Republicans on the House Ways and Means Committee unveiled legislation Monday that would slash renewable energy and climate tax credits established or enlarged by former President Joe Biden’s Inflation Reduction Act.
The legislation would terminate and modify clean energy and manufacturing tax credits from the IRA, which was passed by Democrats in 2022. The IRA provided hundreds of billions of dollars in tax incentives for clean energy projects, technologies, and incentives. President Donald Trump has vowed to undo many of Biden’s clean energy initiatives.
The text released Monday is one part of the multitrillion-dollar tax-and-spending legislation that Republicans are aiming to pass through budget reconciliation, which allows bills to bypass the filibuster and pass with only a simple majority in the Senate. The legislation’s centerpiece is an extension of the 2017 Trump tax cuts. The final bill is expected to include provisions that eliminate tax credits or cut spending to offset tax cuts.
The legislation terminates the $7,500 tax credits, known as 30D credits, under the IRA for purchasing electric vehicles. The Trump administration has targeted policies that boost the EV industry, saying the Biden administration set a de facto “EV mandate” through these policies. The bill would also terminate the tax credit for businesses purchasing or leasing certain EVs.
The bill would also repeal the Clean Hydrogen Production 45V tax credit, which provides a 10-year incentive for clean hydrogen, by next year.
Republicans asked Ways and Means Chairman Jason Smith (R-MO) to be cautious when cutting certain clean energy tax credits, as many Republican-led states have received funding for projects and manufacturing through the IRA.
Last week, Reps. Mariannette Miller-Meeks (R-IA) and Juan Ciscomani (R-AZ) sent letters to Smith calling for the panel to spare the Clean Electricity Investment, the Clean Electricity Production, and the Advanced Manufacturing Production tax credits.
The Clean Electricity Investment and Production tax credits, also known as technology-neutral credits, offer tax credits for facilities producing and investing in renewable energy. In the proposal released Monday, they are subject to a phase-out period and restrictions related to prohibited foreign entities.
The bill would also phase out the Advanced Manufacturing Production tax credit, which bolsters clean energy manufacturing. The GOP bill would also block any wind energy components from eligibility for the credit after 2027.
Sen. Catherine Cortez Masto (D-NV) spoke ahead of the legislation’s release, saying the proposed bill would “jack up prices on American families.”
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“Dismantling the IRA clean energy tax credits will kill jobs,” Masto said during a press call hosted by Climate Power on Monday. “It will create chaos in the business community, and it will raise energy costs for families already struggling to get by.”
The committee will hold a markup hearing on Tuesday. The House Energy and Commerce Committee will also have a markup on its part of the legislation, which would cancel climate spending established by the Biden administration.
