President Biden signed the Inflation Reduction Act today, an important piece of federal legislation that devotes more than $300 billion to energy and climate initiatives and aims to reduce carbon emissions by roughly 40 percent by 2030. Many of the new programs and funding will help improve the sustainability of the nation’s supply chain.
The legislation takes a two-prong approach in terms of energy incentives - new incentives for private industry to produce more renewable energy and incentives for households to change their energy use and consumption. Because our company is deeply invested in helping decarbonize the construction and operations of industrial real estate properties, we have been closely watching the progress of this bill and analyzing the impacts it will have on our and our customers’ businesses.
As the nation looks to increase production of renewable energy and the sustainability of the supply chain, these new public investments will help support more solar, more electric trucks and new clean-energy technologies and infrastructure. Prologis has long been a leader in solar and now is working with our customers to help facilitate the electrification of their fleets and other resiliency solutions such as microgrids. We are hopeful these new investments will help supercharge continued advancements in renewable energy.
Here are some key climate-focused highlights of the bill that would directly impact the sustainability of the supply chain:
- $260 billion in clean-energy tax credits will encourage new sources of renewable energy – such as solar, wind and hydropower. The bill creates new and extended credits for the production of renewable energy and for manufacturing a specific part essential to a renewable project, such as wind turbines or solar panels.
- $80 billion in new rebates for electric vehicles, solar and more will primarily encourage consumers to invest in electric vehicles and energy-efficient home features, like solar and water heaters, but also creates a new credit for commercial clean vehicles. The new investment will facilitate the purchase, installation, operation and maintenance of infrastructure needed to charge, fuel or maintain medium- and heavy-duty zero-emission vehicles.
- $27 billion for ‘green banks’ that will leverage public and private funds to invest in clean-energy technologies and infrastructure.
- $3 billion for ports to help reduce air pollution, including EV charging infrastructure.
With our commitment to achieve net zero emissions in our value chain by 2040 and our focus on helping our customers meet their sustainability goals, we at Prologis are keenly interested in moving the needle on new technologies that will create a greener supply chain. We believe these new public investments will help consumers and business alike do our part to help decarbonize the planet.