By Valerie Volcovici
WASHINGTON (Reuters) – U.S. House lawmakers laid out plans on Sunday to phase out clean energy tax credits, slash spending on electric vehicles and renewable energy, and claw back other climate-related funds as part of the Republicans’ attempt to pass a multi-trillion-dollar budget in line with President Donald Trump’s agenda.
The House Committee on Energy and Commerce laid out a proposal, which will be voted on Tuesday, that would raise $6.5 billion from the repeal of climate-related parts of the Biden administration’s massive Inflation Reduction Act legislation.
The House Ways and Means panel, meanwhile, proposed the phase-out or cancellation of several lucrative tax credits from former President Joe Biden’s signature climate law, according to a draft reviewed by Reuters on Monday.
That proposal, for example, would end a consumer-facing credit for electric vehicle purchases by the end of this year instead of next decade, phase out various key clean energy tax credits for expiry by 2031, and cut short a big hydrogen production tax credit, according to the draft.
Trump campaigned on a promise to end government support for EVs and unwind Biden’s sweeping efforts to combat global warming, arguing that the measures were unnecessary and harmful to automakers, drillers and miners.
He is hoping that his first budget since reclaiming office will make good on his promises to slash the federal bureaucracy.
The House energy panel’s plan would repeal major Biden administration Environmental Protection Agency rules such as one that would cut allowed emissions for light- and medium-duty vehicles starting with model year 2027.
It also includes measures aimed at speeding up permitting for liquified natural gas exports and would direct more than $1.5 billion for the Energy Department to refill the Strategic Petroleum Reserve.
“This bill would claw back money headed for green boondoggles through ‘environmental and climate justice block grants’ and other spending mechanisms through the Environmental Protection Agency and Energy Department,” House energy panel chair Brett Guthrie wrote in a Wall Street Journal op-ed that announced the proposal on Sunday.
The bill would also rescind the remaining unspent money from the $27 billion greenhouse gas reduction fund, which has been a key target of EPA Administrator Lee Zeldin, who claimed that the money was being spent fraudulently in subsequent court cases.
It would also take back unspent funding from nine IRA renewable energy and electrification subsidy programs, such as tribal energy loan guarantees and transmission facility financing, and remove unspent IRA funds from the Energy Department’s loan office.
It would rescind unspent funding made available by the IRA for methane reduction at oil and gas facilities and for greenhouse gas reporting, funds to reduce air emissions at ports and manufacturing facilities and schools as well as funds for low-income communities to access clean energy.
“Their 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 environmental group Evergreen Action Executive Director Lena Moffitt.
The proposed cuts from the tax committee, meanwhile, include a rapid phase-out of the “technology neutral” 45Y tax credits for wind, solar and other clean energy sources. The credits, which had no expiration previously, would sunset in 2031.
Transferability, a provision of the 2022 Inflation Reduction Act that had allowed developers to sell their tax credits and use the funds to finance their projects’ construction, would also be eliminated, according to the proposed draft.
(Reporting by Valerie Volcovici and Jarrett Renshaw; Writing by Richard Valdmanis; Editing by Andrea Ricci)
