U.S. House move to eliminate critical provisions for clean energy and pollution reduction would undercut public health, stifle innovation, and hurt global competitiveness
WASHINGTON – Today, the House Energy and Commerce and Ways and Means committees are voting on legislation that would eliminate clean energy programs and undermine clean energy tax credits. These programs and tax credits “are essential to protecting public health and the climate, bolstering domestic energy production, and driving economic growth and global competitiveness,” according to Reece Rushing, U.S. federal policy director at Clean Air Task Force (CATF).
Rushing continued:
“Just a few weeks ago, the Trump administration touted its support for energy innovation and clean technologies like next-generation geothermal, nuclear energy, and carbon capture and storage. But the legislation moving through House committees today would undermine the viability of many projects using these innovative clean energy technologies. Contrary to the administration’s goal of American energy dominance, this legislation cedes the energy future to global competitors like China. Innovative clean energy projects will be abandoned and good-paying jobs lost, while energy bills go up and grid reliability goes down.”
The House Energy and Commerce Committee is voting to eliminate the U.S. Department of Energy’s Loan Programs Office, which is critical to expanding nuclear energy, among other clean technologies, and repeal the Methane Emissions Reduction Program (MERP) to reduce natural gas leaks and waste.
The House Ways and Means Committee is simultaneously voting on legislation that would undermine vital clean energy tax credits, including the zero-emission nuclear power production tax credit (45U), the clean electricity investment and production tax credits (48E and 45Y) that benefit technologies like geothermal, advanced nuclear energy, and fusion energy, the 45Q tax credit that supports carbon capture and storage (CCS) and direct air capture (DAC), the 45V hydrogen production tax credit, and the 45Z clean fuels credit.
“The combination of limiting the transferability provisions and the imposition of unworkable Foreign Entity of Concern provisions included in the legislation will hinder deployment of CCS projects in the U.S., despite the Trump administration’s stated goal to support cutting edge technologies like carbon capture,” said Sam Bowers, U.S. policy manager, Carbon Capture at CATF. “The proposed reduced transferability window will cut the legs out from a key pathway to project financing. Restricting the ability to transfer 45Q credits beyond a narrow two-year window would also limit developers’ ability to extract the full value of 45Q to finance carbon capture projects, risking fewer projects and fewer carbon emissions reductions across the country.”
“Nuclear energy is one of the few zero-emissions sources that can provide reliable, grid-scale electricity and heat. Under the proposed phaseout of key tax credits for existing and new nuclear included in today’s bill, first- and early-of-a-kind projects set for deployment in the early-to-mid 2030s will struggle to qualify for incentives that are necessary for unlocking commercial nuclear projects at scale,” said Victor Ibarra, Jr., senior manager, Advanced Nuclear Energy at CATF. “In a world of growing economic demand, the viability and expansion of new nuclear depends on preserving, extending, and enhancing these federal tax credits.”
“Geothermal projects take years to plan and construct. The proposed phaseout of the investment tax credit (ITC) will functionally exclude any projects not already well underway,” said Terra Rogers, director, Superhot Rock Geothermal at CATF. “Phasing out the ITC now is like shutting down drilling rigs in the early 2000s, right before U.S. shale production surged over 700% and reshaped global energy markets. It’s just too soon to pull support for geothermal technologies that can drive American energy abundance and security. And, without preserving the ITC’s transferability clause, many early-stage developers who lack tax appetite will be unable to access the credit at all. Without these tools, leading geothermal innovators will look abroad to countries actively investing in advanced energy technologies. This would dramatically slow geothermal development in the U.S. and risk forfeiting our leadership and competitive edge in this abundant, secure, and homegrown energy resource.”
“Fusion energy is no longer decades away, with companies already building toward deployment. The proposed phaseout of 48E and 45Y pulls the rug out from under U.S. commercial fusion deployment as many American companies are actively preparing to add watts to the grid in the early-to-mid 2030s – just shy of a few years following the proposed phaseout,” said Sehila Gonzalez, global director, Fusion Energy at CATF. “Policy certainty is essential for driving American innovation, and eliminating these tax credits will harm U.S. competitiveness.”
“Eliminating the clean hydrogen production tax credit (45V) by the end of this year means essentially no facilities – including the hydrogen hubs currently under development – will qualify,” said Rachel Starr, senior U.S. policy manager, Hydrogen at CATF. “This credit, alongside other policy mechanisms, has provided momentum to grow the U.S. hydrogen industry, which contributes to domestic energy security, jobs, competitiveness, and innovation. This legislation would effectively end the U.S. hydrogen market before it’s able to take off and throw away the tens of thousands of high-paying American jobs that the hydrogen economy is projected to create.”
“Changes proposed to the clean fuel production tax credit (45Z) are both ineffective and costly. Extending the lifetime of the credit and also ignoring how increased demand for biofuels affects land use changes and the associated loss of soil carbon around the world is a dishonest way of making conventional biofuels look better than they are – all while increasing federal spending in the long run,” said Jonathan Lewis, global director, Transportation Decarbonization at CATF. “The legislation could have incentivized biofuel producers to install carbon capture systems, for example, but instead would lower the bar on tax credit eligibility. It’s a multi-billion-dollar giveaway to an existing industry, plain and simple.”
“The Methane Emissions Reduction Program (MERP) protects public health and the climate, reduces waste, and supports American leadership on methane pollution reduction,” said Darin Schroeder, methane legal and regulatory director at CATF. “This short-sighted proposal would shelve that leadership, and not only ignores the public’s support for MERP but also the direction the world is going in demanding low methane intensity gas. There’s no reason the U.S. should take this step backward.”
Press Contact
Samantha Sadowski, Senior Communications Manager, U.S., ssadowski@catf.us, +1 202-440-1717
About Clean Air Task Force
Clean Air Task Force (CATF) is a global nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid development and deployment of low-carbon energy and other climate-protecting technologies. With more than 25 years of internationally recognized expertise on climate policy and a fierce commitment to exploring all potential solutions, CATF is a pragmatic, non-ideological advocacy group with the bold ideas needed to address climate change. CATF has offices in Boston, Washington D.C., and Brussels, with staff working virtually around the world. Visit catf.us and follow @cleanaircatf.
