Effects of the infrastructure law on energy efficiency and sustainability

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On November 15, President Biden signed the Infrastructure Investments and Jobs Act (“the Act”) into law. The historic infrastructure plan includes the largest single climate change mitigation investment in US history.[1] The law allocates billions of dollars to priority areas, including significant funding for the development of carbon capture infrastructure, alternative energy sources and technologies (including but not limited to solar, geothermal, clean hydrogen, advanced nuclear, hydroelectric and battery technologies), grid infrastructure and infrastructure for electric vehicles.

Carbon capture infrastructure

To mitigate the most severe impacts of the climate crisis, many scientists have stressed the importance of not only reducing emissions but also removing carbon from the atmosphere. Carbon capture technologies are critical to this effort — and Biden’s Infrastructure Act can provide the funding needed to make carbon removal solutions a reality. The law provides $2.54 billion for demonstration projects related to carbon capture in coal and natural gas operations and $937 million for large-scale carbon capture pilot projects. To meet the significant infrastructure needs for carbon capture, the Act provides $3.5 billion over five years for projects that will help develop four regional hubs to capture carbon from the atmosphere and then to transport, store and use it. An additional $600 million is available in fiscal years 2022 and 2023, and $300 million each year thereafter through fiscal 2026, to provide credit guarantees and secured loans in support of carbon transportation infrastructure projects.[2]

alternative energy sources

The law provides approximately $6 billion for battery storage technologies, $125 million for hydroelectric generation incentives, $553 million for hydroelectric power plant capital improvement incentives, and $500 million for five clean energy demonstration projects that will Technologies such as solar, microgrids, geothermal, and direct air use capture, storage, and advanced nuclear power.[3]

Funding for battery storage technologies will be split between battery material processing grants and manufacturing and recycling grants, with additional funding available for a battery recycling award and programs at the DOE.

Funds available for hydroelectric power plants and technologies come in the form of production incentives, efficiency gains, maintenance and improvement of hydroelectric power plants by improving grid resilience, improving dam safety and environmental improvements. The Act provides $125 million for hydroelectric generation incentives under the Energy Policy Act of 2005 and $553 million as an incentive for capital improvements at hydroelectric power plants. In addition, the law directs the Secretary of Energy to set up a demonstration project for a pumped-storage hydropower project to facilitate long-term storage of intermittent electricity from renewable sources. The law authorizes $10 million for fiscal years 2022-2026.[4]

The Clean Energy Demonstration Projects aim to demonstrate the feasibility of clean energy projects on current and former mine sites in a manner compatible with existing operations.[5] The DOE will seek clean project funding proposals in consultation with the Department of the Interior, EPA and the Department of Labor.[6]

The law also amends the Outer Continental Shelf Lands Act to allow for offshore energy storage. This change allows for the incorporation of energy storage technologies into future offshore energy development, such as B. Battery storage for offshore wind energy.[7]

electric vehicles

The law aims to provide a transformative investment in the national electric vehicle (EV) infrastructure. It includes $7.5 billion over five years for EV charging station grants and alternative fuel investments with the goal of building a network of 500,000 EV charging stations along highway corridors and within communities to make EVs accessible to all Americans do.[8] The legislation provides an additional $200 million for a grant program to support research and development into recycling and reuse applications for electric vehicle batteries.[9] In addition, the law allows for charging of electric vehicles for funding from the Surface Transportation Block Grant Programs (STBGP).[10]

The law reflects the Biden administration’s commitment to reducing U.S. emissions by 50-52% by 2030 from 2005 levels, creating a 100% zero-carbon energy sector by 2035, and by Achieve a net-zero economy by 2050.[11]

What’s next?

Federal agencies such as the DOE, Department of Transportation, and EPA, among others, will implement the law by disbursing funds not only to states and localities, but also to certain private parties and non-governmental organizations through new programs, grants, or prizes. In connection with the large number of additional programs, grants, and awards made available through the Act, federal, state, and local governments must plan for the additional administrative burden associated with such programs, grants, and awards, potentially creating jobs and jobs create additional internal policies and infrastructure and reorganize certain departments or create sub-divisions of their various organizations. This process, including the deployment of funds and the subsequent execution of the funds, is expected to take months, if not years.

Additionally, not all government agencies will prioritize reducing carbon emissions or funding research, development and deployment of alternative energy technologies or other climate technologies. While a significant amount of funding is allocated directly to advancing, piloting, or researching the climate technologies described above, much of the funding is not allocated specifically to such efforts. State and local governments have wide discretion over the use of funds paid to them. Relevant industry participants, climate technology companies and other private parties should closely follow developments at the relevant government agencies to determine if any funds are made available to them.

[1] FACT SHEET: The bipartisan infrastructure deal boosts clean energy jobs, builds resilience and promotes environmental justiceThe White House Briefing Room (8 November 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/08/fact-sheet-the-bipartisan-infrastructure-deal-boosts – jobs-clean-energy-strengthens-resilience-and-promotes-environmental-justice/; Let’s rebuild AmericaUS Chamber of Commerce, https://www.uschamber.com/major-initiative/lets-rebuild-america (last accessed on 12/27/2021).

[2] Michael Smallberg, Christina Banoub, Naoreen Chowdhury, and Brittney Washington Bloomberg Government, BGOV Billing Summary: HR 3684, Bipartisan Infrastructure Contract (2)Bloomberg Government (5 November 2021), https://news.bloomberglaw.com/tech-and-telecom-law/bgov-bill-summary-infrastructure-deal-amendment-to-hr-3684.

[3] R Neal Martin, Energy & Sustainability Washington Updates – December 2021, Mintz.com (November 30, 2021), https://www.mintz.com/insights-center/viewpoints/2151/2021-11-30-energy-sustainability-washington-updates-december-2021.

[4] Kayla J. Grant and Merrill Kramer, Major Energy Provisions in Biden Administration $1.2 Trillion Infrastructure Investments and Employment Act, Review of national law, (November 17, 2021), https://www.natlawreview.com/article/key-energy-provisions-biden-administration-12-trillion-infrastructure-investment-and.

[5] Summary of the bipartisan Infrastructure Investment and Jobs ActSenate Energy Committee, https://www.cantwell.senate.gov/imo/media/doc/Infrastructure%20Investment%20and%20Jobs%20Act%20-%20Section%20by%20Section%20Summary.pdf.

[6] Grant and Kramer, above Note 4.

[7] Summary of the bipartisan Infrastructure Investment and Jobs Act, above Note 5, at 76.

[8] FACT SHEET: The Biden-Harris EV Charging Action Plan, White House Briefing Room (December 13, 2021), https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/13/fact-sheet-the-biden-harris-electric-vehicle-lade -Action Plan/; martin, above note 3.

[9] ID.

[10] Grant and Kramer, above Note 4.

[11] FACT SHEET: The bipartisan infrastructure deal boosts clean energy jobs, builds resilience and promotes environmental justice, above Note 1.

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC All rights reserved.National Law Review, Volume XII, Number 5

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