Thematic Investing

Is the New US regulation favourable for thematic funds?  

March 2023 | 1 minute read | Marketing Communication      

U.S. President Joe Biden recently signed into law The Inflation Reduction Act (IRA), which includes financial support for energy investment and clean energy. The IRA allocates funds for energy, clean energy and climate action, which should help the US achieve around 40% emissions reductions by 2030. In total, the government envisages spending $369 billion, making it the largest climate investment in US history. 

Areas covered by the bill include wind, solar and nuclear energy, energy storage, energy efficiency, electric vehicles, hydrogen and biofuels. The specific form of support will take the form of:

- Tax credits for clean electricity and energy storage facilities to accelerate the transition to clean energy.
- Tax packages and grants for clean fuels and clean energy commercial vehicles leading to reduced emissions from    the freight transport sector
- Supports aimed at improving household energy efficiency, making things like heat pumps, rooftop solar panels,    electric heating and water heaters more affordable
- Financial support for environmentally friendly agricultural practices
- Tax incentives for consumers to buy new and used clean energy vehicles

 The industries that we believe will benefit most from the bill are:  

- Renewable energy production (solar, wind and geothermal)
- Energy storage facilities
- Electric vehicle and battery suppliers
- Agricultural infrastructure
- Sustainable transport fuels (e.g. hydrogen)   

This bill fully responds to the long-term factors we face in infrastructure - growing demand, inadequate supply, supportive regulation, the need for infrastructure spending, and technological innovation. It also builds on other measures such as the European Green Deal, the Infrastructure Investment and Jobs Act (IIJA) and REPowerEU, in terms of policy support climate policy.

In our view, the Inflation Reduction Act will significantly support a wide range of sectors focused on the clean energy transition.

Explore our Thematic Solutions here     

Source: Amundi. Opinions, estimates, views, forecasts, projections and statements are based on market conditions at the date of the publication, constitute our judgment and are subject to change without prior notice. There can be no guarantee they will be met. As of September 2022

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Doc ID: 2438124
Date of publication: 04/10/2022

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