First Move To Target IRA Incentives Takes Shape In US Congress

By Saur News Bureau/ Updated On Mon, Nov 25th, 2024

In an early indication and test on the impact a Trump Presidency will have on its clean energy ambitions, the US House of representatives has a bi-partisan resolution to consider. The resolution in question proposes suspension of the 45X Advanced Manufacturing Production Tax Credit (PTC) in the US, an incentives that has been a key factor in supporting clean energy manufacturing facilities in the country.

The resolution’s sponsors have made it clear that their target is Chinese firms who they accuse of establishing manufacturing facilities in the US, leaving American ownership out of the picture in the manufacturing base being built up. The bill will need to be passed by the House of representatives as well as the senate, before going for approval to Trump early next year, after he takes charge. In seeking to cancel the benefits, it could be an early test of the new Admin’s approach towards China, even as it could lead to some collateral damage in the form of European and Indian firms that are also seeking to build manufacturing facilities in the US on the back of the 45X benefits. Unless China is specifically targeted.

The Representatives involved are Michigan Republican John Moolenaar and Maine Democrat Jared Golden.

Moolenaar has previously submitted the ‘NO GOTION’ act in 2023 to block companies affiliated with the Chinese government from receiving production tax credits. No Gotion in this case standing for ‘no official giveaways of taxpayers’ income to oppressive nations’.

So far experts have been cautiously optimistic that the investments already made, and those in the pipeline, will still happen as there seems to be bi-partisan support for the support already made due to the IRA and related incentives, visible most clearly in the already enhanced module making facilities in the US. And then there is the whole area of energy storage, where even as China continues to dominate, developed world firms like Sweden based NorthVolt (which just declared bankruptcy in a cloud of mismanagement and incompetence) have struggled to offer a viable option.