Page 72 - Inflation-Reduction-Act-Guidebook

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Expanding America’s Leadership in Industrial

Decarbonization and Carbon Management

The industrial sector is diverse, hard to decarbonize, and contributes nearly one-third of the
nation’s greenhouse gas emissions. The most emissions-intensive industrial sectors—including
steel, aluminum, and concrete—are also a part of the clean energy and infrastructure supply
chain and are essential to U.S. national and economic security. Deploying technologies like
carbon capture and storage (CCS) at scale will be critical for decarbonizing many industrial
processes.

The United States has the opportunity to lead in clean manufacturing and scale the use of low-
carbon materials to produce electric vehicles, wind turbines, and solar panels, rebuild America’s
roads and bridges, and upgrade the nation’s buildings to be more efficient and resilient to climate
impacts. The Inflation Reduction Act provides billions of dollars in grants to help decarbonize
industrial facilities and includes tax credits to expand and improve CCS and direct air capture
technologies. This investment complements funding in the Bipartisan Infrastructure Law, which
provides $12 billion for carbon management, research, demonstration, and deployment over the
next five years.

The law also includes additional funding for the Environmental Protection Agency to work with
industry to mitigate emissions of two climate super-pollutants: hydrofluorocarbons and methane.

Funding Overview

The Inflation Reduction Act makes a big down payment on building a cleaner industrial sector,
reinvigorating American manufacturing, and cutting climate super-pollutants from key industrial
sources. Highlights include:

• $5.8 billion for the new Advanced Industrial Facilities Deployment Program. The
law launched a new program at the Department of Energy, the Advanced Industrial
Facilities Deployment Program, to provide financial support to industrial facilities in
emissions-intensive sectors, such as the iron, steel, aluminum, cement, glass, paper, and
chemicals sectors, to complete demonstration and deployment projects that reduce
greenhouse gas emissions through installation or implementation of advanced industrial
technologies. This program complements the $500 million provided to the Department of
Energy in the Bipartisan Infrastructure Law for Industrial Emissions Demonstration
Projects that test and validate technologies that reduce industrial emissions.

• Expansion of the Advanced Energy Project Credit to include industrial emissions
reduction. The Inflation Reduction Act expands the 48C Advanced Energy Project
Credit to include projects that reduce greenhouse gas emissions by at least 20 percent at
an industrial or manufacturing facility by installing low-carbon heat systems, carbon
capture systems, energy efficiency measures, and other pollution reduction technologies
and practices. (This program is described in more detail earlier in the guidebook on page
27).

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