HR 3330119th CongressIn Committee

Energy Freedom Act

Introduced: May 13, 2025

Economy & TaxesEnvironment & Climate

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Energy Freedom Act (H.R. 3330) is a bill introduced in the 119th Congress that would repeal a wide range of federal tax subsidies and incentives designed to promote energy efficiency, renewable energy, clean transportation, biofuels, and related technologies. If enacted, the bill would terminate many existing tax credits and deductions in the Internal Revenue Code, and it would also repeal certain sections that govern elective payment systems and transfer of credits. The effective dates in the bill generally place the repeal in effect for property placed in service or transactions occurring after December 31, 2025 (with several provisions referencing the day before the enactment for conforming adjustments). In addition, the bill would repeal the federal government’s tax treatment of petroleum (a major shift in energy policy) and would remove sections dealing with the transfer and elective payment of energy credits. In short, the bill represents a sweeping reversal of federal tax incentives that currently support home energy improvements, solar and other renewables, electric and clean vehicles, biofuels, carbon capture, hydrogen, nuclear, and related energy investments, along with a repeal of the petroleum-related tax framework. As introduced, it would shift the United States away from these targeted subsidies starting in 2026 and beyond, with broad policy and market implications for households, industry, investors, and climate policy.

Key Points

1Comprehensive repeal of energy-related tax incentives. The bill would repeal major credits including:
2- Energy efficient home improvement credit (25C) and residential clean energy credit (25D).
3- Previously-owned clean vehicles credit (25E) and related vehicle credits (30D) for new and used clean vehicles.
4- Alternative fuel vehicle refueling property credit (30C) and clean vehicle credit (30D) (with conforming changes to related rules).
5- Second generation biofuel producer credit and incentives for biodiesel, renewable diesel, and other alternative fuels (various sections including 40A, 6426, 6427, 6427(e), and related provisions).
6- Sustainable aviation fuel credit (40B) and related alcohol fuel credits.
7- Electricity produced from certain renewable resources credit (45 and related sections like 45J, 45K) and multiple other clean energy production credits (45V, 45W, 45X, 45Y, 45Z, etc.).
8- Carbon oxide sequestration credit (45Q), zero-emission nuclear power production credit (45U), and clean hydrogen production credit (45V).
9- Qualified commercial clean vehicles credit (45W), advanced manufacturing production credit (45X), and clean electricity production/investment credits (45Y, 48E, and related sections).
10- Energy credit under section 48 and the qualifying advanced energy project credit (48C).
11- Energy efficient commercial buildings deduction (179D).
12Broad timeline for repeal. The amendments generally apply to:
13- Property placed in service after December 31, 2025 (most credits).
14- Vehicles acquired after December 31, 2025 (vehicle-related credits).
15- Several sections specify “as in effect on the day before the enactment” for certain conforming amendments, indicating transitional rules tied to the Energy Freedom Act’s effective date.
16Repeal of the petroleum tax framework. The bill would repeal Subchapter A of Chapter 38 (the petroleum taxes framework) and adjust related provisions across the Code to remove those taxes, with several conforming amendments to other sections. This is a major policy shift away from federal petroleum taxation.
17Repeal of sections governing elective payment and transfer of credits. Sections 6417 and 6418 (which deal with elective payment for energy property and electricity produced from renewable resources, and transfer of credits) would be repealed, eliminating those optional election mechanisms and credit transfer features.
18Overall scope and intent. The bill is titled the Energy Freedom Act and is framed as repealing “green energy tax subsidies.” If enacted, it would significantly reduce or remove federal incentives intended to accelerate energy efficiency, renewable energy deployment, low-emission vehicles, biofuels, and related technologies.

Impact Areas

Primary group/area affected- Homeowners and residential property owners: would lose credits for energy-efficient home improvements and residential clean energy (e.g., solar). This could affect incentives for upgrading windows, insulation, HVAC efficiency, and solar installations.- Renewable energy developers and operators: the loss of production and investment credits (various 40, 45, 48 series) could reduce the financial attractiveness of solar, wind, biomass, geothermal, and other projects.- Clean transportation sector: credits for electric and other clean vehicles, refueling infrastructure, hydrogen, biofuels, and sustainable aviation fuel would be repealed, which could slow the growth of EV adoption, charging/fueling networks, and related technology development.- Biofuels and alternative fuels sectors: incentives for biodiesel, renewable diesel, sustainable aviation fuel, and related fuels would be removed, impacting producers and supply chains.Secondary group/area affected- Automakers, energy equipment manufacturers, and project developers: would face reduced demand for specialized equipment and credits tied to clean energy projects.- Utilities, refiners, and fuel producers: changes to energy-related credits and to petroleum tax policy would shift financial planning and investment signals.- Banks and investors in energy projects: removal of tax incentives could affect project economics, risk profiles, and investment capital availability in the clean energy sector.Additional impacts- Climate and energy policy: a broad rollback of federal incentives would likely slow the deployment of low-emission technologies and could hinder progress toward decarbonization and climate goals embedded in other policy debates.- Federal and state budgets: changes in tax credits and the repeal of petroleum taxes could alter federal revenue and affect the fiscal outlook; states may adjust policy to fill gaps or adapt to new market conditions.- Transition considerations: for taxpayers and firms planning long-term investments, the repeal timeline (starting in 2026 for many provisions) creates a transition period requiring re-evaluation of projects and business models already in planning or development.The bill is currently introduced in the House (status: introduced) and would require passage by both chambers and signature by the President to become law. As introduced, the provisions may be subject to amendments.The bill uses precise legal triggers like “property placed in service” and “vehicles acquired” to determine when repeals take effect, and it includes several “as in effect on the day before the enactment” adjustments for conformity in other tax code sections.Technical terms explained:- Credit vs. deduction: tax credits directly reduce tax liability (dollar-for-dollar), while deductions reduce taxable income, which indirectly lowers taxes. This bill focuses on repealing credits (and related tax treatment in other sections) rather than broadening deductions.- “Placed in service”: the point at which a property is ready and available for use in its intended business or personal purpose, which often determines eligibility for a credit or deduction.- Conforming amendments: changes to other parts of the tax code that are required to maintain internal consistency after the repeal of credits.

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