Coal communities trying to lure development are likely to face competition from brownfields and areas with less fossil-fuel employment under a provision of the new climate and tax law intended to breathe life into areas with fading energy industries.
U.S. energy officials, private developers and communities are eagerly awaiting guidance from the Treasury Department on the scope of the 10% bonus tax credit for projects located in what the climate and tax law describes as “energy communities.” Last week, the Treasury Department opened a public comment period for this tax credit and others, with comments due Nov. 4.
The benefit—along with other additional credits to spur projects that pay prevailing wages and tap apprenticeship programs—is central to the Biden administration’s goal of making sure areas that have long depended on fossil fuels benefit from clean energy. It will likely cover projects in Appalachia decimated by mine and plant closures—the places championed by Sen. Joe Manchin (D-W.Va.), whose support was required for passage of the bill, known as the Inflation Reduction Act (Public Law 117-169).
But the bill’s definition of an “energy community” could span half the country, according to a recent analysis by environmental research group Resources for the Future.
If the interpretation is accurate, “the energy communities provision in the IRA does...
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