Climate Policy News You Can Use — June 2023

Published: June 1, 2023 by Victoria Mills

Climate Policy Leadership

Dear Colleagues,

Summer has arrived, and with it, new calls for corporate leadership on climate policy. Last week, the U.N. Climate Change High-Level Champions called on companies to align their advocacy with net zero goals, and added a fifth criterion (“Persuade”) to the Race to Zero campaign. In parallel, We Mean Business Coalition released the Framework for Responsible Policy Engagement. Both of these efforts build on the AAA Framework for Climate Policy Leadership and provide valuable guidance to companies.

Here are some opportunities to put these new tools into practice in the coming month.

 

I. Defending the Inflation Reduction Act from Congressional attacks

Under the direction of Speaker McCarthy, the House Appropriations Committee introduced bills to make drastic cuts to key government agencies. Ignoring the debt limit agreement struck by Speaker McCarthy and President Biden, House Republicans formally adopted topline cuts of 35% for the bill funding Interior and EPA, and 30% for the bill funding USDA and FDA. Business voices are vital to push back on these reckless proposals and preserve funding for the agencies whose work is essential to meeting corporate climate goals and ensuring effective implementation of the Inflation Reduction Act and Bipartisan Infrastructure Law. See EDF’s statement.

Meanwhile, Republicans on the House Ways and Means Committee are advancing H.R. 3936 (the Tax Cuts for Working Families Act) which repeals key climate-related provisions in the IRA. This is yet another attack on IRA incentives and investments that American businesses advocated for and are already taking advantage of.

➢ Take Action:

  • Use your influence in Congress to call for a common-sense and responsible appropriations process that results in robust funding for agencies involved in IRA and BIL implementation, especially EPA, DOE, and DOT.
  • Let your members of Congress know why the Inflation Reduction Act matters to your business and how you plan to take advantage of its incentives and investments.

➢ Go Deeper:

 

II. EPA extends comment periodfor new power plant rules

EPA extended the public comment period for its proposed carbon pollution standards to August 8th. These standards are crucial for companies seeking to reduce their GHG emissions from purchased electricity (Scope 2). EPA estimates that they will avoid over 600 million metric tons of total CO2 through 2042 from fossil-fuel power plants, while simultaneously cutting emissions of health-harming pollutants including particulate matter, sulfur dioxide and nitrogen oxide. See EDF’s statement.

Businesses have every reason to support these standards: clean energy is now the most affordable option and funding from the Inflation Reduction Act is turbocharging its adoption.

➢ Take Action:

  • File comments with EPA by August 8th supporting the new power plant standards.

➢ Go Deeper:

 

III. Methane matters: MERP rule expected in July; PHMSA rule open until August 16

EPA is expected to propose a rule in July to update the Greenhouse Gas Reporting Program (GHGRP), an essential mechanism in implementing the Methane Emission Reduction Program (MERP) created under the IRA. This update is critical to ensure that reported methane emissions and the waste charge are based on real-world data and accurately reflect total methane emissions from the sector. The actual methane waste charge rule will be introduced in the fall.

And the U.S. DOT Pipeline and Hazardous Materials Safety Administration (PHMSA) extended the comment period on its proposed rule to modernize requirements for pipeline safety, leak detection and repair until August 16th. This important rule can be improved with stronger requirements to deploy advanced leak detection technologies and capture emissions from intentional releases, more robust and comprehensive reporting and mapping, and enhanced repair requirements for all pipelines.

➢ Take Action:

  • Once EPA proposes the MERP/GHGRP rule, file comments supporting the update of the program to ensure that the methane waste charge is based on real-world emissions data.
  • File comments by August 16th urging PHMSA to move swiftly to adopt protective final standards that reduce methane pollution and improve community safety.

➢ Go Deeper:

 

IV. New guidance from IRS on elective pay and transferability

Treasury and the IRS released guidance for two new credit delivery mechanisms created under the IRA: elective pay (also known as “direct pay”) and transferability. These mechanisms enable tax-exempt organizations such as state, local, and Tribal governments; non-profit organizations and other entities to take advantage of clean energy tax credits, including the major Investment and Production Tax credits, as well as tax credits for electric vehicles and charging stations.

Businesses can also choose elective pay for three of the 12 credits, i.e., the Advanced Manufacturing (45X), Carbon Oxide Sequestration (45Q), and Clean Hydrogen (45V) credits. The IRA also allows businesses not using elective pay to transfer some credits to a third-party in exchange for tax-free immediate funds. In this way, businesses can take advantage of these clean energy incentives even if they do not have sufficient tax liability to fully utilize the credits themselves.

➢ Take Action:

➢ Go Deeper:

 

V. EPA heavy-duty truck standards:  comments are in; business support remains important.

Thanks to the companies that filed comments with EPA supporting strong GHG emissions standards for heavy-duty trucks. Continued corporate engagement with EPA is important between now and when the agency issues its final rule, as are public-facing expressions of support from major fleets, shippers and other key stakeholders on the need for and feasibility of protective standards. EDF’s comments emphasize that EPA’s proposal is “eminently feasible” and calls on the agency to adopt even stronger standards that help deliver more zero-emitting freight trucks and buses nationwide.

 

Thanks as always for reading, and please reach out with any feedback or questions.

Best,
Victoria