E+E Leader: Sustainability Unveiled
Welcome to "Sustainability Unveiled," a podcast that delves into the essential domains of Sustainability, Environmental & Energy Management, Compliance, Global Supply Chains, and more. Prepare for insightful conversations that dig deeper than the superficial, enriched by our distinctive human approach that amplifies expert analysis.
Join us as we navigate the juncture of environmental stewardship and corporate initiatives through captivating discussions that reveal fresh perspectives and practical solutions.
Embark on a transformative journey with us as we unravel the intricacies of forging a sustainable future. Welcome to a podcast that transcends the ordinary, revealing the authentic core of sustainability.
Interested in being a part of this program?
Apply Today: Form
E+E Leader: Sustainability Unveiled
Expert Advice in 5 Minutes or Less: Understanding Tech-Neutral Tax Credits Under the Inflation Reduction Act
Unlock the future of clean energy incentives with insights from the experts at EY. EcoVoice is joined by Aruna Kalyanam, EY's global tax policy leader, and Aparna Koneru, a principal at EY, to dissect the game-changing shift to tech-neutral tax credits under the Inflation Reduction Act. Discover how Sections 45Y, 48E, and 45Z are setting a new legal and innovative landscape for the energy sector by emphasizing net-zero emissions over specific technologies. This episode promises to equip you with a thorough understanding of the impending transformations that are set to reconfigure the clean energy landscape.
Navigate the complexities and uncertainties that this transition holds for projects planned for 2024-2025, especially as political shifts could alter energy policies. Gain actionable strategies to safeguard your business interests, like conducting exhaustive modeling, engaging with policymakers, and seeking expert guidance. The tech-neutral credits represent not just an incentive for innovation but a crucial pivot in U.S. energy policy—future-proofing incentives while demanding agility from businesses. Tune in to arm yourself with the knowledge needed to remain competitive in this rapidly evolving energy arena.
Link to the Full Article
Connect with Jessica Hunt and the rest of the team at Environment+Energy Leader - LinkedIn l Twitter l Facebook l Instagram l YouTube l BlueSky
Do you have an idea for an episode?
Call for Speakers - Environment+Energy Leader
Like what you hear? We'd love your support! Please share, like, and review our podcast! Use #EELeaderUnveiled
Additional Opportunities to Support
Welcome to Sustainability Unveiled, the podcast where we break down the most pressing sustainability topics in five minutes or less. I'm EcoVoice, here to guide you through the latest insights shaping our planet's future. Today's episode tackles a major topic for businesses in the energy sector the outlook for tech-neutral tax credits under the Inflation Reduction Act, or IRA. This discussion is inspired by an article written by Aruna Kalyanam, ey's global tax policy leader, and Aparna Koneru, a principal at EY. Together, they outline what companies need to know as we approach a critical transition in US energy policy. So what's changing and how can companies prepare? Let's dive in.
Speaker 0:The clean energy incentives landscape is undergoing its biggest transformation in decades. Historically, tax credits like Section 45's production tax credit and Section 48's investment tax credit were tailored to specific technologies such as wind and solar. However, beginning in 2025, these will be replaced by tech-neutral incentives. One, the Clean Electricity Production Credit Section 45Y. Two, the Clean Electricity Investment Credit Section 48E. Three, and the Clean Fuels Production Credit Section 45Z. What makes them tech neutral? These credits don't focus on particular energy technologies, but instead incentivize facilities that achieve net zero greenhouse gas GHG emissions, no matter what technology is used. This shift paves the way for emerging innovations, from advanced nuclear reactors to energy storage solutions.
Speaker 0:But here's the catch the transition comes with significant uncertainty, especially for projects straddling the 2024 and 2025 timeline. For some businesses, the question isn't just whether their technology will qualify. It's whether they can afford to wait for clarity or need to act now. Here's why this matters so much. Clean energy projects are not only complex but also expensive. Tax credits often fund 30% to 50% of the capital costs for these projects, meaning millions, if not billions, of dollars are on the line. Right now, companies face a pivotal decision One should they accelerate project construction to qualify for expiring credits under the current rules?
Speaker 0:As if the policy shift wasn't enough, the political landscape adds another layer of uncertainty. Historically, incoming administrations have approached energy policy in radically different ways. If Republicans take control, a stronger focus on fossil fuels is likely, with potential rollbacks or modifications to Biden-era credits. While wholesale repeal of the IRA is unlikely due to the economic chaos it could cause, targeted changes or phase-outs are very much on the table. At the same time, congress will face competing priorities in 2025. The looming expiration of provisions from the 2017 Tax Cuts and Jobs Act, known as the tax cliff, will demand attention. Lawmakers may seek to offset costs by adjusting or even sunsetting IRA tax credits earlier than planned.
Speaker 0:For businesses, this means preparing for multiple scenarios. How will shifting policies impact your project's eligibility? Can you model potential outcomes to minimize risk? These are critical questions companies need to address now. So how can companies navigate this evolving landscape? Here are a few actionable steps Conduct thorough modeling.
Speaker 0:Run scenarios to determine which tax credit regime current or tech-neutral offers the most value for your projects. This is especially important if your technology isn't explicitly listed as zero GHG compliant. Evaluate timing listed as zero GHG compliant. Evaluate timing. Assess whether to accelerate construction timelines in 2024 or wait for 2025. For projects moving forward now, ensure you meet the IRS's begun construction rules to lock in eligibility.
Speaker 0:Stay engaged with policymakers. Collaboration is key. Companies that proactively engage with regulators can help shape guidance and ensure their voices are heard. Prepare for legislative change. Keep an eye on the 2024 elections and be ready to adjust your strategy based on shifts in political control. Seek expertise. Complex rules require expert navigation. Consult tax and legal professionals to ensure your projects remain compliant and eligible for incentives.
Speaker 0:Let's take a step back and look at the bigger picture. The IRA's tech-neutral credits aren't just about driving innovation. They represent a major pivot in how we incentivize clean energy by focusing on emissions rather than specific technologies. These policies aim to future-proof US energy incentives. However, this also means businesses need to adapt quickly to stay competitive. The clean energy race is no longer just about adopting proven technologies. It's about being agile enough to navigate a constantly shifting regulatory landscape. To sum it all up, the transition to tech-neutral tax credits under the IRA marks a pivotal moment for the clean energy sector. For businesses, the stakes couldn't be higher. As the rules evolve, preparation and adaptability will be your greatest allies. If you'd like to learn more, check out the original article by Aruna Kalyanam and Aparna Konaru published on Environment Plus Energy Leader, and don't forget to follow Sustainability Unveiled for more expert insights delivered straight to your ears. Thank you for listening. Until next time, I'm EcoVoice, encouraging you to innovate, adapt and lead the way to a sustainable future.
