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May 3, 2024

US IRS releases guidance on second round of allocations for IRC Section 48C credits for qualifying advanced energy projects

  • The application process is the same as for Round 1.
  • The application portal for concept papers is open from May 22, 2024 until June 21, 2024.
  • The application portal will open for full application in Summer 2024 and will stay open for 50 calendar days.
  • IRS allocation decisions for Round 2 will be issued no later than January 15, 2025.

The dates for submitting concept papers has been updated.

In Notice 2024-36 (Notice), the IRS and Treasury Department released guidance on Round 2 of the IRC Section 48C(e) program to allocate the remaining $6b in investments in eligible qualifying advanced energy projects, with $2.5 going to projects located in energy communities census tracts. The IRS said at the close of Round 2 it will determine whether any credits are unallocated and whether another allocation round is needed.


IRC Section 48C, which was extended by the Inflation Reduction Act (IRA), provides an investment tax credit for advanced energy projects. The IRC Section 48C credit has a base amount of 6% (which can go up to 30%, if the prevailing wage and apprenticeship requirements are met (see Tax Alert 2022-1832)).

Notice 2023-18 established the IRC Section 48C(e) program to allocate the IRC Section 48C credits (see Tax Alert 2023-0308) and further guidance was released in Notice 2023-44 (see Tax Alert 2023-1012).

An advanced energy project is defined as one that:

  • Re-equips, expands or establishes an industrial or manufacturing facility for producing or recycling specified advanced energy property
  • Retrofits any industrial or manufacturing facility with equipment designed to reduce greenhouse gas emissions by at least 20% by installing (1) low- or zero-carbon process heat systems; (2) carbon capture, transport, utilization and storage systems; (3) equipment for energy efficiency and reducing waste from industrial processes; or (4) any other industrial technology designed to reduce greenhouse gas emissions


  • Re-equips, expands or establishes an industrial facility for processing, refining or recycling critical materials (as defined in Section 7002(a) of the Energy Act of 2020)

Round 2 guidance

The Notice said Round 2 will be conducted in the same manner as Round 1. Failure to receive an allocation in Round 1 does not preclude an applicant from applying in Round 2. The details of the application process are listed in the previous notices and updated Appendices A and B and C. For details on the application process, see Tax Alert 2023-1012.

The application process consists of two steps — first submitting a concept paper and then submitting the complete IRC Section 48C(e) program application to the Department of Energy (DOE).

For the concept papers, the IRS announced that the DOE opened up the Qualified Advanced Energy Project Credit Program Applicant Portal (48C Portal) on May 22, 2024, and concept papers can be submitted for 30 days after the portal opens until June 21, 5 PM EST.

For the IRC Section 48C(e) program applications, the portal will open to accept the full application submissions in the summer of 2024. The exact date the portal will open and close will be listed on the 48C portal at a later date, according to the Notice. Once the portal opens to accept the IRC Section 48C(e) program application, it must be submitted within 50 days.

The IRS will make its allocation decisions by January 15, 2025.

Notable updates for Round 2

Most changes for the second round of the Qualifying Advanced Energy Projects program (Appendix A) relate to clarifying terminology and examples of eligible and ineligible projects under each category. These changes include: (1) clarifying that projects deploying eligible types of technologies may be eligible under the "Other Advanced Energy Property" or "Industrial Decarbonization" project categories as opposed to clean energy manufacturing and recycling; and (2) expanding certain categories to include new technologies, such as adding alkaline cells, proton-exchange membranes and solid-oxide electrolysis cells to the examples of eligible electrolyzer property. Additionally, some fuels, chemicals and materials have been added to the examples of eligible property for the "Other Advanced Energy Properties" category. These additions include facilities manufacturing or recycling energy-intensive materials with a substantially lower carbon intensity when compared to industry benchmarks, including materials such as low-carbon cement, low-carbon iron and steel, low-carbon aluminum, low-carbon chemicals and low-carbon glass.

In addition, the "Greenhouse Gas Emission Reduction Projects" category from the 2023 round has been renamed "Industrial Decarbonization Projects." The Notice clarifies that this category focuses on energy-efficient retrofit projects at existing facilities. The required facility-level emissions reductions remain at a minimum of 20% of the facility's (or sub-unit) baseline emissions.

Finally, the Notice adds certain definitions to the glossary, including: Registered Apprenticeship Program, Collective Bargaining Agreement, Project Labor Agreement and Community Benefits Agreement. The Notice also expands the priority areas for the 2024 round across each category of eligible projects.


The timing for the 2024 round of funding under IRC Section 48C(e) has been accelerated and applicants will only have 30 days to prepare and submit their concept papers once the allocation round opens. As such, taxpayers should begin the process of evaluating their investment plans for potentially eligible projects before the application period opens. Given the expansion of many of the project categories and the inclusion of certain deployment projects, it is expected that many industries, technologies or materials that were not eligible to apply under the 2023 round might be eligible for the 2024 round. In reviewing potential projects, taxpayers should pay close attention to the priority areas as well as the examples of eligible and ineligible projects so they apply under the correct category.

Additionally, the inclusion of deployment projects may allow for taxpayers to receive an allocation for the deployment of certain technologies even if those technologies would not result in a GHG reduction sufficient to apply under the "Industrial Decarbonization Projects" category. Collectively, the expansion of and clarifications related to eligible projects for each category, along with the expansion of the priority areas, will likely result in a highly competitive application round as the IRS and DOE look to allocate the remaining $6 billion in funding available under IRC Section 48C.

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Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor