Inflation Reduction Act Two Years Later: Historic Industry Investment

Nik Sawe and Sonali Despande, Policy Analysts for Energy Innovation’s Industry Program, authored this piece. This is part of a series exploring the Inflation Reduction Act’s impact after two years. The first article summarizes its total impact.

States across the country are building plants, creating jobs and participating in a quiet new industrial revolution. From the battery belt in the Southeast to the revitalization of Midwest factories, American industry is shifting to a new, cleaner world.

Two years ago, the Biden administration passed the Inflation Reduction Act, a historic down-payment on cleaning up the most emissions-intensive sectors of our economy. While incentives for clean electricity and electric vehicles are well-known, the IRA also made game-changing investments in the United States industrial sector, which manufactures everything from construction materials like steel and concrete to consumer products like appliances and paper.

The industrial sector has a large climate footprint, producing almost a third of the country’s greenhouse emissions. It also releases conventional pollutants into the surrounding environment, creating serious public health impacts on nearby communities. These emissions can be challenging to address fully with existing technologies.

Fortunately, the IRA tackles this issue by establishing multiple programs that invest tens of billions of dollars in innovative industrial technologies and projects. These investments are poised to transform the sector, protecting our climate and public health while also securing technological leadership that will make the U.S. economy competitive in a net-zero future.

Significant Industrial Programs in the IRA

The IRA’s largest dedicated investment in industry is the Advanced Industrial Facilities Deployment Program, which offers over $5.8 billion to commercialize technologies that could take carbon emissions out of the industrial sector.

The U.S. Department of Energy recently created an “Industrial Demonstrations Program,” which will use this funding alongside funding from Biden’s infrastructure law to demonstrate the effectiveness of new technologies…