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Senators Propose Bill to Spur Offshore Wind Manufacturing and Vessels

legislation to spur manufacturing and vessels for offshore wind
Massachusetts is pushing forward with the Vineland project (file photo)

Published Aug 12, 2021 8:37 PM by The Maritime Executive

U.S. Senators representing Massachusetts and New Jersey are proposing legislation that they say will help to spur the domestic manufacturing and deployment of offshore wind projects. Saying that to date the offshore wind supply chain is concentrated in Europe, China, and South Korea, the senators from two of the states expected to be the first to launch large scale offshore wind farms are calling for investment tax credits and a production tax credit for qualified offshore wind components and dedicated offshore wind vessels.

Calling their proposed legislation the Offshore Wind American Manufacturing Act, they said it would prioritize American workers and require prevailing wages for laborers involved in the construction and expansion of qualified manufacturing facilities or the manufacture of qualified offshore wind products. Many states have already proposed massive programs to create wind ports and manufacturing sites as part of a means of rehabilitating ports and supporting the birth of the offshore wind industry. In addition, the U.S. has already said that vessels involved in the wind sector would be subject to the Jones Act in a similar fashion to how the cabotage laws were applied to the offshore oil and gas industry.

“Offshore wind is a booming market, but without effective manufacturing policy, American workers will be left behind,” said Senator Edward Markey of Massachusetts. “The Offshore Wind American Manufacturing Act helps ensure that each offshore wind turbine deployed in the United States over the next 10 years is made in America.”

The proposal calls for the creation of a 30 percent investment tax credit for qualified facilities that manufacture offshore wind components and subcomponents that would reduce the high capital costs required to build, upgrade, or retool a facility. The investment tax credit would be complemented by a new production tax credit that ranges from two to five cents per watt multiplied by the total rated capacity of the turbine. The production tax credit varies by components including blades, towers, nacelles, generators, gearboxes, foundations, and related vessels.

“Federal investment in offshore wind manufacturing is good for the environment, good for the economy, and good for the American people,” said co-sponsor of the proposal Senator Robert Menendez of New Jersey. “It will create good-paying jobs, expand the nation’s manufacturing base, and keep the U.S. on the cutting edge of new, green technologies, ensuring our nation’s economic competitiveness in the face of emerging environmental challenges.”

The full investment tax credit would be available until December 31, 2028, and phase out annually afterward. The production tax credit would be available until December 31, 2030. 

In introducing the proposal, the senators said that the offshore wind industry is a critical part of the U.S. efforts to combat climate change and create energy independence. They are confident that their proposal would help create thousands of manufacturing jobs and ensure that the United States meets President Joe Biden’s offshore wind goal of 30 GW by 2030.