November 21, 2024
Anne Fischer

Congressmen John Moolenaar (R-MI) and Jared Golden (D-ME) introduced bipartisan legislation to block implementation of the recently finalized U.S. Treasury rule on the Advanced Manufacturing Tax Credit of section 45X.

The Inflation Reduction Act, passed in 2022, provides manufacturing tax credits 45 times higher for solar components made in the United States. While the lucrative tax credits have incentivized clean energy manufacturers around the world to build factories in the United States, the fact that some of the new manufacturing facilities come from Chinese companies has created controversy among lawmakers over how to implement the solar supply chain.

Both lawmakers oppose implementing Rule 45X, as currently written, because they believe it would allow Chinese companies to receive U.S. taxpayer dollars for the production of battery components.

“America must be a nation of producers, not just consumers,” Golden said. “That’s the goal of domestic manufacturing credits: to support America’s manufacturing economy. But the Biden administration has consistently included loopholes in regulations that allow foreign companies — including those with ties to adversarial foreign governments — to benefit from preferential tax treatment intended for U.S. companies. The administration needs to go back to the drawing board and make sure it is not subsidizing our global competitors.

Moolenaar previously introduced the “No Gotion Act,” meaning “No official donation of taxpayer revenue to oppressive nations.” aimed at preventing companies based in China, Russia, Iran or North Korea, as well as the subsidiaries of these companies, from benefiting from tax credits, in particular 45X. The difference between the No Gotion bill and the latest bill is that No Gotion restricts tax credits given to businesses from the countries mentioned above, while the latest bill removes 45X completely.

Gotion, a California-based battery manufacturer, is a subsidiary of Gotion Hight Tech, headquartered in Hefei, China and approximately 25% owned by Volkswagen. Gotion plans to build a $2.4 billion electric vehicle battery factory near Big Rapids, Michigan.

The United States has seen incredible growth in domestic manufacturing and clean energy production since the passage of the IRA, and with this growth comes strong demand on the supply chain and of the relocation of this supply chain. Michael Carr, executive director of the Solar Energy Manufacturers of America (SEMA) Coalition, said in a statement to pv magazine United States that passage of this bill would create uncertainty for solar manufacturers and their employees:

U.S. solar manufacturers have invested billions of dollars to reduce our dependence on China, lower energy costs, and create thousands of manufacturing jobs across the supply chain. solar supply. We appreciate the purpose of Reps. Moolenaar and Golden’s resolution, but the abrupt effect of the Congressional Review Act would create significant uncertainty for U.S. solar manufacturers and the workers they employ. The 45X incentives are critical to furthering America’s energy, economic, and national security goals, and we look forward to working with Congress and the next administration to ensure this provision is implemented in a way that supports the interests of American taxpayers and continue our incredible progress in solar energy. manufacturing in the United States.

If Moolenaar and Golden’s legislation is passed by the House of Representatives, the Senate, and signed by the President within 60 legislative days of the Executive Branch’s issuance of the Section 45X rule, the rule would terminate.

The text of the resolution by Moolenaar and Golden can be consulted here.

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