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Washington, D.C. — In a new letter to the Environmental Protection Agency (EPA), Energy and Commerce Committee Republicans are pressing for answers regarding Greenhouse Gas Reduction Fund (GGRF) awards. The letter to Administrator Regan, signed by Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and Subcommittee on Environment, Manufacturing, and Critical Materials Chair Earl L. "Buddy" Carter (R-GA), requests an unredacted copy of all GGRF award agreements that have been finalized.  It follows up on an Oversight Subcommittee hearing from earlier this year, where Mr. Zealan Hoover, Senior Advisor to the Administrator, assured Committee Members that the award agreements that EPA entered into with recipients to receive GGRF program awards would address the concerns raised.   LETTER TEXT BELOW:   Dear Administrator Regan,  We write to you as part of the Energy and Commerce Committee’s (the Committee) continued oversight of the Environmental Protection Agency’s (EPA) Greenhouse Gas Reduction Fund (GGRF). As you know, Committee Members have many questions regarding this first-of-its-kind, $27 billion program, including those discussed at a January 30, 2024, Subcommittee on Oversight and Investigations hearing on the GGRF, with Mr. Zealan Hoover, Senior Advisor to the Administrator, testifying on behalf of the EPA. In numerous instances, Mr. Hoover assured Members that the award agreements that EPA would enter into with recipients that the EPA selected to receive GGRF program awards would address the concerns they raised.   For example, in response to a question from Committee Chair Rodgers about what conflicts of interest policies would govern funding recipients responsible for further distributing this money, Mr. Hoover responded that “they will be subject to all of the terms and conditions of their financial assistance agreement.” After Representative Guthrie pressed for more information on whether organizations with foreign ties could receive GGRF funding, Mr. Hoover stated that “one of the terms and conditions in each of the award agreements is going to be a prohibition against entering into any form of contractual relationship with a foreign entity of concern.” Mr. Hoover also replied to Representative Lesko, “[e]ach grantee is applying with a rigorous investment plan, proposed project pipeline, and timeline for a wide array of necessary activities covering their investment work, their governance, their organizational structure. All of that will be enshrined in our terms and conditions of the grant agreement.”   Members also submitted follow-up questions for the record after the hearing. Oversight and Investigations Subcommittee Chair Griffith requested more detail about performance audits, and the EPA responded, in part, “[w]e expect that the terms and conditions of GGRF grants, as provided in 2 C.F.R. § 200.208, will authorize the project officer to closely monitor recipient performance and compliance with grant requirements.” Additionally, in response to Chair Griffith’s inquiry on how the EPA could evaluate the past performance of applicants that included new organizations or coalitions, the EPA stated that it required applicants to submit risk management plans, and that awardees would have to comply with specific terms and conditions in their award agreements. In response to a question on Build America, Buy America Act (BABA) compliance, the EPA stated that it was “including terms and conditions in the award agreements to reinforce that all grants are subject to [BABA] by statute,” and that “EPA will hold selected applicants accountable to BABA requirements through the terms and conditions of the award agreements.” Finally, the EPA also responded to a question from Representative Crenshaw, saying that “EPA will include a term and condition in all award agreements to protect against federal funds flowing to entities with certain connections to the People’s Republic of China.”  In short, the EPA repeatedly sought to reassure the Committee that its award agreements with selected recipients would address the issues of concern and potential risks. The Committee seeks additional detail on how these award agreements will address the issues of concern and potential risks.    As such, please provide a complete and unredacted copy of the award agreement, including all of the attachments, appendices, and any amendments, that the EPA executes with each funding recipient under the GGRF. By no later than August 29, 2024, please provide a copy of all award agreements that have been finalized as of the date of this letter, and please provide a copy of all remaining agreements as soon as they are finalized. 

Washington, D.C. — In a new letter to Environmental Protection Agency (EPA) Administrator Michael Reagan, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and Subcommittee on Environment, Manufacturing, and Critical Materials Chair Buddy Carter (R-GA), on behalf of the Oversight and Environment Subcommittee Republicans, are pressing for answers about the recently-awarded Greenhouse Gas Reduction Fund (GGRF) grants.  KEY LETTER EXCERPTS :  “As you know, the Committee has questioned how the Environmental Protection Agency (EPA) planned to distribute the $20 billion available to selected recipients under the new GGRF program, including the $14 billion for the National Clean Investment Fund (NCIF). Specifically, the Committee cited warnings that the EPA could use these large awards to subsidize favored organizations. At a January 30, 2024, Subcommittee on Oversight and Investigations hearing, Committee Chair Cathy McMorris Rodgers highlighted examples of former Biden administration officials and Democratic campaign staff in leadership roles of organizations vying for NCIF funding. Predictably, the EPA’s April 4, 2024, announcement of NCIF recipients confirmed our fears that this program would funnel taxpayer dollars to political allies.” [...] “Other individuals with ties to Democratic politics also lead organizations partnering with these recipients. While the EPA insists it had ethics rules and a fair competition policy in place, doling out billions of dollars to organizations led by politically connected individuals undermines public trust in the legitimacy of the federal financial awards process. It also furthers the concern that this program was created as an excuse to hand out funding to political allies.” The Chairs cited more than a dozen examples of politically connected leaders of organizations to which EPA plans to distribute billions of taxpayer dollars, and have requested a list of all of the nearly two dozen stakeholder meetings the EPA held in designing the program, including the dates, names of the individuals and organizations participating as well as any related minutes or memoranda by May 28, 2024. CLICK HERE to read the full letter. 

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Senate Environment and Public Works Committee Ranking Member Shelley Moore Capito (R-WV), and Senator Roger Wicker (R-MS) led 26 of their colleagues in filing a bicameral amicus curiae brief in the U.S. Court of Appeals, D.C. Circuit in support of state and industry challengers to the Environmental Protection Agency’s (EPA) so-called “Good Neighbor” air rule that targets American power production and burdens states with misguided air regulations. “Acting well beyond its delegated powers under the [Clean Air Act], EPA’s Rule proposes to remake the energy sector in the affected states toward the Agency’s preferred ends. The Rule is part of the broader joint EPA-White House Strategy that oversteps the Agency’s authority by concurrently developing regulations under three separate environmental statutes. It does so not to meet any of the statutes’ individual ends but to transform the power sector. "The group of regulations—including the Rule—are designed to hurriedly rid the U.S. power sector of fossil fuels by sharply increasing the operating costs for fossil fuel-fired power plant operators, forcing the plants’ premature retirement,” the brief reads in part. BACKGROUND: The so-called “Good Neighbor” rule imposes overreaching emissions requirements on power plants, natural gas pipeline assets, and industrial plants, like steel, cement, and paper production facilities in 23 states. Other federal courts have already frozen implementation of the rule in 12 states. Despite active Supreme Court proceedings that may halt implementation of the rule nationwide, the EPA has remained committed to the illegal rule and recently proposed to add five more states to the program.  In June 2023 , Capito joined Wicker in introducing a formal challenge to the rule through a Congressional Review Act (CRA) joint resolution of disapproval.  In June 2023, Rep. Michael Burgess (R-TX) also introduced H.J.Res. 69, a formal challenge to the rule through a Congressional Review Act (CRA) joint resolution of disapproval.  In June 2022 , Ranking Member Capito sent a letter to EPA Administrator Michael Regan outlining serious concerns with the proposed “Good Neighbor Plan.”  Ranking Member Capito has criticized the EPA’s proposed “Good Neighbor Plan” during EPW hearings in March 2023 , July 2022 , and May 2022 , and in an op-ed .  In November 2023 , Chairs Rodgers, Duncan, and Johnson sent a letter to the Federal Energy Regulatory Commission expressing concerns with the impact of EPA’s suite of rules, including the “Good Neighbor” Rule (or Interstate Transport Rule), on the reliability of the nation’s electric grid. In addition to Capito and Wicker, senators who signed on to brief include, John Barrasso, (R-WY), Marsha Blackburn (R-TN), John Boozman (R-AR), Mike Braun (R-IN), John Cornyn (R-TX), Ted Cruz (R-TX), Steve Daines (R-MT), Deb Fischer (R-NE), John Hoeven (R-ND), Ron Johnson (R-WI), Cynthia M. Lummis (R-WY), Markwayne Mullin (R-OK), Pete Ricketts (R-NE), Jim Risch (R-ID), Dan Sullivan (R-AK), and John Thune (R-SD). In addition to Rodgers, House members who signed on to the brief include, Rick Allen (R-GA), Kelly Armstrong (R-ND), Troy Balderson (R-OH), Gus Bilirakis (R-FL), Larry Bucshon (R-IN), Michael Burgess (R-TX), Kat Cammack (R-FL), Earl “Buddy” Carter (R-GA), Dan Crenshaw (R-TX), John Curtis (R-UT), Jeff Duncan (R-SC), Neal Dunn (R-FL), Russ Fulcher (R-ID), Morgan Griffith (R-VA), Brett Guthrie (R-KY), Diana Harshbarger (R-TN), Richard Hudson (R-NC), John James (R-MI), John Joyce (R-PA), Bob Latta (R-OH), Debbie Lesko (R-AZ), Mariannette Miller-Meeks (R-IA), Jay Obernolte (R-CA), Gary Palmer (R-AL), Greg Pence (R-IN), August Pfluger (R-TX), Tim Walberg (R-MI), and Randy Weber (R-TX).  Full text of the brief is available here .

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and Subcommittee on Environment, Manufacturing, & Critical Materials Chair Buddy Carter (R-GA) wrote to Environmental Protection Agency (EPA) Administrator Michael Regan regarding the agency’s Clean School Bus Program. KEY EXCERPT:   “Alarming information about this program continues to emerge. In particular, the EPA’s Office of the Inspector General (OIG) has flagged serious shortcomings in the program that create significant vulnerabilities to waste, fraud, and abuse. The EPA’s own reporting on the program reveals that numerous award recipients encountered difficulty utilizing the funding they were awarded. Additionally, the EPA continues to administer the program in a manner that favors the use of electric school buses over other types of buses that are eligible for funding under the program.”  CHALLENGES TO IMPLEMENT:   Of almost 400 selectees under the 2022 Clean School Bus Rebate program 46 selectees withdrew from the program.  The most common reasons provided for withdrawal were school boards voting against the projects for reasons including difficulties coordinating with electric utilities, potentially lengthy and costly electric infrastructure upgrades required to install electric vehicle supply equipment, and hesitancy about maintenance and range issues associated with electric buses.  The OIG concluded in a December 2023 audit that “the agency may be unable to effectively manage and achieve the program mission unless local utility companies can meet increasing power and supply demands for electric buses.”  The OIG noted that establishing charging stations and connecting them to power lines could take approximately twelve to twenty-four months.   Stakeholders reported that infrastructure to support 25 buses or more demands a more complex electrical setup, which can take a year to construct.  POTENTIAL FOR WASTE, FRAUD, AND ABUSE:   In December 2023, the OIG issued a Management Implication Report that highlighted serious problems with the Clean School Bus Program.   The OIG “identified concerns regarding the EPA’s lack of robust verification mechanisms within the Clean School Bus rebate and grant application process, which led to third parties submitting applications on behalf of unwitting school districts, applicants not being forthright or transparent, entities self-certifying applications without having corroborating supporting documentation, and entities being awarded funds and violating program requirements.”  The OIG further stated, “Our initial investigation of its protocols found that the Clean School Bus Program is rife with potentially inaccurate information” and that “the EPA uses few mechanisms to verify the accuracy of application contents and relies on the applicant’s self-certification of all aspects of the application,” including the applicant’s eligibility for the program, satisfaction of vehicle-use requirements, and the identity of the school district the replacement buses funded by the program will serve.  The OIG also found that an administrative entity with zero students was selected to receive a rebate, despite it seeking funding for buses that were ineligible for the program.   Some recipients selected to receive rebates under the 2022 Clean School Bus Rebate program later declined the funding.   These withdrawals accounted for $38 million of awards, which the OIG stated lengthened program timetables and created confusion.  EPA PICKING WINNERS AND LOSERS:   The Infrastructure Investment and Jobs Act (IIJA) directed the EPA to award grants, rebates, and contracts to replace existing school buses with both zero-emission buses and clean school buses.  The IIJA defines clean school buses as school buses that reduce emissions and operate partly or entirely using an alternative fuel, or zero-emission buses.   The Committee has previously voiced concerns about the EPA's bias towards electric buses while ignoring the benefits of other clean school buses, concerns that persist today.   According to information provided by the agency, “As of January 2024, the EPA has awarded approximately $1.84 billion to fund 5,103 clean school buses—96 percent of which are electric—and related charging infrastructure at 642 school districts in most states and territories, and at schools operated by federally recognized Tribes.”   Under the 2023 Clean School Bus Rebates program, the EPA continues to offer maximum awards for fully electric school buses that are several times larger than the maximum award amount for other types of clean school buses.  Additionally, under the Clean School Bus program, the EPA continues to fund charging infrastructure for electric vehicles but not propane or compressed natural gas fueling infrastructure.  Under the 2022 Clean School Bus Rebate program, the maximum bus funding amount for a class 7+ zero-emission bus was $375,000, and the maximum amount for a propane class 7+ propane bus was $30,000.  The EPA reported, “The majority of awarded electric school buses cost at or near $375,000, while many awarded propane buses cost around $150,000.”  In other words, the maximum rebate amount seemingly covered the entire cost of an electric bus but covered only a fraction of a propane bus.  CLICK HERE to read the letter.

Washington D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Oversight and Investigations Subcommittee Chair Morgan Griffith (R-VA), and Environment, Manufacturing, and Critical Materials Subcommittee Chair Bill Johnson (R-OH) today sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Michael Regan calling on the EPA to withdraw the overreaching and unworkable Clean Power Plan 2.0 proposal, which would make electricity less reliable and more expensive for Americans. The letter, sent on behalf of the Republicans on the Oversight and Environment subcommittees, also requests additional information regarding the EPA’s rule development process, which appeared to be riddled with misleading and defective analyses. EXCERPTS FROM THE LETTER: "Like its predecessor, the Clean Power Plan, the CPP2.0 Proposal aims to transform the nation’s electric generation, causing Americans’ utility service to be less reliable and more expensive. In this way, both the Clean Power Plan, which was stayed and later vacated by the Supreme Court, and this CPP2.0 Proposal, vastly exceed the limited authority Congress granted EPA under Clean Air Act Section 111, thereby violating the “major questions” doctrine." […] “ In addition to our concerns with the legality of the EPA’s CPP2.0 Proposal, the EPA’s promulgation of proposals with misleading and defective analyses undermines public trust and creates costly regulatory and legal uncertainty that harms the orderly planning for power generation that is essential to public welfare. The plainly inaccurate discussion about CO2 pipelines adds to serious questions about the analytical quality of the proposed rule. There are myriad other defects. For example, there are widespread concerns about the accuracy of the EPA’s claim that Boundary Dam, the coal fired EGU in Saskatchewan, Canada, has been adequately demonstrated to capture 90 percent of CO2. Even though the plant’s owner filed comments that the EPA was wrong about this assertion.”   BACKGROUND: Under the Clean Power Plan 2.0, the EPA has introduced policy proposals to set strict, costly, and untested standards on both new and existing natural gas and remaining coal generators.  These changes will have a chilling effect on American natural gas and coal—which account for about 60 percent of U.S. electricity generation—making life unaffordable for Americans and increasing risks for blackouts. The EPA’s proposals are legally dubious, scientifically questionable, and pragmatically unworkable.  The letter was sent ahead of an Energy and Commerce Committee hearing today, where members will hear from state officials on how the EPA’s efforts are affecting their ability to provide affordable, reliable energy to power local economies, keep people safe, and preserve livelihoods in their communities. The Chairs requested Administrator Regan provide the following information by November 28, 2023: Describe in detail your Action Development Process (ADP) for developing the regulatory proposals for GHG standards and guidelines for fossil fuel EGUs, including, but not limited to: The date you or your staff initiated the process and the timeline for each step of the process including the options selection briefing package, draft actions, and final drafts at the conclusion of the process; How you developed your regulatory options, including assessment of alternative approaches, the entities with which you consulted, including federal agencies and non-governmental entities, such as utilities, electric generators, pipeline operators, electric grid operators, and electric reliability entities, etc.; Your evaluation of the full costs of infrastructure development and deployment necessary to support your proposed emissions controls technologies and systems, and if you did not conduct such as evaluation, explain why not; How you validate the accuracy of the information in the proposals; How you determined that CCUS for the power sector has been adequately demonstrated based upon the limited performance of cited power plants; Whether any element of your proposal was not subject to the ADP and identify the element; The role of the Executive Office of the President, including the Office of Management and Budget, National Climate Advisors, and any other member of the White House staff, in developing the CPP2.0 Proposal, including after completion of the ADP. Provide all documents the EPA prepared to initiate this regulatory development process, including all preliminary and final Analytic Blueprints and any other planning or guidance documents covering the approach, scope, underlying technical criteria, legal criteria, and review mechanisms the EPA would follow for developing these GHG regulatory proposals, regulatory impact analyses, and Technical Support Documents. Describe why information supplied in the rulemaking docket was not complete at the time of the initial release of the CPP2.0 Proposal. CLICK HERE to read the full letter to Administrator Regan. CLICK HERE to read the statement from Chairs Rodgers and Johnson following the CPP2.0 Proposal announcement. CLICK HERE for information from the June 6th hearing about the Clean Power Plan 2.0. CLICK HERE to read about a recent letter to FERC regarding the risks posed to the grid by CPP 2.0.

Members concerned about conflicts of interest; risk of waste, fraud, and abuse; and an increased reliance on China Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and Subcommittee on Environment, Manufacturing, & Critical Materials Chair Bill Johnson (R-OH), on behalf of the Oversight and Environment subcommittees’ Republicans, wrote to Environmental Protection Agency Administrator Michael Regan. The letter outlines the following concerns with the Greenhouse Gas Reduction Fund (GGRF), established by the so-called “Inflation Reduction Act”:  Possible conflicts of interest with funding recipients  Speed at which $27 billion in grants must be awarded opens door to waste, fraud, and abuse  Challenges to program implementation given China’s control over solar market  The letter requests answers to the following questions by November 1, 2023.  1. Possible Conflicts of Interest with Fund Recipients   KEY FACTS :  Earlier this year, the EPA released its plan for implementing the GGRF, which includes three competitions through which it plans to administer $27 billion in grant funding:  A $14 billion National Clean Investment Fund (NCIF) competition will fund two to three national non-profits that would partner with private capital providers to deliver financing to businesses, communities, community lenders, and others for clean energy projects.  A $6 billion Clean Communities Investment Accelerator (CCIA) competition will fund two to seven non-profits that will build financing capacity across specific networks of community lenders for clean technology projects.  A $7 billion Solar for All (SFA) competition aims to expand access to residential solar investment among low-income and disadvantaged communities.  The GGRF program is a completely new undertaking for the EPA, according to the agency’s inspector general, and includes provisions associated with entities often referred to as “ green banks .”  According to the EPA, the program will “leverage public investment with private capital” to finance clean energy projects, despite the agency having no experience administering such a funding vehicle, referring to it as “a first-of-its-kind” program.  KEY EXCERPT :  “[…] [S]ome have flagged that the EPA could use this program to subsidize favored special interest organizations. Others have alleged that current EPA appointees have ties to potential recipients of these sizeable awards, raising ethical concerns.”   READ :  AEI : Response to Request for Information from the Environmental Protection Agency: Greenhouse Gas Reduction Fund  Protect the Public’s Trust : Greendoggle? EPA Privately Discussed How to Spend $20B With a Few Favorite Environmental Groups  2. Speed at Which $27 Billion in Grants Must be Awarded Opens Door to Waste, Fraud, and Abuse   KEY FACTS :  The SFA notice of funding opportunity (NOFO) was announced in June 2023, with an application deadline of October 12, 2023.  According to the NOFO, the EPA anticipates notifying selectees in March 2024 and making awards in July 2024.  The EPA released NOFOs for the $14 billion CCIA and the $6 billion NCIF on July 14, 2023, with applications closing on October 12, 2023.  For these competitions, the EPA anticipates notifying selectees in March 2024 and plans for them to start administering the funds by July 2024.  The EPA has a statutory deadline to obligate funds by September 2024.  Under this timeline, the EPA has just over a year to obligate $27 billion.  KEY EXCERPT :  “The GGRF implicates many oversight concerns. For example, the EPA’s Inspector General recently testified before the Committee’s Subcommittee on Oversight and Investigations that newly created programs providing funding to new recipients on short timelines possess an increased vulnerability to fraud and execution errors.”   READ :   EPA IG’s Testimony at E&C OI Hearing Titled “Follow the Money: Oversight of President Biden’s Massive Spending Spree”  3. China’s Control over Solar Market Presents Challenges to Implementation   KEY FACTS:  China’s control of key materials in renewable energy extends “across the board.”  China controls almost half of the U.S. solar panel market share, making it incredibly difficult to supplant Chinese producers with domestic suppliers.   Certain projects under all three competitions are subject to the Buy America domestic sourcing requirements of the Build America, Buy America (BABA) provisions of the Infrastructure Investment and Jobs Act (IIJA).   The EPA also claims it will provide future guidance on which projects are subject to the BABA requirements.  KEY EXCERPT :  “If there will be domestic sourcing requirements through BABA on the various GGRF programs—and we know that China has a significant stranglehold on the availability of solar panels, among other green energy technologies—we are unsure how the EPA and program participants will ensure that the GGRF programs are not supporting Chinese products.”   CLICK HERE to read the letter. 

Washington, D.C. — House Energy and Commerce Committee Republicans, led by Chair Cathy McMorris Rodgers, wrote to Ford President and CEO James Farley regarding a new partnership with Chinese-owned Contemporary Amperex Technology Co., Limited (CATL) to build lithium iron phosphate batteries in the United States.  CLICK HERE to read FOX News's coverage: BACKGROUND :  Earlier this year, Ford announced it would invest $3.5 billion to construct a lithium iron phosphate battery plant in Marshall, Michigan.  According to Ford, its wholly-owned subsidiary will manufacture the battery cells using Chinese company CATL’s technology and services.  KEY LETTER EXCERPTS :  “While Ford has labeled this project a ‘commitment to American manufacturing’ and asserts it will create 2,500 new American jobs, we are concerned that Ford’s partnership with a Chinese company could aid China’s efforts to expand its control over United States electric vehicle supply chains and jeopardize national security by furthering dependence on China.”  […]  “Additionally, Members learned at this hearing that Chinese companies often supply their own workers to projects in Latin America and Africa, reinforcing fears that CATL will import workers for this facility rather that creating jobs for United States workers.”  […]  “We seek to learn more about whether this partnership, and others like it, will potentially exacerbate our reliance on China. Should China gain control of domestic electric vehicle production, the United States would be exposed to serious national security risks at a time of escalating geopolitical tensions.”  The Members requested information and answers to the following questions by September 18, 2023:  A copy of the complete licensing agreement between Ford and CATL, including any appendices, amendments, or addenda.  All documents and communications exchanged between Ford officers or employees and officials, appointees, employees, contractors, or consultants of the United States government referring or relating to Ford and CATL’s partnership and eligibility for tax credits and federal incentives.  Did Ford consider making a similar investment in a partnership with a non-Chinese company? If so, why did Ford ultimately decide to partner with CATL? If not, why did Ford not consider other partners?  How many CATL employees will CATL supply to the Facility?  What steps did Ford take to prevent or limit CATL’s ability to halt production unilaterally, such as at the direction of the Chinese government?  CLICK HERE to read the letter. 

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA); Subcommittee on Energy, Climate, and Grid Security Chair Jeff Duncan (R-SC); Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA); and Subcommittee on Environment, Manufacturing, and Critical Materials Chair Bill Johnson (R-OH), on behalf of the Energy, Oversight, and Environment Subcommittees, today sent a letter to Environmental Protection Agency Administrator Michael Regan. The Chairs’ letter raised concerns that loopholes in the so-called “Inflation Reduction Act’s (IRA) electronic vehicle (EV) tax provisions might lead to an increased reliance on China.  KEY EXCERPT:   “We are concerned that EPA potentially overestimates the impact of the IRA’s tax credits in supporting domestic supply chains for critical minerals and electric vehicle batteries. EPA asserts that widespread vehicle electrification ‘will not lead to a critical long-term dependence on foreign imports of minerals or components’ and that increased demand will not threaten national security. However, increased adoption of electric vehicles to meet the demands of this rule could force the United States to rely on foreign adversaries such as China, which dominates much of the electric vehicle supply chain.”  BACKGROUND:   The IRA permits individuals to claim a federal income tax credit for purchasing a qualifying new clean vehicle.  The IRA placed restrictions on which vehicles are eligible for this credit, including:  Critical Minerals Requirement: A certain percentage of the vehicle’s battery be extracted or processed in the United States or any country with which the United States has a free trade agreement, or recycled in North America, starting with 40 percent for vehicles placed in service on or after April 18, 2023, and before January 1, 2024, and escalating to 80 percent for vehicles placed in service after December 31, 2026;  Battery Components Requirement: A certain percentage of the value of the vehicle’s battery components must be manufactured or assembled in North America (battery components requirement), starting with 50 percent for vehicles placed in service on or after April 18, 2023, and before January 1, 2024, and escalating to 100 percent for vehicles placed in service after December 31, 2028; and   Final Assembly Requirement: Final assembly of the vehicle must occur in North America.   The IRA also added a credit for qualified commercial clean vehicles, which allows businesses to claim a federal income tax credit for clean vehicles dedicated to commercial use, and not for resale.   Note: This credit, the Commercial Clean Vehicle Credit, does not include tax credit eligibility limitations—such as the critical minerals requirement, the battery components requirement, or the final assembly requirement.  As Members discussed at a recent hearing on the Committee’s Subcommittee on Oversight and Investigations, car manufacturers may exploit the absence of the critical minerals requirement, the battery components requirement, and the final assembly requirement in the Commercial Clean Vehicle Credit.  Reportedly this “loophole” is “quickly changing the behavior of foreign automakers.”  For example, Hyundai is “direct[ing] many more of its [electric vehicle] customers to leases.”  The Chairs requested that Administrator Regan respond to the following questions by July 10, 2023:  Prior to issuing this final rule, does the EPA plan to analyze the extent to which vehicle manufacturers and retailers may focus on increasing leases of electric vehicles, as compared to those purchased?  If so, how does the EPA plan to do so?  If not, why not?  Has the EPA communicated, or does it plan to communicate, with any other relevant entities or agencies, such as the Department of Treasury, regarding the extent to which stricter requirements for vehicles eligible for the Clean Vehicle Credit than the Commercial Clean Vehicle Credit may lead to an increase in the number of leased electric vehicles, as compared to those purchased?  CLICK HERE to read the full letter. 

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Environment, Manufacturing, and Critical Materials Subcommittee Chair Bill Johnson (R-OH), and Oversight and Investigations Subcommittee Chair Morgan Griffith (R-VA) sent a letter on March 21 to U.S. Environmental Protection Agency Administrator Michael Regan requesting an extension of the comment period on a proposal by the EPA to revise national air quality standards to ensure ample time for full public comment. The letter also requested information concerning EPA’s outreach to affected stakeholders, including small businesses, communities, and homeowners. Excerpts and highlights below: “On October 14, 2022, we wrote you to request that you ensure meaningful public engagement and opportunity for public comment concerning any proposal by the Environmental Protection Agency (EPA) to revise existing air quality standards for fine particulate matter, also known as PM2.5. “We requested that you ensure the agency follows its own precedents as well as requirements under the Administrative Procedure Act to accept comment on retaining the existing standards. We also asked that you ensure the public has at least 90 days to submit comments once any proposal is published. “This past January 6, you proposed to revise the PM2.5 standards to significantly lower levels, and specifically asked for comment on a range below the current standard. Indeed, you failed to take comment on keeping the current standards, in that proposal. You also provided for only 60 days for public comment. Given the complexity and scope of regulatory impacts to comply with the potential new standards, it is disappointing that you would not provide for full opportunity for public comment on all aspects of the proposed decision. “We write today to request you extend the comment period by 30 days and confirm to us as soon as practicable that you will accept full public comment, including for retaining the existing standards. “In addition, we request you supply a written response by April 4, 2023, in which you describe in detail: (a) The EPA’s current assessment of the impacts of the proposed standards on small businesses, agriculture, municipalities, individual homeowners, and other small, nonpoint sources, which your data indicate make up some 80% of the sources that will be required to reduce PM2.5 emissions; (b) What outreach you have made to ensure these small businesses, agriculture, municipalities, individual homeowners, and other small, nonpoint sources understand the proposal, given the likelihood of increased controls and costs for these sources; and (c) The significance of the EPA’s inability to identify sufficient emission controls in the Draft Regulatory Impact Analysis to attain the proposed alternative standards.” CLICK HERE to read the full letter to Administrator Regan. NOTE: Energy and Commerce Republican Leaders sent a similar letter to the EPA in September 2022 requesting the agency ensures an appropriate amount of time for public review and comment.