U.S. Treasury, DOE, and IRS Receive 800+ Proposals for Nearly $40 Billion in Industrial Tax Credits

On August 29, the U.S. Department of Treasury, the Department of Energy (DOE), and the Internal Revenue Service (IRS) announced that they had received over 800 project proposals requesting nearly $40 billion in industrial tax credits. The IRS confirmed that of this amount, around $10.3 billion is earmarked for projects located in designated energy communities.

These proposals were submitted under the second round of the Qualifying Advanced Energy Project Tax Credit (48C) program. In the first round, the IRS allocated roughly $4 billion in 48C credits across more than 100 projects in 35 states. Of that initial allocation, approximately $1.5 billion was directed toward projects in energy communities, specifically those impacted by the closure of coal mines or coal plants.

For the second round, up to $6 billion in tax credits are available, significantly less than the $40 billion requested by applicants. The credits aim to support projects that enhance clean energy manufacturing and recycling, as well as the refining, processing, and recycling of critical materials. Additionally, the credits are intended for projects that work to reduce greenhouse gas emissions in industrial facilities.

After an initial review of the submitted proposals, the IRS has opened applications for the next stage of evaluation to determine which projects will receive tax credits. Applications must be submitted by October 18 at 11:59 PM Eastern Time.

The IRS noted that more than 450 projects across 46 states and the District of Columbia have been encouraged to proceed. "The encouraged projects span large, medium, and small businesses and non-profits, all of which must meet prevailing wage and apprenticeship requirements to receive a 30% investment tax credit," the IRS stated.

Applicants who submitted a concept paper, regardless of whether they received an encouragement or discouragement letter, may now proceed to submit a full application on the 48C portal, according to the IRS.

The DOE’s Manufacturing & Energy Supply Chains division is responsible for managing the 48C program on behalf of the Treasury Department and the IRS. All three agencies have collaborated to implement the Qualifying Advanced Energy Project Tax Credit program.

By fLEXI tEAM