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Clean Energy · Inflation Reduction Act · Supply Chain · US Manufacturing
The U.S. government, led by President Biden, enacted the $369 billion Inflation Reduction Act of 2022 to make enormous investments in clean energy, aiming to reduce national emissions by 50% by 2035 and achieve net zero by 2050, while strategically countering China's dominance in critical supply chains.
This legislation follows significant strain on global clean energy supply chains due to the COVID-19 pandemic and the Russian invasion of Ukraine, which escalated oil and gas prices and caused mineral shortages. The U.S. currently lags behind China in lithium-ion battery production, semiconductors, solar panel manufacturing (where China controls at least 75% of key stages), and wind power.
China achieved its dominant position through long-term incentives like low-interest loans and free property for manufacturing facilities. The U.S.'s reliance on foreign supply chains resulted in millions of lost manufacturing jobs and vulnerability to disruptions, such as the 2022 polysilicon shortages in China.
The U.S. Department of Energy's (DOE) _America’s Strategy to Secure the Supply Chain for a Robust Clean Energy Transition_ identifies strategic opportunities including increasing domestic raw material availability, expanding manufacturing, and supporting a skilled U.S. workforce. This transition creates millions of jobs, builds a resilient supply chain, and enhances U.S. global presence, with states and cities playing a critical role in leveraging the Act's provisions.
