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Existing tax credits modified in the recently passed One Big Beautiful Bill Act of 2025 (OBBBA) are about to negatively impact the domestic automotive industry – a major economic driver and job creator. Just as traditional automotive manufacturers were accelerating work to build out electric vehicle (EV) supply chains, the OBBBA phases out existing tax incentives, including the clean vehicle tax credit (30D) and the advanced manufacturing credit (45X).  

These tax credits helped catalyze significant job creation across the industry. As of June 2025, an estimated 62,700 jobs were created, and a total of $48.3 billion was invested in the manufacturing of batteries, in part due to 45X. Announced investments of $41.7 billion and more than 72,000 jobs are linked to facilities producing EVs and batteries eligible under the 30D tax credit.  

This analysis breaks down the 30D and 45X tax credits, how recent changes to these credits might influence the U.S. automotive industry, and a potential path forward. 

What are the 30D and 45X tax credits?  

The 30D and 45X tax credits are key federal incentives that were signed into law in 2022 to support a robust clean energy manufacturing ecosystem in the United States.  

The 30D credit offers eligible buyers of new clean vehicles up to $7,500 in savings. Although most EVs are cheaper to own over the course of their lifetime than their gas-powered counterparts, they tend to be more expensive up front. This tax credit was designed to help offset the higher cost of new electric vehicles, making them more affordable for Americans at the time of purchase. Starting in 2024, there are new eligibility requirements for clean vehicles; they cannot contain battery components that are assembled by a specified foreign entity, meaning that to receive the 30D tax credit, components from foreign countries that threaten U.S. national security cannot be used in eligible EV production.  

The 45X tax credit supports the production of America’s supply of battery cells and critical minerals crucial for EV batteries, such as lithium, cobalt, and nickel. It also supports the domestic production of the components of clean energy technologies, such as solar and wind. It offers producers of eligible battery cells a credit of $35 per kilowatt-hour (kWh) of maximum capacity. The 45X credit also provides producers with a 10percent credit on costs incurred while producing critical minerals to the required purity levels.  

Why 30D and 45X Matter  

The 30D and 45X tax credits are crucial to supporting the global competitiveness of the American automotive industry. Without the incentives, the American EV market will continue to lag far behind foreign competitors like China.  

The 30D tax credit is a central driver of EV affordability, domestic job growth, and reduced reliance on specified foreign entities. Through its domestic content requirement, it incentivizes the domestic production of EV components, encourages investment in the domestic EV supply chain, and helps ensure that consumers who want to go electric can buy American-made vehicles.  

The 45X tax credit is crucial in supporting American manufacturing of battery materials, strengthening domestic energy security, creating U.S. jobs, and accelerating investment in American communities. It lowers the costs of production to help domestic producers compete with mature markets that have lower production costs, such as China. It also provides a tax incentive to drive growth in domestic manufacturing of battery components and the refining or recycling of critical minerals.   

The credits are intended to operate in tandem: 30D makes American-made EVs more affordable for consumers while 45X makes it cheaper to build batteries domestically, which also makes EVs more affordable. Together, 30D and 45X are crucial to supporting the domestic EV market. 

OBBBA Changes to 30D & 45X 

Under the recently passed OBBBA, the 30D tax credit will now sunset on September 30, 2025 – seven years earlier than previously planned in the IRA. This will impact the EV market and its domestically produced materials significantly. Repealing 30D could: 

• Reduce the ability of consumers to buy EVs, dropping market demand as EV prices rise,  

• Increase risks to the domestic battery supply chain as the domestic and global industry becomes more reliant on cheaper, foreign EV components, and  

• Decrease domestic investment and job creation as it becomes more expensive to establish U.S.-based EV supply chains. 

As for 45X, the OBBBA limits credit use until certain Foreign Entities of Concern (FEOC) requirements are met. FEOC rules apply at two levels: the foreign taxpayer level (prohibiting companies based in China, Russia, Iran, and North Korea from claiming the credit) and the product level (prohibiting a percentage of components sourced from these same countries). Beginning in 2027, integrated components will only qualify for the tax credit if they’re built into another element at the same facility, sold to an unrelated buyer, and made with at least 60 percent U.S.-sourced materials. 

 The new FEOC rules are expected to: 

• Ensure prohibited foreign entities (PFEs) cannot claim the credit: meaning that if a company is owned or controlled by a PFE, it is not eligible for the credit 

• Restrict material assistance from PFEs: companies are limited in purchasing specified amounts of key minerals, components, or materials from foreign entities. 

• Restrict licensing agreements with PFEs: meaning that companies can’t use technology or patents licensed from FEOCs in projects claiming the credit. 

• Restrict financial arrangements with PFEs: companies are limited in establishing specific funding or investment arrangements with specified foreign entities. 

The new FEOC rules impose higher upfront costs on EV supply chain investment, encourage investors to relocate to markets outside of the United States, and complicate credit adoption, creating an uncertain environment for the domestic battery supply chain. Shortening the runway for 30D —which may lead to ceding market share to foreign vehicle manufacturers—and tightening 45X requirements hinder both the supply and demand sides of EVs in America.  

The Path Forward  

Despite the obstacles that the revised tax credits will bring, there are still ways to navigate future challenges. For example:  

• States can enact clean energy manufacturing policies to support EV adoption 

• The U.S. Department of Treasury can work with industry to streamline FEOC compliance guidance to support continued 45X tax credit adoption   

• Key players across the industry can continue to strengthen regional coordination through dialogue.  

Ensuring holistic support for the U.S. battery supply chain helps meet the rising demand for advanced energy technologies while ensuring supply chains remain secure, domestic, and globally competitive. C2ES’s Regional Clean Economies Initiative is working to bring together businesses, policymakers, and community members in the Southeast to explore scalable solutions to support the domestic battery supply chain.  

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Last week saw Tropical Storm Erin rapidly intensify from a tropical storm to a Category 5 hurricane in just over 24 hours. While this storm is forecast to miss the coastline by hundreds of miles, the intensity of this hurricane is expected to cause severe impacts like storm surge and flooding, strong winds, rip currents and dangerous surf across the entire east coast. 

This level of rapid intensification is becoming more common as the climate warms. Tropical cyclone intensification is in part a result of rising ocean temperatures associated with climate change, which serve as the fuel for these complex storm systems. Warmer sea surface temperatures are tied to the rapid intensification, which, in addition to posing a greater threat to communities and infrastructure, can also make forecasting and early warning systems more challenging to deploy.  

Not only is the intensity of hurricanes and tropical cyclones increasing with a warming climate, but so too is the area at risk of impact. The expanded reach of hurricanes deeper into the continental United States—reaching farther from the coast—raises the alarm for communities not traditionally impacted by these storms. Just last year, Hurricane Helene made landfall in Florida before traveling north to impact communities in western North Carolina and eastern Tennessee, leaving a path of destruction more than 500 miles from its initial landfall. 

Hurricanes and tropical cyclones have short- and long-term impacts on communities and regional economies. In the immediate, strong storms cause significant damage through high power winds, heavy rain, and flooding, impacting homes, commercial buildings, schools, and other essential spaces. Storms also disrupt the power grid, contaminate drinking water, and complicate evacuation and emergency response efforts by destroying road and bridge infrastructure. In the long term, damaged infrastructure can slow down recovery efforts and keep local economies in a depressed state. In the case of Hurricane Helene, the storm took the city of Asheville’s water treatment plant offline, contaminating the city’s water supply and depriving the residents of clean water for seven weeks.  

Some communities may take decades to recover—homes in New Orleans, Louisiana, are still boarded up from Hurricane Katrina’s landfall two decades ago. Aside from physical impacts, storms also pose a risk to the mental and emotional health of survivors, worsening existing conditions and triggering increased instances of major depressive disorders, general anxiety disorders, and post-traumatic stress disorders (PTSD). 

Storms like Hurricane Katrina, Helene, and Erin emphasize the need for integrated adaptation, resilience, and disaster planning. Decision-makers and planners must identify vulnerabilities across critical infrastructure, regional and local economies, and communities and neighborhoods to inform both pre- and post-disaster efforts. Many communities have responded to extreme storm events by investing in both physical and policy strategies that build resilience. These strategies include: 

• Improved Coordination and Decision-Making: The Louisiana State Legislature consolidated coastal restoration and hurricane protection responsibilities under a single government authority in 2005 in response to Hurricanes Katrina and Rita; the Coastal Protection and Restoration Authority now oversees nearly $2 billion in projects designed to improve coastal resilience, including by mitigating extreme storm risks.  

• Investments in Nature-Based Solutions for Resilience: In 2022, Florida established the Resilient Florida Grants Program to fund projects that enhance natural systems to help mitigate flood impacts, improve water quality and prevent coastal erosion. Nature-based climate resilience solutions like those supported by the Resilient Florida Grants provide multiple benefits and help stretch the impact of necessary, but limited, funding.  

• Physical Infrastructure and Built Environment Upgrades: At the local level, communities are investing in grid resilience efforts to decrease impacts from storms on energy infrastructure systems, such as burying power lines or exploring community owned and decentralized power models. Boston, Massachusetts, Kitty Hawk, North Carolina, and Eastport, Maine have all upgraded grid infrastructure to be able to maintain power at critical nodes in preparation for storm impacts.   

While residents in Asheville struggled with access to clean water after Hurricane Helene, the damage could have been much worse if not for smart resilience planning. In 2021, the city completed construction of an auxiliary spillway for the river’s dam. During the storm, the spillway worked as intended, ultimately preventing the dam from failing outright according to city officials.  

As more communities across the United States experience the worsening impacts of climate change, it is increasingly important to invest in solutions that produce co-benefits, like upgraded infrastructure and improved water quality, delivering high value for low cost. Multi-benefit climate resilience solutions can deliver value to businesses, communities, and municipalities by both reducing risk and improving preparedness, thereby increasing a community’s capacity to respond in the case of an extreme event.  

Robust preparation and response systems can be lifelines even when a storm doesn’t make a direct hit like Hurricane Erin. Proactive steps to build resilience to hurricanes and tropical cyclones can help ensure that when storms do make landfall, communities and businesses are equipped. 

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2025 is shaping up to be a historic year for climate impacts, with large wildfires raging and blowing smoke across the United States and the world. Smoke from one of Canada’s worst wildfire seasons in history has blanketed the Midwest and the East Coast and is only expected to worsen. Against this backdrop, the case for building resilience to these fires couldn’t be stronger, and the solutions and goals below must be deployed to better protect communities.

The U.S. is facing a worsening wildfire crisis driven by rising temperatures, prolonged droughts, and outdated land and building practices. Since 2005, wildfires have destroyed over 129,000 buildings nationwide. According to the U.S. Congress Joint Economic Committee, wildfires now cost the U.S. economy an estimated $400 to $900 billion annually. That cost includes health impacts, hospital stays, lost workdays, and even premature deaths as more people are exposed to the harmful effects of fire and smoke.

As of today, the U.S. National Interagency Fire Center states on its website: “There are currently 47 large fires burning across nine geographic areas nationwide. A total of 15,453 firefighters and support personnel are assigned to incidents, including 307 crews, 736 engines, and 102 helicopters. So far in 2025, 44,130 wildfires have been reported, for a total acreage of 3,766,597.”

Wildfire: A Threat Multiplier

The true cost of wildfire to the U.S. economy is vast, easily underestimated, and growing. A 2022 report highlights that wildfire-related costs go far beyond suppression—encompassing direct damages to timber, infrastructure, and homes, as well as indirect losses such as degraded water quality, post-fire flooding, public health impacts, and economic disruption.

This crisis is exacerbated by continued development in the Wildland-Urban Interface (WUI). In this area, human development and infrastructure intermingle with wildland vegetation, creating higher wildfire risks and challenges in managing these risks. Warming is causing more frequent strong winds and dry air, expanding fire-prone areas beyond the WUI to grasslands, rainforests, and urban environments. The 2018 Camp Fire, 2021 Marshall Fire, 2023 Maui Fire, and 2025 Los Angeles fires demonstrate the devastating consequences of increasing wildfire risk to U.S. homes and businesses.

While recovery is difficult for any major disruption, the Government Accountability Office testified that wildfire recovery is 10 times harder than that of floods, hurricanes, and other disasters, due to the extent of damage to land and homes. Meanwhile, the return on investment (ROI) for proactive mitigation, including fuel treatments and home hardening, is substantial and well-documented. In its 2024 report, the U.S. Chamber of Commerce found that every $1 invested in resilience and disaster preparedness saves $13 in economic impact, damage, and cleanup costs after the event.

Government at all levels plays a crucial role in supporting and coordinating wildfire mitigation and preparedness for the benefit of community safety, economic security, public health, and forest health.

Why Federal Policy Matters

Federal spending on wildfire response doubled between 2011 and 2020 due to climate change, WUI development, and decades of accumulated fire deficit. Despite recent historic investments—over $20 billion through the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA)—federal policy still disproportionately focuses on suppression, with some Members of Congress even advocating to return to outdated strategies. This includes the “10AM rule,” a policy adopted by the Forest Service in 1935 requiring the extinguishing of any fire by 10 a.m. the day after it was reported. While this protected timber and communities in the short term, it led to a buildup of combustible vegetation, known as “fuel,” intensifying the severity of future fires. This created the “wildfire paradox” where successful suppression can worsen long-term wildfire risk.

The 2023 Wildland Fire Mitigation and Management Commission offered 148 federal policy recommendations to transition from reactive response to proactive resilience. Building on these through the Climate Resilient Communities Accelerator, C2ES is working to increase community resilience to wildfires through on-the-ground engagement in Colorado and beyond. After consulting with 27 local, national, and business leaders, C2ES offers five goals for federal wildfire policy that reflect opportunity for significant impact and broad support.

Five Goals for Federal Policy

Through federal leadership, we can reduce the intensity and cost of future wildfires, protect infrastructure, homes, and lives, and equip communities with the tools they need for long-term resilience. To achieve this, C2ES has identified five interconnected policy goals, each paired with an actionable recommendation to drive meaningful progress.

• Secure Power Systems
• Strong Infrastructure
• Cleaner Air
• Safe and Skilled Workforce
• Healthy Lands

Goal #1: Secure Power Systems

Electric utilities are critical to maintaining essential services during disasters, yet they are increasingly threatened by wildfires and can also be a source of ignition. However, the lack of consistent regulatory guidance has created a patchwork of state-level requirements and utility-driven wildfire mitigation plans, with no standardized best practices for permitting or implementing risk reduction work.

Recommendation: Empower utilities with clear guidance and industry standards for wildfire readiness to streamline planning, reduce costs, and improve coordination among utilities—especially smaller providers and co-ops—state energy offices, and land management agencies, helping to build a more reliable and fire-resilient grid. Invest in research and development (R&D) partnerships for utilities to pilot advanced fire prediction technologies, such as Xcel Energy’s use of AI to detect and mitigate wildfires in Texas.

Goal #2: Strong Infrastructure

Proactive mitigation measures across the built environment help protect communities from wildfire by reducing risks to homes, infrastructure, and critical services. Implementing comprehensive fire-resilient building practices, including creating buffers around buildings, hardening exteriors, and using noncombustible materials, offers promising solutions in high-risk areas. This year, for example, Colorado adopted a Wildfire Resiliency Code and passed a new law requiring premium discounts or underwriting adjustments for homeowners who implement proven mitigation strategies. The state also supports resilience hubs through an annual technical assistance and grant program.

Recommendation: Remove financial barriers and incentivize local risk-reduction efforts, including faster deployment of post-fire resources and enabling wildfire-ready building codes and construction. Federal programs can support wildfire-resilient building codes and land use policies, which are adopted at the local and state levels and include the International Wildland-Urban Interface Code. Wildfire Prepared is a system of mitigation actions that addresses both the structure and defensible space (Wildfire Prepared Home and Home Plus) and the neighborhood (Wildfire Prepared Neighborhood) from the Insurance Institute for Business and Home Safety (IBHS), which is receiving growing recognition from insurers. Investments can also support resilience hubs and microgrids at critical and community-serving facilities that can augment local emergency response capacity.

Goal #3: Cleaner Air

Communities across the U.S. are increasingly experiencing harmful smoke events, both from unplanned wildfires and the growing use of prescribed fire. While prescribed burns are a necessary tool for long-term wildfire risk reduction, they can still pose short-term health risks if not carefully managed. Wildfire smoke disproportionately harms vulnerable populations, including seniors, children, outdoor workers, people with asthma or cardiovascular disease, and communities lacking access to healthcare or safe indoor environments. Although Tribal, state, and local public health agencies often have strong community ties and local knowledge, they lack sufficient capacity, training, and resources to prepare for and respond to these growing health threats.

Recommendation: Promote smoke-ready communities and minimize the health impacts of both wildfires and prescribed fire. Federal and state agencies must coordinate to align land management and air quality goals while ensuring communities are equipped to manage smoke exposure. This includes training healthcare providers, investing in air quality improvements, supporting public outreach and education, and developing best practices for risk reduction—especially in high-risk and underserved areas.

Goal #4: Safe and Skilled Workforce

Wildfire is no longer just a land management issue—it requires a cross-sector workforce that integrates fire response, proactive fuels reduction, forest and land stewardship, emergency services, planning, and public health to meet the complexity of today’s challenges. As wildfires grow more intense and seasons extend, workforce demand is surging while existing responders face burnout, mental health strain, and insufficient support. While state and local fire services, the private sector, and non-federal responders are critical to both proactive mitigation and emergency response, they remain largely disconnected from federal wildfire operations. At the same time, the federal firefighting workforce—especially within the U.S. Forest Service—is under pressure from hiring freezes, inadequate pay, and limited training opportunities. With only one prescribed fire training center in the country and the expiration of federal firefighter pay increases, the ability to attract, train, and retain qualified personnel is rapidly eroding.

Recommendation: Strengthen and engage the non-federal workforce while stabilizing and investing in federal firefighting and mitigation teams. Increase capacity for the U.S. Fire Administration to expand community-based training, foster coordination between local and federal responders, and promote fire-adapted communities. Programs like Colorado’s Strategic Wildfire Action Program (COSWAP) demonstrate how state-federal partnerships can enhance workforce development and proactive mitigation. Simultaneously, Congress must address compensation gaps, improve benefits, and expand training infrastructure—such as additional prescribed fire centers—to meet the growing demand for skilled wildfire professionals and ensure a sustainable, high-quality workforce across sectors, including public health.

Goal #5: Healthy Lands

Existing federal performance metrics, such as acres treated or timber volume harvested, fail to capture the full range of outcomes needed to address wildfire risk in today’s context. Furthermore, because wildfire impacts cross state, Tribal, federal, and private lands, collaboration among diverse actors is essential to ensure forward-thinking stewardship of important lands. However, fragmented authorities, differing regulations, and inconsistent management capacities often hinder effective strategies. Multi-benefit land management approaches—those that integrate forest health, community safety, and resource protection—are more effective but remain difficult to implement without structural support.

Recommendation: Update land management performance metrics and support landscape-scale solutions to reflect desired outcomes that improve both forest and community health. There is widespread agreement that new outcome-based metrics are needed, such as the number of protected assets, communities protected, local partnerships, watershed conditions, and healthy forests and rangeland. At the same time, we must empower landscape-scale action between state, local, and Tribal partners for more effective wildfire risk reduction across jurisdictions, including prescribed burns and new uses of woody biomass. For example, capacity-building programs and “forests to faucets” initiatives that span multiple jurisdictions, such as Coalitions & Collaboratives, the Northern Colorado Fireshed Collaborative, and the Peaks to People Water Fund, should be supported and replicated.

A Path Forward

These five policy goals reflect a holistic and broadly supported approach to wildfire resilience, advancing community safety, economic stability, and forest health. Through federal leadership, we can empower local communities to implement solutions that fit their unique needs, while simplifying programs to reduce barriers, expand access, and expedite the processes for both planning and recovery.

Realistically, addressing these goals will require investments in funding and staff capacity. First, we must maximize the impact of existing funds, protecting programs that have proven beneficial to communities and businesses, while continuing to build a case for future investments.

Policymakers, businesses, and community leaders all have a role to play in ensuring the nation is better prepared for the wildfire risks of today and tomorrow. Community exchange can speed recovery by sharing hard-earned lessons, as Superior, CO’s recovery leaders did—drawing on their experience from the 2021 Marshall Fire to help shape Project Recovery: Rebuilding Los Angeles After The January 2025 Wildfires.

C2ES will continue to support community and cross-sector partnerships and advance public policy solutions as we expand the Climate Resilient Communities Accelerator to new vulnerable regions across the United States.

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To date, the illegal freezing of funds at the Department of Energy (DOE) alone has cost the U.S economy $550 million, 640,503 lost workdays, and $197 million in lost income for workers. The irreversible cost for each day the federal funding freeze continues can be tracked in real-time using the Live Funding Freeze Ticker—developed by Greenline Insights in partnership with the Center for Climate and Energy Solutions (C2ES).

On January 20th, 2025, the Trump Administration issued an executive order halting the disbursement of all federal grants and loans across numerous federal agencies. This action, aimed at reducing federal spending and redirecting resources to the new administration’s priorities, was accompanied by mass layoffs to the federal workforce. Funding provided by the bipartisan Infrastructure Investment and Jobs Act (IIJA) as well as the Inflation Reduction Act (IRA) of 2022 were all frozen, prompting legal action from a swell of concerned companies and organizations.

Three months after the initial announcement, federal judge Mary McElroy ordered the Trump administration to reinstate these funds. Following thorough investigation, on May 22, 2025, the Government Accountability Office (GAO) ruled that the Trump administration’s blockage of funding violated the Impoundment Control Act. Days later, U.S. Secretary of Energy Chris Wright announced the termination of 24 awards totaling $3.7 billion from the Department of Energy’s (DOE) Office of Clean Energy Demonstration (OCED). These would have supported clean energy and manufacturing projects across the country that will keep energy costs down and strengthen the long-term competitive position of U.S. manufacturing.

While the continued freeze of these funds represents real and wasteful economic losses, project cancellations carry an even higher cost for companies that have already invested billions in projects the federal government has legally contracted to undertake.

Zooming in on the Office of Clean Energy Demonstrations (OCED)

The Office of Clean Energy Demonstrations (OCED), established in 2021 through the bipartisan Infrastructure Investment and Jobs Act, manages the deployment of several large-scale clean energy technologies including clean hydrogen, carbon management, advanced nuclear reactors, and long-duration energy storage. OCED was created to centralize and leverage project management experience across the DOE to enhance project outcomes, through close collaboration with private companies. Unfortunately, this program is also under attack; a recent executive order proposes to cut the program’s 250 person staff down to 35 full-time employees. This would leave little support to manage OCED’s project portfolio, effectively undermining $20 billion in congressionally approved awards, impacting hundreds of clean energy and industrial manufacturing initiatives that have made investments based on legal contracts with the federal government, as well as communities positioned to benefit from the jobs and local tax revenue the projects would generate.

The consequences of eliminating OCED’s operations will be felt nationwide across the clean hydrogen, long-duration energy storage, carbon management, distributed energy, and industrial manufacturing sectors. Among the 35 states with projects at high risk of termination, California, Iowa, and Pennsylvania face the largest potential losses, with $3.2 billion, $1.1 billion, and $1 billion respectively in total economic output at stake. States that host several major projects like Texas’ HyVelocity Hub are generating thousands of jobs—45,000 in Texas alone. A loss of federal funding for DOE projects puts 156,352 jobs on the line nationwide. Industries crucial to advancing America’s global competitiveness, such as the construction of new power and manufacturing facilities, face losing $6.3 billion in total economic output, not even accounting for the millions of dollars in potential private investment.

The cumulative and irreversible economic costs of federal program freezes pose serious threats to domestic manufacturing, job opportunities, and clean energy technology development. The scale of damage caused by cuts to OCED’s project portfolio alone demonstrates that continued withholding of funds by the Administration will worsen the long-term prospects for secure and affordable energy supply in America undermining our economic future.

The Live Funding Freeze Ticker represents a conservative estimate, as it doesn’t account for private sector investment being sidelined by the freeze. What’s worse is that we’re getting nothing in return for that delay—literally lighting $10 million dollars on fire for every day of delay, while freezing America’s manufacturing renaissance with consequences that will reverberate through communities nationwide for decades to come.

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Policy Recommendations from the Discussion

Accelerate the development of the nuclear energy supply chain in Kentucky

To demonstrate the opportunity for Kentucky to manufacture parts for the existing U.S. nuclear fleet, the Kentucky General Assembly should fund a study to identify what certifications (if any) are required for workers, which parts could be manufactured, and the standards that must be put in place to produce nuclear power plant equipment in Kentucky. Moreover, this would include determining if a new manufacturing line within an existing facility is required (or if they can be produced on existing production lines or if an entirely new facility would be required) to fabricate the equipment.

Promote the global competitiveness of Kentucky-made products

To support Kentucky’s global competitiveness in sustainable product/material manufacturing, the Kentucky General Assembly should dedicate resources to establish an interstate regional coalition across the southeast Ohio River Valley and Appalachia focused on transportation, manufacturing, and energy supply.

Build, expand, and retool infrastructure to support access to the new energy economy

To address the need for greater coordination between state, local, and federal government entities on energy infrastructure buildout, Congress should pass legislation to direct the U.S. Economic Development Administration (EDA) to establish a federal Office of Community Prosperity for Underserved Communities, with coordinating offices in all 50 states, as conduits for state, local, federal, and industry to access federal funds.

The Kentucky General Assembly should pass enabling legislation to support the development of a corresponding office at the state level.

Promote workforce development for advanced energy manufacturing in Kentucky

To increase access to and utilization of workforce development opportunities, the Kentucky General Assembly should fund the creation of a comprehensive online database of workforce development resources and opportunities for area development districts, local governments, and local communities across the state.

Develop the innovation ecosystem for advanced energy in Kentucky

To equitably and transparently strengthen the innovation ecosystem in Kentucky, and across the country, Congress should establish a public/private partnership supporting a national Innovation & Entrepreneurship program that drives a graduated K-12 experiential learning program.

Conclusion

As recent momentum has demonstrated significant opportunities for Kentucky to leverage its infrastructure and human capital in the emerging advanced energy economy, further state and federal investment is necessary to continue to attract investment and preserve or even expand the global competitiveness of Kentucky-made products. Roundtable participants were optimistic about the opportunity for the state, but noted that significant investment in workforce and community development are necessary to ensure communities are able to support these emerging industries and enjoy the benefits they bring to the Commonwealth.

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Policy Recommendations

Driving Private Sector Investment and Domestic Manufacturing

Recommendation: To ensure business confidence in announced investments and the long term stability necessary to grow American manufacturing in the battery and EV industries, Congress should maintain clean energy and clean vehicle tax credits, specifically 45X, 30D, and 45W.

Increasing Investment Certainty in the Critical Mineral and Material Market

Recommendation: To derisk new critical mineral projects, Congress should appropriate funds for the Department of Energy to investigate which mechanisms best support private offtake agreements for new projects. The mechanisms should be determined in consultation with industry stakeholders and include options such as contracts-for-difference, and offtake backstops.

Creating Circularity in the Battery Industry

Recommendation: To increase the ability of dismantlers and recyclers to safely remove, handle, and recycle batteries, Congress should direct and appropriate funds for EPA to convene a coalition of industry stakeholders to develop a roadmap for best practices on battery design for efficient removal from a vehicle by dismantlers and recovery of battery materials by recyclers.

Improving Community Engagement in Project Development

Recommendation: To help companies and communities engage earlier and more comprehensively in the leadup to large project development, the South Carolina Department of Commerce’s Coordinating Council for Economic Development should provide a statewide fund to establish a community benefits agreement council that can be included in the negotiation process with companies looking to site projects in South Carolina.

Developing the Workforce for South Carolina’s Advanced Energy Future

Recommendation: To increase the enrollment of students into technical college programs in fields of need as identified by supply gap analysis conducted by the state’s Department of Employment and Workforce, the South Carolina Legislature should appropriate funds to expand the SC WINS scholarship program to cover the full cost of tuition for positions of high need.

Recommendation: To ensure that recent graduates have immediately applicable and transferable skills in high demand employment contexts, the SC technical college system should foster partnerships between individual local colleges and nearby companies to develop curriculums that will train workers for available jobs and incorporate statewide skill needs analysis into their curriculum.

Conclusion

The growing market share of electrified options within the automobile industry offers both a challenge to incumbent manufacturers to diversify their production and an opportunity for South Carolina to position itself to enhance growth and resilience in its economy. C2ES’s roundtable in Columbia, South Carolina, provided an opportunity to bring together a wide-ranging group of battery and EV industry stakeholders to discuss how the state can strengthen those aspects of the supply chain that might pose a risk to the long-term resilience of the industry. In-depth discussions among stakeholders on the topics of critical mineral supply chains, battery circularity and recycling, community engagement, and workforce development provided the foundation for a set of policy recommendations aimed at bolstering these aspects of South Carolina’s battery and EV industries. In the near term, ensuring announced projects begin production is key to realizing the economic potential of the industry. State and federal policymakers should work to preserve the incentives that are powering the growth of these industries in the state, ensuring that businesses have the policy certainty they need to bring projects, jobs, and economic development to both South Carolina and the nation.

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