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How the infrastructure bill will fight climate change and advance clean energy

The just-passed legislation sends more than $80 billion to the power grid, EV charging, batteries, hydrogen, carbon capture and more.
By Jeff St. John

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U.S. President Joe Biden makes remarks after the infrastructure bill was passed. (Samuel Corum/Getty Images)

The $1.2 trillion infrastructure bill passed by the U.S. House of Representatives late Friday contains more than $80 billion to advance the clean energy transition and fight climate change. The U.S. Senate had already approved the bill in August on a strong bipartisan basis, so now it’s going to the desk of President Biden, who will enthusiastically sign it into law in the coming days.

The bill dedicates funding to build nationwide electric-vehicle charging networks and bus fleets, expand and modernize power grids, create industrial hubs for carbon capture and clean hydrogen, support advanced batteries and nuclear power projects, fund energy-efficiency programs, invest in environmental remediation and bankroll other key parts of Biden’s climate agenda.

Still, the infrastructure bill’s climate and clean energy investments are outstripped by those in the Build Back Better budget reconciliation package, whose fate is still unclear. That larger budget bill, as currently drafted, contains roughly $555 billion for climate and clean energy, including tax credits and direct spending for renewables and energy storage projects, the transmission grid, electric vehicles, building electrification and other provisions that analysts agree are critical to achieving the Biden administration’s goal of cutting U.S. greenhouse gas emissions in half by 2030.

Last week’s deal in the House to pass the infrastructure bill without securing the passage of the budget reconciliation package in the U.S. Senate has left many climate activists frustrated and fearful that the latter bill won’t be passed at all.

We do not live in a perfect world, and the events of last night in the U.S., unfortunately, are not ideal for us,” Ramón Cruz, president of the Sierra Club, said at a Saturday panel at the COP26 United Nations climate conference in Glasgow, Scotland. We…have an infrastructure bill that’s historic, and it’s there. But it had been the intent of progressive organizations and progressive caucus members [in Congress] to go hand in hand with the legislation that’s really transformational and will really change people’s lives.”

U.S. Senator Ed Markey (D-Massachusetts), who has championed the clean energy provisions in the budget reconciliation package, said during the same panel event that he believes the legislation will pass the Senate: I am very confident that we can get to 51 votes.”

The House took a step forward last night,” Manish Bapna, president and CEO of the Natural Resources Defense Council, said at the panel. It must take a giant next step and pass the Build Back Better Act, the essential climate action we need.”

At the same time, Biden administration officials, climate advocates and industry groups highlighted the gains they say will stem from the provisions in the infrastructure bill. 

With passage of this legislation, the U.S. makes an important down payment on comprehensive climate action,” Lindsey Baxter Griffith, federal policy director at Clean Air Task Force, said in a statement. The Infrastructure Investment and Jobs Act unlocks important funding for research, development, and demonstration of the technologies we need to decarbonize the U.S. economy — all while creating jobs and protecting against the worst impacts of climate change.”

In a Saturday address at the White House, Biden cited the bill’s historic and significant strides that take on the climate crisis,” along with the investments in roads, bridges, ports, airports, railways, lead water pipe replacements and other hard infrastructure that make up the majority of its spending.

We will get America off the sidelines on manufacturing solar panels, wind farms, batteries and electric vehicles to grow these supply chains, reward companies for paying good wages and for sourcing their materials from here in the United States, and allow us to export these products and technologies to the world,” he said. It will also make historic investments in environmental cleanup and remediation, and build up our resilience for the next superstorms, droughts, wildfires and hurricanes that cost us billions of dollars in damage each year.”

Here’s a quick breakdown of what’s in the infrastructure bill. 

Electric vehicles

In his White House address, Biden outlined the bill’s plan to create the first-ever national network of electric-vehicle charging stations across the country.” The funding for that effort includes $5 billion in grants for states to deploy public EV chargers, along with another $2.5 billion to support stations for EV charging or for fueling vehicles with hydrogen, propane or natural gas.

This is the first time the federal government has funded EV-charging infrastructure in the U.S., a task that’s so far been left to states, utilities and the private sector. But it’s half the amount that the Biden administration had sought in its initial EV charging plans, and far from the funding level that analysts say will be needed to reach the administration’s goal of 500,000 public EV charging points by 2030.

The bill also contains $2.5 billion for electric buses and another $2.5 billion for zero-emissions buses, aimed at helping school districts and private-sector transportation partners replace diesel-fueled school buses across the country. An additional $2.5 billion is directed at electrifying ferries.

With critical funding for charging infrastructure and thousands of electric buses, this legislation provides a much-needed down payment to accelerate the transition to a cleaner, more secure American transportation system,” said Ben Prochazka, executive director of the Electrification Coalition, in a statement.

Batteries and rare earth minerals

To boost U.S. competitiveness in a global battery industry that is today dominated by Asian manufacturers, the infrastructure bill contains $6 billion for Department of Energy grant programs: $3 billion for battery materials processing and $3 billion for battery manufacturing and recycling. It also sets up a DOE program to study the potential for second-life” uses of depleted EV batteries in grid energy storage.

Think tank Third Way has estimated that the $6 billion investment and additional provisions in the bill could bring us close to the $10 billion we believe is necessary to bring U.S. battery manufacturing up to scale.” The think tank highlighted other parts of the infrastructure bill that could boost U.S. battery manufacturing, including $8 billion for a 30 percent manufacturing tax credit for investments in facilities that make or recycle energy-related products or reduce their greenhouse gas emissions. Third Way also noted that the bill reforms the DOE’s Loan Programs Office in a way that will allow its $17.7 billion Advanced Technology Vehicle Manufacturing program to fund not only light-duty EVs but medium- and heavy-duty electric vehicles, ships and train locomotives as well.

Robbie Diamond, president and CEO of Securing America’s Future Energy, a nonprofit that advocates for U.S. self-reliance in transportation and mobility technologies, issued a statement highlighting other parts of the infrastructure bill that fill key gaps in the critical materials supply chain, from mapping our mineral resources to examining permitting reform and demonstrating early steps toward domestic rare earths development.”

Those include $140 million for a demonstration project for domestic production of rare earth minerals needed for batteries and electric drivetrains, as well as $320 million for the Earth Mapping Resources Initiative, a federal program to identify undiscovered critical mineral resources.

Grid modernization and transmission development 

The infrastructure bill directs billions of dollars at grid modernization and expansion, representing a small portion of the hundreds of billions of dollars analysts say will be needed to achieve the Biden administration’s goal of a 100 percent carbon-free national power grid by 2035.

In the area of high-voltage transmission grid infrastructure, the bill will create a $2.5 billion revolving loan fund to allow the DOE to serve as an anchor tenant” for up to half of the capacity of a new or upgraded transmission line, which could help costly and time-consuming transmission line projects secure financing needed to move ahead. It also contains a $10 billion increase in borrowing authority for the Bonneville Power Administration, which manages hydropower and transmission resources across the Pacific Northwest, a portion of which could be applied to new transmission.

This funding represents only a fraction of the costs of building the nearly two dozen transmission projects already in advanced stages of development, let alone the many new projects needed to carry wind and solar power where it’s needed and hit clean energy targets, transmission groups say.

Still, the bipartisan support for expanding transmission sends a strong message to the industry and its regulators to get busy planning, permitting, and paying for new and expanded lines,” Rob Gramlich, executive director of Americans for a Clean Energy Grid, said in a statement.

The bill also directs $3 billion to DOE’s Smart Grid Investment Grant program, which was created in 2007 and funded billions of dollars of grid technology investments after the 2008 recession, to increase grid flexibility to support integration of renewable and distributed energy resources. New authorization for this program could allow this funding to support grid-enhancing technologies” to increase the capacity and flexibility of existing or new transmission lines.

Another $5 billion will go toward DOE grants for investments that reduce the risk and impact of grid outages caused by extreme weather, wildfires and natural disasters, such as those that have struck California, Texas and the Gulf Coast over the past year. An additional $1 billion in funding is earmarked for grid investments in rural or remote areas, and $500 million will support the DOE’s State Energy Program, which aids states in transmission and distribution planning.

Hydrogen, carbon capture and nuclear power 

Much of the infrastructure bill’s funding is aimed at technologies that aren’t cost-competitive today but which will be needed to move the country’s power grid to 100 percent carbon-free energy and tackle hard-to-decarbonize sectors including heavy industry, shipping and aviation.

Hydrogen produced with low or no carbon emissions — a potentially valuable replacement for fossil fuels across a wide range of uses — will receive $9.5 billion, including $1 billion to reduce the cost of green hydrogen” produced with electrolyzers using renewable energy and $500 million in clean hydrogen project grants.

The majority of the funding — $8 billion — will go toward developing four hydrogen hubs” that will centralize the production, processing, storage, delivery and use of clean hydrogen. Not all of these hubs will be powered by wind and solar, however — at least one must produce hydrogen using nuclear energy and at least one using fossil fuels. This doesn’t sit well with green-hydrogen advocates, who have warned against reliance on blue hydrogen” produced using natural gas paired with carbon capture.

Carbon capture, utilization and storage (CCUS) projects, seen by some as an important means to reduce emissions from hard-to-decarbonize sectors, will receive another $8 billion from the infrastructure bill. Of that, $3.5 billion will be used to develop four direct air capture hubs” to bring to scale technology that can capture carbon from the atmosphere.

Another $2.5 billion will go toward large-scale carbon storage to prevent captured carbon from reentering the atmosphere. To make use of captured carbon, the bill directs $300 million to state and local grants for carbon utilization projects and will offer $1.8 billion in low-interest loans for projects that transport captured carbon.

Nuclear power will get $6 billion in DOE civil nuclear credits to be offered to certified nuclear reactors through a bidding and auction process, in a move to support existing nuclear plants struggling to remain competitive in U.S. energy markets. The bill also provides $3.2 billion to DOE’s Advanced Reactor Demonstration Program, which is geared to boost development of next-generation nuclear reactor technologies that could bring down costs compared to costly large-scale nuclear reactors.

Energy efficiency and environmental remediation 

The infrastructure bill also contains billions of dollars to boost energy efficiency in homes, multifamily buildings, commercial buildings and industrial facilities, efforts geared not only to reduce energy consumption but also to boost the economic health of lower-income Americans. The bill calls for a $3.5 billion increase in funding for low-income home weatherization, $550 million for local energy-efficiency and conservation block grants, and $225 million to assist states and other jurisdictions in updating building energy codes.

The American Council for an Energy-Efficient Economy trade group has tallied up other efficiency spending in the infrastructure bill, including a revolving loan fund for upgrades to commercial buildings and homes, money for upgrades to public schools and federal buildings, and funding for worker training. On the industrial side, the bill includes $550 million for Industrial Assessment Centers to help small manufacturing plants identify and implement efficiency improvements and $500 million for demonstration projects under a clean industrial technology program created last year.

The bill also aims to help repair the harms of past pollution and environmental degradation with $21 billion in environmental remediation funding, including funds to clean up Superfund sites, reclaim abandoned mining lands and seal abandoned oil and gas wells. The Biden administration’s fact sheet identifies the spending as targeting legacy pollution and boosting jobs and economic development in low-income communities and communities of color.

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.