After a marathon markup stretching over 17 hours, the House Ways and Means Committee advanced sweeping cuts to Democratic renewable energy and climate tax credits as part of the tax portion of the massive fiscal overhaul Republicans are aiming to pass to enact much of President Donald Trump‘s domestic agenda. 

The bill advanced by Republicans would terminate or amend a number of clean energy and manufacturing tax credits from the Inflation Reduction Act, signed into law by President Joe Biden in 2022. Altogether, it would eliminate $560 billion in subsidies over the next 10 years, according to the Joint Committee on Taxation.

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The cancelation of the credits would help partially offset a range of Republican tax cuts in the bill, most notably the extension of the 2017 Trump tax cuts.

“The Democrat’s so-called inflation Reduction Act, was designed to, by their estimation, to reduce our dependence upon foreigners for energy. Inflation Reduction Act actually would have been better called the Inflation Enhancement Act. Democrats pass the inflation Reduction Act, and what happened? Inflation shot through the roof, but also loopholes created by the Biden administration that allowed foreign actors to take advantage of our tax credits. Why should the Chinese government be allowed to come in here and take advantage of American taxpayer loopholes? We shouldn’t allow that. We should want domestic production of energy. We should want domestic investment. And the way to make that happen is to pass this one big, beautiful bill.” — Rep Rudy Yakym of Indiana

The IRA has been lauded by Democrats as the largest climate mitigation and adaptation measure in U.S. history, providing hundreds of billions of dollars in federal incentives for clean energy projects and technologies. 

Critics argue that repealing these provisions will threaten domestic manufacturing, new energy projects, clean energy adoption, and affordable energy bills in both Democratic and Republican-led districts.

After the legislative text was released this week, analysts with Rhodium Group warned that in its current form, the proposal will increase energy costs for Americans by as much as 7% by 2035.

“Repealing tax credits effectively acts as a energy tax increase,” analysts with the research group wrote Tuesday, estimating that consumers could see home electricity bills rising by as much as $72 each year. 

The cuts included in the bill went further than some in the Republican Party expected, and could be watered down on the House floor or in the Senate. Dozens of GOP lawmakers and industry groups have echoed support for keeping many of the subsidies for weeks. Some Republican members of the committee even expressed concern about how far the cuts went during the hearing.

Rep. Claudia Tenney (R-NY) expressed support for keeping the nuclear production tax credit (45U) in place. The bill would phase out the credit between 2029 and 2031. 

“While this is an impressive package, I join my colleagues in expressing concern over the winddown of the 45U nuclear power production Tax Credit,” Tenney said, adding that nuclear power remains “critical” to New York’s base load power.

A number of clean energy incentives, including the sustainable aviation fuel credit and advanced energy project credit, remained untouched under the Ways and Means proposal. Most, though, were cut.

Specifically, the proposal would terminate the $7,500 tax credits for purchasing electric vehicles. Republican lawmakers and the Trump administration have repeatedly targeted policies supporting the EV industry, claiming the Biden administration set a de facto “EV mandate” by enacting the credits and imposing emissions-related regulations. 

The bill would also terminate the tax credit for businesses purchasing or leasing certain EVs, as well as the credit aimed at offsetting costs associated with purchasing and installing EV charging equipment. 

The legislative text also proposes phase-outs for numerous clean energy incentives, including the nuclear power production credit, the clean electricity production and investment tax credits, and the advanced manufacturing production tax credit. 

Some of these phase-out schedules begin as early as 2029, limiting full eligibility for the credit to projects placed in service before that date. This would effectively block energy projects expecting to be operational in the 2030s from collecting any large portion of the credit. 

Additionally, the bill would repeal the Clean Hydrogen Production 45V tax credit, which provides a 10-year incentive for clean hydrogen, by next year. 

Rep. Mike Thompson (D-CA) introduced an amendment to remove the clean energy-related provisions from the bill late Tuesday night, saying the GOP cuts would be devastating for American workers and manufacturing if approved.

“Whether my Republican colleagues believe it or not, clean energy is the industry of the future, and China is doing all it can to dominate the supply chain,” Thompson said. “This bill would shut off the most impactful tool to ensure America and American companies lead in the future.”

Rep. Don Beyer (D-VA) described it as “the most important amendment” in the energy portion of the proposed bill. He said the GOP changes would disrupt financing in the energy market.

“It’s just so deeply unserious at a time when we have increasing energy demand, we should be supporting the rapid deployment of energy,” he continued.

The committee did not pass Thompson’s amendment.

While advancing the legislative package marks a major win for Republicans in the House, it faces a steep climb to arriving on the president’s desk. 

Republicans in the Senate have indicated opposition to several provisions of the proposed tax cuts, saying cuts to the IRA could lead to job losses and fewer investments in critical domestic energy developments.

Several members have already insisted the language will change by the time the proposal is taken up in the upper chamber. 

On Tuesday, Sen. Kevin Cramer (R-ND) indicated that he opposed plans to phase out the clean electricity tax credits by 2029, as it would disincentivize advanced energy technologies like nuclear power and geothermal that are expected to be deployed in the 2030s. 

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“They definitely need more time than that,” Cramer told Politico. “It’s too short for truly new technologies. We’ll have to change that. I don’t think it’s fair to treat an emerging technology the same as a 30-year-old technology.”

The text passed Wednesday is just one part of the multitrillion-dollar tax-and-spending legislation House Republicans are aiming to pass through budget reconciliation, which allows bills to bypass the filibuster and pass with only a simple majority in the Senate.

Maydeen Merino contributed to this reporting.