Senate of the United States has narrowly passed a budget resolution for $3,5 trillion in budget for aggressive climate action; and the establishment of an American renewable energy industry. According to an S&P Global report, the resolution is a major and first step for budget reconciliation process.
Firstly, the resolution is now on the House of Representatives; if passes, relevant committees in both chambers will work together to draft legislation for the Senate Budget Committee’s reconciliation instructions; which include creating sweeping new programs to curb climate-warming greenhouse gas emissions.
Secondly, the budget resolution gave the committees until September 15 to work on their reconciliation bill. Such bill, calls for the Senate Energy and Natural Resources Committee to propose a “clean electricity payment program.” Which would be similar to a clean electricity standard. It aims at providing incentives to utilities to add zero-emission generation; and also, penalize those that do not meet the program’s clean energy requirements.
Thirdly, other policies requested in the reconciliation instructions include tax incentives for clean energy; manufacturing and transportation, investments in clean vehicles; also, fees on methane emissions and carbon-intensive imports, and consumer rebates for home weatherization and electrification, according to S&P.
Moreover, Senator Chuck Schumer, said about the budget. “The Democratic budget will bring a generational transformation to how our economy works for average Americans. It will cut taxes for American families; lower costs for everyone. It will create good-paying jobs while tackling climate change.”
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Senate aims to the creation of a domestic supply chain
In addition, as we reported previously, this budget measure comes just days after the upper chamber approved a $1 trillion bipartisan infrastructure package; however, it also comes a day after the U.S. government urged OPEC for more oil production; which was seen by some industry players as a major contradiction of the Biden administration.
On the other hand, some amendments were some amendments to the bill; specifically, for the strengthening a domestic supply chain of rare earth elements and materials and other minerals; commonly imported from China.
Furthermore, if enacted, the proposal could substantially impact the renewable power industry. China is responsible for about 80% of the processing and manufacturing of minerals; also, rare earth elements and metals used in the U.S. renewable energy and national security sectors.
Finally, Senator Dan Sullivan from Alaska, said. “If we are going to build out our domestic renewable energy industry, we also need to have an honest conversation about where we are sourcing these materials. We cannot continue to be dependent on China for critical minerals.”
