Nasdaq ESG Solutions has partnered with sustainable financial technology company Crux to help clients advance sustainability objectives and achieve cost savings through clean energy transferable tax credits enabled by the Inflation Reduction Act (IRA). This collaboration aims to provide clients with access to Crux’s platform and expertise to better navigate the emerging market for these tax credits. The IRA, passed by the U.S. in 2022, allocates nearly $370 billion for renewable energy and industrial decarbonization solutions, utilizing mechanisms such as tax credits, loans, grants, and subsidies. For the first time, the IRA made these tax credits transferable, allowing clean energy developers and manufacturers to sell them to third parties. This approach offers a new way to fund energy transition projects while helping companies reduce their federal tax liabilities. Crux, a New York-based sustainable finance platform launched in 2023, provides an ecosystem for developers, tax credit buyers, and financial institutions to transact and manage these transferable tax credits. The platform aims to streamline the process for parties involved in the clean energy market, facilitating the trading of credits created under the IRA.
According to Crux, the market for transferable tax credits is expected to more than double by the end of 2024, reaching between $20 billion and $25 billion, with average pricing higher than in 2023. Crux’s Co-Founder and CEO, Alfred Johnson, highlighted the potential impact of transferable tax credits in a LinkedIn post, stating that they represent the “largest ever opportunity for companies to invest directly in clean energy and domestic manufacturing.” He noted that companies are increasingly viewing these credits as a key element of their sustainability strategies and are turning to advisors like Nasdaq for guidance on utilizing them effectively. Through the partnership, Nasdaq clients will gain access to Crux’s platform, which connects them with a network of clean energy project developers and manufacturers. Clients will also benefit from Crux’s understanding of the credit transfer market, helping them understand how these credits can improve their sustainability performance and reduce liabilities. In its blog post announcing the merger, Nasdaq highlighted the importance of this new market opportunity, noting that more than $12 billion in debt is now available. Nasdaq ESG Solutions and Crux are here to help clients, along with their legal and tax advisors, understand how they can use these transition tax credits to support sustainability strategies and reduce government tax liabilities. This ratio reflects the increased focus on sustainable finance and the increase in tax credits that can be transferred to promote investments in clean energy.