Editor's note: This post was coauthored by Maren Taylor, former corporate climate leadership manager at EDF+Business.
The Inflation Reduction Act is the largest investment in combating climate change ever passed by Congress.
The nearly $369 billion in climate and clean energy provisions in the new law include grants and tax credits that will bring down emissions and provide businesses with the certainty they need to make long-term investments in clean energy.
Business voices were instrumental in securing the passage of this historic legislation, with example after example of companies showing true climate leadership.
Now that the Inflation Reduction Act has been signed into law by President Biden, here are three benefits for businesses worth celebrating.
1. The Inflation Reduction Act’s investments will help companies meet ambitious net zero goals by priming the market for clean energy, clean manufacturing and zero-emission transportation.
Every company with climate goals is counting on the availability and affordability of clean energy. The Inflation Reduction Act puts a modernized grid within reach and clears the way for companies to meet climate pledges by expanding tax credits for things like new wind turbines, solar panels and batteries.
These credits — combined with investments in new clean energy innovation and transmission infrastructure — will accelerate the accessibility of renewable energy in the private sector, especially in rural areas.
For companies that own and operate medium- and heavy-duty vehicles like trucks, electrifying these fleets is a high-impact opportunity to drive down emissions. The Inflation Reduction Act will unleash critical investments and tax credits for the manufacturing and purchasing of vehicles that will make fleet electrification easier.
Additionally, tax credits for charging infrastructure like charging stations will complement important investments in the Bipartisan Infrastructure Law passed last year.
2. The Inflation Reduction Act provides businesses with the certainty to make long-term investments in the transition to clean energy.
The new law provides the stable, long-term incentives needed to drive investments in clean energy by both manufacturers and purchasers.
For example, the historic legislation extends investment and production tax credits for renewable energy and storage for a decade.
These credits were previously limited to one to three years, making future planning difficult. Also, the law shifts in 2025 to technology-neutral tax credits, giving utilities and power operators stability and options to maximize their facilities’ long-term clean energy potential.
3. The Inflation Reduction Act’s investments will boost American competitiveness, strengthen domestic supply chains and create millions of jobs.
The law secures American supply chains by investing in new and adapted manufacturing facilities.
The law supports the domestic production of technologies from batteries to heat pumps and positions American businesses to compete in the global energy economy. The byproduct of this support: an opportunity for businesses to create millions of jobs across the country.
Continued climate leadership from businesses
The Inflation Reduction Act is a transformative investment in communities and businesses, and a historic step forward in meeting national and company-level climate goals.
However, the work is not over. The private sector has shown how powerful it can be in shaping climate policy.
Business voices will continue to be instrumental in advocating for the additional policies needed — from executive agencies and from state and local governments — to put the U.S. and American businesses on a path to rapid decarbonization over the next decade and beyond.
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