The Clean Energy for America Act Advances in the Senate

By Matt Heller
Jun 01 2021 |
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The bill would consolidate tax credits to incentivize investment in renewable energy, and could help America lead in manufacturing electric vehicles. 

The Senate Finance Committee recently advanced legislation designed to utilize tax credits to encourage the production of renewable energy and electric vehicles (EVs).  

The panel moved the Clean Energy for America Act on a 14-14 party-line vote on Wednesday. The bill would consolidate energy tax credits across different industries to promote the making of EVs and other clean energy vehicles.

Although it earned the support of Democrats, Republicans on the committee voted against the measure, which also would end tax subsidies for fossil fuels. That will lead to the loss of oil industry jobs, Republicans argued.

But supporters of the legislation say it will serve as major investment in the American manufacturing industry that will create new jobs, especially in the making of electric vehicles and their components. The bill is designed to ensure that the United States does not fall behind its peers, especially China, when it comes to the electric vehicle industry – which is expected to quickly supplant traditional fossil fuel-powered automobiles in the near future.  

“It’s clear that electric vehicles are going to be a part of our country’s future,” said Sen. Debbie Stabenow (D-Mich.). “It’s not a question of if they’ll be built, but where they’ll be built: America or Asia.” 

The legislation would implement a 10% raise in production and investment tax credits, with bonus tax incentives available for nascent technologies. It also would aim to help ensure workers see the benefits, including by providing bonus tax incentives for products made in facilities that source a certain percentage of components domestically and for manufacturing facilities in communities that have seen a decline in jobs as the coal industry declines.  

Senate Finance Committee Chairman Sen. Ron Wyden (D-Ore.) remarked that the Clean Energy for America Act “can spark a wave of job-creating, carbon cutting ingenuity across the country.” 

“The new system creates incentives for three goals: clean energy, clean transportation and energy efficiency,” Wyden said. “It levels the playing field because the same rules are going to apply to any and all who want to compete from the biggest fossil fuel company to the smallest renewable start up.” 

Notably, the bill emphasizes a boost to American manufacturing, rather than just mandating a transition to renewable energy that could lead to massive imports from countries like China. It does this through domestic content requirements and incentives for companies to invest in new facilities in communities in need of work. 

“This bill takes the important step forward to ensure that only cars made in this country by this country’s workers will be eligible for those tax credits,” said Sen. Sherrod Brown (D-Ohio). “The bill includes provisions to spur domestic clean tech manufacturing to make sure we get that investment in my part of the country and in other regions that have seen older and inefficient power plants retire.” 

Other provisions included by Sen. Maria Cantwell (D-Wash.) would expand tax credits from electric automobiles to all electric vehicles. That means electric busses, planes, boats, tractors, forklifts, and a new wave of infrastructure powered by green energy and built by American workers.  

Other amendments to the bill proposed at the committee included those by Sens. Bill Cassidy (R-La.) and John Cornyn (R-Texas) to ensure that products qualifying for these tax credits are not being Made in China, and will need to be certified as having not been made by forced or child labor.  

These measures are designed to protect American manufacturing from being undercut by cheaper producers, in China especially, that abuse their workers and commit human rights violations in order to keep costs down. It’s an issue we’ve previously written about, and we’re pleased that Senators from both sides of the aisle recognize it.  

The Clean Energy for America Act faces an uncertain future in the full Senate – not a single Republican voted to advance it in committee, after all. Absent an agreement brokered in some smoke-filled backroom between the two parties, the only path forward for the bill as written appears to be the budget reconciliation process.  

But the future of the bill is worth watching. We’ll be following along as it continues its long journey through the Senate.