A growing number of House Republicans are asking federal budget planners to protect Biden-era tax incentives for clean and renewable energy projects from repeal by Congress and freezes by the Trump administration.
In a letter on Sunday, 21 Republican members of the House warned of economic disruptions and loss of investments if the tax credits from the 2022 Inflation Reduction Act were slashed.
The letter came as the House Ways and Means Committee is expected to begin meeting behind closed doors to decide precisely which budget cuts to make to pay for Trump’s big tax cut bill, a measure expected to be passed through what is known as a budget reconciliation process. It is the same process that was used to pass the IRA, and requires only a simple majority in the Senate for passage. At the same time, Congress is racing to pass a bill to cover the current fiscal year and avoid a government shutdown before a March 14 deadline.
“Both our constituencies and the energy industry alike remain concerned about disruptive changes to our nation’s energy tax structure,” the Republican lawmakers wrote.
We’re hiring!
Please take a look at the new openings in our newsroom.
See jobs
Incentives offered under the IRA include tax discounts for a wide range of new energy fields, from electric vehicles and ethanol fuels to wind and solar farms, hydrogen plants and carbon capture projects. Many of the incentives were enacted for a 10-year period, the Republicans’ letter said, allowing developers to incorporate them into plans for major projects, “all of which would be jeopardized by premature credit phase outs or additional restrictive mechanisms.”
But not every Republican signatory supports every energy tax credit offered under the IRA. Many remain opposed to programs supporting electric vehicles in particular.
When reached earlier this year about whether he continued to support preservation of at least some of the energy tax incentives in the IRA, Rep. Don Bacon (R-Neb.) made clear that he particularly was concerned about the provisions that benefited his state’s farm economy.
Nebraska is second only to neighboring Iowa in ethanol production capacity, and it also is one of the nation’s leading wind energy states, with many wind developments benefiting farmers who have signed agreements to have turbines on their land. The IRA extended or increased certain tax credits for wind projects and ethanol production, and also provided new opportunities for the ethanol industry to generate tax savings through installation of carbon capture, biogas or energy efficiency upgrades.
“The answer is yes, we should preserve tax credits for biofuels and for energy generation,” Bacon said in an email. “Folks who have invested in IRA projects should be grandfathered in regardless.”
But he said he did not support continuation of the IRA’s incentives for electric vehicles.
“There’s no support for the EV mandates and tax credits,” he wrote. “Hybrids are the way to go. EVs really aren’t popular in the Midwest.”
On Monday, the conservative environmental group Citizens for Responsible Energy Solutions issued a statement in support of the Republican lawmakers who are backing the IRA credits.
“Energy tax credits have already resulted in billions of dollars in private investments, spurring economic development and creating new, high-paying jobs in communities across the country,” said CRES President Heather Reams. “Maintaining these tax credits will help accelerate energy dominance.”
The letter means that even more House Republicans have joined the call to maintain at least some of the energy tax incentives of the IRA. Last August, some of the same members wrote a similar letter to House Speaker Mike Johnson of Louisiana. Fourteen of those members remain in Congress, and they now have been joined by seven more Republicans, significant because Republicans have a historically narrow majority in the House. Any Republicans who hold firm against repeal of energy tax cuts would be joined by the vast majority of Democrats.
The tug-of-war over the energy incentives is bound to be complex, however, because there is at least some Democratic support for repeal of the large IRA tax incentives for carbon capture technology. Rep. Ro Khanna (D-Calif.) joined with Rep. Scott Perry (R-Pa.) in introducing legislation Monday to repeal those tax breaks, which one study said could cost taxpayers $800 billion over the next 18 years, with much of the benefit going to the fossil fuel industry.
Meanwhile, many Republican interests still oppose the energy tax credits across the board. The Heritage Foundation’s Project 2025, widely seen as a blueprint for the Trump administration, seeks a full repeal of IRA tax credits, calling them distortions of the free market. Elon Musk, the billionaire donor who has been given authority to seek out steep budget cuts across government, has voiced support for the idea of eliminating all government subsidies.
Last month, a member of Texas’ oil and gas regulatory commission, Wayne Christian, wrote an op-ed for the website World Oil that argued for an end to the tax credits.
“It is time to stop playing defense against radical environmentalists and go on offense: end all energy subsidies, eliminate market distortions, and let innovation and competition determine the future,” wrote Christian, a former banker and a strong supporter of the oil and gas sector. “The bottom line is that America’s energy policy shouldn’t be tipping the scales, it should be a hands-off approach and meritorious by having consumers reward success.”
According to a May 2023 report from the nonprofit Climate Scorecard, U.S. oil companies receive $20 billion a year in direct and indirect federal government subsidies. The Organization for Economic Cooperation and Development puts the figure for all U.S. fossil fuel subsidies at about $17.8 billion per year.
About This Story
Perhaps you noticed: This story, like all the news we publish, is free to read. That’s because Inside Climate News is a 501c3 nonprofit organization. We do not charge a subscription fee, lock our news behind a paywall, or clutter our website with ads. We make our news on climate and the environment freely available to you and anyone who wants it.
That’s not all. We also share our news for free with scores of other media organizations around the country. Many of them can’t afford to do environmental journalism of their own. We’ve built bureaus from coast to coast to report local stories, collaborate with local newsrooms and co-publish articles so that this vital work is shared as widely as possible.
Two of us launched ICN in 2007. Six years later we earned a Pulitzer Prize for National Reporting, and now we run the oldest and largest dedicated climate newsroom in the nation. We tell the story in all its complexity. We hold polluters accountable. We expose environmental injustice. We debunk misinformation. We scrutinize solutions and inspire action.
Donations from readers like you fund every aspect of what we do. If you don’t already, will you support our ongoing work, our reporting on the biggest crisis facing our planet, and help us reach even more readers in more places?
Please take a moment to make a tax-deductible donation. Every one of them makes a difference.
Thank you,
Dylan Baddour
Reporter, Austin
Dylan Baddour covers the energy sector and environmental justice in Texas. Born in Houston, he’s worked the business desk at the Houston Chronicle, covered the U.S.-Mexico border for international outlets and reported for several years from Colombia for media like The Washington Post, BBC News and The Atlantic. He also spent two years investigating armed groups in Latin America for the global security department at Facebook before returning to Texas journalism. Baddour holds bachelor’s degrees in journalism and Latin American studies from the University of Texas at Austin. He has lived in Argentina, Kazakhstan and Colombia and speaks fluent Spanish.
Marianne Lavelle
Bureau Chief, Washington, D.C.
Marianne Lavelle is the Washington, D.C. bureau chief for Inside Climate News. She has covered environment, science, law, and business in Washington, D.C. for more than two decades. She has won the Polk Award, the Investigative Editors and Reporters Award, and numerous other honors. Lavelle spent four years as online energy news editor and writer at National Geographic. She spearheaded a project on climate lobbying for the nonprofit journalism organization, the Center for Public Integrity. She also has worked at U.S. News and World Report magazine and The National Law Journal. While there, she led the award-winning 1992 investigation, “Unequal Protection,” on the disparity in environmental law enforcement against polluters in minority and white communities. Lavelle received her master’s degree from Columbia University Graduate School of Journalism, and is a graduate of Villanova University.
