Biden Seeks Brownfields Liability Protections Amid Tax Credit Confusion
The White House is seeking a cleanup liability shield for clean energy projects at brownfields sites as part of its plan for a possible legislative deal on permitting amid concerns from lawyers that developers face uncertainty in determining brownfields sites’ eligibility for an Inflation Reduction Act (IRA) tax credit for such energy projects.
The White House in a May 10 fact sheet outlined a dozen areas that it would like to see as part of any permit legislation, including a cleanup liability exemption for clean energy developers at pre-screened EPA waste sites if certain conditions are met.
EPA has pre-screened nearly 200,000 brownfield sites across the country that have clean energy potential, the fact sheet says.
“However, the potential that a developer could become liable for existing contamination can significantly curtail the use of brownfields. Congress should protect clean energy developers who build projects on sites pre-screened by EPA from liability for existing contamination when the developers make reasonable investments to address contamination and ensure their activities do not disturb contamination in a manner that increases the risks posed to human health and the environment,” it adds.
While it is not clear how much support the White House’s request will win on Capitol Hill, should Congress enact such a shield it would likely provide a significant incentive for renewable energy projects on brownfields sites.
That could be significant because lawyers are raising concerns that provisions in the IRA providing bonus tax credits for such brownfields projects, as well as subsequent implementation guidance from the IRS, are creating confusion about what kinds of sites are eligible.
“Unfortunately, even with the guidance, the eligibility of certain sites as brownfields remains uncertain,” lawyers at Husch Blackwell, a climate solutions firm, wrote in an April 18 energy policy alert.