The Internal Revenue Service (IRS) has announced the allocation of $6 billion in tax credits for the second round of the Inflation Reduction Act’s § 48C Qualifying Advanced Energy Project Tax Credit. This initiative is part of a larger effort, initially established by the American Recovery and Reinvestment Act of 2009 and expanded with a $10 billion investment under the IRA. The program aims to fund projects that expand clean energy manufacturing, recycling capacity, critical materials processing, refining capacity, and reduce greenhouse gas emissions at industrial facilities in the United States.
In this second round, over 140 projects across more than 30 states have been selected. The IRS has allocated roughly $2.5 billion to approximately 50 projects located in designated § 48C energy communities—areas with closed coal mines or coal plants. This brings the total allocation to these communities to $4 billion across both rounds.
The demand for these tax credits was significant. During the application process, over 800 concept papers were submitted requesting more than $40 billion in tax credits. Ultimately, more than 350 applications were received from over 40 states requesting over $16 billion in tax credits.
The selected projects are expected to create approximately 30,000 construction jobs over four years, with about one-third of these jobs located in energy communities. Many projects have committed to using project labor agreements or collective bargaining agreements to ensure trained workers are employed.
Round two awards include $3.8 billion for clean energy manufacturing and recycling projects, $1.5 billion for critical materials recycling, processing, and refining projects, and $700 million for industrial decarbonization initiatives.
To claim a § 48C tax credit, allocated projects must meet specific certification requirements within set timelines. The Department of Energy (DOE) will oversee compliance through its portal system.
In accordance with statutory requirements, the names of organizations with certified projects will be published after certification is complete.
