On August 16, 2022, President Joe Biden signed the Inflation Reduction Act, the largest climate legislation passed in United States history. The act pledges $369 billion in climate investments over the next decade to counter global warming. Specifically, the Inflation Reduction act allocates $490 million to National Oceanic and Atmospheric Administration (NOAA) for climate research grants, high-performance computing equipment, and hurricane observing aircrafts. It also grants $60 billion to organizations like The Department of Energy (DoE) for manufacturing clean-energy technologies, such as solar panels and electric vehicles. The largest portion of money will be in clean energy tax credits, awarded to businesses shifting to greener power sources. In order to fund the changes made by this legislation, a 15% corporate minimum tax is also implemented by the law. The tax, which applies to companies with more than $1 billion in annual profits, could apply to some of the largest U.S. waste management companies. However, this corporate tax is not the only part of the bill that may impact the waste management industry. The law provides new and expanded tax credits for biogas projects, beginning construction before 2025. Biogas can be created from industrial composting programs using food and farm waste. The law also includes a new “clean hydrogen” tax credit that allows for the use of renewable natural gas (RNG) as a qualifying feedstock for producing hydrogen. The legislation will be a major catalyst for advancing the biogas industry and is a solution to combat climate change and decarbonize our energy infrastructure. This transformative legislation provides a no-regret solution for converting methane from society’s waste stream into an environmentally friendly alternative.
Although the United States has fallen behind other developed nations in the fight against climate change, it is believed that this legislation could set the tone for progress on the global stage. However, while funding for research and development is beneficial, to have a global impact, the United States needs to collaborate with other nations in meeting climate change goals. Tying this legislation with foreign policy initiatives and sharing the results of domestic climate research would help low- and lower-middle income nations prepare for the impacts of climate change. While there is still a lot of work to be done in the environmental sector, laws such as this one are critical in combating the global climate change dilemma.
For more information about the Inflation Reduction Act and its implications on solid waste management, read here.