One, Big, Beautiful Bill provisions – Clean Energy
Clean vehicle credit expirations (Sections 70501, 70502 and 70503)
Overview of credit expirations
The Act accelerates the end of several clean vehicle credits:
New Clean Vehicle Credit (30D): Not allowed for any vehicle acquired after Sept. 30, 2025
Used Clean Vehicle Credit (25E): Not allowed for any vehicle acquired after Sept. 30, 2025
Qualified Commercial Clean Vehicle Credit (45W): The credit will not be allowed for any vehicle acquired after Sept. 30, 2025
Related resources
Clean energy credit modifications FAQs (FS-2025-05) – Covers modifications to clean energy credits under the One, Big, Beautiful Bill, including sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D, under Public Law 119-21, 139 Stat. 72
New Clean Vehicle Credit (30D)
Used Clean Vehicle Credit (25E)
Qualified Commercial Clean Vehicle Credit (45W)
Home energy credit expirations (Sections 70505, 70506 and 70507)
Overview of credit expirations
The Act accelerates the end of the following home and residential energy credits:
Energy Efficient Home Improvement Credit (25C): Not allowed for any property placed in service after Dec. 31, 2025
Residential Clean Energy Credit (25D): Not allowed for any expenditures made after Dec. 31, 2025
Related resources
Clean energy credit modifications FAQs (FS-2025-05)
Energy Efficient Home Improvement Credit (25C)
Residential Clean Energy Credit (25D)
Clean Electricity Production Credit restrictions (Section 70512)
Overview
Under the One, Big, Beautiful Bill, electricity-producing qualified facilities, energy storage technologies, or eligible components receiving material assistance from a prohibited foreign entity (PFE) would be ineligible for certain energy tax credits.
Related resources
Guidance for certain energy tax credits regarding material assistance provided by prohibited foreign entities (IR-2025-23)
Notice 2026-15 PDF, Guidance to Apply Interim Safe Harbors for Purposes of Determining a Taxpayer’s Material Assistance from a Prohibited Foreign Entity; Other Prohibited Foreign Entity Guidance
Carbon Oxide Sequestration Credit (Section 70522)
Overview of the new guidance
Explains how taxpayers can qualify for the credit
Applies to qualified carbon oxide captured and stored securely underground
Covers activities that occur during calendar year 2025
Provides safe harbor method for reporting and certification
Related resources
Treasury, IRS provide safe harbor for taxpayers claiming the carbon capture credit (IR-2025-122)
Notice 2026-01 PDF, Safe Harbor for the Credit for Carbon Oxide Sequestration under Section 45Q for Qualified Carbon Oxide Disposed of in Secure Geological Storage in Calendar Year 2025
Extension and modification of clean fuel production credit (Section 70521)
The One Big Beautiful Bill brings significant changes to the Section 45Z Clean Fuel Production Credit.
Key Takeaways:
The Section 45Z clean fuel production credit is extended and available for fuel sold before January 1, 2030.
For any transportation fuel produced after December 31, 2025, the applicable amount is either $0.20 or $1.00.
Transportation fuel produced after December 31, 2025, must be exclusively derived from a feedstock that was produced or grown in the United States, Mexico, or Canada.
Emissions Rates: Negative emissions rates are prohibited for fuels produced after December 31, 2025, unless they are derived from animal manure feedstocks. Distinct emissions rates will be provided with respect to such fuel based on the specific animal manure feedstock.
Emissions rates for fuels produced after December 31, 2025, exclude emissions rates attributable to indirect land use change.
For fuels produced after December 31, 2025, the Section 45Z credit cannot be claimed for fuels produced from a different transportation fuel.
The Section 45Z credit cannot be taken by:(i) a specified foreign entity, for taxable years beginning after July 4, 2025; or
(ii) a foreign-influenced entity (other than a foreign-influenced entity described in section 7701(a)(51)(D)(i)(II)), for taxable years beginning after July 4, 2027.
Transfer of the section 45Z credit is still allowed, but not to specified foreign entities.
Sustainable Aviation Fuel (SAF):The Section 6426(k) credit for SAF mixtures will no longer apply to any sale or use for any period after September 30, 2025.
The Section 45Z credit for SAF is reduced to the same applicable amounts for other transportation fuels ($.20 or $1.00/gallon) for fuel sold after December 31, 2025.
Small Agri-biodiesel Producer Credit:For fuel sold or used after June 30, 2025, a small agri-biodiesel producer can elect to transfer all or a portion of the credit to an unrelated third-party buyer under IRC 6418. Producers who wish to transfer eligible credits must first complete a mandatory pre-filing registration.
For fuel sold or used after June 30, 2025, the qualified agri-biodiesel fuel must be exclusively derived from feedstock that was produced or grown in the United States, Canada or Mexico.
For fuel sold or used from January 1, 2025, through June 30, 2025, the credit is $.10 per gallon. For fuel sold or used after June 30, 2025, but before January 1, 2027, the rate increased to $.20 per gallon.
The small agri-biodiesel producer credit for any gallon of fuel is in addition to any Section 45Z credit determined with respect to such gallon of fuel.
Related resource
Proposed regulations on the Clean Fuel Production Credit (IR-2026-20)
