Steel Products

Steel Groups Urge US-Made Material to Receive IRA Tax Credits

Written by Becca Moczygemba

Five domestic steel trade associations wrote a letter requesting the government to ensure the use of US-made steel in certain components of wind and solar projects receiving federal funding.

Addressing the letter to US Treasury Secretary Janet Yellen, the groups included the American Iron and Steel Institute (AISI), Steel Manufacturers Association (SMA), American Institute of Steel Construction (AISC), Committee on Pipe and Tube Imports (CPTI), and the Specialty Steel Industry of North America (SSINA).

“We are pleased that the guidance as outlined requires certain wind and solar components made predominantly of steel and iron to use steel and iron made in the United States to qualify for the domestic content bonus credits,”  the letter stated.

The credits are part of the clean electricity production and investment tax credits within the Inflation Reduction Act (IRA).

“However, we are concerned that the guidance places other steel components of wind and solar systems in the manufactured product category,” the letter added. “This will allow those components to be made of imported steel while still receiving the domestic content bonus credit as long as the overall project meets the lower standards for domestic content in manufactured products.”

“If the government makes it easier to use imported steel in these projects, it undermines the goal of the domestic content bonus credits, which is to incentivize the use of steel capacity in the US to make the key components needed for clean electricity,” Kevin Dempsey, president and CEO of AISI, told SMU in an email.

He noted that the American steel industry has already made significant investments to meet the demand for these products in the US. Dempsey added that the guidance for the IRA’s domestic content bonus credits “should ensure that only projects using domestic iron and steel receive these additional tax benefits.”

A request in the letter encourages the agency to take action to amend what was referred to as “errors” in the issued guidance.

“It is critical to ensuring that the clear intent of Congress to incentivize the use of domestic steel and iron in clean energy projects is realized,” the letter said. This will also ensure the guidance does not “unwittingly benefit China and other countries that have repeatedly exported dumped and subsidized steel into the US market, injuring domestic steel producers and their workers.” 

“American steelmakers already produce the steel required for the solar and wind energy equipment that make the transition to renewable energy possible,” SMA president Philip K. Bell told SMU in an email. 

He commented that there is no reason to remove any of the steel components in question from the domestic steel requirement under the law.

“Green energy projects should use American-made steel, which has lower carbon intensity than imported steel. If the intent of the IRA is to reduce carbon emissions, the choice is clear: green energy needs American steel, and American steel needs green energy,” Bell said. 

By Becca Moczygemba,

Becca Moczygemba

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