On October 29, 2025, Democratic members of the House Ways and Means Committee introduced H.R. 5862, the American Energy Independence and Affordability Act (the Bill). The legislation, introduced by Rep. Mike Thompson (D-Calif.), would restore clean energy tax credits from the Inflation Reduction Act (IRA) that were cut by the One Big Beautiful Bill Act (OBBBA), passed earlier this year.
The Clean Fuels Credit, codified under 26 U.S. Code Section 45Z, has quickly become a central focus for businesses pursuing opportunities in the evolving energy sector. Designed to incentivize the production of cleaner transportation fuels, this credit not only benefits fuel producers but has also started attracting interest from companies seeking to purchase credits under the transferability provisions of 26 U.S. Code Section 6418. Initially introduced as part of the Inflation Reduction Act (IRA), the Clean Fuels Credit stands out as one of the few tax incentives that received an extension through 2029 under the One Big Beautiful Bill Act (OBBBA). As the regulatory landscape continues to shift, it is essential for companies to understand both the strategic advantages and the legal requirements associated with this incentive.
The One Big Beautiful Bill Act (OBBBA), signed into law by President Donald Trump on July 4, 2025, provides for enhanced restrictions on entities claiming many of the renewable energy credits established under the Inflation Reduction Act of 2022 (IRA). Namely, the bill prohibits foreign entities of concern (FEOCs), as well as domestic entities that are related to or otherwise engage in significant transactions with FEOCs, from claiming such credits. The credits that are subject to the new FEOC limitations under the bill include:
On July 4, 2025, the One, Big, Beautiful Bill Act (the Act) was enacted. Several provisions of the Act will impact renewable energy projects and the tax credits generated by such projects. Such provisions include the accelerated termination for wind and solar credits, as well as restrictions with respect to foreign entities of concern. Most of the energy provisions of the Act will take effect beginning with the taxable year beginning after that date of enactment (i.e., the taxable year beginning January 1, 2026, for most taxpayers), although there are some deviations, as described below.
Under the Senate Finance Committee’s June 28th version of the One, Big, Beautiful Bill (the “Bill”), there are several limitations and requirements that would take effect based on the date a project begins construction. For solar and wind projects, unless construction begins prior to enactment of the Bill, the production tax credit and investment tax credit under section 45Y and 48E will terminate for projects that are placed in service after 2027. Additionally, certain restrictions on material assistance from prohibited foreign entities would apply to solar and wind projects which begin construction after June 16th and most other projects that begin construction after 2025. The provisions of the Bill are still being negotiated in the Senate. However, establishing the beginning of construction will almost certainly remain important for developers of renewable energy projects.
The Senate Finance Committee recently released its own draft of the “One Big Beautiful Bill Act” (the Bill) previously passed by the House as H.R. 1. Both the House and Senate versions of the Bill impose restrictions on Inflation Reduction Act (IRA) tax credits based on “material assistance” from “Foreign Entities of Concern” (FEOCs). The House version lacked significant details on what “material assistance” was. The Senate Bill provides significant details on the structure and operation of the restrictions.
On June 16, 2025, the Senate Finance Committee released its version of the “One, Big Beautiful Bill” (OBBB) that would create a steep phase-out of renewable energy tax credits—notably, renewable energy companies would have to start construction on wind and solar projects before December 31, 2025, to receive 100% of the available tax credits. The reconciliation process is far from over, and there are further revisions expected to the text, but the Senate Finance Committee is the final committee in the Senate expected to release legislative text related to energy tax credits.
Its version of the bill includes the following provisions.
Lately, elected representatives on both sides of the aisle have been displaying an appetite for expanding transferable tax credits to a broader variety of industries. This is evidenced by the recent profusion of proposed legislation that endeavors to subsidize emerging or important technologies with such valuable, transferable credits. This glut of proposed legislation—and the significant opportunities it may afford to the savvy buyer or seller—only promises to increase in importance with federal tax reform on the horizon.
On April 30, 2024, the Department of the Treasury issued final regulations on tax credit transfers that allow hydrogen producers to sell tax credits earned under § 45V of the Inflation Reduction Act (IRA). Section 6418 of the Internal Revenue Code and the final regulation issued thereunder allow credit purchasers to use purchased credits to offset their tax liability. Credit sellers will be able to sell credits that they would not otherwise be able to use due to insufficient tax liability. Given such powerful incentives, many energy producers are wondering how to add “green” hydrogen (discussed below) to their portfolios by powering hydrogen facilities with wind turbines and solar panels. Here, we discuss what wind and solar producers should keep in mind as they plan, negotiate, and begin developing hydrogen plants powered by renewable energy, with a particular focus on site control.
On December 22, 2023, the U.S. Department of the Treasury (DOT) released a Notice of Proposed Rulemaking (NPRM) meant to address several issues associated with the Clean Hydrogen Production Tax Credit (PTC) established via Section 45V of the Inflation Reduction Act of 2022 (IRA). This article provides a brief overview of the proposed rules.