One Big Beautiful Bill phases out wind energy IRA credits by 2027 and restricts 45X minerals credits from FEOC suppliers, while adding metallurgical coal

Summary

The US House passed H.R. 1, the "One Big Beautiful Bill Act," on May 22, 2025. The bill terminates IRA Section 45Y wind production credits and Section 48E wind investment credits for projects beginning construction after December 31, 2026, a provision the American Clean Power Association estimated places 75,000 jobs and $100-$140 billion in planned wind investment at risk. The Section 45X Advanced Manufacturing Production Credit, the key incentive for battery materials, cell manufacturing and magnet production, is extended and modified: FEOC (Foreign Entity of Concern) eligibility restrictions now bar Chinese and Russian-owned processors of battery-grade materials from claiming the credit, creating a specific incentive to develop non-Chinese supply chains for graphite, lithium, nickel and cobalt. A new metallurgical coal production credit is added. Section 20004 appropriates $2 billion for the Strategic Resilience Reserve for critical minerals. The Senate Finance Committee proposed extending wind credit eligibility to 2029 and retaining 45X FEOC provisions; a Senate floor vote remained pending as of mid-June 2026.

The split

Clean energy advocates and wind-industry associations oppose the credit phase-out as economically destructive and inconsistent with US energy security goals: offshore wind is being cancelled at a time when AI-driven electricity demand growth is accelerating and domestic fossil-fuel capacity additions are insufficient to replace retiring coal plants. The administration and House Republicans frame wind credit termination as eliminating a "wasteful subsidy" for intermittent power, arguing the IRA's original costs vastly exceeded Congressional Budget Office estimates. On 45X, the FEOC restriction is broadly supported across partisan lines as a supply-chain security measure: preventing Chinese-owned mineral processors from collecting US tax credits while China restricts Western access to the same materials has political logic that crosses aisles. Battery manufacturers argue the FEOC restriction forces a supply transition that cannot be completed within the 45X credit window, creating a 2-3 year compliance gap during which battery production costs rise before non-FEOC supply chains reach scale. The China graphite export suspension makes the FEOC graphite restriction particularly acute: US manufacturers cannot easily source non-Chinese spherical graphite at scale in 2026.

By the numbers

• May 22, 2025, House passage of H.R. 1 (One Big Beautiful Bill Act).
• December 31, 2026, effective date for wind credit termination in the House bill.
• January 1, 2029, Senate-proposed extended wind credit termination deadline (with domestic content requirements).
• $100-$140bn, estimated planned wind investment at risk from the 2026 termination date (Tax Policy Center).
• 75,000, wind-industry estimated jobs at risk (American Clean Power Association).
• $2bn, Strategic Resilience Reserve appropriation (Section 20004).
• $1.5-$2bn, 10-year cost estimate for the new metallurgical coal production credit.
• 45X, the IRA Advanced Manufacturing Production Credit section covering battery cells, modules, and critical mineral components.

Why it matters

The 45X credit is the single most important US industrial policy instrument for battery manufacturing and critical minerals processing. For rare-earth magnets, it pays $0.20/W for NdFeB magnets and related components, directly incentivising the MP Materials and US Rare Earths domestic manufacturing build. The FEOC restriction aligns 45X with the broader export-control and price-floor framework, creating a consistent policy logic: US credits, stockpile purchases and price floors go to non-FEOC supply chains; FEOC-origin materials face both tariffs and credit ineligibility. The wind credit termination, if enacted as passed by the House, would be the largest single rollback of US clean-energy industrial policy since the IRA's passage, affecting a sector that reached 15% of US electricity generation in 2025. The Senate outcome will determine whether US offshore wind remains commercially viable and whether the US energy transition retains its current trajectory.

What to watch

• Senate floor vote on the OBBBA and whether the 2029 wind credit extension survives conference.
• Treasury and IRS FEOC definitions under 45X: which Chinese-owned entities qualify as FEOCs, and what tracing requirements apply to battery material supply chains.
• 45X credit claims by domestic critical mineral producers: whether the credit drives new investment in US rare earth separation, lithium hydroxide processing and graphite purification.
• Offshore wind project cancellations: whether developers exit US offshore markets entirely or wait for Senate modifications before making final investment decisions.
• Whether the $2 billion Strategic Resilience Reserve is deployed and what minerals are targeted for stockpile purchases in 2026-2027.