After 18 months of tribulations, the largest climate investment bill in US history was passed by a narrow margin of 51-50 in the Senate on Sunday.

In the face of a wave of "N" climate investment bills, Senate Majority Leader Schumer, who pushed for the passage of the bill, said:

After more than a year of efforts, the Senate is making history. The bill will usher in an era of clean energy that America can afford. It changes the rules of the game, a turning point that came a long time ago.

369 billion! The largest Climate Investment Act in American History

The $369 billion climate investment bill is bound to make a big difference in the history of clean energy in the United States.

The bill aims to reduce greenhouse gas emissions in the United States, making it a historic federal effort to combat climate change, with a goal of reducing carbon emissions by 40% by 2030.

The content mainly involves five major aspects, among which the second part of the bill is highly valued by the market.The focus is on clean energy manufacturing, including solar panels, wind turbines, batteries, electric vehicles, hydrogen production and key minerals.

Key projects involve:

• Tax credits to accelerate the manufacture of solar panels, wind turbines, batteries and key minerals

• Tax relief programs to build clean technology manufacturing facilities, including electric car factories and manufacturing plants that produce wind turbines and solar panels

• A subsidy project to renovate existing car manufacturing facilities to make clean cars

• A loan program to build new clean car manufacturing plants across the country.

• Tax credits that support emerging technologies such as carbon capture and hydrogen production.

  

At the same time, the driving effect of the Climate Investment Act on the US new energy vehicle industry should not be underestimated, and it will also increase clean energy demand through tax credits.

Key projects involve:

• For low-and middle-income consumers, there is a $4000 tax credit for second-hand clean vehicles and up to $7500 for new clean vehicles. Everbright Securities believes that the move may accelerate the growth of demand for electric vehicles in the United States, with sales expected to reach 1.15 million in 2022 and about 1.8 million in 2023.

• The 10-year consumer tax credit program aims to improve household energy efficiency and encourage the use of clean energy.

  

In terms of economic decarbonization, the bill includes tax credits to promote clean electricity and energy storage (ITC).Focus on investment in qualified clean energy power companies from 2022 to 2026, with a tax credit of 30 per cent.

Changjiang Dianxin predicts that in this context, the growth rate of demand for surface power stations in the United States may rise.

In addition, it is worth paying attention toThe bill also increases tax breaks for emerging technologies such as carbon capture and hydrogen production, boosting the profitability of the industry.

Some analysts believe that support for hydrogen production may be the most transformative part of the climate investment bill, especially for green hydrogen, which is produced by clean energy.

Green hydrogen will receive a subsidy of up to $3 per kilogramIt is estimated that this has exceeded 50% of the cost of green hydrogen production.

Dimitry Dayen, a clean energy analyst at investment agency ClearBridge Investments, said the subsidy would change the rules of the game in the industry and "change the cost structure of green hydrogen", according to the media.

Drive the global investment boom up to trillions of dollars

The passage of the largest climate bill in US history has had a significant impact on the global energy landscape.

Along with an EU energy plan called RepowerEUTogether, the two will inject more than $5 trillion in subsidies into the market and set off a multi-trillion-dollar investment boom in the global clean energy sector.

According to the US Energy Agency, global investment in renewable energy will triple to $4 trillion annually by 2030, meeting the broad commitment to net zero carbon emissions by 2050.

According to S&P Global Inc. Global Commodity Insights, renewable energy may account for 60 per cent of total electricity generation in western Europe by 2030, up from the current 35 per cent, and the proportion of renewable energy in the US and China will rise to 38 per cent from 23 per cent and 30 per cent respectively.

Chris Seiple, an energy transformation expert at research firm Wood Mackenzie, believes:

Both the EU plan and US legislation have greatly accelerated the growth of renewable energy.

The agency expectsBy 2035, the total investment that can be unleashed by the US government's $369 billion climate investment alone will reach $1.2 trillion.Given that the government will bear part of the cost or provide a stable and predictable tax credit, investors will be encouraged to invest in renewable energy.

The Breakthrough of "quality": the substitution of Old Energy in Europe and the United States

In addition, Wood Mackenzie also mentionedIn the next stage, renewable energy will achieve a "qualitative" breakthrough in Europe and the United States, that is, the replacement of traditional energy power generation.

Throughout the pattern of the US energy market over the past decade, the rapid development of photovoltaic and wind power has met the growing demand for electricity, but has not significantly reduced the share of other energy sources.

Last year, for example, the United States added total electricity generation to 30GW, which meant that renewable energy accounted for almost all of the growth, but failed to challenge the existing energy structure.

But according to Wood Mackenzie's estimates,By 2030, Europe and the United States will increase the power generation of 80GW through photovoltaic and wind energy every year, which will be able to replace the traditional form of energy generation.