Following months of negotiation over Congressional Democrats' agenda, and with persistent advocacy from the port industry, the Senate passed the long-awaited Inflation Reduction Act, the budget reconciliation bill that includes $3 billion over five years to establish a new grant program to install electrified equipment and reduce emission at ports.
The inclusion of electrification in this bill is an enormous win for the American port industry and U.S. supply chains. It provides a brand-new source of funding for ports seeking to purchase electrified or alternative-fueled cargo-handling equipment, shore power systems, microgrids for energy resiliency, electric grid infrastructure, and more. This pivotal investment of Federal capital will make U.S. ports more resilient to extreme weather events like heat waves and storms, including through the construction of microgrids. The creation of a Federal grant program to reduce emissions and electrify ports demonstrates the Federal Government's unprecedented attention to port infrastructure needs.
The $3 billion will go a long way toward establishing innovative projects at ports to boost resiliency, expand cargo-handling capacity, and reduce emissions, but further investment will still be necessary. A survey of AAPA's members found that American ports have $50 billion worth of green infrastructure projects ready to build over the next decade, but there is a gap in funding. Nevertheless, this Federal grant program will signal to equipment manufacturers and private investors that this electrification technology at ports will be ubiquitous in the coming years. AAPA will continue to work with government and industry to secure the necessary resources to modernize ports and the supply chain.
The Inflation Reduction Act contains other provisions ports can utilize, including a bevy of tax credits for clean energy solutions, such as offshore wind and hydrogen energy, and a $60 million allocation to the Diesel Emissions Reduction Act grant program, which is intended specifically for goods movement. Another $2.6 billion is allocated to the National Oceanic and Atmospheric Administration (NOAA) for the protection of marine habitats and resilience for coastal communities from extreme storms. Finally, $1 billion is provided for the replacement of ‘class 6 or 7’ heavy-duty vehicles with zero-emission alternatives.
In August 2021, AAPA sent a letter to Congressional Leadership, encouraging them to include port electrification in the next reconciliation package. Since then, AAPA has continued engaging with Congress on this program, including directly with the offices of Senators Schumer and Manchin, through briefings with the Congressional PORTS Caucus, and in dozens of meetings conducted by AAPA members during the Legislative Summit: “Now We Build!” in March. This legislation also aligns with the launch of the AAPA Port Opportunities with Energy, Resilience, and Sustainability (POWERS) Program, impelling the energy and environmental aspects of AAPA's Federal advocacy.