Set-Aside Alert News Analysis:

Inflation Reduction law to fund climate actions for gov agencies

Effects to ripple throughout government supply chains

      President Biden’s ambitious new law addressing the economy and climate change--The Inflation Reduction Act--provides funding and tax credits for climate and clean energy projects, with a significant portion expected to impact federal contractors, large and small, in the government’s supply chain.

      The climate actions affecting federal vendors are likely to include:

• Awards of government procurement contracts for clean energy technology and related services;
• Tax credits and other financial assistance for vendor installations of clean energy technologies at their offices and homes; and
• Disclosures of vendors’ carbon footprints and actions taken to limit carbon emissions.

      The law is the largest U.S. investment in slowing climate change to date, with the expectation of reducing the nation’s carbon emissions by roughly 40% by 2030, according to a Senate summary.

      The law allocates $369 billion for projects to reduce reliance on fossil fuels to limit global warming. The funding includes:

• $60 billion for clean energy manufacturing in the U.S.;
• $30 billion in production tax credits for U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing;
• $30 billion in grants and loans for states and electric utilities to convert to clean electricity;
• $27 billion for a clean tech accelerator program to support reducing emissions in communities, especially in disadvantaged communities;
• Up to $20 billion in loans, and $10 billion in investment tax credits, for construction of clean technology manufacturing facilities; and
• $9 billion for direct federal procurement of U.S.-made clean technologies, including $3 billion for the U.S. Postal Service to purchase electric vehicles.

      The government’s roles as a buyer of clean energy and as an enforcer of clean energy adoption are likely to have a significant impact on contractors.

      “This flurry of federal climate action will create a domino effect on federal suppliers and beyond,” according to a recent analysis in Green Biz written by specialists at the Persefoni carbon tech accounting firm.

GHG emissions disclosures

      For example, on the enforcement side, the government’s Federal Supplier Greenhouse Gas (GHG) Management Scorecard (https://bit.ly/3Qqhkvc) established in 2015 is likely to gain more traction. The scorecard discloses major federal suppliers’ GHG emissions, and their actions to reduce them. In 2020, the scorecard revealed climate actions by more than 100 federal contractors.

      Next, vendors may be required to annually disclose and to align with global standards for disclosure and emission reduction, the Persefoni writers said. In addition, they said, federal vendors soon may need to disclose emissions of their suppliers.

Other procurement/climate initiatives

     The Defense Dept. in July issued a Request for Information for contractors who can support its new DOD Strategic Climate Sustainability and Resilience Services (SCSRS) initiative.

      The contract involves organizational efforts, data analysis and architecture to support DOD’s net-zero transition.

      Also, White House officials on Aug. 3 announced the Climate Smart Building Initiative for federal buildings (See story). It will upgrade federal buildings through energy savings performance contracts.

More Information:
Climate provisions: https://bit.ly/3ebMOIj
Green Biz article:https://bit.ly/3Q6AhTI
DOD RFI:https://bit.ly/3e11Gcc

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