Electric Vehicle Programs in the Bipartisan Infrastructure Bill
December 6, 2021 | M. Moaz Uddin | Policy
In November, President Biden signed the bipartisan Infrastructure Investment and Jobs Act (IIJA), the single largest infrastructure investment in American history. The bill includes significant funding at the federal and state levels for electric vehicles (EVs) and the infrastructure needed to support EV deployment. As state and local governments look to increase transportation electrification, this bill provides investment in several critical areas for deployment.
The infrastructure package, which Congress passed with bipartisan votes in the House and Senate, authorizes $1.2 trillion in spending over five years from FY2022 through FY2026, including $550 billion in new spending. The funding is focused on modernizing the country’s aging infrastructure with investments across the economy, from transportation to the power grid.
- The infrastructure package passed with bipartisan support and represented a historic investment in US infrastructure.
- The bill will provide significant funding for state and local governments to support EV deployment and infrastructure.
- Funding will be distributed to states and local governments through formula allocation and competitive grants.
Funding Breakdown by Federal Agency
The bulk of the new funding will be directed to the US Department of Transportation ($274 billion), followed by the Environmental Protection Agency ($67 billion) and the Department of Energy ($63 billion). Other federal agencies like the Department of Commerce, Department of the Interior, and the Department of Homeland Security will also see their budgets expand.
EV and Charging Infrastructure Funding
EVs and infrastructure are eligible for $30.7 billion of the IIJA funding, which includes funding in the following areas:
- $7.7 billion dedicated to the deployment of EVs and related infrastructure only
- $12.7 billion dedicated to the deployment of all types of clean vehicles and fueling infrastructure, which includes EVs and charging infrastructure
- $10.3 billion for grid and battery-related investments
The bill includes $7.5 billion for EV charging infrastructure, which comes in the form of two programs, the Charging and Refueling Grant Program and the EV Charging Formula Program.
The $2.5 billion Charging and Refueling Infrastructure Grant Program, which will be spearheaded by the Department of Transportation, is aimed at state and local governments, metropolitan planning organizations, and other public-sector entities. It focuses on further investments along the Alternative Fuel Corridors that states have already been working on. This includes a set-aside for Community Grants under the surface transportation reauthorization. The program aims to complement state efforts on publicly accessible alternative fuel charging infrastructure along designated alternative fuel corridors.
The $5 billion EV Charging Formula Program complements the Charging and Refueling Grant program by establishing a National Electric Vehicle Formula Program at the Department of Transportation. The $5 billion dedicated to the program can be used by states for the acquisition and installation of EV infrastructure as well as operations and maintenance. The funding also establishes a Joint Office of Energy and Transportation at the Department of Transportation and the Department of Energy to coordinate work on EV infrastructure.
The IIJA also dedicates $5 billion for clean school buses under the Clean School Bus Program. State and local governments, eligible contractors, and nonprofit school transportation associations will be eligible for the funding. Half of this funding ($2.5 billion) is for electric buses. The other half will be available to all clean alternative fuel technologies, including electric powertrains.
Lastly, the bill appropriates $250 million for an Electric or Low-Emitting Ferry Pilot Program that the Department of Transportation will administer to encourage the uptake of low-emission and electric ferries.
Other EV-Related Provisions
EV-related provisions have also been included in other bills that have been introduced or reauthorized under the IIJA (e.g., Surface Transportation Reauthorization Act of 2021). The $72 billion Surface Transportation Block Grant Program was reauthorized under the Surface Transportation Reauthorization Act of 2021 with new eligibilities that now include electric vehicle charging infrastructure and vehicle-to-grid infrastructure.
The IIJA also adds eligibilities to the $13.2 billion Congestion Mitigation and Air Quality Improvement Program. The funds can now be used for shared micromobility, including bike share and shared scooter systems, as well as for the purchase of medium- or heavy-duty zero emission vehicles and related charging equipment.
Truck electrification efforts at ports will receive $250 million under the new Reducing Truck Emissions at Ports program. The program requires the Department of Transportation to study how ports would benefit from electrification and emerging technologies that reduce emissions from idling trucks.
Other Department of Transportation supplemental appropriations include the Grants for Buses and Bus Facilities Formula Program. The program provides funding to states and transit agencies to replace, rehabilitate, and purchase buses and related equipment and to construct bus-related facilities. The budget for the program has been increased to $10.25 billion. New eligibilities have been added, including purchasing or leasing low- or no-emission buses, as well as acquiring low- or no-emission buses with a leased power source. The new eligibilities also include constructing or leasing facilities and related equipment (including intelligent technology and software) for low- or no-emission buses.
Clean Energy Supply Chains
The IIJA provides $140 million for the Department of Energy to establish a rare earth demonstration facility that will include a full-scale integrated rare earth element extraction and separation facility and refinery. It also supports critical mineral supply chains by giving agencies direction to evaluate and adhere to permitting timelines for critical mineral projects. This will help make the process of producing lithium-ion batteries for EVs cheaper and more efficient.
The IIJA establishes a $3 billion Battery Material Processing Grant Program that will be administered by the Department of Energy’s Office of Fossil Energy and Carbon Management. The funding aims to support demonstration projects and the construction of facilities for processing battery materials.
Another $3 billion is included for Battery Manufacturing and Recycling Grants. The program, which will be administered by the Department of Energy’s Office of Energy Efficiency and Renewable Energy aims to support battery manufacturing and recycling by funding demonstration projects and facility construction.
The IIJA also provides $750 million for a new advanced energy manufacturing and recycling grant program. The program provides funding for the manufacturing of all types of EVs and related technologies, including, but not limited to, components and charging or refueling infrastructure.
How will the funds be distributed?
The IIJA will use both formula allocations of funds and competitive grants to distribute the $1.2 trillion over five years.
Formula Allocation: The formulas dictated by the bill are based on criteria like state population and, in some cases, by specific items and metrics pertinent to the programs being funded. States then decide where to allocate the funds. States can also decide to allocate some of the funding to the county or city governments within their state. The Surface Transportation Block Grant Program is an example of a program that uses the formula allocation.
Competitive Grants: Competitive grants are distributed through a competitive application process. The Reducing Truck Emissions at Ports program is an example of a competitive grant under the IIJA. Programs like the Reducing Truck Emissions at Ports program use the Department of Transportation’s Discretionary Grant Process to award funds.
We will continue to provide updates on EV-related provisions of the infrastructure bill and its impacts as we learn more. To stay updated, follow us on Facebook and Twitter and subscribe to our newsletter.
This blog was originally published by Great Plains Institute.