The Inflation Reduction Act (IRA) is a wide-ranging document aiming at reducing inflation, improve healthcare across the country, invest in domestic energy production and manufacturing to increase security of supply and jobs while reducing carbon emissions and focusing on disadvantaged communities. One of the main objective of the Act is to lower energy costs while making cleaner technologies affordable, thus also reducing future costs of climate inaction. It further invests through federal support in a wide range of economic sectors to encourage their decarbonisation efforts. It also aims to increase and resilience among rural areas by supporting climate-smart practices for farmlands and forests.The Act is based on a series of tax credits, grants and subsidies with a $369 billion funding for climate- and energy-related purposes. Prominent incentives contain in the Act aim to boostthe U.S. manufacturing and buying of electric vehicles; U.S. manufacturing of solar panels, wind turbines and batteries; carbon-capture solutions ; green hydrogen production.The Act contains clauses on environmental justice 1) on legacy pollution reduction, 2) on affordable and accessible clean energy for disadvantaged communities, and 3) on better quality of life and good jobs (urban forests, renewable energy, adaptation programs).
In July 2025, Congress passed the 'One Big Beautiful Bill' Act, which repeals section 50262 of IRA and restored earlier legal provisions that had been amended by section 50262. Section 50262 of IRA increased the minimum royalty of gas leases from 12.5% to 16.66%, in addition to increasing the minimum rates for renting and bidding on oil and gas leases.
Furthermore, as of March 2025, the status of some of the other provisions of this entry are likely impacted by the Trump-Vance administration’s regulatory rollback on climate action and ongoing litigation challenging the rollback. To learn more about the rollback, visit the Sabin Center’s Climate Backtracker.
