On 7 August 2022, the U.S. Senate approved the Inflation Reduction Act (IRA) of 2022, combining the objectives of reducing domestic inflation-notably brought by the global energy crisis- whilst tackling climate change .
Amongst the objectives set out in the energy sector, the Bill will:
-lower energy costs by 500 to 1000 USD per annum
-increase investments in climate to reduce carbon emissions by 40% by 2030
-create employment by investing 60 billion USD for millions of people in the clean energy sector, notably in manufacturing (solar panels, wind turbines, EVs)
-60 billion USD will be allocated specifically to disadvantaged communities to reduce environmental injustice
Around 370 billion USD will be disbursed for measures dedicated to improving energy security and accelerating clean energy transitions.
The IRA also includes funding for carbon capture, utilization, and storage (CCUS) projects.
The Act encompasses a Methane Emissions Reduction Program (Sec. 60113) that introduces a charge on methane emitted by oil and gas companies reporting emissions under the Clean Air Act and providing funding for the Environmental Protection Agency to finance and provide technical assistance for methane abatement in the oil and gas sector. The IRA also introduces Royalties for Produced Methane on Federal Lands and Waters (Sec. 50263), to be assessed on all gas produced, including gas that is consumed or lost by venting, flaring or negligent releases during upstream operations.
- Strategic plans
- Payments, finance and taxation
- Loans / debt finance
- On-bill finance
- Externality taxation
- Permitting processes
- Framework legislation
- Targets, plans and framework legislation
- Rights, permits and licenses
- Climate change strategies
- Long-term low emissions development strategy (LT-LEDS)
- Education and training
- GHG taxation
- Resource extraction taxes and royalties
- Flaring/venting (economic)
- Domestic manufacturing incentive