House Republicans have unveiled sweeping proposals to dismantle several cornerstone climate initiatives enacted under President Joe Biden, aligning their efforts with the budgetary goals of former President Donald Trump.

Rolling back the Inflation Reduction Act. Central to the plan is a rollback of major provisions from the Inflation Reduction Act (IRA), a landmark climate and energy law passed in 2022. According to proposals introduced by the House Committee on Energy and Commerce and the House Ways and Means Committee, these changes would eliminate or phase out tax credits and subsidies for electric vehicles (EVs), renewable energy sources, and other clean technology.

The proposed repeal would generate an estimated $6.5 billion by eliminating climate-related funding. This includes scrapping tax incentives for EV purchases, home energy efficiency improvements, and broad clean energy development credits such as the “technology neutral” 45Y provision. This particular credit, which previously had no expiration, would be gradually phased down until fully eliminated by 2032.

Another key target is the IRA’s credit transferability feature—an innovation that had allowed clean energy developers to sell their tax credits to raise upfront capital for project construction. Under the new plan, that mechanism would be abolished.

Targeted exceptions and strategic retentions. While most clean energy subsidies are slated for phase-out, some climate incentives favored by Republican interests are set to remain. Credits for carbon capture (45Q), direct air capture, and sustainable aviation fuels would be largely preserved, with some restrictions on foreign ownership. These technologies are particularly popular within the fossil fuel and biofuel sectors.

Notably, several House and Senate Republicans—particularly those from states that have benefited significantly from IRA-related investments—have lobbied to preserve selected credits.

EPA rules and climate fund reversals. Beyond tax code revisions, the House energy panel’s legislation proposes revoking a suite of Environmental Protection Agency (EPA) rules. Chief among them is a regulation designed to limit vehicle emissions beginning with model year 2027. Additional measures include expedited permitting for liquefied natural gas (LNG) exports and a $1.5 billion allocation to replenish the Strategic Petroleum Reserve. The bill also calls for rescinding unspent funds from the IRA, including:

• The $27 billion Greenhouse Gas Reduction Fund
• Various tribal energy and transmission financing programs
• Methane emissions reduction initiatives
• Clean energy access programs for low-income communities
• Emissions reduction funds for ports, factories, and schools

House Energy Chair Brett Guthrie defended the legislation in a Wall Street Journal op-ed, framing it as a crackdown on “green boondoggles” and wasteful government spending.

Clean energy advocates sound the alarm. Environmental groups and clean energy proponents have expressed concern over the proposed legislation. While some acknowledged that the phase-outs were not as severe as feared, they nonetheless warned of significant setbacks for the U.S. clean energy transition.

“This proposal guts investments that are cutting energy costs, powering a domestic manufacturing boom, and delivering essential healthcare to the communities that need it most,” said Lena Moffitt, Executive Director of Evergreen Action.

Source: Reuters

For the original story, visit: https://www.reuters.com/sustainability/climate-energy/us-house-targets-big-climate-clean-energy-rollbacks-budget-proposal-2025-05-12/