S 2444119th CongressIn Committee

End Polluter Welfare Act of 2025

Introduced: Jul 24, 2025

Sponsor: Sen. Sanders, Bernard [I-VT] (I-Vermont)

Economy & TaxesEnvironment & Climate

Standard Summary

Comprehensive overview in 1-2 paragraphs

The End Polluter Welfare Act of 2025 is a comprehensive package to eliminate what the sponsors call “polluter welfare” for fossil fuels. It pursues this by: (1) repealing or tightening a wide set of fossil-fuel subsidies and favorable tax provisions, (2) raising or removing royalty relief and altering royalty rates on fossil-fuel leases (including offshore) and creating new taxes related to fossil-fuel production, (3) ending the federal government’s financial support for fossil fuels through multiple agencies and programs (including DOE offices, ARPA-E, USDA, and international finance), and (4) eliminating several existing fossil-fuel tax expenditures and credit programs in the Internal Revenue Code. Taken together, the bill would substantially reduce federal government support for fossil-fuel production and investment, while increasing certain costs and liabilities for fossil-fuel developers. The net effect, if enacted, would be a major shift toward limiting fossil-fuel activity and accelerating a transition toward other energy sources. What this means in practice: the government would no longer provide many tax breaks or funding favorable to oil, gas, coal, or related activities; offshore royalties would be higher; liability rules for offshore spills would tighten; international finance would be restricted from financing fossil projects; key research and loan programs would be redirected away from fossil fuels; and new or higher taxes would apply to fossil-fuel production, including potential severance taxes in the Gulf of Mexico. The bill also would repeal or scale back several existing fossil-fuel incentives in the tax code, with wide-ranging effects on fossil-fuel companies, workers, suppliers, and related industries.

Key Points

1Elimination of fossil-fuel subsidies and tax incentives across multiple programs and agencies.
2- Repeals or terminates numerous tax provisions and credits related to fossil fuels (e.g., enhanced oil recovery credits, marginal-well credits, depletion rules, and other deductions related to fossil-fuel activities).
3- Reforms or terminates several depreciation, amortization, and tax treatment provisions that currently favor fossil-fuel investments.
4Increased costs and liability for fossil-fuel production, especially offshore.
5- Increases offshore royalty rates (to 18.75% in several offshore contexts) and eliminates royalty relief.
6- Expands liability for offshore facilities and pipelines (tightens liability rules for certain onshore/offshore facilities and adds coverage for bitumen-related transport).
7Reduction or elimination of federal funding and support for fossil fuels.
8- Terminates the Office of Fossil Energy and Carbon Management and rescinds unobligated funds; prohibits DOE loan programs from funding fossil-fuel projects (with limited hydrogen exception).
9- Prohibits U.S. international finance institutions (e.g., DFC, Ex-Im Bank etc.) from financing fossil-fuel projects and restricts future funding unless the institution agrees not to support fossil fuels.
10- Ends USDA support for carbon capture and storage systems and blocks ARPA-E from funding projects that support fossil fuels.
11- Prohibits certain rural utility loan guarantees and transportation grants/loans that would directly support fossil-fuel transport or infrastructure.
12New or expanded fossil-fuel-related taxes and payments.
13- Creates a new Gulf of Mexico severance-type tax on crude oil and natural gas removed from the Outer Continental Shelf, with credits for royalties paid, capped to the amount of the tax due.
14- Expands the Oil Spill Liability Trust Fund financing rate and applies it to oil and related products after 2025.
15- Broadens the definition of crude oil and synthetic crude oil for tax purposes, and allows regulatory authority to classify additional fuel feedstocks as taxable under certain conditions.
16Repeal or narrowing of other fossil-fuel favorable rules.
17- Repeals or tightens foreign tax credit rules applicable to fossil-fuel taxpayers receiving specific benefits.
18- Ends certain ownership/participation exemptions under CERCLA for certain lenders.
19- Repeals or restricts tax-expenditure provisions tied to fossil-fuel research, development, and investment.

Impact Areas

Primary affected group/area- Fossil-fuel producers, refiners, miners, and related companies (oil, gas, coal) and their financiers; offshore operators; fossil-fuel project developers.Secondary affected group/area- Taxpayers and investors in fossil-fuel activities; workers and communities dependent on fossil industries; suppliers and service companies in fossil value chains.Additional impacts- Federal budget and revenue: potential increase in federal revenue from repealing subsidies and new taxes, offsetting other program costs but with wide regional and sectoral implications.- Energy market dynamics: potential changes in fossil-fuel investment and production decisions; possible effects on energy prices, reliability, and transition timing as federal support shifts away from fossil fuels.- Environmental and public policy: intended reduction in fossil-fuel activity could affect greenhouse gas emissions and pollution outcomes; potential changes in spill-liability regimes and environmental cleanup obligations.Fossil fuel: coal, petroleum, natural gas, or any derivative used as fuel.Royalty relief/royalties: payments owed to the federal government for extracting fossil fuels from public lands or waters.CERCLA: a law that sets liability rules for cleanup of hazardous substances; the bill broadens who can be treated as ineligible mortgage, lender, or owner for certain liability consequences.ARPA-E, DOE offices, USDA programs, Ex-Im/DFC/International Development Finance: federal agencies and programs that currently provide funding or support for energy projects, research, and development. The bill would curtail or end fossil-fuel related activities within these programs.Offshore Gulf of Mexico: the area beyond state waters where the federal government leases resources for extraction; the bill introduces a new severance-style tax and tightens royalty rules there.

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