Coal Community Investment Bill Seeks to Drive a Just Transition to Clean Energy | Article

Rapid nationwide decarbonization is essential to meet emission reduction goals, but communities with coal-dependent economies are already suffering from the energy and economic transition. These communities face a workforce crisis exacerbated by the COVID-19 pandemic: U.S. coal mining employment dropped by over 53 percent in less than a decade, declining from 90,000 jobs in 2012 to just 42,000 by the end of 2020.

American Jobs in Energy Manufacturing Act of 2021 in Brief

According to a press release and one-pager accompanying the bill’s introduction, the main features of the American Jobs in Energy Manufacturing Act of 2021 are:

A revival and adjustment of the 48C Advanced Energy Manufacturing Tax Credit program (which was part of the American Recovery and Reinvestment Act of 2009) to spur a private-sector clean energy transition
A total of $8 billion in tax credits to support domestic clean energy manufacturing and promote recycling by building new or retrofitting existing industrial facilities
$4 billion of these tax credits would be carved out for coal communities where coal mines have closed and power plants have been retired (only communities that have not previously received the 48C tax credit would qualify)

While various federal programs provide assistance to coal communities and workers in transition, such communities need increased support and investment. Supporting economic diversification is key to creating and stabilizing sustainable, local economies because all coal jobs cannot simply be replaced by renewable energy ones. Diversified workforce development opportunities span areas including renewable energy and efficiency, fiber optic and broadband, entrepreneurship, and environmental restoration.

Recent proposed legislation seeks to address the disparities coal-dependent communities face and help mitigate the shock from the coal industry’s decline. In early March, Senators Joe Manchin (D-W.Va.) and Debbie Stabenow (D-Mich.) introduced the American Jobs in Energy Manufacturing Act of 2021 (S.622), which would provide $8 billion in tax credits to spur domestic clean energy manufacturing while supporting targeted job creation in affected rural communities. The bill takes an equity-centered approach, as it earmarks $4 billion for coal-dependent communities where mines or power plants have closed. The $8 billion in tax credits would come from reviving and adjusting the 48C Advanced Energy Manufacturing Tax Credit program, a previous version of which supported economic recovery from the Great Recession as part of the American Recovery and Reinvestment Act of 2009.

Manufacturers would be able to use the tax credits to retrofit, expand, or build new industrial facilities that produce or recycle energy products spanning the industrial, transportation, and power sectors. Such products could include advanced electric grid and fuel cell equipment, renewable energy and energy efficiency infrastructure, and carbon capture and storage technologies. Tax credits could also go toward upgrading existing facilities to reduce industrial process emissions. The industrial sector currently makes up 22 percent of U.S. greenhouse gas emissions but is challenging to decarbonize, so extra resources could help make a difference.

The bill builds on recent federal legislation introduced—but not passed—during the 116th Congress to address coal transitions, such as the Marshall Plan for Coal Country Act (S.4306), the Environmental Justice for All Act (H.R.5986), and the Revitalizing the Economy of Coal Communities by Leveraging Local Activities and Investing More (RECLAIM) Act (H.R.2156). As the country transitions to clean energy, driving a just transition is key to ensuring that historically coal-dependent communities are not left behind.

Author: Celine Yang

For more information on this topic, read EESI’s issue brief on how coal country can adapt to the energy transition.