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Biden releasing new Build Back Better plan with $555B for climate, clean energy


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Biden releasing new Build Back Better plan with $555B for climate, clean energy

  • Author Molly ChristianEllie Potter
  • Theme Energy

U.S. President Joe Biden will announce a new framework for his Build Back Better agenda on Oct. 28 after months of negotiations with moderate and progressive Democrats as the administration seeks to pass major legislation to address the climate crisis, build out the nation's infrastructure and support various social programs.

The newly released plan would provide $555 billion for climate and clean energy investments.

Biden is scheduled to speak before the House Democratic caucus to "announce a framework on the Build Back Better Act, a historic economic growth and climate package that will ensure our economy delivers for middle-class families, not just those at the top, and gives them financial breathing room," senior administration officials told reporters early Oct. 28.

Dubbing it the "largest effort to combat climate change in history," the officials said the framework would immediately begin curbing pollution.

But the plan did not mention Democrats' long-sought-for clean electricity performance program, which aimed to use incentives and penalties to prompt electricity suppliers to grow their share of emissions-free power. Moderate U.S. Sen. Joe Manchin, D-W.Va., had opposed the program, robbing the proposal of crucial support as Democrats control a narrow majority in the Senate.

The Oct. 28 outline also did not mention a fee on methane emissions, which had been included in earlier Build Back Better legislation in Congress and that the oil and gas industries strongly opposed.

The biggest chunk of the climate and clean energy investment — $320 billion — would provide for 10-year expanded tax credits for "utility-scale and residential clean energy, transmission and storage, clean passenger and commercial vehicles, and clean energy manufacturing," according to a three-page summary from the White House.

In addition, the plan would set aside $105 billion for climate resilience, including investments and incentives to address extreme weather and legacy pollution and to develop a Civilian Climate Corps with over 300,000 members. Another $110 billion would support investments and incentives for clean energy technology, manufacturing and supply chains, including for "solar, batteries, and advanced materials while boosting the competitiveness of existing industries, like steel, cement, and aluminum."

The remaining $20 billion would support clean energy procurement by the federal government, including through incentives for the government to purchase "long-duration storage, small modular reactors, and clean construction materials."

"The framework will start cutting climate pollution now, and deliver well over one gigaton, or a billion metric tons, of greenhouse gas emissions reductions in 2030 — at least 10 times larger than any legislation Congress has ever passed," the White House said in its fact sheet.

Those investments "will set the United States on course" to meet its pledge under the Paris Agreement on climate change to slash economywide greenhouse gas emissions by 50% to 52% from 2005 levels by 2030, according to the fact sheet.

Included in the new Build Back Better agenda are consumer rebates and credits aimed at reducing household energy costs and encouraging electrification, including enhanced and expanded home energy and efficiency credits and a new electrification-focused rebate program. The White House estimated its framework will cut the cost of installing rooftop solar at homes by around 30% and shorten the payback period for those projects by roughly five years.

Turning to transportation, the framework aims to lower American-made electric vehicle costs by $12,500 for a middle-class family, fund port electrification and facilitate the deployment of cleaner transit, buses and trucks.

The new proposal also provides grants and loans through the U.S. Energy Department to help rural communities transition to clean energy.

The Build Back Better legislation will develop a new clean energy and sustainability accelerator aimed at hitting Biden's target to deliver 40% of the benefits of climate investments to disadvantaged communities.

Another key focus is providing resources to farmers, ranchers and forestland owners to help reduce emissions, including through natural climate solutions.

"Taken together, this legislation will set the United States on course to meet its climate targets in a way that grows domestic industries and good jobs and advances environmental justice that's long overdue," a senior official said.

The officials said they could not speak for any lawmaker but were "confident that this historic framework will earn the support of every Democratic senator and pass the House."

Biden will call on Congress to pass both a bill based on the framework and a bipartisan infrastructure package, but the administration is deferring to U.S. House Speaker Nancy Pelosi, D-Calif., to set specific dates for the votes, the officials said. They also reiterated that the bills will be fully paid for and reduce the deficit.

Ellie Potter is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.