Restoring Energy Market Freedom Act

This bill would remove many federal tax credits for energy projects and equipment. It strikes a long list of credits from the tax code, including those currently found in sections 45, 45Q, 45V, 45X, 45Y, 48, 48C, 48E, and others, and makes related clean‑up changes to the code. It also updates one remaining fuel credit by defining a “qualified facility” as a facility used to make transportation fuels under section 45Z. In addition, it revises parts of the general business credit and the rules for “direct pay” and the transfer of credits by removing several provisions and resetting definitions and election rules for certain public and tax‑exempt entities, including States, tribal governments, Alaska Native Corporations, the Tennessee Valley Authority, and rural electric cooperatives .

These changes would apply starting with the 2025 tax year (tax years beginning after December 31, 2024).

• Who is affected:

  • Businesses and projects that claim energy‑related tax credits
  • Tax‑exempt and public entities that use “direct pay,” including States, tribal governments, Alaska Native Corporations, the TVA, and rural electric co‑ops
  • Facilities producing transportation fuels under section 45Z (definition updated)

• What changes:

  • Repeals many energy‑related tax credits and adjusts the general business credit list
  • Amends the fuel credit (45Z) to define “qualified facility”
  • Narrows and revises rules for direct pay (section 6417) and credit transfers (section 6418)

• When it starts: For tax years beginning in 2025