It’s been two years since passage of the bipartisan Infrastructure Investment and Jobs Act (IIJA) and critical demonstration projects to decarbonize industry, transportation, power, and land sources are already emerging across the country, benefiting red and blue states alike. These investments, together with tax incentives and funding from the Inflation Reduction Act (IRA), put the United States closer to its emissions targets than ever before. Now is the time to make sure these projects maximize benefits for climate, the economy, and communities.
Where are we now?
Many IIJA funding programs have selected projects for negotiations (the pre-award phase when federal agencies and applicants agree on the scope of activities to be funded, budget, and other requirements before award), in addition to significant formula funding (noncompetitive grants based on a formula set by Congress) to states to deliver immediate benefits. Critical projects for deep emissions reductions announced to date include:
- Industry: Selections of hydrogen hubs, direct air capture hubs, and front-end engineering design studies as part of carbon capture demonstrations that will help decarbonize industrial processes, with the sizable Industrial Demonstration Program selections to be announced in early 2024.
- Transportation: Formula grants to states such as the carbon reduction program, and funding to build infrastructure along alternative fuel corridors that will enable long-haul trucking and connective infrastructure to transport low carbon fuels and supply chains across the U.S.; $653 million recently announced for 41 port projects to help supply chain infrastructure.
- Power: Funding to states for transmission upgrades and expansion, including three interregional transmission lines just announced through the Transmission Facilitation Program and funding for utilities to build decarbonization projects at reasonable rates; IIJA also funded Diablo Canyon to be a core component of clean power in California.
- Land: Funding to plug emissions from orphaned wells, which 24 states applied to receive.
We’re entering a critical time to demonstrate that clean energy technologies and decarbonization can be affordable and equitable. But there are only a few years left for stakeholders to apply for and use IIJA funding, and, to maximize impact, to stack IIJA funding with available IRA tax credits.
Federal government, states, industry, project developers, and other stakeholders will need to work together to achieve success, including:
- Transparency: Clear processes, engagement opportunities, and project milestones so stakeholders can know when and how to meaningfully participate and track federal dollars.
- Reporting: Information sharing to demonstrate how funded projects are meeting production and decarbonization targets.
- Community benefits: Realizing benefits for local workforce, health, and economies to promote equity and local economic development.
- Supply chains and connecting infrastructure: To scale up demonstration projects for long-term viability.
- Federal and state policies: To support demand and market creation, recognizing that current policies are not alone enough to achieve U.S. decarbonization goals.
There is a lot at stake to make use of IIJA funding for local benefits and economic growth, and to serve as a model for global emissions reductions. CATF is tracking and supporting this next phase of IIJA with research-backed recommendations and guidance, resources for state and local stakeholders, and more.
If you have questions, please feel free to contact Holly Reuter at [email protected].