Canada set to hit 5 GW milestone

Canadian Electric Bus Fleet leads North America as Toronto's TTC deploys 59 battery-electric, zero-emission buses, advancing public transit decarbonization with charging infrastructure, federal funding, lower maintenance, and lifecycle cost savings for a low-carbon urban future.

Key Points

Canada's leading battery-electric transit push, led by Toronto's TTC, scaling zero-emission buses and charging.

✅ Largest battery-electric bus fleet in North America

✅ TTC trials BYD, New Flyer, Proterra for range and reliability

✅ Charging infrastructure, funding, and specs drive 2040 zero-emissions

The largest battery-powered electric bus fleet in North America is Canadian. Toronto's transit system is now running 59 electric buses from three suppliers, and Edmonton's first electric bus is now on the road as well. And Canadian pioneers such as Toronto offer lessons for other transit systems aiming to transition to greener fleets for the low-carbon economy of the future.

Diesel buses are some of the noisier, more polluting vehicles on urban roads. Going electric could have big benefits, even though 18% of Canada's 2019 electricity from fossil fuels remains a factor.

Emissions reductions are the main reason the federal government aims to add 5,000 electric buses to Canada's transit and school fleets by the end of 2024. New funding announced this week as part of the government's fall fiscal update could also give programs to electrify transit systems a boost.

"You are seeing huge movement towards all-electric," said Bem Case, the Toronto Transit Commission's head of vehicle programs. "I think all of the transit agencies are starting to see what we're seeing ... the broader benefits."

While Vancouver has been running electric trolley buses (more than 200, in fact), many cities (including Vancouver) are now switching their diesel buses to battery-electric buses in Metro Vancouver that don't require overhead wires and can run on regular bus routes.

The TTC got approval from its board to buy its first 30 battery-electric buses in November 2017. Its plan is to have a zero-emissions fleet by 2040.

That's a crucial part of Toronto's plan to meet its 2050 greenhouse gas targets, which requires 100 per cent of vehicles to transition to low-carbon energy by then.

But Case said the transition can't happen overnight. 

Finding the right bus
For one thing, just finding the right bus isn't easy.

"There's no bus, by any manufacturer, that's been in service for the entire life of a bus, which is 12 years," Case said.

"And so really, until then, we don't have enough experience, nor does anyone else in the industry, have enough experience to commit to an all-electric fleet immediately."

In fact, Case said, there are only three manufacturers that make suitable long-range buses — the kind needed in a city the size of Toronto.

Having never bought electric buses before, the city had no specifications for what it needed in an electric bus, so it decided to try all three suppliers: Winnipeg-based New Flyer; BYD, which is headquartered in Shenzhen, China, but built the TTC buses at its Newmarket, Ont. facility; and California-based Proterra.

They all had their strengths and weaknesses, based on their backgrounds as a traditional non-electric bus manufacturer, a battery maker and a vehicle technology and design startup, respectively.

"Each bus type has its own potential challenges." Case said all three manufacturers are working to resolve any adoption challenges as quickly as possible.

But the biggest challenge of all, Case said, is getting the infrastructure in place. 

"There's no playbook, really, for implementing charging infrastructure," he said.

Each bus type needed their own chargers, in some cases using different types of current. Each type has been installed in a different garage in partnership with local utility Toronto Hydro.

Buying and installing them represented about $70 million, or about half the cost of acquiring Toronto's first 60 electric buses. The $140 million project was funded by the federal Public Transit Infrastructure Fund.

Case said it takes about three hours to charge a battery that has been fully depleted. To maximize use of the bus, it's typically put on a long route in the morning, covering 200 to 250 kilometres. Then it's partially charged and put on a shorter run in the late afternoon.

"That way we get as much mileage on the buses as we can."

Cost and reliability?
Besides the infrastructure cost of chargers, each electric bus can cost $200,000 to $500,000 more per bus than an average $750,000 diesel bus. 

Case acknowledges that is "significantly" more expensive, but it is offset by fuel savings over time, as electricity costs are cheaper. Because the electric buses have fewer parts than diesel buses, maintenance costs are also about 25 per cent lower and the buses are expected to be more reliable.

As with many new technologies, the cost of electric buses is also falling over time.

Case expects they will eventually get to the point where the total life-cycle cost of an electric and a diesel bus are comparable, and the electric bus may even save money in the long run.

As of this fall, all but one of the 60 new electric buses have been put into service. The last one is expected to hit the road in early December.

Summer testing showed that air conditioning the buses reduced the battery capacity by about 15 per cent. 

But the TTC needs to see how much of the battery capacity is consumed by heating in winter, at least when the temperature is above 5 C. Below that, a diesel-powered heater kicks in.

Once testing is complete, the TTC plans to develop specifications for its electric bus fleet and order 300 more in 2023, for delivery between 2023 and 2025.

Potential benefits
Even with some diesel heating, the TTC estimates electric buses reduce fuel usage by 70 to 80 per cent. If its whole fleet were switched to electric buses, it could save $50 million to $70 million in fuel a year and 150 tonnes of greenhouse gases per bus per year, or 340,000 tonnes for the entire fleet.

Other than greenhouse gases, electric buses also generate fewer emissions of other pollutants. They're also quieter, creating a more comfortable urban environment for pedestrians and cyclists.

But the benefits could potentially go far beyond the local city.

"If the public agencies start electrifying their fleet and their service is very demanding, I think they'll demonstrate to the broader transportation industry that it is possible," Case said.

"And that's where you'll get the real gains for the environment."

Alex Milovanoff, a postdoctoral researcher in the University of Toronto's department of civil engineering, did a U of T EV study that suggested electrified transit has a crucial role to play in the low-carbon economy of the future.

His calculations show that 90 per cent of U.S. passenger vehicles — 300 million — would need to be electric by 2050 to reach targets under the global Paris Agreement to fight climate change.

And that would put a huge strain on resources, including both the mining of metals, such as lithium and cobalt, that are used in electric vehicle batteries and the electrical grid itself.

A better solution, he showed, was combining the transition to electric vehicles with a reduction in the number of private vehicles, and higher usage of transit, cycling and walking.

"Then that becomes a feasible picture," he said.

What's needed to make the transition
But in order to make that happen, governments need to make investments and navigate the 2035 EV mandate debate on timelines, he added.

That includes subsidies for buying electric buses and building charging stations so transit agencies don't need to make fares too high. But it also includes more general improvements to the range and reliability of transit infrastructure.

"Electrifying the bus fleet is only efficient if we have a large public transit fleet and if we have many buses on the road and if people take them," Milovanoff said.

In its fall economic update on Monday, the federal government announced $150 million over three years to speed up the installation of zero-emission vehicle infrastructure.

Josipa Petrunic, CEO of the Canadian Urban Transit Research and Innovation Consortium, a non-profit organization focused on zero-carbon mobility and transportation, said that in the past, similar funding has paid for high-powered charging systems for transit systems in B.C. and Ontario. But that's only a small part of what's needed, she said.

"Infrastructure Canada needs to come to the table with the cash for the buses and the whole rest of the system."

She said funding is needed for:

Feasibility studies to figure out how many and what kinds of buses are needed for different routes in different transit systems.

Targets and incentives to motivate transit systems to make the switch.

Incentives to encourage Canadian procurement to build the industry in Canada.

Technology to collect and share data on the performance of electric vehicles so transit systems can make the best-possible decisions to meet the needs of their riders.

Petrunic said that a positive side-effect of electrifying transit systems is that the infrastructure can support, in addition to buses, electric trucks for moving freight.

"It's not a lot given that we have 15,000 buses out there in the transit fleet," she said.

"But we should be able to get a lot further ahead if we match the city commitments to zero emissions with federal and provincial funding for jobs creating zero-emissions technologies."

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Faroe Islands Tidal Kites harness predictable ocean energy with underwater turbines by Minesto, flying figure-eight paths in fjords to amplify tidal power and deliver renewable electricity to SEV's grid near Vestmanna at megawatt scale.

Key Points

Subsea turbines that fly figure-eight paths to harvest tidal currents, delivering reliable renewable power to the grid.

✅ Figure-eight control amplifies speed vs. ambient current

✅ Predictable baseload complementing wind and hydro

✅ 1.2 MW Dragon-class units planned for Faroese fjords

Known as "sea dragons" or "tidal kites", they look like aircraft, but these are in fact high-tech tidal turbines, part of broader ocean and river power efforts generating electricity from the power of the ocean.

The two kites - with a five-metre (16ft) wingspan - move underwater in a figure-of-eight pattern, absorbing energy from the running tide. They are tethered to the fjord seabed by 40-metre metal cables.

Their movement is generated by the lift exerted by the water flow - just as a plane flies by the force of air flowing over its wings.

Other forms of tidal power use technology similar to terrestrial wind turbines, and emerging kite-based wind power shows the concept's versatility, but the kites are something different.

The moving "flight path" allows the kite to sweep a larger area at a speed several times greater than that of the underwater current. This, in turn, enables the machines to amplify the amount of energy generated by the water alone.

An on-board computer steers the kite into the prevailing current, then idles it at slack tide, maintaining a constant depth in the water column. If there were several kites working at once, the machines would be spaced far enough apart to avoid collisions.

The electricity is sent via the tethering cables to others on the seabed, and then to an onshore control station near the coastal town of Vestmanna.

The technology has been developed by Swedish engineering firm Minesto, founded back in 2007 as a spin-off from the country's plane manufacturer, Saab.

The two kites in the Faroe Islands have been contributing energy to Faroe's electricity company SEV, and the islands' national grid, on an experimental basis over the past year.

Each kite can produce enough electricity to power approximately 50 to 70 homes.

But according to Minesto chief executive, Martin Edlund, larger-scale beasts will enter the fjord in 2022.

"The new kites will have a 12-metre wingspan, and can each generate 1.2 megawatts of power [a megawatt is 1,000 kilowatts]," he says. "We believe an array of these Dragon-class kites will produce enough electricity to power half of the households in the Faroes."

The 17 inhabited Faroe islands are an autonomous territory of Denmark. Located halfway between Shetland and Iceland, in a region where U.K. wind lessons resonate, they are home to just over 50,000 people.

Known for their high winds, persistent rainfall and rough seas, the islands have never been an easy place to live. Fishing is the primary industry, accounting for more than 90% of all exports.

The hope for the underwater kites is that they will help the Faroe Islands achieve its target of net-zero emission energy generation by 2030, with advances in wave energy complementing tidal resources along the way.

While hydro-electric power currently contributes around 40% of the islands' energy needs, wind power contributes around 12% and fossil fuels - in the form of diesel imported by sea - still account for almost half.

Mr Edlund says that the kites will be a particularly useful back-up when the weather is calm. "We had an unusual summer in 2021 in Faroes, with about two months with virtually no wind," he says.

"In an island location there is no possibility of bringing in power connections from another country, and tidal energy for remote communities can help, when supplies run low. The tidal motion is almost perpetual, and we see it as a crucial addition to the net zero goals of the next decade."

Minesto has also been testing its kites in Northern Ireland and Wales, where offshore wind in the UK is powering rapid growth, and it plans to install a farm off the coast of Anglesey, plus projects in Taiwan and Florida.

The Faroe Islands' drive towards more environmental sustainability extends to its wider business community, with surging offshore wind investment providing global momentum. The locals have formed a new umbrella organisation - Burðardygt Vinnulív (Faroese Business Sustainability Initiative).

It currently has 12 high-profile members - key players in local business sectors such as hotels, energy, salmon farming, banking and shipping.

The initiative's chief executive - Ana Holden-Peters - believes the strong tradition of working collaboratively in the islands has spurred on the process. "These businesses have committed to sustainability goals which will be independently assessed," she says.

"Our members are asking how they can make a positive contribution to the national effort. When people here take on a new idea, the small scale of our society means it can progress very rapidly."

One of the islands' main salmon exporters - Hiddenfjord - is also doing its bit, by ceasing the air freighting of its fresh fish. Thought to be a global first for the Atlantic salmon industry, it is now exporting solely via sea cargo instead.

According to the firm's managing director Atli Gregersen this will reduce its transportation CO2 emissions by more than 90%. However it is a bold move commercially as it means that its salmon now takes much longer to get to key markets.

For example, using air freight, it could get its salmon to New York City within two days, but it now takes more than a week by sea.

What has made this possible is better chilling technology that keeps the fresh fish constantly very cold, but without the damaging impact of deep freezing it. So the fish is kept at -3C, rather than the -18C or below of typical commercial frozen food transportation.

"It's taken years to perfect a system that maintains premium quality salmon transported for sea freight rather than plane," says Mr Gregersen. "And that includes stress-free harvesting, as well as an unbroken cold-chain that is closely monitored for longer shelf life.

"We hope, having shown it can be done, that other producers will follow our lead - and accept the idea that salmon were never meant to fly."

Back in the Faroe Island's fjords, a firm called Ocean Rainforest is farming seaweed.

The crop is already used for human food, added to cosmetics, and vitamin supplements, but the firm's managing director Olavur Gregersen is especially keen on the potential of fermented seaweed being used as an additive to cattle feed.

He points to research which appears to show that if cows are given seaweed to eat it reduces the amount of methane gas that they exhale.

"A single cow will burp between 200 and 500 litres of methane every day, as it digests," says Mr Gregersen. "For a dairy cow that's three tonnes per animal per year.

"But we have scientific evidence to show that the antioxidants and tannins in seaweed can significantly reduce the development of methane in the animal's stomach. A seaweed farm covering just 10% of the largest planned North Sea wind farm could reduce the methane emissions from Danish dairy cattle by 50%."

The technology that Ocean Rainforest uses to farm its four different species of seaweed is relatively simple. Tiny algal seedlings are affixed to a rope which dangles in the water, and they grow rapidly. The line is lifted using a winch and the seaweed strands simply cut off with a knife. The line goes back into the water, and the seaweed starts growing again.

Currently, Ocean Rainforest is harvesting around 200 tonnes of seaweed per annum in the Faroe Islands, but plans to scale this up to 8,000 tonnes by 2025. Production may also be expanded to other areas in Europe and North America.

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BC Hydro Vehicle-to-Grid Pilot enables EVs to deliver V2G power, using bidirectional charging to provide grid services, clean energy resilience, and emergency power for microgrids, critical infrastructure, and storm response.

Key Points

BC Hydro's V2G pilot uses parked EVs as mobile batteries, supplying bidirectional power to the grid for resilience.

✅ Medium- and heavy-duty EV integration via 60 kW charger

✅ Supports critical infrastructure and storm response

✅ Cleaner, faster alternative to diesel generators

BC Hydro has unveiled an innovative pilot project designed to enable electric vehicles (EVs) to contribute electricity back to the power grid, with some owners able to sell electricity back to the grid through managed programs, effectively transforming these vehicles into mobile energy storage units that function as capacity on wheels for the electricity system.

The utility company recently announced the successful trial of the vehicle-to-grid program, allowing for the transfer of electricity from the batteries of medium- and heavy-duty EVs back to the electrical grid. This surplus electricity can be utilized in various ways, including supporting emergency response efforts by energizing critical infrastructure and to power buildings during natural disasters or major storms. It offers a cleaner, faster, and more flexible alternative to conventional methods like the use of diesel generators.

BC Hydro's President and CEO, Chris O'Riley, highlighted the significance of this initiative, stating, "The average car is parked 95 per cent of the time, and with the evolution of technology solutions like vehicle-to-grid, stationary vehicles hold the potential to become mobile batteries, powered by clean and affordable electricity."

The successful test was conducted using a Lion Electric school bus provided by Lynch Bus Lines, which was connected to a 60-kilowatt charger, illustrating BC Hydro's rollout of faster electric vehicle charging across the province. BC Hydro pointed out that the typical bus battery holds 66 kilowatts of electricity, sufficient to power 24 single-family homes with electric heating for two hours. Therefore, if 1,000 of these buses were converted to electric power, they could collectively supply electricity to 24,000 homes for two hours.

This groundbreaking project is a collaborative effort between BC Hydro, Powertech, and Coast to Coast Experience, with funding support from the provincial government amid study findings that B.C. may need to double its power output to meet transport electrification.

While this pilot marks the first of its kind in Canada, similar technology has already been successfully implemented in Europe and the United States, including California's efforts to leverage EVs for grid stability that offer promising potential for enhancing the energy landscape and sustainability in the region.

Separately, Nova Scotia Power plans to pilot electric vehicle to grid integration in Atlantic Canada, underscoring growing national interest in V2G approaches.

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Building Energy Iowa Wind Farm delivers 30 MW of renewable energy near Des Moines, generating 110 GWh annually with wind turbines, a long-term PPA, CO2 reduction, and community benefits like jobs and clean power.

Key Points

Building Energy Iowa Wind Farm is a 30 MW project generating 110 GWh a year, cutting CO2 and supporting local jobs.

✅ 30 MW capacity, 10 onshore turbines (3 MW each)

✅ ~110 GWh per year; power for 11,000 households

✅ Long-term PPA; jobs and emissions reductions in Iowa

With 110 GWh generated per year, the plant will be beneficial to Iowa's environment, reflecting broader Iowa wind power investment trends, contributing to the reduction of 100,000 tons of CO2 emissions, as well as providing economic benefits to host local communities.

Building Energy SpA, multinational company operating as a global integrated IPP in the Renewable Energy Industry, amid milestones such as Enel's 450 MW U.S. wind project, through its subsidiary Building Energy Wind Iowa LLC, announces the inauguration of its first wind farm in Iowa, which adds up to 30 MW of wind distribution generation capacity. The project, located north of Des Moines, in Story, Boone, Hardin and Poweshiek counties, will generate approximately 110 GWh per year. The beginning of operations has been celebrated on the occasion of the Wind of Life event in Ames, Iowa, in the presence of Andrea Braccialarghe, MD America of Building Energy, Alessandro Bragantini, Chief Operating Officer of Building Energy and Giuseppe Finocchiaro, Italian Consul General.

The overall investment in the construction of the Iowa distribution generation wind farms amounted to $58 million and it sells its energy and related renewable credits under a bundled, long-term power purchase agreement with a local utility, reflecting broader utility investment trends such as WEC Energy's Illinois wind stake in the region.

The wind facility, developed, financed, owned and operated by Building Energy, consists of ten 3.0 MW geared onshore wind turbines, each with a rotor diameter of 125 meters mounted on an 87.5 meter steel tower. The energy generated will satisfy the energy needs of 11,000 U.S. households every year, similar in community impact to North Carolina's first wind farm, while avoiding the emission of about 70,000 tons of CO2 emissions every year, according to US Environmental Protection Agency methodology, which is equivalent to taking 15,000 cars off the road each year.

Besides the environmental benefits, the wind farm also has advantages for the local community, providing it with clean energy and creating jobs for local Iowans. The project involved more than a hundred of local skilled workers during the construction phase. Some of those jobs will be also permanent as necessary for the operation and maintenance activities as well as for additional services such as delivery, transportation, spare parts management, landscape mitigation, and further environmental monitoring studies.

The Company is present in many US states since 2013 with more than 500 MW of projects under development, spread across different renewable energy technologies, and aligning with federal initiatives like DOE wind energy awards that support innovation.

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California Electric School Bus Mandate 2035 sets zero-emission requirements, outlines funding, state reimbursement, fleet electrification, infrastructure, and cost estimates, highlighting exemptions for frontier districts and alignment with clean transportation and climate policy goals.

Key Points

California's 2035 policy requires all new school buses be zero-emission, with funding and limited rural exemptions.

✅ Mandates zero-emission purchases for new school buses from 2035

✅ Estimates $5B transition cost with state reimbursement support

✅ Frontier districts may apply for 5-year extensions

California Governor Gavin Newsom has signed a new legislation requiring that from 2035, all newly ordered or contracted school buses must be zero-emission, a move aligned with California's push for expanded EV grid capacity statewide.

The state estimates that switching to electric school buses will cost around five billion dollars over the next decade, a projection reflecting electric bus challenges seen globally. That is because a diesel equivalent costs about 200,000 dollars less than a battery-electric version, as highlighted by critical analyses of California policy. And “the California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.”

There are about 23,800 school buses on the road in California. About 500 are already electric, with conversion initiatives expected to expand the total, and 2,078 electric buses have been ordered.

There are – as always- exceptions to the rule. So-called “frontier districts,” which have less than 600 students or are in a county with a population density of less than ten persons per square mile, can file for a five-year extension, drawing on lessons from large electric bus fleets about route length and charging constraints. However, they must “reasonably demonstrate that a daily planned bus route for transporting pupils to and from school cannot be serviced through available zero-emission technology in 2035.”

Califonia is the fifth US state to mandate electric school buses, and jurisdictions like British Columbia are deploying electric school buses as well. Connecticut, Maryland, Maine, and New York implemented similar legislation, while California continues broader zero-emission freight adoption with Volvo VNR electric trucks entering service across the state.

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Inflation Reduction Act climate provisions accelerate clean energy, EV tax credits, methane fee, hydrogen incentives, and a green bank, cutting carbon emissions, boosting manufacturing, and advancing environmental justice and net-zero goals through 2030.

Key Points

They are U.S. policies funding clean energy, EV credits, a methane fee, hydrogen, and justice programs to cut emissions.

✅ Up to $7,500 new and $4,000 used EV tax credits with income limits

✅ First federal methane fee to curb oil and gas emissions

✅ $60B for clean energy manufacturing and environmental justice

The Biden administration this year signed a historic climate and tax deal that will funnel billions of dollars into programs designed to speed the country’s clean energy transition, with ways to tap new funding available to households and businesses, and battle climate change.

As the U.S. this year grappled with climate-related disasters from Hurricane Ian in Florida to the Mosquito Fire in California, the Inflation Reduction Act, which contains $369 billion in climate provisions, was a monumental development to mitigate the effects of climate change across the country, with investment incentives viewed as essential to accelerating clean electricity this decade. 

The bill, which President Joe Biden signed into law in August, is the most aggressive climate investment ever taken by Congress and is expected to slash the country’s planet-warming carbon emissions by about 40% this decade and move the country toward a net-zero economy by 2050, aligning with a path to net-zero electricity many analyses lay out.

The IRA’s provisions have major implications for clean energy and manufacturing businesses, climate startups and consumers in the coming years. As 2022 comes to a close, here’s a look back at the key elements in the legislation that climate and clean energy advocates will be monitoring in 2023.

Incentives for electric vehicles
The deal offers a federal tax credit worth up to $7,500 to households that buy new electric vehicles, as well as a used EV credit worth up to $4,000 for vehicles that are at least two years old. Starting Jan. 1, people making $150,000 a year or less, or $300,000 for joint filers, are eligible for the new car credit, while people making $75,000 or less, or $150,000 for joint filers, are eligible for the used car credit.

Despite a rise in EV sales in recent years, the transportation sector is still the country’s largest source of greenhouse gas emissions, with the lack of convenient charging stations being one of the barriers to expansion. The Biden administration has set a goal of 50% electric vehicle sales by 2030, as Canada pursues EV sales regulations alongside broader oil and gas emissions limits.

The IRA limits EV tax credits to vehicles assembled in North America and is intended to wean the U.S. off battery materials from China, which accounts for 70% of the global supply of battery cells for the vehicles. An additional $1 billion in the deal will provide funding for zero-emissions school buses, heavy-duty trucks and public transit buses.

Stephanie Searle, a program director at the nonprofit International Council on Clean Transportation, said the combination of the IRA tax credits and state policies like New York's Green New Deal will bolster EV sales. The agency projects that roughly 50% or more of passenger cars, SUVs and pickups sold in 2030 will be electric. For electric trucks and buses, the number will be 40% or higher, the group said.

In the upcoming year, Searle said the agency is monitoring the Environmental Protection Agency’s plans to propose new greenhouse gas emissions standards for heavy-duty vehicles starting in the 2027 model year.

“With the IRA already promoting electric vehicles, EPA can and should be bold in setting ambitious standards for cars and trucks,” Searle said. “This is one of the Biden administration’s last chances for strong climate action within this term and they should make good use of it.”

Taking aim at methane gas emissions
The package imposes a tax on energy producers that exceed a certain level of methane gas emissions. Polluters pay a penalty of $900 per metric ton of methane emissions emitted in 2024 that surpass federal limits, increasing to $1,500 per metric ton in 2026.

It’s the first time the federal government has imposed a fee on the emission of any greenhouse gas. Global methane emissions are the second-biggest contributor to climate change after carbon dioxide and come primarily from oil and gas extraction, landfills and wastewater and livestock farming.

Methane is a key component of natural gas and is 84 times more potent than carbon dioxide, but doesn’t last as long in the atmosphere. Scientists have contended that limiting methane is needed to avoid the worst consequences of climate change. 

Robert Kleinberg, a researcher at Columbia University’s Center on Global Energy Policy, said the methane emitted by the oil and gas industry each year would be worth about $2 billion if it was instead used to generate electricity or heat homes.

“Reducing methane emissions is the fastest way to moderate climate change. Congress recognized this in passing the IRA,” Kleinberg said. “The methane fee is a draconian tax on methane emitted by the oil and gas industry in 2024 and beyond.”

In addition to the IRA provision on methane, the Biden Interior Department this year proposed rules to curb methane leaks from drilling, which it said will generate $39.8 million a year in royalties for the U.S. and prevent billions of cubic feet of gas from being wasted through venting, flaring and leaks. 

Boosting clean energy manufacturing
The bill provides $60 billion for clean energy manufacturing, including $30 billion for production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical minerals processing, and a $10 billion investment tax credit to manufacturing facilities that are building EVs and clean energy technology, reinforcing the view that decarbonization is irreversible among policymakers.

There’s also $27 billion going toward a green bank called the Greenhouse Gas Reduction Fund, which will provide funding to deploy clean energy across the country, particularly in overburdened communities, and guide utility carbon-free electricity investments at scale. And the bill has a hydrogen production tax credit, which provides hydrogen producers with a credit based on the climate attributes of their production methods.

Emily Kent, the U.S. director of zero-carbon fuels at the Clean Air Task Force, a global climate nonprofit, said the bill’s support for low-emissions hydrogen is particularly notable since it could address sectors like heavy transportation and heavy industry, which are hard to decarbonize.

“U.S. climate policy has taken a major step forward on zero-carbon fuels in the U.S. and globally this year,” Kent said. “We look forward to seeing the impacts of these policies realized as the hydrogen tax credit, along with the hydrogen hubs program, accelerate progress toward creating a global market for zero-carbon fuels.”

The clean energy manufacturing provisions in the IRA will also have major implications for startups in the climate space and the big venture capital firms that back them. Carmichael Roberts, head of investment at Breakthrough Energy Ventures, has said the climate initiatives under the IRA will give private investors more confidence in the climate space and could even lead to the creation of up to 1,000 companies.

“Everybody wants to be part of this,” Roberts told CNBC following the passage of the bill in August. Even before the measure passed, “there was already a big groundswell around climate,” he said.

Investing in communities burdened by pollution
The legislation invests more than $60 billion to address the unequal effects of pollution and climate change on low-income communities and communities of color. The funding includes grants for zero-emissions technology and vehicles, and will help clean up Superfund sites, improve air quality monitoring capacity, and provide money to community-led initiatives through Environmental and Climate Justice block grants.

Research published in the journal Environmental Science and Technology Letters found that communities of color are systematically exposed to higher levels of air pollution than white communities due to redlining, a federal housing discrimination practice. Black Americans are also 75% more likely than white Americans to live near hazardous waste facilities and are three times more likely to die from exposure to pollutants, according to the Clean Air Task Force.

Biden signed an executive order after taking office aimed to prioritize environmental justice and help mitigate pollution in marginalized communities. The administration established the Justice40 Initiative to deliver 40% of the benefits from federal investments in climate change and clean energy to disadvantaged communities. 

More recently, the EPA in September launched an office focused on supporting and delivering grant money from the IRA to these communities.

Cutting ag emissions
The deal includes $20 billion for programs to slash emissions from the agriculture sector, which accounts for more than 10% of U.S. emissions, according to EPA estimates.

The president has pledged to reduce emissions from the agriculture industry in half by 2030. The IRA funds grants for agricultural conservation practices that directly improve soil carbon, as well as projects that help protect forests prone to wildfires.

Separately, this year the U.S. Department of Agriculture announced it will spend $1 billion on projects for farmers, ranchers and forest landowners to use practices that curb emissions or capture and store carbon. That program is focusing on projects for conservation practices including no-till, cover crops and rotational grazing.

Research suggests that removing carbon already in the atmosphere and replenishing soil worldwide could result in a 10% carbon drawdown.

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