The Internal Revenue Service (IRS) and the Department of Energy (DOE) in the United States have unveiled the allocation of the second round of tax credits under the 48C program, selecting dozens of projects across more than 30 states to receive the remaining $6 billion in tax credits from the initiative.
Background and Goals of the 48C Program
Administered by the IRS with assistance from the DOE’s Office of Manufacturing and Energy Supply Chains, the 48C program was initially established under the American Recovery and Reinvestment Act of 2009 and later expanded by 10 million under the IRA. Its objectives include expanding domestic clean energy manufacturing and recycling capabilities, bolstering the processing and refining of critical material in the US, and reducing green house emission from industrial facilities. Of the 10 billion, 40% is reserved for designated “48C energy communities” — areas with closed coal mines or plants.
Second Round of Applications and Funding
As in the first round, demand for the second round of 48C funding far outstripped supply. In the summer of 2024, the DOE received over 800 submissions totaling more than 40 billion, more than six times the available funds. By the October deadline, over 350 applications were received, including 75 from 48C energy communities across more than 40 states, requesting over 16 billion in tax credits. In the second round, the IRS allocated approximately 2.5 billion to about 50 projects in 48C energy communities, bringing the total allocation to these community projects to 4 billion over two rounds. All selected projects must meet current wage and apprenticeship requirements to receive a 30% investment tax credit.
Disclosure Requirements
As per regulations, the federal government will publish the names of all certified project organizations and funding amounts after projects are certified. Prior to certification, the program cannot disclose information about funding recipients or their projects without the applicants’ consent. Recipients are not currently required to publicly share their funding information, but some may do so voluntarily.
Investment Areas and Impacts of the Second Round
Clean Energy Manufacturing and Recycling: Received $3.8 billion in tax credits, accounting for 63% of the second round. This includes projects in the low-carbon-intensity materials category to support new manufacturing facilities producing energy-intensive materials with at least 30% lower carbon intensity than benchmarks. Selected projects cover clean hydrogen, power grids, electric vehicles, batteries, nuclear energy, solar PV, wind energy, and other industries and components crucial for supporting a secure and resilient domestic energy supply chain.
Recycling, Processing, and Refining of Critical Materials: Received $1.5 billion in tax relief, representing 25% of the second round. Selected projects include investments in facilities for refining and processing lithium, copper, and rare earth elements, as well as recycling lithium-ion batteries, copper, aluminum, and rare earth elements.
Industrial Decarbonization: Received $700 million in tax relief, accounting for 12% of the second round. Selected projects span multiple industries, including chemicals, food and beverages, district energy systems, pet products, aluminum, ceramics, and building materials, reflecting the adoption of industrial decarbonization solutions such as heat pumps, electric boilers, and thermal storage technologies. Once implemented, these projects will reduce approximately 2.8 million tons of CO2 emissions.
According to the IRS and DOE, the 10 billion allocated by the 48C program will support about 250 projects in over 40 states, with investment exceeding 44 billion. It is expected to support 30,000 construction jobs within four years, with 10,000 located in energy communities.
