Researchers testing battery cells with silicon oxide at a Daejoo factory in South Korea. — Bloomberg
SEOUL: South Korean battery and energy firms that have already built production sites in the United States are expected to receive tax credits from the US Inflation Reduction Act (IRA), South Korea’s Trade, Industry and Energy Ministry says.
The US Department of Treasury earlier unveiled proposed guidelines for manufacturers looking to receive consumer tax credits for making eco-friendly energy components such as batteries for electric vehicles and solar panels.
The incentive, named the Section 45X Advanced Manufacturing Production Credit of the IRA, aimed at boosting domestic manufacturing and encouraging more use of clean energy to reduce carbon emissions, is available for products sold after Dec 31, 2022.
The tax credits will be effective through 2032.
The Trade Ministry said the guidelines resolve uncertainties for companies that produce advanced manufacturing items in the United States because they include details on the definitions of products and application circumstances.
It added that South Korean firms in the battery, solar panel and wind sectors will greatly benefit from the tax credits.
Section 45X consists of a US$35 tax credit per one kilowatt-hour of a battery cell. — The Korea Herald/ANN
