Foreign Entities of Concern

FEOC rules are generally a set of restrictions designed to prevent entities with ties to foreign adversaries from benefiting from U.S. clean energy tax credits. This concept was present in a more limited form under the Inflation Reduction Act (IRA), applying exclusively to the Clean Vehicle Credit under IRC § 30D by making a vehicle ineligible if its battery components or critical minerals were sourced from a FEOC. Laubenstein noted the IRA’s narrower scope rendered the FEOC rules “kind of an afterthought” for the broader energy industry.

The OBBB, however, expanded these restrictions to a host of new and modified energy credits, including the clean electricity production credit under IRC § 45Y, the investment credit under IRC § 48E, and the advanced manufacturing production credit under IRC § 45X. This expansion brought the issue of foreign sourcing “front and center” for the entire clean energy industry.

To dig deeper, visit the original article on the Thomson Reuters blog.