TL/DR –
President Trump has signed a sweeping reconciliation package called the “Big Ugly Bill” that aims to dismantle the Inflation Reduction Act (IRA), having significant implications on climate work worldwide and increasing energy costs for Americans. The new legislation, introduced as a tax reform, cuts key clean energy incentives such as the Production Tax Credit (PTC) and Investment Tax Credit (ITC) by 40% for projects starting in 2026 and eliminates them by 2028, along with defunding Electric School Bus programs and cancelling residential energy efficiency tax credits by the end of 2025. Critics argue that this bill poses a major threat to the country’s clean energy and climate policies, impacts job security, and harms public health, the environment, and the economy by significantly increasing energy costs.
President Trump Endorses Massive Bill Undermining Global Climate Efforts and Clean Energy Incentives
President Trump has approved a wide-ranging reconciliation package, known as the “Big Ugly Bill”, dismantling key elements of the Inflation Reduction Act (IRA) after months of political wrangling.
As we previously noted, this legislation poses global threats to climate work and aims to undermine cornerstone clean energy incentives. It jeopardizes over a million jobs and boosts energy expenses for American households.
The Senate passed the bill on July 1, with Vice President JD Vance casting the deciding vote. The House concurred two days later, and on July 4, the bill became law.
We commend House Minority Leader Jeffries for his long-standing opposition to this destructive legislation that threatens American citizens.
The Bill’s Impacts on Clean Energy and Climate Policies
The legislation, disguised as tax reform, essentially erodes historic environmental investments that have started to reshape America’s energy economy. The country’s most influential clean energy and climate policies are being rolled back.
Key Changes in the IRA
The Production Tax Credit (PTC) and Investment Tax Credit (ITC) facilitating wind, solar, and battery storage development will be reduced by 40% for projects starting in 2026 and eradicated by 2028. Furthermore, the bill will increase electricity rates for consumers due to these tax cuts.
The Advanced Manufacturing Credit (45X) will also be phased out by 2028, impacting wind turbines and their parts.
Elimination of EV Tax Credit
The bill also quashes the burgeoning electric vehicle (EV) market by revoking the $7,500 federal EV tax credit after September 30, 2025. The $4,000 credit for used EVs is also being abolished. According to Kelley Blue Book, the price of a new EV is on average $9000 higher than a new gas-powered car. These incentives were instrumental in broadening EV adoption and scaling up domestic production. Their removal will make EVs less affordable and impede US efforts to electrify transportation.
Cuts to Residential Clean Energy Credits
Popular residential energy efficiency tax credits for items like rooftop solar, home battery storage, heat pumps and high-efficiency HVAC, electric vehicle charging stations, and energy-efficient windows, doors, and insulation will be eliminated after December 31, 2025. Under the IRA, these credits covered up to 30% of costs for clean energy home upgrades.
Additionally, the bill defunds Electric School Bus programs and cuts funding for tracking harmful air pollution. These cuts will not only increase upfront costs for families but also slow the adoption of low-carbon, money-saving technologies in millions of homes.
The Trump administration’s endorsement of this bill underscores their intent to dismantle environmental policies. It’s time to escalate state action and advocate for sensible climate action on the state level.
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