BAKU, Azerbaijan, September 27. The US Inflation Reduction Act will boost investments in clean energy, reads the latest report from Fitch Ratings.
The report reveals that the Inflation Reduction Act, recently signed into law by President Joe Biden, is the most significant US climate bill for decades, Trend reports.
“It will lead to investment of almost USD370 billion in clean energy, industry, manufacturing and other climate change mitigation efforts. The IRA will cut US greenhouse gas (GHG) emissions by more than 40 percent by 2030 from 2005 levels, accelerate its transition to a low-carbon economy, and strengthen domestic industries and supply chains.”
Fitch believes that tax credits, incentives and other financial support for the clean energy sector contained in the IRA will cushion high inflation and support the industry’s continued growth.
“The cost competitiveness and rising market share of renewables will be further strengthened, especially compared with fossil fuel power generation. IRA tax credits could be pivotal for improving green hydrogen’s competitiveness over blue hydrogen and revitalizing the nuclear industry, while encouraging investment in next-generation technology.”
Fitch experts note that while the significant electric vehicle (EV) and clean transportation tax credits in the IRA are likely to increase demand for EVs, existing supply-chain issues and domestic content restrictions with regards to manufacturing and critical minerals may hinder accelerated adoption of EVs in the near term.
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