Info!
UPDATED 1 Sept: The EI library in London is temporarily closed to the public, as a precautionary measure in light of the ongoing COVID-19 situation. The Knowledge Service will still be answering email queries via email , or via live chats during working hours (09:15-17:00 GMT). Our e-library is always open for members here: eLibrary , for full-text access to over 200 e-books and millions of articles. Thank you for your patience.
New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)

Trump’s ‘One Big Beautiful Bill’ blows big hole in US emissions target

9/7/2025

News

US President Donald Trump at desk surrounded by group of people Photo: White House/Daniel Torok
US President Donald Trump signing the ‘One Big Beautiful Bill’ on the South Lawn of the White House

Photo: White House/Daniel Torok

President Donald Trump’s attack on US climate policy continued in earnest with his signature into law of the so called ‘One Big Beautiful Bill’ on 4 July 2025. Among hundreds of tax and spending provisions, the Bill is to phase-out a significant tranche of clean energy tax credits.

According to estimates based on modelling by Princeton University’s REPEAT Project, passage of the Bill will add an extra 7bn tonnes of greenhouse gas (GHG) emissions to the atmosphere between now and 2030, says Carbon Brief, compared to the former US climate pledge under the Paris Agreement.

 

Since winning office last November, Trump had already signed an executive order pulling out of the Paris Agreement. Signature of his ‘One Big Beautiful Bill’ effectively terminates Biden-era climate policies, including the Inflation Reduction Act, in favour of promoting fossil fuels over renewable energy.

 

The Bill sets in motion the phase-out of green tax credits, with a small breathing space for the clean tech sector after concerted lobbying in the Senate up to the last minute. Credits will be allowed to continue for wind and solar projects which are ‘planned, financed and approved’, and either start construction by June 2026 or are operational by December 2027. However, this is still a significant modification of the original timeline for wind and solar tax credits, which weren’t due to expire until 2032.

 

Electric vehicle (EV) tax credits will also be phased out by September 2025 along with elimination of EV charging tax credits by June 2026. The Bill also terminates a concerted energy efficiency programme, as well as the Greenhouse Gas Reduction Fund, which provides finance for non-profit organisations funding projects to reduce pollution and GHG emissions for consumers.

 

Fees on methane emissions will be postponed for 10 years, while tax credits for biofuels will be extended an additional four years to 2031, which gives some relief to petrol retailers.

 

At the eleventh hour, a swingeing new excise tax was withdrawn, which would have been imposed on wind and solar projects constructed with a certain percentage of materials from ‘prohibited’ countries like China. The American Clean Power Association estimated that this move alone would have cost clean energy businesses an additional $4–7bn by 2036, along with raising energy prices for consumers by 8–10%.  

 

Trump insisted that the excise tax could boost domestic US manufacturing. But critics pointed out that the cost of eliminating Chinese components from solar and wind projects could prove to be cost-prohibitive.

 

What the critics said

Trump’s clean energy roll-back was criticised by The New York Times for ‘derailing renewable energy production and research in the US and [potentially] ceding the clean energy race to China’.  

 

Critics said the Bill is expected to lead to large clean energy job losses, factory closures and to deter investment in clean technologies.

 

Jason Grumet, CEO of the American Clean Power Association, said the Bill ‘is a step backward for American energy policy... The intentional effort to undermine the fastest-growing sources of electric power will lead to increased energy bills, decreased grid reliability and the loss of hundreds of thousands of jobs. Most discouraging is forfeiting the progress we’ve made in manufacturing batteries, wind turbines and solar panels, and the economic growth occurring in communities across the country.’

 

Analysis by the Centre for Climate and Energy Solutions (CCES) predicts that the ‘One Big Beautiful Bill’ could eliminate 1.6 million jobs, cost more than $290bn in lost GDP, and increase US GHG emissions by 8% by 2035, while increasing the cost of energy by 4% per MW.  

 

Nevertheless, on a more positive note, Nathaniel Keohane, President of the CCES, said: ‘The Senate Bill would preserve tax credits for newer technologies like advanced nuclear, battery storage, geothermal and carbon capture, as well as advanced manufacturing.’

 

Passage of the Bill is anticipated to slow down (but not necessarily halt) US solar and wind power generation, as well as sales of EVs and energy efficiency programmes. However, without federal support, the pipeline of new renewable energy projects is expected to contract significantly.  

 

According to the REPEAT analysts’ estimates, new solar additions could drop by 29 GW by 2030 and 140 GW by 2035, while wind power is forecast to decrease by 45 GW by 2030 and 160 GW by 2035, according to Carbon Brief. Although some renewable projects will likely go ahead without federal support, they may have to contend with Trump administration policies and severe challenges to federal wind farm approvals.

 

Nevertheless, the lost renewable capacity is unlikely to be entirely replaced by fossil fuels, due to a backlog of gas-fired power plants in the pipeline. Furthermore, tax credits for nuclear and geothermal power have been retained until 2036 in the Bill, although they tend to have long, often delayed, construction schedules.