Yellen says Biden tax credits boost clean energy investment in coal country (updated)
13/03/2024 19:44
(Adds details on Kentucky EV investments, Yellen comments on
affordability, paragraphs 6, 10-14)
By David Lawder
ELIZABETHTOWN, Kentucky, March 13 (Reuters) - Treasury
Secretary Janet Yellen said on Wednesday clean energy
investments in parts of the U.S. historically reliant on fossil
fuels have more than doubled to $4.5 billion per month due to
Biden administration tax credits targeting such communities.
Yellen said in remarks in central Kentucky that Treasury
Department research using Rhodium Group data also shows clean
energy investment in other communities has risen to $3.5 billion
per month - a $1 billion increase - thanks to the incentives in
the 2022 Inflation Reduction Act (IRA).
Yellen is visiting Kentucky, a heavily Republican state that
Democratic President Joe Biden is not expected to win in the
Nov. 5 U.S. election, to promote the state's growing supply
chain for electric vehicle (EV) battery production that Biden
touted in his State of the Union address to Congress last week.
"We've seen investments grow significantly. Companies have
announced almost $650 billion in investments in clean energy and
manufacturing across the country since the start of the
administration," Yellen said.
Yellen is visiting Advanced Nano Products, a South
Korean-owned battery materials manufacturer that has invested
$49 million in a new factory in Elizabethtown, Kentucky that
will employ around 100 workers after it starts production in
May.
The facility will supply carbon nanomaterials to the $5.8
billion BlueOval SK battery manufacturing complex under
construction a few miles to the south by Ford Motor Co and South
Korea's SK Group. The plant will eventually employ more than
5,000 workers.
Japan's AESC is also building a $2 billion battery factory
in Bowling Green, Kentucky that will employ 2,000 people.
All of these facilities are taking advantage of IRA clean
energy manufacturing tax credits that provide up to 30% of the
investment costs, with a 10% bonus if located in a community
historically dependent on fossil fuel energy or one that is
economically disadvantaged. They also will benefit from consumer
EV tax credits of up to $7,500 on the purchase of vehicles that
meet U.S. production and battery content requirements.
Kentucky accounted for just under 5% of U.S. coal production
in 2022, ranking it fifth among the states producing the fossil
fuel, according to the U.S. Energy Information Administration.
The right-to-work state has captured over $11.6 billion
in EV-related investments partly because it sits at the center
of a growing Mid-South auto manufacturing belt stretching from
Georgia to Texas. The BlueOval SK venture also is benefiting
from a $9.2 billion
Department of Energy loan.
SALES HURDLES
The investments have faced some obstacles, including a
slowdown in U.S. EV sales and Ford's decision to freeze $12
billion in EV investments last year, including delaying one of
two plants at the BlueOval SK site in Glendale, Kentucky.
Yellen told Fox Business in an interview that while
sales may not have met rosy expectations over the past year,
consumers will want EVs as they become more affordable and more
charging stations are built, partly with federal infrastructure
funding.
"The future for EVs is extremely bright in the United
States. More subsidies will come into play that'll help make
these cars affordable, and over time, their costs will decline."
Yellen said the Treasury would take further steps to
encourage leaders and businesses in more than 150 U.S. cities
with high poverty rates to take advantage of the tax credits to
attract investment.
(Reporting by David Lawder; editing by Paul Simao and Mark
Heinrich)
((David.Lawder@tr.com; +1 202 843 6288;))