Inflation Reduction Act 2022: Sec. 13502 Advanced Manufacturing Production Credit

Country / jurisdiction: United States · Year: 2022 · Status: In force · Level: National · Type: Voluntary

The Inflation Reduction Act (IRA) of 2022, which seeks to reduce domestic inflation – notably brought by the global energy crisis – whilst tackling climate change, establishes a New Advanced Manufacturing Production Credit to incentivise the domestic production of various components, including applicable critical minerals used in renewable energy generation, storage and related manufacturing.

Under the regulation, a tax credit equal to 10% of the cost of production is awarded to the producers of the following applicable critical minerals used in such manufacturing: aluminium, antimony, barite, beryllium, cerium, caesium, chromium, cobalt, dysprosium, europium, fluorspar, gadolinium, germanium, graphite, indium, lithium, manganese, neodymium, nickel, niobium, tellurium, tin, tungsten, vanadium, yttrium and others. Eligible minerals must be produced in the United States.

The credit for critical mineral production begins in 2023 and is exempted from the phaseout that is applied to other eligible components beginning in 2030.

As of July 2025, the credit was amended to implement a phase out period for critical minerals production as part of the One Big Beautiful Bill Act . The credit will be reduced:

By 25% for critical minerals produced in 2031

By 50% for critical minerals produced in 2032

By 75% for critical minerals produced in 2033; and

Eliminated for 2034 and beyond.

Producers of critical minerals will be required to limit the sourcing of goods from "prohibited foreign entities." Tax credits for wind energy components will not apply to any components produced and sold after 2027.

Additionally, metallurgical coal was added as an “applicable critical mineral” and will receive a production credit through 2029.

Official source: https://www.govinfo.gov/content/pkg/BILLS-117hr5376enr/pdf/BILLS-117hr5376enr.pdf