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Yellen says Biden tax incentives encourage clean energy investment in coal country

U.S. President Joe Biden talks next to U.S. Treasury Secretary Janet Yellen during a cabinet meeting in the Cabinet Room of the White House in Washington, U.S., June 6, 2023

ELIZABETHTOWN, Kentucky, March 13 (mod1s) - Treasury Secretary Janet Yellen said on Wednesday renewable energy investments in portions of the U.S. traditionally dependent on fossil fuels had more than quadrupled to $4.5 billion per month owing to Biden administration tax subsidies targeting such towns. 

Yellen said in remarks in central Kentucky that Treasury Department research using Rhodium Group data, opens new tab also shows clean energy investment in other communities has risen to $3.5 billion per month - a $1 billion increase - thanks to the incentives in the 2022 Inflation Reduction Act (IRA).

Yellen is visiting Kentucky, a heavily Republican state that Democratic President Joe Biden is not expected to win in the Nov. 5 U.S. election, to promote the state's growing supply chain for electric vehicle (EV) battery production that Biden touted in his State of the Union address to Congress last week. 

"We've seen investments expand considerably. Companies have announced about $650 billion in investments in renewable energy and manufacturing throughout the nation since the start of the administration," Yellen noted.

Yellen is visiting Advanced Nano Products, a South Korean-owned battery materials business that has invested $49 million in a new plant in Elizabethtown, Kentucky that will employ roughly 100 people once it begins production in May. 

The project will feed carbon nanomaterials to the $5.8 billion BlueOval SK battery production complex under built a few miles to the south by Ford Motor Co and South Korea's SK Group. The facility will ultimately employ more than 5,000 people.

Japan's AESC is also establishing a $2 billion battery manufacturing in Bowling Green, Kentucky that will employ 2,000 people. 

All of these sites are taking advantage of IRA clean energy manufacturing tax credits that give up to 30% of the investment expenses, with a 10% bonus if situated in a town historically reliant on fossil fuel energy or one that is economically disadvantaged. They also will benefit from consumer EV tax credits of up to $7,500 on the purchase of cars that fulfill U.S. manufacturing and battery content criteria.

Kentucky accounted for little under 5% of U.S. coal output in 2022, putting it sixth among the states producing the fossil fuel, according to the U.S. Energy Information Administration. 

The right-to-work state has garnered over $11.6 billion in EV-related investments largely because it is at the core of a developing Mid-South car manufacturing belt running from Georgia to Texas. The BlueOval SK venture also is benefitting from a $9.2 billion Department of Energy financing. 

SALES HURDLES 

The investments have met some challenges, including a downturn in U.S. EV sales and Ford's decision to block $12 billion in EV expenditures last year, including postponing one of two facilities at the BlueOval SK site in Glendale, Kentucky. 

Yellen told Fox Business in an interview that although sales may not have exceeded optimistic predictions over the last year, customers would prefer EVs as they become more inexpensive and more charging stations are constructed, partly with government infrastructure financing. 

"The future for EVs is quite bright in the United States. More subsidies will come into play that'll help make these automobiles cheap, and over time, their prices will fall." 

Yellen said the Treasury will take additional efforts to encourage leaders and companies in more than 150 U.S. towns with high poverty rates to take advantage of the tax credits to attract investment.


Source: https://www.reuters.com/

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