President Trump’s ‘One Big Beautiful Bill Act’ has passed, marking a significant shift in US energy policy. The legislation phases out key tax credits for solar and wind energy while providing historic access to federal lands for the oil, gas, and coal industries. This move signals a clear prioritisation of fossil fuels over renewable energy sources, aligning with President Trump’s openly expressed preference for traditional energy.
The new law opens up federal lands and waters to oil and gas drilling, reversing previous curbs enacted by the Biden administration. It mandates numerous lease sales in the Gulf of Mexico and across nine states, granting the industry expanded access to resources. Additionally, the bill slashes royalties paid by producers for extracting oil and gas on federal lands, further incentivising increased output. The American Petroleum Institute hailed the bill as transformational, encompassing nearly all of their priorities.
Conversely, the law phases out clean electricity investment and production tax credits for wind and solar projects that have been instrumental in the growth of the renewable energy sector. While projects commencing construction within a year of the bill’s enactment are eligible for an exception, the overall impact is expected to slow investment in renewable energy. Industry groups, such as the Solar Energy Industries Association, have criticised the legislation, warning it undermines the nation’s manufacturing comeback and energy leadership.
Furthermore, the law impacts related tax credits for using US-made components in solar and wind farms, potentially affecting domestic manufacturing. The changes have raised concerns about factory closures and a slowdown in sector investment. Companies such as Chevron and Exxon are investing in hydrogen fuel, but the hydrogen tax credit ends in 2028.
