US unveils rules for subsidies aimed at raising clean energy wages

(Reuters) – President Joe Biden’s administration unveiled final rules on Tuesday for new clean energy subsidies to ensure jobs and wages in green industries are competitive with those in the oil and gas sector.

The guidelines for companies seeking job quality tax credits aim to advance Biden’s vision that fighting climate change will create millions of jobs with good wages and benefits.

Biden is trying to tout his economic policies as he competes for votes ahead of a November general election rematch with former President Donald Trump.

The Inflation Reduction Act, signed into law in 2022, includes an estimated $370 billion in subsidies for solar, wind and electric vehicles.

Under Treasury Department regulations, companies that pay workers prevailing wages and employ interns for projects that claim IRA tax credits will receive five times the basic 6% credit. Developers were impatiently waiting for the conditions for applying for subsidies.

The provision is intended to give companies a clear incentive to raise wages in a sector that lags behind industries such as nuclear power, natural gas and coal.

“In the fossil fuel industry, our experience over the last 100 years is that they pay the highest wages and benefits. However, in the renewable industries that have developed over the last few decades, this has not happened,” Sean McGarvey, president of the North American Building Trades Union (NABTU), said on a call with reporters. “With the introduction of these new rules, there will be a huge increase in the number of people who currently work in this industry, as well as hundreds of thousands of people who will want to join this industry with a middle class, family-sustaining wages and good health care and aftercare benefits. retiring.”

The administration said it is encouraging companies to adopt project labor agreements that establish wage and employment conditions between unions and contractors on specific projects to help them comply with the rules.

Trade unions are a key constituency for Biden.

Treasury said the Internal Revenue Service will devote significant resources to promoting and enforcing compliance with the new regulations.

(Reporting by Nichola Groom; Editing by David Gregorio)