Innovation That Matters

The Springwise Top 5: How the Inflation Reduction Act is fuelling clean tech innovation

Innovation Snapshot

It has been a year since the US passed the landmark climate bill, how have innovators responded?

One year ago today, President Biden signed the Inflation Reduction Act (IRA) into law. Described by the president as “the most significant legislation in history to tackle the climate crisis,” it is estimated that the law will direct nearly $400 billion (the final figure could end up being even higher) in federal funding towards clean energy in the form of grants, loan guarantees, and, above all, tax incentives.

According to a one-pager published on the website of the Senate Democrats, the Act “lowers energy costs, increases cleaner production, and reduces carbon emissions by roughly 40 per cent by 2040.” And there is a distinct focus on boosting investment in domestic US manufacturing, and on procuring key supplies for the clean energy transition at home. For example, the IRA stipulates that clean energy tax credits should only apply to sales of products made within the US.

This latter point has not been without controversy, with some world leaders voicing concerns that it amounts to “green protectionism.” But whatever way you look at it, the IRA represents a historic investment in clean energy technology, and to mark the anniversary of the Act, we take a look at some of the innovations we’ve spotted that benefit from its provisions.

Making clean hydrogen and carbon black without combustion
Photo source Monolith


Hydrogen is promising as a fuel because it does not emit CO2 at point-of-use. However, the way in which the element is produced determines whether or not it is a truly clean fuel. Today, almost all the hydrogen we use is produced from fossil fuels, which means that its production generates significant amounts of CO2. ‘Green hydrogen’ is an often-discussed alternative to fossil-derived hydrogen. It is produced by running a renewable electric current through water to break the bond between the hydrogen and oxygen atoms. Although very promising, green hydrogen has its own limitations, such as the current high cost of electrolysers needed for its production. Now, however, US startup Monolith, has developed a new clean way of producing hydrogen. Using a process called methane pyrolysis, the company heats up traditional or renewable natural gas or biogas with renewable electricity. This process heats the gas but does not combust it, which means no CO2 is released. Instead, the bonds between the hydrogen and carbon atoms in the gas are broken, and the two elements are collected separately, with the solid carbon turned into ‘carbon black,’ a material that is used in tyres and rubber products and as an ink, black paint, or dye. This approach produces far fewer emissions than traditional fossil-fuel-based production methods and can be made carbon negative by using renewable natural gas. It also requires seven times less energy than green hydrogen production. The IRA offers tiered tax credits for hydrogen producers depending on the amount of CO2 emitted during the production process, and Monolith’s methane pyrolysis process is able to qualify for the top tier. Read more

Hi-tech anodes for the next generation of EV batteries
Photo source NanoGraf


Lithium-ion (Li-ion) batteries are ubiquitous, powering everything from portable consumer electronics to electric vehicles (EVs). While they boast energy densities much higher than lead-acid batteries, increases in their energy density are plateauing. However, a new type of anode, produced by NanoGraf Technologies, may change this. NanoGraf, a spinout from Northwestern University and Argonne National Laboratory, has developed a way to vastly improve the energy density of Li-ion batteries by replacing the conventional graphite-based anode with one based on a proprietary, doped silicon alloy with a protective inorganic and organic coating. The combination helps stabilise the material during charge and discharge. The new anode, which can be easily dropped into existing battery manufacturing processes, could lead to longer-lasting, higher-energy, and higher-power Li-ion batteries. Last year, the company was awarded a $10 million (around €9 million) contract from the US Government to develop an advanced silicon anode manufacturing facility – which will be the US’s first large-scale silicon oxide factory – for which it will receive tax credits under the Inflation Reduction Act. Read more

The first solar-powered cobalt processing facility in the US
Photo source EVelution Energy


Presently, demand for cobalt is skyrocketing due to the huge rise in demand for electric vehicles (EVs). And by 2026, EV production will account for half of all global cobalt demand. One company is aiming to boost the US domestic supply of processed cobalt and is doing so using renewable energy. EVelution Energy is building the first solar-powered and carbon-neutral cobalt processing facility in the US. With this new facility, located in Yuma County, Arizona, the company hopes to be able to produce 33,000 metric tonnes of battery-grade cobalt sulphate annually, which will support the manufacture of 470,000 EVs every single year. According to current projections, approximately 2.5 million EVs are likely to be sold in the US in 2028. And the US government is keen to ensure that a significant chunk of this demand is met by domestic processing and manufacturing of EV materials and components, which is being incentivised by the IRA. EVelution Energy’s new facility is part of this trend. Read more

Making chemicals, materials, and fuels from captured CO2
Photo source Twelve


According to research from Columbia Universit’s SIPA Centre on Global Energy Policy, using recycled CO2 – captured from an industrial source or the ambient air – in the production of chemicals, materials, and fuels could abate 6.8 gigatonnes of CO2 a year. And one company making great strides in this area is Twelve. The startup uses carbon transformation technology to convert captured CO2 into products traditionally made from fossil fuels. In a process that the company terms “industrial photosynthesis”, captured CO2, water, and renewable energy are used to make new, useful carbon-based products. At the centre of the technology is a highly efficient CO2-reducing catalyst that forms the basis of a “plug-n-play” reactor that can be dropped into existing industrial systems to convert captured carbon into complex hydrocarbons. These hydrocarbons can then be made into a range of different products. The IRA contains tax credits for carbon removal, sustainable jet fuel, and manufacturing, and these are helping Twelve get to market sooner. Read more

An ecosystem for managing and trading transferable clean energy tax credits
Photo source Canva


Among the IRA’s provisions is the establishment of 11 types of transferable clean energy tax credits. Qualifying companies are awarded these credits, which can be used to offset their tax. But those who do not have substantial tax liabilities can sell the credits on to third parties in exchange for a tax-free cash payment. This is designed to encourage follow-on private investment in the clean energy sectors that are essential for the ongoing energy transition as the US aims to hit net-zero emissions by 2050. The transferable credits represent a huge new market, and one startup, Crux Climate, is aiming to streamline the process of managing and transferring the credits. The company has created a network of buyers and sellers, which is supported by a suite of tools that are designed to streamline transactions, reduce risk, and increase trust between counterparties. Read more

Written By: James Bidwell