The US Senate Environment Committee has introduced a proposal to rescind all unspent funds allocated for climate and clean energy programs under the Inflation Reduction Act (IRA), passed during President Joe Biden’s administration in 2022.
The draft budget reconciliation bill aims to eliminate these unused funds and impose a fee on energy project developers—such as those involved in oil extraction and pipeline construction—to speed up environmental reviews.
The IRA originally provided billions in grants, loans, and incentives to support clean energy and electric vehicle initiatives.
However, the Senate Republicans’ proposal would cancel any unspent money from these programs. It also calls for suspending the methane emissions fee on oil and gas operators for ten years and repealing the natural gas tax introduced by the IRA.
Senator Shelley Moore Capito, chair of the Environment and Public Works Committee, stated that this legislation fulfills Senate Republicans’ commitments to stop the Democrats’ natural gas tax and withdraw unallocated IRA funds.
The proposal also includes over $250 million for renovating the Kennedy Center for the Arts in Washington, D.C.
While the House of Representatives recently passed a related budget bill with significant cuts to clean energy tax credits, Senate Republicans remain divided. Some senators want to preserve certain IRA tax credits that benefit their states.
The final outcome of the budget reconciliation process is still uncertain amid ongoing negotiations.
This move comes amid broader Republican efforts to roll back clean energy subsidies established under Biden’s administration, which critics argue are too costly and expose taxpayers to large liabilities.
Clean energy investment in the US has already declined in early 2025 due to inflation, high interest rates, supply chain issues, and policy uncertainty.
In summary, the Senate panel’s proposal marks a significant step toward reducing federal support for climate and clean energy programs by cutting unspent funds from the IRA and easing regulations for fossil fuel projects.
