Authored by Daniel Gonzalez
and Taylor PitelThe Center for Transportation and the Environment (CTE) commends the United States Congress on the passage of the Inflation Reduction Act (IRA), with President Biden signing the bill on August 16, 2022. The climate-related provisions in the IRA are a monumental step forward to combat climate change over the next 10-15 years. The $370 billion of new climate spending, predominantly in the form of tax credits, will financially incentivize the American economy to decarbonize in all five of the major GHG-emitting economic sectors.

For transit, the IRA provides approximately $39 billion in funding for the modernization of the transit sector. This funding, complemented by the $89.9 billion guaranteed by the IIJA, sets up the transit industry, the highest emitting economic sector in the United States, to make ambitious steps forward to lower its emissions. With every funding opportunity to decarbonize the transportation industry, CTE has played a major role in ensuring the transit industry will be the first to convert to predominantly Zero Emission Vehicles.

Transit isn't the only industry that will greatly benefit from the recently passed bill. Vehicles and infrastructure at ports will receive $3 billion through Grants to Reduce Air Pollution at Ports. The $1 billion allocated to Clean Heavy-Duty Vehicles Grants will support states, municipalities, and Indigenous tribes with the replacement of their Class 6 or Class 7 heavy-duty fossil-fueled vehicles, with efficient, clean zero-emission vehicles. The extension of the Alternative Fuels Excise Tax Credit and the new Clean Hydrogen Tax credit will help lower the costs of the various fuels zero-emission vehicles use. In addition, the Greenhouse Gas Air Pollution Plans and Implementation Grants and Environmental and Climate Justice Block Grants can help states, municipalities, and Indigenous tribes plan and start transitioning their fleets to 100% zero emissions.

The indirect impacts on the medium- and heavy-duty zero-emission industry are equally exciting. Investments in all clean climate technologies, light-duty EV markets, resiliency, and environmental justice could have positive spillover effects for the entire US ZEV industry.

CTE has shaped clean transportation policy in D.C. and Sacramento from day one, advocating for policies that are informed by our real-world, hands-on experience. In addition to our advocacy work for the IRA, our policy accomplishments include helping to increase the ZEB Low-No Program funding by fivefold to $5.25 billion, creating a national strategy to achieve a 100% zero-emission transit system, helping to secure $2.5+ billion in funding for the electric school bus industry, and helping to elevate the role of fuel cells and green hydrogen in clean transportation.

CTE and our partners work hard every day to make zero-emission vehicles a reality. The IRA directly supports the advancement of CTE's mission to improve the health of our climate and communities by bringing people together to develop and commercialize clean, efficient, and sustainable transportation technologies.

Through these various programs and tax credits, the IRA provides fleet operators, technology providers, and other transportation industry stakeholders the tools and resources needed to plan for and deploy zero-emission transportation technologies in both the medium- and heavy-duty vehicle markets. CTE's extensive zero-emission vehicle deployment project management and consulting experience positions our team well to facilitate the successful execution of the projects that result from the IRA.

The signing of the Inflation Reduction Act is a marquee part of the most promising government actions to combat climate change in recent memory. Nonetheless, the most exciting developments are still to come. The funding established in the IRA opens the door for emerging and groundbreaking energy technologies to deliver significant emissions reductions across the zero-emission transportation industry and the entire economy.