cleaner, better fuels like biodiesel and renewable diesel are essential to America’s economy and environment. They support well-paying jobs, reduce fuel prices and the cost of transporting consumer goods, and reduce carbon emissions by an average of 74%,” said Clean Fuels Vice President of Federal Affairs Kurt Kovarik. “We appreciate Congress providing our industry with long-term tax policy certainty, and we thank Representatives Cindy Axne and Angie Craig for their tireless advocacy for the biodiesel tax credit, as well as President Richard Neal and Rep. Mike Thompson for supporting its inclusion in Tax Policy Today. legislation.”

“We applaud the further expansion of the agricultural commodities and biofuels infrastructure market, which will build on the success of the USDA’s current infrastructure grant program,” Kovarik continued. “As our industry seeks to continue to grow and sustainably meet America’s need for clean, affordable energy, these grants will help our industry deliver cleaner, higher-quality fuels directly to consumers. “

The American Biogas Council“Before this bill, our industry only benefited from short extensions of one to two years of a tax credit that only served one sector of the biogas industry. While trying to attract investment to projects that take years to build and competing with other industries with long-term tax credits, this was not a long-term solution. For the first time, this bill gives developers and financiers the certainty and competitive advantage that will fuel the growth of the biogas and clean energy industries for years to come.

“While the United States has 2,300 operational biogas systems, only about 15% of the country’s biogas industry potential has been realized. Meanwhile, we produce 65 million tons of food waste, manure and waste from 8 billion cows, chickens, turkeys and pigs, and over 11 trillion gallons of wastewater each year. We need to build more biogas systems to recycle this material into basic renewable energy and soil products, and we can do it 24 hours a day, 365 days a year with 95% reliability.

“For the first time, the bill’s tax credit system supports all biogas sectors: wastewater, farm, food waste, and renewable electricity, renewable natural gas, and renewable heat generation projects. Additionally, the additional $1.965 billion to support the existing Rural Energy Program for America (REAP) will help our industry work with agriculture to increase sustainability and productivity.

“While many have been supportive of the biogas industry, special thanks go to Reps. Ron Kind (D-WI-03) and Tom Reed (R-NY-23) and Senators Sherrod Brown (D-OH) and John Thune (R-SD) They have fought for the biogas industry for years to create a level playing field so we can compete in fair markets with fossil fuels and other renewable energy sectors .

“We look forward to President Biden signing this landmark bill and are excited to engage the administration and other leaders to secure a clean energy future for the United States.”

Joe BretonCEO of the Zero Emission Transportation Association: “With the passage of the Cut Inflation Act today, we are one step closer to creating millions of well-paying American jobs, lowering consumers’ energy and transportation costs, and protecting tens of millions of Americans from dangerous emissions and unhealthy air caused by tailpipe pollution. On behalf of ZETA, I would like to sincerely thank the White House and congressional leaders for their tireless efforts to enact this law, as well as the many electric vehicle champions inside and outside of government who have contributed significantly over the years. securing politics. support for the zero-emission vehicle sector.

“We will continue to work with our federal partners to ensure smart and timely implementation of this law, and do our part to ensure that Americans experience and benefit from the electrification of transportation it makes possible.”

The American Ethanol Coalition“This far-reaching legislation sent from Congress to the President’s office will provide half a billion dollars for E15 and E85 infrastructure, invest $18 billion to support climate-smart agricultural practices that help reduce the intensity carbon from ethanol, reward fuels like ethanol with a new tax credit for producing clean fuel based on carbon intensity, establish a new sustainable tax credit for aviation fuel based on carbon intensity and give a big boost to projects that capture and sequester carbon.

“While this bill is not everything on our wish list, it does contain incredible incentives for farmers and ethanol producers looking to capitalize on carbon intensity and we encourage the President to enact it, so that farmers and ethanol producers can continue to innovate and play a significant role in the fight against climate change.

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