Top NREE Stories
New Tax Credit Guidance
The Biden administration through the Treasury Department released three new sets of tax credit guidance. The proposed guidance address the production of energy components and critical minerals and the production of hydrogen, while the revised guidance focuses on the production of sustainable aviation fuel (SAF).
The proposed guidance for Section 45X Advanced Manufacturing Production Credit, clarifies how domestic production of clean energy components and critical minerals can qualify for federal tax incentives. The tax credit, authorized in the Inflation Reduction Act (IRA) and available through 2032, gives tax credits to domestic producers of clean energy components. This credit is intended to encourage innovation and develop a domestic supply chain for the materials needed to undergo a clean energy transition. The proposed guidance provides a clear definition for eligible components and minerals, offers information about fraud prevention safeguards, and clarifies the conditions under which manufactures can claim the credit. Some of these clarifications include allowing recycled materials and components to be used in the construction of eligible components. The guidance does not impose restrictions against “foreign entities of concern,” which was mandated in the recent clean vehicle tax credit guidance. The proposed guidance comment window closes on Feb. 13, 2024.
The proposed guidance for the Clean Hydrogen Production Credit lays out the requirements companies must meet to be eligible for hydrogen production tax credits. This credit, established by the IRA, also known as the 45V tax credit, will ensure that companies are making a sustainable product by requiring the use of low-carbon or zero-emissions energy to power the hydrogen production process. Credits will range from 60 cents to $3 per kilogram of hydrogen produced depending on the lifecycle emissions created during the productions process, the location of hydrogen production, and other wage and apprenticeship requirements. This technology is part of the Biden administration’s plan to achieve clean energy goals. It is estimated that hydrogen could eventually provide fuel for up to a fifth of the U.S. economy. The notice of proposed rulemaking’s comment window closes on Feb. 20, 2024.
The revised guidance for the Sustainable Aviation Fuel (SAF) Credit now allows for several fuel types including biomass-based diesel, advanced biofuels, cellulosic biofuel and cellulosic diesel to be eligible for the credit. These fuels must achieve at least a 50% reduction of greenhouse gases compared with petroleum-based jet fuel to qualify. The credit will likely increase the ability of farmers to participate in the SAF industry. Like the Clean Hydrogen Production Credit, the SAF credit is part of the Biden administration’s plan to achieve clean energy goals.
Strengthening Protections Against Harmful Heavy Metals
The Environmental Protection Agency (EPA) has released a proposed rule, updating the 30-year-old Lead and Copper Rule, to improve federal protections against lead contamination in drinking water. If enacted, the rule would lead to a number of actions and changes, including the mandatory removal of all public lead pipelines within the next decade. Utilities would also be required to develop an inventory of legacy lead pipelines and remove and replace 10% of the pipelines annually. The cost, estimated to be between $20 billion to $30 billion, could be offset with available funds from the Bipartisan Infrastructure Law (BIL) and the Drinking Water State Revolving Fund. This proposed rule would also require revisions of tap sampling protocol to ensure best practices, implementation of more stringent contamination levels that trigger action and public notification, and requirements for the installation of certified lead reduction filters in systems that violate actionable levels. The EPA will host a public hearing on the proposed rule on Jan. 16, 2024, and plans to finalize the rule in October 2024.
EPA Releases New Methane Emissions Rule
In a step toward mitigating U.S. methane emissions, the EPA has released a final rule requiring oil and gas industry operators to actively search for methane leaks throughout their entire production operations and replace defective equipment.
The regulation covers monitoring for both old and new operations of all sizes, including single wellhead sites. Rather than relying on calculated estimates of emissions, companies will now be required to use sensors and other equipment to measure actual methane emissions. The rule also bans routine flaring, or burning off extra gases, in new oil well construction and mandates that states develop and implement plans for reducing methane from existing sources. The rule is expected to prevent 58 million tons of methane emissions by 2038. Though the rule has some support from major oil and gas industry players, court challenges are expected.
Top Transportation Stories
FAA Authorities Extended
Before departing for the December recess, Congress passed a clean extension of the Federal Aviation Administration’s (FAA) authorities through March 8, 2024. NCSL submitted a letter in support of a short-term extension to congressional leadership in December. The House of Representatives approved a long-term FAA reauthorization bill, the Securing Growth and Robust Leadership in American Aviation Act (H.R. 3935), in July 2023. The Senate has yet to pass a long-term FAA reauthorization bill.
Highspeed Rail Gets a Boost
In a continuation of other recent efforts to advance American passenger railroad transportation, the Biden administration announced $8.2 billion of additional funding focused on improving passenger rail speeds. This funding will be applied towards 10 major passenger rail projects across the country, though the majority will be used to provide a significant portion of the requested funds for two major improvement projects. The first project intends to create a high-speed rail connection between Las Vegas, NV and Los Angeles, CA and the second intends to improve rail speeds between Richmond, VA and Raleigh, NC. Other projects include upgrades to Chicago’s Union Station and Pennsylvania’s Keystone Corridor, as well as extending services in Maine, Pennsylvania and Massachusetts. In addition to improving regional connectivity, these projects support the Biden administration’s commitment to improving America’s passenger rail.
Short but Sweet, More News Below!
Agriculture
- The U.S. Department of Agriculture Forest Service has released proposed amendments to 128 federal forests and grasslands land management plans. These proposed updates, a result of President Biden’s executive order 14072, would prohibit most commercial activities on these lands and work to improve wildfire resilience. Learn More.
Energy
- In an effort to further the Biden administration’s climate goals and jump-start carbon capture technology, the Department of Energy (DOE) has released $890 million of Infrastructure Investment and Jobs Act (IIJA) funding to develop three large domestic carbon-capture projects. The projects will be constructed with the ability to annually capture 7.75 million metric tons of carbon dioxide emissions. Learn More.
- The DOE has released $42 million to further efforts to develop fusion energy. This funding, which was awarded to eight fusion reactor developers, is intended to establish multi-institutional multi-disciplinary hubs that further fusion science and technology. Read More.
- For the first time in over a decade, DOE has released an update to the congressionally-mandated final standards for residential refrigerators and freezers. Over 30 years these standards are expected to reduce greenhouse gas emissions by 2.5 billion metric tons and save consumers an estimated $1 trillion. Read More.
Environment
- In an effort to decrease wildlife-vehicle crashes and improve roadway safety, the Biden administration has announced the release of $110 million in grants through the Wildlife Crossing Pilot Program. These funds, which come from the BIL, will fund 19 state and tribal wildlife crossing projects that include building fencing, implementing mapping and tracking tools, and other preventative measures. Read More.
- The EPA has announced a new environmental grantmaking structure to more effectively administer $600 million in funding for environmental justice projects and boost community access to federal funding. This new structure relies on national and regional institutions to distribute the funding to regional sub-recipients, a process which is expected to significantly cut down the grant application process times to help ensure that funding goes towards projects that will make a real impact. Read More.
Transportation
- The Federal Highway Administration has released a final rule to help state departments of transportation and other transportation organizations track transportation-related greenhouse gas emissions. This rule mandates that these organizations set targets, in accordance with state polies, for statewide greenhouse gas emissions reduction. Learn More.
- The National Highway Traffic Safety Administration has released the 11th edition of “Countermeasures That Work.” This guide is meant to help state and local governments improve road safety, by providing information about major traffic strategies and countermeasures. Read More.
- The Biden administration released $643 million through the Rural Surface Transportation Grant Program to target the development and completion of rural transportation projects to ensure transportation effectiveness and safety. This funding is a part of the $44 billion made available in the BIL to support rural transportation objectives including the improvement and repair of roads, airports, ports and transit systems. Read More.
- The Federal Transit Administration has released $220 million of IIJA funding through the Ferry Service for Rural Communities Program and the Passenger Ferry Grant Program. Grants were awarded in eight states and American Samoa to support a variety of projects including the replacement and expansions of ferry fleets and the development of new ferry facilities and docks. Read More.
- To help build transportation and freight infrastructure projects with significant regional and local impacts, the Department of Transportation is releasing $1.5 billion through the Rebuilding American Infrastructre with Sustainability and Equity grant program. The deadline for applications is Feb. 28, 2024. Read More.
- In an effort to improve pedestrian, cyclist and motorist safety across the nation, the Federal Highway Administration has released new road design standards for the first time since 2009. The new standards include updated guidance for developing speed limits, increased guidance on bike-oriented infrastructure, and revised standards for accessible crosswalk signals. Read More.
NCSL News and Resources
- Check out NCSL’s recent comprehensive resilience report, State Policy Considerations for Disaster Risk and Resilience, which covers policy options available to states to prepare for and mitigate the impacts of natural disasters including wildfires, extreme heat and flooding. The easy-to-navigate format of the report highlights state policy strategies related to land-use planning, building codes, innovative funding and financing mechanisms and much more.
- Read NCSL’s new resource on wetlands, which provides an overview of these critical natural resources, delves into the history and management policies that impact agriculture, development and disaster resilience. Following last year’s Supreme Court Sackett v. Environmental Protection Agency decision, states now have more control over wetlands and will likely be considering how to manage these resources going forward. Visit NCSL’s new webpage to learn more.
- Soil health is an increasingly important factor in policy decisions related to agriculture, food supply and disaster resilience. Check out NCSL’s new report to learn about state and federal programs that can support soil health studies and improvements including opportunities for technical assistance, partnerships with university extensions and more.