Inflation Reduction Act of 2022 (IRA): Provisions Related to Climate Change

October 3, 2022 – October 26, 2023 R47262

Inflation Reduction Act of 2022 (IRA):
October 26, 2023
Provisions Related to Climate Change
Jonathan L. Ramseur,
On August 16, 2022, President Biden signed H.R. 5376 (P.L. 117-169), a budget reconciliation
Coordinator
measure commonly referred to as the “Inflation Reduction Act of 2022” (IRA). IRA contains
Specialist in Environmental
eight titles, each with some provisions that directly or indirectly address issues related to climate
Policy
change, including reduction of U.S. greenhouse gas (GHG) emissions or promotion of adaptation

and resilience to climate change impacts.

The funding and financial incentives of IRA promote the deployment of low- and no-GHG
emission technologies. This deployment would likely reduce or avoid some quantity of GHG emissions compared to baseline
projections. A 2023 journal article in Science compared emissions estimates from a number of modeling groups. The groups’
estimates indicated that under baseline conditions (i.e., federal, state, and local policies and practices in place before IRA),
U.S. GHG emissions would decrease by 25% to 31% by 2030 compared to 2005 levels. The same modeling teams estimated
that the IRA provisions would reduce U.S. GHG emissions by 33% to 40% by 2030 compared to 2005 levels. The range of
estimates from the baseline and IRA scenarios is due to varied assumptions in the models, such as future oil and natural gas
prices, among other uncertain factors. Actual GHG emission levels will depend on how the provisions are implemented, the
growth rate of the U.S. economy, fuel prices, and a range of other factors.
A number of factors will likely play a role in determining the economic effects of IRA and the distribution of these effects
across geographic areas, income groups, and communities. These factors include federal implementation of the law, and state,
local, and private responses to the financial incentives and provisions in IRA.
This report identifies provisions of IRA related to climate change, with abbreviated information about their content and the
Congressional Budget Office’s estimates of revenue effects over the period of the law, from 2022 to 2031. The provisions are
organized by sectoral sources of GHG emissions:
• electricity;
• transportation;
• fossil fuel resources;
• buildings and energy efficiency;
• manufacturing;
• environment and climate justice;
• agriculture, forestry, and land conservation;
• climate research; and
• cross-cutting.
Congressional Research Service

Inflation Reduction Act of 2022 (IRA): Provisions Related to Climate Change

Background
On August 16, 2022, President Biden signed H.R. 5376 (P.L. 117-169), a budget reconciliation
measure commonly referred to as the “Inflation Reduction Act of 2022” (IRA).1 IRA contains
eight titles, each with some provisions that directly or indirectly address issues related to climate
change, including reduction of U.S. greenhouse gas (GHG) emissions or promotion of adaptation
and resilience to climate change impacts. Some selected provisions in the eight titles are listed
below.
• Title I—Committee on Finance includes provisions that modify, extend, or
provide new tax credits for electricity from clean and renewable resources,
alternative fuels and alternative fuel infrastructure, residential and commercial
energy efficiency, advanced energy manufacturing, and clean vehicles, while
reinstating or extending certain taxes on oil and coal.
• Title II—Committee on Agriculture, Nutrition, and Forestry includes
provisions that provide funding for the U.S. Department of Agriculture (USDA)
for agriculture, forestry, and land conservation.
• Title III—Committee on Banking, Housing, and Urban Affairs includes
provisions that provide funding to influence domestic industry to produce certain
materials and goods for the national defense, and for projects to increase energy
or water efficiency of affordable housing.
• Title IV—Committee on Commerce, Science, and Transportation includes
provisions that provide funding for the National Oceanic and Atmospheric
Administration (NOAA) for coastal communities, NOAA facilities, and weather
research and forecasting; and for the Department of Transportation (DOT) for
aviation fuels and low-emission aviation technologies.
• Title V—Committee on Energy and Natural Resources includes provisions
that provide funding for the Department of Energy (DOE) for energy rebates,
building codes, energy efficiency, transmission of electricity, advanced and
reduced-emission industrial facilities, and energy infrastructure, and loan
programs for advanced vehicle manufacturing; provides funding for the
Department of the Interior (DOI) for conservation of lands and resources,
drought preparedness, technical assistance to Insular Areas (i.e., American
Samoa, Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin
Islands), leasing for offshore wind energy development, and increased royalty
rates for federal land and offshore oil and gas leases.
• Title VI—Committee on Environment and Public Works includes provisions
that provide funding to the Environmental Protection Agency (EPA) for a
Greenhouse Gas Reduction Fund, renewable fuels programs, environmental and
climate justice block grants, and more; provides funding to the Fish and Wildlife
Service for recovery plans for endangered and threatened species; and for
resilience and capacity of—and reducing damage to—habitats and infrastructure;
provides funding to the Council on Environmental Quality for collecting data on
environmental and climate issues, including tracking disproportionate burdens
and environmental impacts; provides funding to the Federal Highway

1 The law provided for reconciliation of the federal budget, allowing the Senate to pass it with a simple majority. For
further information on reconciliation, see, among other CRS products, CRS Report R44058, The Budget Reconciliation
Process: Stages of Consideration, by Megan S. Lynch and James V. Saturno.
Congressional Research Service

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link to page 7 Inflation Reduction Act of 2022 (IRA): Provisions Related to Climate Change

Administration (FHWA) and the General Services Administration (GSA) for
transportation projects, environmental reviews, and use of low-carbon
construction materials and products in federally funded transportation projects;
and directs EPA to impose a charge on methane emissions from specific
petroleum and natural gas system facilities.
• Title VII—Committee on Homeland Security and Governmental Affairs
includes provisions that provide funding for several environmental programs,
including to the Department of Homeland of Security (DHS) to carry out
sustainability and environmental programs; the Federal Emergency Management
Agency (FEMA) for low-carbon building materials and low- or no-emission
energy projects; and the U.S. Postal Service to purchase zero-emission vehicles
and related infrastructure.
• Title VIII—Committee on Indian Affairs includes provisions that provide
funding for the Bureau of Indian Affairs (BIA) and Office of Native Hawaiian
Relations for climate resilience and adaptation programs; and provides funding to
the BIA for a tribal electrification program.
The funding and financial incentives of IRA promote deployment of low- and no-GHG emission
technologies. This deployment would likely reduce or avoid some quantity of GHG emissions
compared to a baseline scenario (i.e., hypothetical scenario without IRA).
A 2023 journal article in Science compared emissions estimates from a number of modeling
groups. The groups’ estimates indicated that under baseline conditions (i.e., federal, state, and
local policies and practices in place before IRA), U.S. GHG emissions would decrease by 25% to
31% by 2030 compared to 2005 levels.2 The same modeling teams estimated that the IRA
provisions would reduce U.S. GHG emissions by 33% to 40% by 2030 compared to 2005 levels.
The range of estimates from the baseline and IRA scenarios is due to varied assumptions in the
models, such as future oil and natural gas prices, among other uncertain factors. Actual GHG
emission levels will depend on how the provisions are implemented, the growth rate of the U.S.
economy, fuel prices, and a range of other factors.
A number of factors will likely play a role in determining the economic effects of IRA and the
distribution of these effects across geographic areas, income groups, and communities. These
factors include federal implementation of the law, and state, local, and private responses to the
financial incentives and provisions in IRA. Assessments of the analyses published to date and
other information regarding GHG emissions and other effects of the law are beyond the scope of
this report.
Table 1 identifies climate-change-related provisions of IRA that are included in specific IRA
sections. The selected provisions include those that (1) are explicitly intended to affect GHG
emissions or climate-related or weather-disaster-related adaptation or resilience; (2) are intended
to influence deployment of technologies and practices that are widely recognized as influencing
GHG emissions, such as energy efficiency incentives or agricultural soil conservation; (3) may
affect the prices of fossil fuels, which are a major source of GHG emissions; (4) more generally
support climate or weather research, analysis, or policymaking.
The table provides a general overview of the provisions, Congressional Budget Office estimates
of the cumulative revenue effects (2022-2031) when available, and appropriations and funding

2 A 2023 journal article in Science compared emissions estimates from a number of modeling groups. See John Bistline
et al., “Emissions and Energy Impacts of the Inflation Reduction Act,” Science, June 30, 2023,
https://www.science.org/doi/10.1126/science.adg3781.
Congressional Research Service

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Inflation Reduction Act of 2022 (IRA): Provisions Related to Climate Change

mechanisms for applicable provisions. Funding mechanisms include grants, loans, and other
agency activities, the details of which are provided in the provision highlights column.
The table also identifies for congressional clients a CRS contact for each provision. In addition,
the table notes identify selected CRS products that offer further description of specific IRA
provisions and additional context.
The provisions are organized by sectoral sources of GHG emissions, compiling related and
possibly interacting provisions from different titles. The table sections are
• electricity;
• transportation;
• fossil fuel resources;
• buildings and energy efficiency;
• manufacturing;
• environment and climate justice;
• agriculture, forestry, and land conservation;
• climate research; and
• cross-cutting.
Congressional Research Service

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Table 1. Climate-Related Provisions in P.L. 117-169
CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
ELECTRICITY

Section 13101
Extends and modifies the production tax credit (PTC) for
-51.062
—
—
Donald Marples
Extension and
electricity produced from wind, biomass, geothermal, solar,
Modification of Credit for
landfil gas, trash, qualified hydropower, and marine and
Electricity Produced from
hydrokinetic resources; credit amounts depend in some cases
Certain Renewable
on meeting prevailing wage or apprenticeship requirements,
Resourcesb
domestic content requirements, or being located in an “energy
community”
Section 13102
Extends and modifies the energy investment tax credit (ITC) for
-13.962
—
—
Donald Marples
Extension and
investments in certain energy property, such as solar, fuel cells,
Modification of Energy
waste energy recovery, combined heat and power, small wind
Investment Tax Creditb
property, microturbines, and geothermal heat pumps; expands
scope to include energy storage, qualified biogas properties,
electrochromic glass, and microgrid control ers, and
interconnection property; credit amounts depend in some cases
on meeting prevailing wage or apprenticeship requirements,
domestic content requirements, or being located in an “energy
community”
Section 13103
Allows allocation of “environmental justice solar and wind
Revenue effects
—
—
Donald Marples
Increase in Energy Credit
capacity” credits in 2023 and 2024 in addition to otherwise
included in Sections
for Solar and Wind
allowed ITCs
13101 and 13102
Facilities Placed in Service
in Connection with Low-
Income Communitiesb
CRS-4

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 13104
Extends and modifies the carbon oxide capture credit for
-3.229
—
—
Donald Marples
Extension and
industrial carbon capture or direct air capture (DAC) facilities;
Modification of Credit for
increases the credit amount, with higher credit amounts for
Carbon Oxide
DAC; reduces the threshold amount of carbon oxide that must
Sequestrationb
be captured at a qualifying facility, adding the restriction for
electricity generating facilities that the property must be
designed to capture not less than 75% of the baseline carbon
oxide production or 60% for electricity generating facilities not
yet or recently placed into service; credit amounts depend in
some cases on meeting prevailing wage or apprenticeship
requirements
Section 13105
Creates a new tax credit for qualifying nuclear power that
-30.001
—
—
Donald Marples
Zero-Emission Nuclear
phases out as electricity prices rise; increased credit amounts
Power Production
are available for taxpayers satisfying prevailing wage and
Creditb
apprenticeship requirements
Section 13701
Creates a new production tax credit for sale of qualified
-11.204
—
—
Donald Marples
Clean Electricity
domestically produced electricity with GHG emissions not
Production Creditb
greater than zero; credit amounts depend in some cases on
meeting prevailing wage or apprenticeship requirements,
domestic content requirements, or being located in an “energy
community”
CRS-5

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 13702
Creates a new technology-neutral investment tax credit for
-50.858
—
—
Donald Marples
Clean Electricity
qualifying zero-emissions electricity generation facilities or
Investment Creditb
energy storage technology, with credit rates determined by
paying prevailing wage and meeting apprenticeship or domestic
content requirements, or in an energy community; allows for an
allocation for environmental justice solar and wind capacity
credits in a low-income community or on Indian land
Section 13703
Allows cost recovery as a five-year property for facilities
-0.624
—
—
Donald Marples
Cost Recovery for
qualifying for the clean electricity production or investment tax
Qualified Facilities,
credits
Qualified Property, and
Energy Storage
Technologyb
Section 22001
Provides funding to USDA for electric loans for renewable
—
1.000

Direct loans
Kelsi Bracmort
Additional Funding for
energy under the Rural Electrification Act, including for projects
Electric Loans for
that store electricity
Renewable Energy
Section 22002
Provides funding to USDA to support the Rural Energy for
—
2.025
Grants and direct loans
Kelsi Bracmort
Rural Energy for America
America Program (REAP), which provides grants for energy
Program
efficiency and renewable energy projects ($1.7 bil ion); provides
funding for grants and loans for underutilized renewable energy
technologies and technical assistance with REAP applications
($304 mil ion)
CRS-6

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 22004
Provides funding to USDA to offer financial assistance (e.g.,
—
9.700
Direct loans and other
Kelsi Bracmort
USDA Assistance for
loans) to eligible entities for the long-term resiliency, reliability,
assistance
Rural Electric
and affordability of rural electric systems through the purchase
Cooperatives
of renewable energy, renewable energy systems, zero-emission
systems, carbon capture and storage systems, and more
Section 22005
Provides funding to USDA for administration and
—
0.100
Other agency activities
Kelsi Bracmort
Additional USDA Rural
implementation of Sections 22001-22004, among other
Development
provisions
Administrative Funds
Section 50141
Increases loan guarantee commitment authority to $40 bil ion
—
3.600
Loan guarantees
Phil ip Brown
Funding for Department
for the Department of Energy (DOE) Title XVII Innovative
of Energy Loan Programs
Technology Loan Guarantee Program (§1703), supporting
Officec
eligible projects that avoid, reduce, utilize, or sequester air
pol utants or anthropogenic GHG emissions, and—with the
exception of projects supported by a State Energy Financing
Institution—employ new or significantly improved technologies;
provides funding to DOE to pay for loan guarantee costs and
program administration
CRS-7

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 50144
Creates a temporary loan guarantee authority of $250 bil ion
—
5.000
Loan guarantees
Phil ip Brown
Energy Infrastructure
for DOE under Title XVII of the Energy Policy Act of 2005
Reinvestment Financingb
(§1706) for projects that (1) retool, repower, repurpose, or
replace energy infrastructure, subject to the requirement that
fossil fuel electricity generation projects must have controls to
avoid, reduce, utilize, or sequester air pol utants and
anthropogenic GHG emissions, or (2) enable operating
infrastructure to avoid, reduce, utilize, or sequester air
pol utants or anthropogenic GHG emissions; for the purpose of
this program, “energy infrastructure” means a facility and
associated equipment used for (1) generation or transmission of
electrical energy, or (2) production, processing, and delivery of
fossil fuels, fuels derived from petroleum, or petrochemical
feedstocks; provides funding to DOE to implement Section
1706 activities
Section 50145
Permanently increases the Tribal Energy Loan Guarantee
—
0.075
Loan guarantees
Corrie Clark
Tribal Energy Loan
Program lending authority to $20 bil ion and appropriates
Guarantee Programb
money for program activities
Section 50151
Creates a new direct loan program for development of certain
—
2.000
Direct loans
Ashley Lawson
Transmission Facility
transmission projects located in a National Interest Electric
Financingd
Transmission Corridor (NIETC), as designated by DOE;
NIETCs are to promote goals such as energy security or use of
intermittent energy sources such as wind and solar
Section 50152
Creates a new DOE grant program generally for state and local
—
0.760
Grants
Ashley Lawson
Grants to Facilitate the
governments aimed at facilitating the siting of certain onshore
Siting of Interstate
and offshore transmission lines, to cover project studies, host
Electricity Transmission
negotiations, participate in federal and state regulatory
Linesd
proceedings, and promote economic development in affected
communities
CRS-8

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 50153
Provides new funding to DOE for interregional and offshore
—
0.100
Planning, modeling,
Ashley Lawson
Interregional and
wind electricity transmission planning, modeling, and analysis,
analysis, among others
Offshore Wind Electricity
and stakeholder convening; may include planning for the effects
Transmission Planning,
of weather changes due to climate change on the reliability and
Modeling, and Analysisd
resilience of the electric grid
Section 50251
Authorizes DOI to issue offshore wind leases in portions of the
0.160f
—
—
Laura Comay
Leasing on the Outer
Mid- and South Atlantic and the Gulf of Mexico that had
Continental Shelfe
previously been withdrawn from leasing disposition through
2032; authorizes renewable energy leasing offshore of U.S.
territories and directs DOI to take steps to pursue offshore
wind lease sales in these locations
Section 60107
Provides funds to EPA to support education, outreach, technical
—
0.087
Technical assistance,
Jonathan
Low Emissions Electricity
assistance, and/or partnerships to (1) consumers; (2) low-
outreach, and
Ramseur
Program
income and disadvantaged communities; (3) industries; and (4)
partnerships
state, tribal, and local governments; directs EPA to assess within
one year of enactment the GHG emission reductions
anticipated to result from changes in domestic electricity
generation and use each year through 2031
Section 80003
Adds funds to BIA for zero-emission electricity systems for
—
0.150
Various mechanisms
Mariel Murray
Tribal Electrification
tribal homes, including associated home repairs and retrofitting
under BIA authorities
Program
CRS-9

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)

TRANSPORTATION
Section 13201
Extends existing tax credits for alternative fuels and alternative
-5.571
—
—
Nicholas Buffie
Extension of Incentives
fuel mixtures and biodiesel and renewable diesel
for Biodiesel, Renewable
Diesel and Alternative
Fuelsb
Section 13202
Extends the existing second-generation biofuel producer tax
-0.054
—
—
Nicholas Buffie
Extension of Second
credit
Generation Biofuel
Incentivesb
Section 13203
Creates a new tax credit for the sale or mixture of sustainable
-0.049
—
—
Nicholas Buffie
Sustainable Aviation Fuel
aviation fuel; credit amount is $1.25 per gallon with a
Creditb
supplemental credit amount of $0.01 per gallon for each
percentage point by which the lifecycle GHG emissions
reduction percentage for the fuel exceeds 50%
Section 13204
Creates a new tax credit for the qualified production of clean
-13.166
—
—
Nicholas Buffie
Clean Hydrogenb
hydrogen; the credit rate would be determined by the lifecycle
GHG emissions rate achieved in producing clean hydrogen, with
higher credit amounts available when prevailing wage and
apprenticeship requirements are met
CRS-10

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 13401
Extends and modifies vehicle tax credits; revised credit provides
-7.541
—
—
Nicholas Buffie
Clean Vehicle Creditg
up to $7,500 for the purchase of fuel cell or eligible new plug-in
electric vehicles meeting a critical minerals requirement and/or
battery components requirement; the credit is disallowed for
certain higher-income taxpayers and is subject to vehicle price
limits
Section 13402
Creates a new tax credit—$4,000, limited to 30% of the
-1.347
—
—
Nicholas Buffie
Credit for Previously-
purchase price—for the purchase of previously owned plug-in
Owned Clean Vehiclesg
electric or fuel cell vehicles, subject to purchaser income and
vehicle price limits
Section 13403
Creates a new tax credit for qualified commercial clean vehicles;
-3.583
—
—
Nicholas Buffie
Qualified Commercial
credit amount varies by vehicle cost and weight
Clean Vehiclesg
Section 13404
Extends and modifies a tax credit for qualifying charging or
-1.738
—
—
Nicholas Buffie
Alternative Fuel Refueling
alternative fuel refueling property at a business or taxpayer’s
Property Creditb
principal residence; eligible charging or refueling property must
be placed in service within a low-income or rural census tract
Section 13704
Creates a new tax credit for domestic clean fuel production,
-2.946
—
—
Nicholas Buffie
Clean Fuel Production
depending on the type of fuel (aviation or nonaviation), the CO2
Creditb
emissions rate of the fuel, and the producer’s labor practices
CRS-11

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 40007
Creates a competitive grant program in DOT for sustainable
—
0.297
Grants
Kelsi Bracmort
Alternative Fuel and Low-
aviation fuel (SAF) and low-emission aviation technologies;
Emission Aviation
financial assistance is for the production, transportation,
Technology Program
blending, and storage of SAF as well as for projects related to
low-emission aviation technologies, among other things; SAF is
defined as achieving at least a 50% lifecycle greenhouse gas
emission reduction in comparison with petroleum-based jet fuel
Section 60101
Creates EPA program to provide grants and rebates to eligible
—
1.000
Grants and rebates
Richard
Clean Heavy-Duty
recipients (a state, municipality, Indian tribe, or nonprofit school
Lattanzio
Vehicles
transportation association) or eligible contractors for the
incremental costs of replacing eligible vehicles with zero-
emission vehicles, for associated infrastructure and workforce
development and training, and planning and technical activities;
includes $400 mil ion for recipients that propose to replace
eligible vehicles to serve one or more communities in air
pol ution nonattainment areas
Section 60102
Creates EPA program to provide grants and rebates to
—
3.000
Grants and rebates
Richard
Grants to Reduce Air
purchase or install zero-emission port equipment or technology
Lattanzio
Pol ution at Ports
at or to serve ports, for connected planning or permitting, and
“to develop qualified climate action plans”; of rebates and
grants, $750 mil ion is for activities with respect to ports in air
pol ution nonattainment areas
Section 60105
Provides funding ($20 mil ion) to EPA for grants and other
—
0.025
Grants and other
Richard
Funding to Address Air
activities to monitor methane emissions (§60105(e)); provides
authorized activities
Lattanzio
Pol ution
funding ($5 mil ion) to EPA for grants to states to adopt and
implement GHG and zero-emission standards for mobile
sources (§60105(g))
CRS-12

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
FOSSIL FUEL

RESOURCES
Section 50261
Increases the minimum royalty rate for new offshore fossil fuel
0.484f
—
—
Laura Comay
Offshore Oil and Gas
leases from 12.5% to 16.6%; sets a maximum royalty rate of
(total estimate for
Royalty Rate
18.8% for new offshore oil and gas leases for 10 years
§§50261-50265)

Section 50262
Increases the minimum royalty rate for new onshore fossil fuel
0.484f
—
—
Laura Comay
Mineral Leasing Act
leases from 12.5% to 16.6%; eliminates noncompetitive leasing,
(total estimate for
Modernization
adjusts rental rates, and establishes a higher minimum bid on
§§50261-50265)
federal leases

Section 50263
Modifies the scope of royalty col ection for natural gas
0.484f
—
—
Laura Comay
Royalties on All Extracted
produced on federal land or the outer continental shelf to
(total estimate for
Methane
include “gas that is consumed or lost by venting, flaring, or
§§50261-50265)
negligent releases through any equipment during upstream
operations,” with certain exceptions

Section 50264
Requires DOI to conduct three offshore oil and gas lease sales
0.484f
—
—
Laura Comay
Lease Sales Under the
that had been canceled under the 2017-2022 five-year offshore
(total estimate for
2017-2022 Outer
oil and gas leasing program; specifies dates by which each sale
§§50261-50265)
Continental Shelf Leasing
must be conducted; requires DOI to issue leases from Gulf of

Program
Mexico Lease Sale 257, which was conducted in November
2021 but was later vacated by a court ruling
CRS-14

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CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 50265
Requires DOI to conduct oil and gas lease sales each year for a
0.484f
—
—
Laura Comay
Ensuring Energy Securityh
decade as a prerequisite to issuing leases or rights-of-way for
(total estimate for
any new solar or wind energy; without offering minimum parcels
§§50261-50265)
for fossil fuel leasing, the federal government would not have
the authority to approve utility-scale renewable energy projects

on public lands or waters
Section 60113
Establishes a methane emissions charge (fee) that applies to
6.350
1.550
Grants
Jonathan
Methane Emissions
specific types of petroleum and natural gas system facilities;
Ramseur
Reduction Programi
charge based on emissions reported to EPA and an emissions
threshold that varies by facility type; appropriates $850 mil ion
to EPA to provide grants to these facilities to help reduce their
methane emissions; appropriates $700 mil ion to EPA to
support similar activities at “marginal conventional wells”
BUILDINGS AND

ENERGY
EFFICIENCY
Section 13301
Extends and modifies the tax credit for qualified energy
-12.451
—
—
Nicholas Buffie
Extension, Increase, and
efficiency improvements made to a taxpayer’s residence;
Modifications of
increases the credit rates, and modifies energy efficiency
Nonbusiness Energy
standards over time; expands credit to include home energy
Property Creditb
audits
Section 13302
Extends and modifies tax credit for purchase of residential solar
-22.022
—
—
Nicholas Buffie
Residential Clean
electric property, solar water heating property, fuel cells,
Electricity Creditb
geothermal heat pump property, small wind energy property,
and qualified biomass fuel property; adds qualified battery
storage technology
CRS-15

link to page 30 link to page 30 link to page 30
CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 13303
Updates energy efficiency requirements to qualify for the tax
-0.362
—
—
Nicholas Buffie
Energy Efficient
deduction for certain energy-saving commercial building
Commercial Buildings
property installed as part of the (1) interior lighting system; (2)
Deductionb
heating, cooling, ventilation, or hot water system; or (3) building
envelope; deduction amount depends on meeting requirements
for prevailing wage and apprenticeship requirements; al ows a
tax-exempt entity to allocate the deduction to the designer of
the building or retrofit plan
Section 13304
Extends and modifies the energy efficient new home credit;
-2.043
—
—
Nicholas Buffie
Extension, Increase, and
increases the credit amount and provides a larger credit if
Modifications of New
prevailing wage and apprenticeship requirements are met; al ows
Energy Efficient Home
credit for low-income housing tax credit recipients
Creditb
Section 30002
Provides funding to the Department of Housing and Urban
—
1.000
Loans, loan
Maggie McCarty
Improving Energy
Development (HUD) for loans, loan modifications, and grants to
modifications, and
Libby Perl
Efficiency or Water
finance projects in existing HUD-funded multifamily housing
grants
Efficiency or Climate
developments that improve energy or water efficiency, enhance
Resilience of Affordable
indoor air quality or sustainability, implement the use of zero-
Housing
emission electricity generation, low-emission building materials
or processes, energy storage, or building electrification
strategies, or address climate resilience; provides direct loan
authority not to exceed $4 bil ion
Section 50121
Provides funding to DOE for state energy offices ($4.3 bil ion)
—
4.300
Grants
Corrie Clark
Home Energy
to develop and implement a rebate program to homeowners
Performance-Based,
and aggregators for whole-house energy saving retrofits
Whole-House Rebates
CRS-16

link to page 30 link to page 31 link to page 30 link to page 30
CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 60504
Provides funding to GSA’s Federal Buildings Fund for emerging
—
0.975
Other agency activities
Garrett Hatch
General Services
and sustainable technologies, and related sustainability and
Administration Emerging
environmental programs
Technologies
Section 70006
Allows the Federal Emergency Management Agency (FEMA) to
—
—j
Financial assistance
Diane Horn
FEMA Building Materials
provide financial assistance for hazard mitigation under the
Program
Robert T. Stafford Disaster Relief and Emergency Assistance
Act for costs of low-carbon materials and incentives for low-
carbon and net-zero energy projects

MANUFACTURING

Section 13501
Provides $10 mil ion in allocations of a tax credit for qualifying
-6.255
—
—
Donald Marples
Extension of the
investments in advanced energy projects, with at least $4 bil ion
Advanced Energy Project
for “energy communities”; Secretary of the Treasury is to
Creditb
establish a program to award credits to project sponsors; credit
rate depends on whether a project pays prevailing wages and
meets apprenticeship requirements
Section 13502
Creates a new production tax credit for domestic production
-30.632
—
—
Donald Marples
Advanced Manufacturing
and sale of qualifying solar and wind components
Production Creditb
CRS-18

link to page 30 link to page 31 link to page 31
CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 30001
Provides funding to carry out activities under the Defense
—
0.500
Other agency activities
Heidi Peters
Enhanced Use of the
Production Act of 1950 (DPA); on March 31, 2022, and June 6,
Defense Production Actk
2022, President Biden invoked the DPA to accelerate domestic
production of clean energy technologies, including large-capacity
batteries, solar panel components, and heat pumps, among
othersl
Section 50142
Provides funding to DOE for costs of loans for equipping,
—
3.025
Direct loans
Melissa Diaz
Advanced Technology
expanding, or establishing manufacturing facilities in the United
Vehicle Manufacturing
States to produce, or for engineering integration performed in
the United States of, advanced technology vehicles that emit,
under any possible operational mode or condition, low- or
zero-GHG emissions; eliminates previous loan program cap of
$25 bil ion
Section 50143
Provides funding to DOE for grants for domestic production of
—
2.000
Grants
Melissa Diaz
Domestic Manufacturing
efficient hybrid, plug-in electric hybrid, plug-in electric drive, and
Conversion Grants
hydrogen fuel cell electric vehicles, and administrative costs of
making grants
Section 50161
Provides funding to DOE for financial assistance for clean energy
—
5.812
Grant, rebate, direct
Corrie Clark
Advanced Industrial
demonstrations by eligible facilities, with priority to projects to
loan, or cooperative
Facilities Deployment
achieve GHG reductions, provide the greatest benefit for the
agreement
Program
greatest number of people in the area, and participate in a
partnership with purchasers of the facility’s output
Section 60109
Provides funding to EPA to implement provisions to reduce
—
0.039
Grants
Richard
Funding for
hydrofluorocarbons (HFCs) under the American Innovation and
Lattanzio
Implementation of the
Manufacturing Act, including $20 mil ion for general
American Innovation and
implementation, $3.5 mil ion to deploy new implementation and
Manufacturing Act
compliance tools, and $15 mil ion for competitive grants for
“reclaim and innovative destruction technologies”
CRS-19

link to page 30 link to page 30
CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
ENVIRONMENT

AND CLIMATE
JUSTICE
Section 13901
Permanently extends higher excise tax rates to fund the Black
1.159
—
—
Scott
Permanent Extension of
Lung Disability Trust Fund on underground and surface coal
Szymendera
Tax Rate to Fund Black
mines; prior to this change, these tax rates were temporary
Lung Disability Trust
Fundb
Section 60103
Provides funding to EPA for a new GHG Reduction Fund with
—
27.000
Grants
Richard
GHG Reduction Fund
$7 bil ion to make competitive grants to states, municipalities,
Lattanzio
tribal governments, and eligible recipients to provide financing
and technical assistance to enable low-income and disadvantaged
communities to deploy or benefit from zero-emission
technologies, including distributed technologies on residential
rooftops, and to carry out other GHG emission reduction
activities; $11.97 bil ion for general assistance; $8 bil ion for
low-income and disadvantaged communities; and $30 mil ion for
EPA administrative costs
Section 60106
Provides funding to EPA for grants and other activities to
—
0.050
Grants and other
Richard
Funding to Address Air
monitor and reduce GHG emissions and other air pol utants at
assistance
Lattanzio
Pol ution at Schools
schools in low-income and disadvantaged communities, and for
providing technical assistance to such schools
CRS-21

link to page 30
CBO Estimated

Revenue Effects
Appropriationsa

CRS Contact
$ Billions
$ Billions
(for
Section Number and
Cumulative 2022-
Cumulative 2022-
Type of Federal
Congressional
Title
Overview of Climate-Related Provisions
2031
2031
Assistance
Clients)
Section 60111
Provides funding to EPA to support enhanced standardization
—
0.005
Other agency activities
Angela Jones
Greenhouse Gas
and transparency of corporate climate action commitments and
Corporate Reporting
plans to reduce GHG emissions; enhanced transparency
regarding progress toward meeting such commitments and
implementing such plans; and progress toward meeting such
commitments and implementing such plans
Section 60114
Provides funding ($250 mil ion) to EPA to issue a grant to at
—
5.000
Grants
Jonathan
Climate Pol ution
least one eligible entity (e.g., states, state agencies,
Ramseur
Reduction Grants
municipalities, Indian tribes) in each state to develop a plan for
GHG emission reduction; provides funding ($4.75 bil ion) to
EPA to issue grants to entities to implement their GHG
reduction plans
Sources: CRS analysis of P.L. 117-169; estimated revenue effects from Congressional Budget Office, “Estimated Budgetary Effects of H.R. 5376, the Inflation Reduction
Act of 2022, as Amended in the Nature of a Substitute (ERN22335) and Posted on the Website of the Senate Majority Leader on July 27, 2022,” revised August 5, 2022,
https://www.cbo.gov/publication/58366.
Notes: A “—” indicates no revenue effects or appropriations for this provision.
a. Appropriation amounts provided in this table are from the statutory text. For the budgetary effects of these provisions, see the “estimated outlays” provided in
Congressional Budget Office, “Estimated Budgetary Effects of H.R. 5376, the Inflation Reduction Act of 2022, as Amended in the Nature of a Substitute (ERN22335)
and Posted on the Website of the Senate Majority Leader on July 27, 2022,” revised August 5, 2022, https://www.cbo.gov/publication/58366.
b. See CRS Report R47202, Tax Provisions in the Inflation Reduction Act of 2022 (H.R. 5376), coordinated by Mol y F. Sherlock.
c. See CRS Insight IN11984, Inflation Reduction Act of 2022 (IRA): Department of Energy Loan Guarantee Programs, by Phil ip Brown.
d. See CRS Insight IN11981, Electricity Transmission Provisions in the Inflation Reduction Act of 2022, by Ashley J. Lawson.
e. See CRS Insight IN11980, Offshore Wind Provisions in the Inflation Reduction Act, by Laura B. Comay, Corrie E. Clark, and Mol y F. Sherlock.
f.
In leasing offshore wind resources, the federal government col ects certain proceeds, such as bid bonuses, rents, and royalties. Although this amount is listed as
“revenue” in this table, proceeds from such offshore leasing are treated as offsetting receipts, which are recorded in the federal budget as negative spending (i.e.,
reductions in federal spending).
g. See CRS Insight IN11996, Clean Vehicle Tax Credits in the Inflation Reduction Act of 2022, by Mol y F. Sherlock.
h. See CRS Report R44692, Five-Year Offshore Oil and Gas Leasing Program: Status and Issues in Brief, by Laura B. Comay.
CRS-27

i.
See CRS Report R47206, Inflation Reduction Act Methane Emissions Charge: In Brief, by Jonathan L. Ramseur.
j.
In CBO’s cost estimate report, “estimated outlays” from this provision totaled $61 mil ion between FY2022 and FY2031. Congressional Budget Office, “Estimated
Budgetary Effects of H.R. 5376, the Inflation Reduction Act of 2022, as Amended in the Nature of a Substitute (ERN22335) and Posted on the Website of the Senate
Majority Leader on July 27, 2022,” revised August 5, 2022, https://www.cbo.gov/publication/58366.
k. See CRS Report R43767, The Defense Production Act of 1950: History, Authorities, and Considerations for Congress, by Heidi M. Peters; and CRS Report R47124, 2022
Invocation of the Defense Production Act for Large-Capacity Batteries: In Brief, by Heidi M. Peters et al.
l.
See White House, “FACT SHEET: President Biden Takes Bold Executive Action to Spur Domestic Clean Energy Manufacturing,” press release, June 6, 2022,
https://www.whitehouse.gov/briefing-room/statements-releases/2022/06/06/fact-sheet-president-biden-takes-bold-executive-action-to-spur-domestic-clean-energy-
manufacturing/. In addition, explanatory documentation released by Senate Democrats describe this funding as allocated for DPA activities connected to heat pumps
and critical minerals mining; see Senate Democrats, “Summary of the Energy Security and Climate Change Investments in the Inflation Reduction Act of 2022,”
https://www.democrats.senate.gov/imo/media/doc/
summary_of_the_energy_security_and_climate_change_investments_in_the_inflation_reduction_act_of_2022.pdf.

CRS-28

Inflation Reduction Act of 2022 (IRA): Provisions Related to Climate Change

Author Information

Jonathan L. Ramseur, Coordinator

Specialist in Environmental Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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