Clean Energy Investments in $3.5T Budget Bill Will Cut 1B Tons of GHG Emissions, Study Says
Six investments included in recently produced legislative text for President Joe Biden’s $3.5 trillion, 10-year budget would cut nearly 1 billion tons of U.S. greenhouse gas emissions by 2030, a non-partisan research group said in a Sept. 15 analysis.
“Up until this point, estimating the greenhouse gas emissions implications of congressional action has been challenging because of a lack of legislative text,” the Rhodium Group study said, but as key committees involved with energy and climate recently report out and mark up their contributions to the bill, “the picture is becoming clearer.”
The actions included in the House Ways and Means and Senate Energy and Commerce Committee measures would be up to 10 times larger than the impacts of the Energy Act of 2020, which was enacted at the end of last year, said analysis authors.
The six investments include full value, long-term clean energy tax credits for new zero-emitting electric generation plants and grid improvements.
Also included is a Clean Electricity Performance Program (CEPP) with grants to electric utilities to procure more clean energy through 2030. Missing procurement targets results in a fee.
The measures also include funding for rural electric cooperatives to accelerate decarbonization efforts and a new electric vehicle tax credit of $7,500 per vehicle, which adds higher credits for meeting labor and domestic production criteria.
Also included is a fee on methane emissions associated with oil and gas production and transmission.
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The largest reduction comes from the electric power sector, which would cut emissions by up to 715 million tons through a combination of clean energy tax credits, the CEPP program and the rural electric program, Rhodium says. “For this analysis, we assume the CEPP is implemented and sufficiently funded to achieve 80% clean electricity by 2030.”
Electric vehicle tax credits could drive their deployment as high as 61% of total vehicle sales in 2030, beating President Joe Biden’s goal of 50%, the analysis shows.
Study authors say that the emissions cut total will crystallize as the budget reconciliation bill continues to come together in the next few weeks. “It’s not clear what could be on the chopping block should the package get trimmed down," Rhodium says. "What is clear is that if any of the measures we assess in this analysis, especially the electric power provisions, are pared back, then Congress could leave millions of tons of emission reductions on the table.”
Ways and Means scheduled a vote on its portion of the bill for Sept. 23. Energy and Commerce completed markup of its bill on Sept. 15.
In other climate actions, oil giant Chevron said Sept. 14 that it is increasing its investment to grow its lower carbon energy businesses by $10 billion through 2028, including $2 billion to lower the “carbon intensity” of its operations.
The investment will be used to boost renewable natural gas production to 40,000 MMBtu per day, increase renewable fuels capacity to 100,000 barrels per day and increase hydrogen production to 150,000 tons per year. The company also will increase carbon capture and offsets to 25 million tons per year in partnership with others.
“Renewable fuels, hydrogen and carbon capture target customers such as airlines, transport companies and industrial producers,” said Jeff Gustavson, president of Chevron New Energies. “These sectors of the economy are not easily electrified, and customers are seeking lower carbon fuels and other solutions to reduce carbon emissions.”
