Steel Products

Steel Groups React Favorably to Inflation Reduction Act

August 15, 2022

Domestic steel groups are supportive of some portions of the recently passed Inflation Reduction Act. The bill is meant not only to make a down payment on deficit reduction to fight inflation but to also invest in domestic energy production and manufacturing. It in addition aims to reduce carbon emissions by 40% by 2030, allow for lower Medicare prescription drug prices, and expand the Affordable Care Act for another three years.

The White House The Steel Manufacturers Association (SMA) applauded parts of the Act, including the creation of a new office within the Department of Energy to help the country move toward a zero-emissions future.

“The true impact of this bill will have to be measured over time, as it will impact individuals, companies, and industries in different ways. But we know this for sure, America’s electric arc furnace steelmakers, who today produce the highest-quality steel with the lowest emissions found anywhere in the world, look forward to partnering with the Department of Energy’s new Office of Clean Energy Demonstrations to further decrease our already historically low emission rates,” SMA president Philip Bell said in a statement.

“By working together, we will not only supercharge the fight against climate change today, but we will create a new model for low-carbon steel that will lead the global steel industry into the future,” Bell added.

The bill provides $5.8 billion in funding for the new Office of Clean Energy Demonstrations to financially assist key sectors of the economy in deploying new technologies to accelerate greenhouse gas (GHG) emissions reductions.

Steel’s role in sustainability and carbon reduction will be highlighted by the bill, according to Lisa Harrison, senior vice president of communications at the American Iron and Steel Institute (AISI).

“Steel is a critical component in the continued development of all clean energy and is therefore essential to many of the provisions called for under the Inflation Reduction Act to combat the global climate crisis. Wind, solar and tidal renewable energy systems all depend on steel—as does the electrical grid. And steel is integral to the electric vehicle (EV) market—not only in the vehicles but also in charging stations,” Harrison said in a statement sent to SMU.

The Act includes tax credits for Americans to purchase EVs whose final assembly occurs in North America, as well as tax credits for carbon capture, hydrogen production and investment, renewable energy production, nuclear production, clean fuel, and energy efficiency.

The United Steelworkers (USW) union lauded passage of the Act for its ability to bring down health care costs and invest in domestic manufacturing and clean energy supply chains.

“Building out our nation’s capacity for solar, wind and other sources of renewable energy will create good, domestic manufacturing jobs and help break our dangerous dependence on foreign producers to meet our needs,” USW international president Tom Conway said.

“At the same time, providing incentives for a wide variety of technologies like carbon capture, direct air capture, and nuclear power will help ensure that our steel and other critical industries remain among the cleanest in the world,” Conway added.

The Inflation Reduction Act was passed by both the Senate and the House of Representatives without the support of Republicans. The Senate vote was split 50-50, with Vice President Kamala Harris casting the tie-breaking vote in favor of the bill. President Joe Biden is expected to sign the bill into law this week.

By Laura Miller, Laura@SteelMarketUpdate.com

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.