Sponsors (23)
Official title: To eliminate certain subsidies for fossil-fuel production.
Introduced July 23, 2025 by Ilhan Omar · Last progress July 23, 2025
The bill trades expanded government revenue, stronger environmental oversight, and incentives for some clean technologies against higher taxes and compliance costs for fossil-fuel firms (with likely higher energy prices), slower permitting, and increased administrative and privacy burdens for businesses and tax agencies.
Taxpayers and federal coffers: new taxes/fees (e.g., Gulf OCS tax, 10¢/barrel Oil Spill Trust Fund rate) and removal of some fossil subsidies raise federal revenue and strengthen the Oil Spill Liability Trust Fund.
Market incentives shift away from supporting new fossil-fuel production (removal of tax preferences and accelerated depreciation), which can reduce long‑run fossil output and associated greenhouse-gas emissions and health harms.
Cleaner-energy support and predictability: establishes an inflation‑adjusted base clean-hydrogen tax credit and explicitly allows certain hydropower to qualify, and increases transparency about carbon‑sequestration credit recipients (45Q reporting).
Households and energy consumers: higher taxes and removal of tax advantages for fossil-fuel producers are likely to raise production costs, which can be passed through into higher energy and fuel prices and reduce investment in affected firms.
Project developers and local economies: reinstating fuller environmental reviews and repealing permitting accelerators may slow federal approvals, delay projects and jobs, and increase development costs that can be passed to consumers.
Taxpayers, firms, and tax agencies: multiple phased, retroactive, and definitional changes increase compliance complexity and administrative burdens for taxpayers, Treasury, IRS, and financial institutions.
Based on analysis of 11 sections of legislative text.
Terminates many fossil‑fuel tax benefits and royalty relief, tightens oil liability, rolls back recent fossil‑fuel permitting/subsidy changes, and directs Treasury to identify remaining subsidies.
Ends a range of federal financial supports for fossil fuels by repealing tax credits, royalty relief, and some permitting/administrative changes that expanded oil, gas, and coal development. It tightens liability for certain oil facilities, removes specific fossil-fuel tax and subsidy provisions, requires Treasury to identify remaining fossil-fuel subsidies, and phases out some carbon-capture and petroleum tax benefits.