H.R. 3330 — Energy Freedom Act

This section (1) cites the Act as the “Energy Freedom Act”; (2) specifies that, except as otherwise expressly provided, amendments or repeals in the Act are to provisions of the Internal Revenue Code of 1986; and (3) states the table of contents.

This section repeals the energy efficient home improvement credit (IRC §25C), which provides a tax credit of up to $3,200 (30% of qualified expenses) for energy-efficient improvements to existing homes (e.g., insulation, windows, doors, and certain heating/cooling equipment). (Thus, taxpayers may claim the credit for property placed in service in taxable years beginning before January 1, 2026.)

This section repeals the residential clean energy credit (i.e., a nonrefundable tax credit equal to 30% of qualified expenditures for solar electric and water heating property, qualified fuel cell property, small wind energy property, geothermal heat pumps, and battery storage technology installed in residences). (Thus, taxpayers may claim the credit for expenditures paid or incurred in taxable years beginning on or before December 31, 2025.)

This section repeals the previously-owned clean vehicle tax credit for vehicles acquired after December 31, 2025. (Thus, taxpayers may claim a tax credit equal to the lesser of $4,000 or 30% of the vehicle's sale price for a qualified previously-owned clean vehicle—i.e., a used plug-in electric or fuel cell vehicle meeting specified battery capacity, price, and prior-use requirements—acquired on or before that date.)

This section repeals the alternative fuel vehicle refueling property credit under section 30C of the Internal Revenue Code for property placed in service after December 31, 2025. (Thus, taxpayers may claim a credit equal to 30% of the cost of qualified property—such as electric vehicle chargers, hydrogen fueling equipment, or natural gas dispensers—not to exceed $100,000, through December 31, 2025.) It also makes conforming amendments to various Internal Revenue Code provisions and strikes paragraph (6) of 42 U.S.C. 17052(b), which authorizes Department of Energy grants for renewable fuel blend infrastructure (i.e., up to 33% of costs, not to exceed $180,000 per retail location, for E11-E85 gasoline or B10+ diesel storage and dispensing equipment).

This section repeals the clean vehicle tax credit (IRC §30D). The repeal applies to vehicles placed in service after December 31, 2025. (Thus, taxpayers may claim a tax credit of up to $7,500 for qualified new clean vehicles—i.e., plug-in electric or fuel cell vehicles meeting specified battery and performance requirements—placed in service through December 31, 2025.)

This section terminates the second generation biofuel producer credit by striking its provisions from Section 40 of the Internal Revenue Code, including the credit amount in subsection (a)(4), definitions in subsection (b)(6), and related rules in subsections (d) and (e). It makes conforming amendments to Sections 168(l) and 4101(a) to preserve cross-references to the prior definition of qualified second generation biofuel.

This section repeals tax incentives for biodiesel, renewable diesel, alternative fuels, and related mixtures, including (1) the income tax credit under section 40A ($1 per gallon for biodiesel and renewable diesel used as fuel), (2) the excise tax credit under section 6426 (e.g., $0.50 per gallon for biodiesel and renewable diesel mixtures, $0.20-$1.00 per gallon for alternative fuel mixtures depending on fuel type), and (3) related income tax payments in lieu of credits under section 6427(e) for biodiesel, alternative fuel, or sustainable aviation fuel. (Thus, these credits and payments terminate upon enactment, with conforming amendments preserving prior-law references for periods before enactment.)

This section repeals the sustainable aviation fuel credit (IRC §40B), which provides producers a per-gallon income tax credit (generally up to $1.75) for qualified sustainable aviation fuel that reduces lifecycle greenhouse gas emissions by at least 50% compared to conventional jet fuel. (Thus, the credit is available for fuel sold or used on or before December 31, 2025.)

This section repeals the renewable electricity production credit under IRC §45 for electricity produced in taxable years beginning after December 31, 2025. (Thus, taxpayers may claim the per-kilowatt-hour tax credit—generally up to 2.7 cents (inflation-adjusted) for electricity from qualified renewable resources such as wind, solar, geothermal energy, and certain biomass—through taxable years beginning on or before that date.)

This section repeals the New Energy Efficient Home Credit (i.e., section 45L, which provides a tax credit of up to $5,000 to builders of qualified new energy efficient homes that meet specified energy savings standards). (Thus, the credit is available for homes acquired on or before December 31, 2025.)

This section repeals the carbon oxide sequestration tax credit (IRC § 45Q) for facilities or equipment placed in service after December 31, 2025. (Thus, taxpayers may claim the credit—up to $85 per metric ton of qualified carbon oxide for secure geological storage, $60 per metric ton for utilization, or $180 per metric ton for direct air capture storage—for equipment placed in service through that date.) It also makes conforming amendments to (1) IRC § 38(b) by striking the reference to § 45Q; and (2) IRC § 142(o)(1)(B) and Energy Policy Act of 2005 § 969D(e)(4)(B)(ii)(II)(cc) (42 U.S.C. 16298d(e)(4)(B)(ii)(II)(cc)) by preserving references to § 45Q as in effect before enactment.

This section repeals the zero-emission nuclear power production credit (IRC §45U). The repeal applies to electricity produced and sold after December 31, 2025, in taxable years beginning after such date. (Thus, taxpayers may claim the credit—generally 0.3 cents per kilowatt hour (increased to 1.5 cents if prevailing wage and apprenticeship requirements are met)—for electricity produced at qualified zero-emission nuclear power facilities and sold through December 31, 2025.)

This section repeals the clean hydrogen production tax credit. (Thus, taxpayers may claim the credit for qualified clean hydrogen (i.e., with lifecycle greenhouse gas emissions below specified thresholds, up to $3 per kilogram) produced through December 31, 2025.)

This section repeals the qualified commercial clean vehicles tax credit (IRC §45W). (Thus, businesses may claim a tax credit of up to $40,000 per vehicle (over 14,000 pounds gross vehicle weight rating) or $7,500 (14,000 pounds or less) for new qualified clean vehicles—i.e., battery-electric, fuel cell, or certain plug-in hybrid motor vehicles acquired for use or lease in a trade or business—acquired through December 31, 2025.)

This section repeals the advanced manufacturing production credit under IRC §45X, which provides tax credits to eligible taxpayers for producing specified clean energy components (e.g., solar wafers, wind turbine blades, battery cells) in the United States. The repeal applies to components produced and sold after December 31, 2025, and includes a conforming amendment removing the credit from the list of general business credits in IRC §38(b).

This section repeals the clean electricity production credit (section 45Y), a technology-neutral tax credit for zero-greenhouse gas emission electricity production and storage at qualified facilities, and makes conforming amendments to the general business credit and depreciation provisions. (Thus, taxpayers may claim the credit only for facilities placed in service through December 31, 2025.)

This section repeals the clean fuel production credit (section 45Z), which provides a tax credit to producers of transportation fuel based on lifecycle greenhouse gas emissions reductions relative to petroleum-based fuel. (Thus, fuel producers may claim the credit only for transportation fuel produced through December 31, 2025.)

This section repeals the energy investment tax credit under section 48 for qualified energy property (e.g., solar electric, fuel cell, wind facilities) placed in service in taxable years beginning after December 31, 2025. (Thus, taxpayers may claim a tax credit generally equal to 6% to 50% (depending on technology and adders) of the basis of such property placed in service in taxable years beginning on or before that date.) It also makes conforming amendments to various Internal Revenue Code provisions to remove or preserve certain cross-references to section 48.

This section repeals the qualifying advanced energy project investment tax credit (i.e., IRC §48C, which provides a 30% credit for qualified investments in manufacturing facilities for clean energy components such as batteries and critical minerals processing), effective January 1, 2026. (Thus, the credit is available only for eligible projects certified and placed in service before that date.)

This section repeals the clean electricity investment credit (section 48E), which provides a tax credit for qualified investments in zero-emission electricity generation or storage facilities (e.g., solar, wind, battery storage). The repeal applies to facilities and property placed in service after December 31, 2025. (Thus, taxpayers may claim the credit for eligible facilities placed in service through December 31, 2025.)

This section repeals the energy efficient commercial buildings deduction (IRC §179D)—which allows building owners or designers a deduction equal to qualified energy savings expenditures, up to approximately $5 per square foot (inflation-adjusted)—for property placed in service after December 31, 2025. (Thus, the deduction remains available through 2025 for installing or designing energy-efficient interior lighting, HVAC, and building envelope systems in commercial buildings.)

This section repeals the federal excise tax on petroleum imposed under subchapter A of chapter 38 of the Internal Revenue Code (i.e., the 9-cent-per-barrel tax on crude oil received at U.S. refineries and on imported petroleum products, which partially funds the Oil Spill Liability Trust Fund), effective January 1, 2026. The section also makes conforming amendments to eliminate cross-references to the repealed tax in other excise tax provisions (e.g., chemicals under section 4661) and trust fund financing rules.

This section repeals the elective payment (direct pay) option for clean energy tax credits (IRC §6417, available to tax-exempt entities, states, local governments, and others) and the transferability of those credits (IRC §6418, allowing monetization by selling to unrelated taxpayers), effective for taxable years beginning after December 31, 2025. It also makes conforming amendments to IRC §§39, 50, and 56A, and to the Inflation Reduction Act. (Thus, after 2025, only taxpayers with tax liability may claim these credits directly, with no option for cash refunds or sales.)