Central Alameda News

WASHINGTON, DC – On April 25, U.S. Representatives Eric Swalwell (CA-14) Guy Reschenthaler (PA-14) reintroduced a bipartisan bill to help secure the domestic supply chain and stimulate the production of rare earth magnets as part of a national initiative to strengthen the economy and combat climate change.

The Rare Earth Magnet Manufacturing Production Tax Credit Act would create a production tax credit for rare earth magnets that are manufactured in the United States; no domestic manufacture of them currently exists. These magnets are used in a wide variety of applications necessary for our modern economy, such as computer hard disks, cell phones, and MRIs. They are also critical for certain clean energy uses.  For example, 93 percent of all-electric vehicles contain a powertrain driven by one of these magnets.

“The timing of this bill is critical,” said Representative Eric Swalwell. “Earlier this month, President Biden proposed a rule that would ensure that two-thirds of new passenger cars and a quarter of new heavy trucks sold in the United States are all-electric by 2032, but if America wants to be a global leader in electric vehicles, we can’t let other nations, like China, control production of vital materials and components. By encouraging domestic production of rare earth magnets, we’re shoring up our supply chain, protecting national security, and combating climate change.”

Rare earth magnets are challenging to make and are not readily available in large quantities. Low-cost, high-quality magnets from China have squeezed the profitability of United States producers, and while industry sources estimate the global rare earth magnet market will nearly double by 2027, China could dominate the market because of low production costs.

The bipartisan bill creates a $20 per kilogram production tax credit for magnets that are manufactured in the United States, or $30 per kilogram for magnets that are both manufactured in the United States and for which all component rare earth material is produced and recycled or reclaimed wholly within the United States. To be eligible, the rare earth magnets may not include any component rare earth magnet material produced in non-allied foreign nations such as China, Iran, North Korea, and Russia.

The bill is endorsed by MP Materials, USA Rare Earths, National Mining Association, and Zero Emission Transportation Association.

“USA Rare Earth applauds the reintroduction of the bipartisan Rare Earth Magnet Manufacturing Production Tax Credit Act. This effort directly encourages domestic rare earth magnet production at a time of surging global demand," said Tom Schneberger, Chief Executive Officer, USA Rare Earth. “Rare earth permanent magnets are critical to the U.S. economy and national security. The tax incentives will help make a re-emerging sector for magnet and metal production competitive with China, where production is currently concentrated.”

“The Rare Earth Magnet Manufacturing Production Tax Credit Act will support domestic manufacturing of rare earth magnets that are essential to the development of electric vehicles and other modern technologies,” said Zero Emission Transportation Association (ZETA’s) Executive Director, Albert Gore. “Despite their importance in the supply chain, companies currently rely exclusively on imports of these components. By endorsing this bill, ZETA notes that developing an American supply chain for these rare earth magnets will ease sourcing challenges and support a robust, domestic EV industry.”

Swalwell and Reschenthaler launched the bipartisan Congressional Critical Materials Caucus in 2021 to help the United States develop the technical expertise and production capabilities to assure a long-term, secure and sustainable supply of energy-critical elements like those used in rare earth magnets.

Original source can be found here