US DOE tax credit program will invest $4 bil in clean energy production, supply chains

The US Department of Energy will invest $4 billion worth of tax credits in over 100 clean energy projects in former coal communities through the Qualifying Advanced Energy Project Tax Credit, or 48C program.

The investment aims to bolster clean energy supply chains and lower costs, according to a March 29 announcement from the DOE, Treasury Department and Internal Revenue Service. The program is $10 billion in total and funded by the Inflation Reduction Act.

"The President's agenda places direct emphasis on communities that have traditionally powered our nation for generations, helping ensure those communities reap the economic benefits of the clean energy transition and continue to play a leading role in building up the next wave of energy sources," US energy secretary Jennifer Granholm said in a DOE statement.

Ballard Power Systems announced April 1 it was awarded $54 million of investment tax credits from the program. Ballard will use the resources to support construction of an upcoming fuel cell gigafactory in Texas, according to the company statement.

"Ballard sits at the convergence of the megatrends of decarbonization, energy security, and technology change, with highly disruptive and proven zero-emission fuel cell products," said Ballard CEO Randy MacEwen.

The first phase of the upcoming Rockwall Giga 1 project will feature $110 million of investment from Ballard to "build and commission a new manufacturing facility for membrane electrode assemblies (MEAs), bipolar plates, stacks, and engines," according to the statement.

"We expect our Phase I investment to provide for annual production capacity of 8 million MEAs, 8 million bipolar plates, 20,000 fuel cell stacks, and 20,000 fuel cell engines per year, or the equivalent of 3 gigawatts of fuel cells," said chief operating officer Mark Biznek.

Battery material and technology company NOVONIX announced April 1 it received $103 million in tax credits "to support production of critical battery materials" for its Tennessee facility.

NOVONIX has a goal to produce 40,000 mt of synthetic graphite by 2025, according to a company statement when the facility was completed in November 2021.

MP Materials saw $58.5 million from the 48C program, according to an April 1 company statement. The funding will be used in the construction of MP's upcoming rare earth magnet manufacturing facility.

The Texas facility will produce neodymium-iron-boron magnets to General Motors, "indispensable components" found in "electric vehicles, robots, wind turbines, drones, electronics, and critical defense systems," the statement reads. Global demand for the magnets is "expected to triple by 2035," per the statement.

The overview of funding allocations in this initial round include:

• $2.7 billion for "clean energy manufacturing and recycling," including manufacturing capabilities for hydrogen, electric grids, electric vehicles, nuclear power, solar and wind.
• $800 million for "critical materials recycling, processing and refining," including electrical steel applications, lithium-ion battery recycling and rare earth projects.
• $500 million for "industrial decarbonization" across several sectors, including chemicals, food and beverage, pulp and paper, biofuels, glass, ceramics, iron and steel, automotive manufacturing, and building materials.

"The program will help to catalyze the nation's equitable transition to a clean, secure, affordable, and resilient energy system, reduce industrial greenhouse gas emissions, and create high-quality jobs across the country," the DOE said.

The second round of funding is expected to be announced in the coming months, according to the DOE.