HR 310119th CongressIn Committee

Restoring Energy Market Freedom Act

Introduced: Jan 9, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Restoring Energy Market Freedom Act would repeal a large suite of energy-related tax incentives by striking numerous credits in the Internal Revenue Code (notably sections 45, 45J, 45Q, 45U, 45V, 45X, 45Y, and 48 through 48E) and by removing related entries from the General Business Credit (Section 38). In addition to the repeal, the bill makes a broad set of conforming amendments throughout the code to reflect the loss of these credits and to preserve certain pre-repeal rules in specific contexts. The changes are slated to apply to taxable years beginning after December 31, 2024. The bill also revises definitions and reference language (for example, redefining “qualified facility” related to transportation fuels) and includes several provisions to ensure that pre-existing credits or pre-repeal rules are treated as they existed immediately before repeal in certain situations. In short, the bill would substantially scale back or remove federal tax incentives for energy production, efficiency, and related technologies, shifting the economic calculus for many energy projects and affecting developers, investors, and households that relied on these credits.

Key Points

1Repeal of major energy-related credits: The bill would strike sections 45, 45J, 45Q, 45U, 45V, 45X, 45Y, 48, 48A, 48B, 48C, 48D, and 48E, effectively eliminating a broad set of energy, carbon capture, and clean-energy incentives from the tax code.
2General Business Credit overhaul: Section 38 would be amended to remove several credits that are part of the General Business Credit, with substantial redesignation of paragraphs and reordering of the subsections. This is aimed at narrowing or eliminating the use of these credits against corporate and individual tax liabilities.
3Conforming amendments across the code: The bill includes numerous amendments to other sections (such as 25(e)(3), 30C, 45K, 45L, 45Z, 6417, 6418, 168, 179D, 501(c)(12), and related provisions) to reflect the repeal and to preserve certain language “as in effect immediately prior to its repeal” where relevant. This is to keep pre-repeal rules intact for existing or ongoing credits in some contexts and to adjust references in the code accordingly.
4Changes to energy definitions and eligibility: The bill modifies definitions tied to energy credits, including a redefined “qualified facility” for transportation fuels. It also adjusts various related provisions to align with the repeal, which can affect how certain projects are treated under the tax code.
5Effective date: The repeal and amendments apply to taxable years beginning after December 31, 2024 (i.e., starting in 2025 for most taxpayers).

Impact Areas

Primary groups/areas affected- Energy project developers and investors (renewables, carbon capture, efficiency upgrades, etc.) who previously benefited from income tax credits will face a more expensive financing environment due to the removal of these incentives.Secondary groups/areas affected- Utilities, manufacturers, and project developers involved in producing or using cleaner fuels or energy-efficient technologies.- Tax-exempt entities and nonprofits that relied on related credits or on changes in the landscape created by such incentives.Additional impacts- State and local governments could see shifts in planned energy infrastructure and related job creation or subsidies, given changes in the federal incentive landscape.- All taxpayers could experience indirect effects on energy prices, project timelines, and the pace of clean-energy deployment, depending on how market participants adjust to the absence of these credits.- Transitional language (“as in effect immediately prior to its repeal”) may preserve pre-existing eligibility or treatment in some cases, but the overall direction is toward eliminating these incentives going forward.A “credit” lowers tax liability on a dollar-for-dollar basis. When credits are repealed, that direct reduction disappears.“Conforming amendments” are adjustments to other parts of the tax code to keep the law internally consistent after the repeal.“Qualified facility” and related definitions determine what types of energy facilities qualify for remaining or transitional credits; in this bill, definitions are revised to fit the repealed framework (e.g., facilities producing transportation fuels).

Generated by gpt-5-nano on Nov 18, 2025