How would Trump’s ‘Big Beautiful Bill’ reverse clean energy tax incentives and reshape the US climate agenda?

WASHINGTON, July 4 — With the passage of the Republican-led “One Big Beautiful Bill,” President Donald Trump has taken a major step toward dismantling President Joe Biden’s landmark climate legislation, fundamentally altering the course of US climate and energy policy.

Clean Energy Tax Credits Slashed

Biden’s 2022 Inflation Reduction Act (IRA) marked the largest climate investment in US history, dedicating roughly $370 billion to clean energy initiatives—including tax credits for renewables, energy-efficient appliances, and other green technologies. Much of that funding is now set to be repealed.

“These incentives were essential in driving clean energy projects across the country,” said Jean Su, a senior attorney at the Center for Biological Diversity. “With them gone, many of these projects are now in jeopardy.”

She warned that the rollback comes at a time of soaring energy demand—driven in part by AI data centers—which may now be met with fossil fuels instead, increasing greenhouse gas emissions and pollution.

Critics argue that leaning back into fossil fuels risks repeating past market instability, like that seen during the Ukraine conflict. Su also noted that utilities often profit more from building costly fossil fuel infrastructure, which could lead to higher electricity rates for consumers.

Trump, who reportedly received around $445 million in campaign support from the oil and gas sector, has championed the move as a win against what he calls the “Green New Scam.”

According to tax attorney Doug Jones of Husch Blackwell, wind and solar energy were among the hardest hit. New eligibility rules mean projects must be operational by 2027 or start construction within 12 months of the bill’s signing to still receive credits.

“The project pipeline will dry up,” said Jones. “Without tax credits, financing these projects becomes incredibly difficult.” He noted that many major companies who previously bought credits from renewable developers to meet sustainability goals are now scrambling to reassess.

Home and commercial energy-efficiency tax credits will now expire on June 30, 2026. However, the bill leaves some incentives intact for nuclear, geothermal, hydrogen, and carbon capture technologies.

Electric Vehicles Take a Major Blow

Electric vehicles (EVs) were particularly affected. Tax credits for both new and used EV purchases will sunset this year, and incentives for EV charging infrastructure will end by mid-2026.

Albert Gore of the Zero Emission Transportation Project called the bill a strategic misstep, saying it abandons America's ambition to compete in the global EV market, effectively giving China the upper hand in battery and mineral supply chains.

A particularly controversial measure eliminates penalties for automakers who fail to meet fuel economy standards. Dan Becker of the Center for Biological Diversity criticized the move: “It’s like telling a student they won’t be penalized for cheating—what outcome do you expect?”

Fossil Fuels Still Protected

Ironically, many IRA provisions that benefit fossil fuel companies remain untouched. These include billions in subsidies and offshore drilling leases in the Gulf of Mexico.

The new bill even introduces a tax credit for coal used in steel production, while eliminating a program aimed at reducing methane emissions and waste in the oil and gas sector.

It also opens up vast areas of public land for drilling, mining, and logging—including the Arctic National Wildlife Refuge, a region long protected due to its ecological sensitivity.

Despite earlier hopes that job growth and investment under the IRA—especially in Republican-led states—might shield it from repeal, those expectations have largely fallen short. Still, climate advocates managed to secure one small victory: the removal of a last-minute proposal that would have imposed a crippling new tax on wind and solar projects. — AFP