In February, LanzaJet, a US company specializing in sustainable aviation fuel (SAF), announced plans for a second, larger plant in the country, citing the impact of the Inflation Reduction Act (IRA) as a significant factor. The IRA, signed into law by President Biden in August 2022, alongside the Bipartisan Infrastructure Law (BIL), aims to funnel substantial federal funds into clean energy development, with the goal of reducing greenhouse gas emissions and fostering green industries and jobs.
The IRA offers attractive tax credits and financial support for companies involved in clean energy production and technology manufacturing, including electric vehicles (EVs) and batteries. Similarly, the BIL provides direct government investment through grants for research, development, and capital projects, totaling around $77 billion for clean energy technology projects.
Companies like LanzaJet and Ascend Elements are already benefitting from these initiatives, receiving significant grants and matching private investments to expand their operations. While the full impact of these policies on private investment is still unfolding, clean energy investment in the US reached a record $239 billion in 2023, reflecting a growing trend towards sustainable technologies.
Despite these positive developments, challenges remain, with some sectors of the green economy, such as wind and heat pumps, yet to see significant growth under the IRA. Additionally, concerns linger about the future of these laws, particularly amidst potential political changes in the upcoming elections.
While some advocate for the repeal of the IRA and BIL, citing fiscal concerns and the need for renewable energy to stand independently, others argue that continued government support is essential for driving innovation and scaling up new solutions in the transition to a cleaner economy.
As the US navigates its path towards a sustainable future, the effectiveness of these policies in driving long-term investment and innovation will remain a focal point of discussion and debate.