Blog: Sens. Crapo, Whitehouse release draft of energy tax proposal – Financial Regulation News – Financial Regulation News

Sens. Mike Crapo (R-ID) and Sheldon Whitehouse (D-RI) released a discussion draft of an energy tax proposal to encourage innovation in the clean energy sector.

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The draft bill calls for the creation of an Energy Sector Innovation Credit (ESIC) – an investment tax credit (ITC) or production tax credit (PTC) designed to promote innovation across a range of clean energy technologies, including generation, storage, carbon capture, and hydrogen production.

“The U.S. is a leader in energy production because our robust economy allows for innovation and pathways to clean energy solutions,” Crapo said. “But if we are to meet long-term emissions targets without sacrificing affordable electricity, we need to invest in on-the-horizon technologies that can accomplish our environmental goals, create good-paying American jobs and meet our energy demand. This proposal incentivizes technology-wide clean energy innovation so new, clean technologies can rapidly scale up and compete independently in the market. Moreover, the credits scale down as technologies’ market share ramps up, so taxpayer dollars do not subsidize market-mature technologies.”

The bill would allow up to a 40 percent ITC or 60 percent PTC for low market penetration technologies across a range of energy sources, including renewables, fossil fuels, and nuclear. Further, it would phase out credits as technologies mature, providing an on-ramp for the most innovative technologies to get to market and then compete independently. Also, it provides flexibility for unforeseen clean energy technologies to be eligible for ESIC by including an expedited consideration provision.

“We have plenty of good ideas for clean energy technology to battle climate change; the challenge is bringing them online quickly enough to make a difference. That’s why we need proposals like this one,” Whitehouse said. “Our legislation will hit the accelerator on promising new sources of clean energy and help those technologies compete with heavy-polluting sources on the open market.”

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