Legislation phases out production tax credits, shifts strategy toward federal stockpiles and private investment.
On Thursday, the United States House of Representatives passed the One Big Beautiful Bill Act, following Senate approval earlier in the week. The legislation now heads to President Trump’s desk for signature. The bill marks a major overhaul of key components of the Inflation Reduction Act (IRA), notably by scaling back a range of clean energy tax credits. At the same time, it includes significant direct investments in the U.S. critical minerals sector.
Under the IRA, tax incentives were extended in October 2024 to support the domestic production of critical minerals and the manufacturing of clean energy technologies. These included a 10% production tax credit for qualifying mineral projects. In its original form, the new legislation eliminated these credits entirely. The final version, however, adopts a phased sunset schedule: credits are reduced to 75% in 2031, 50% in 2032, and 25% in 2033, with full expiration by 2034. While less abrupt than an immediate cutoff, experts warn this timeline may still be too short for many new projects to be financially viable.
On the other hand, the bill introduces new federal spending measures that could support the domestic minerals supply chain. These include $2 billion to expand the National Defense Stockpile, allowing the government to purchase and store strategic minerals, and $500 million to grow the Department of Defense loan program.
While the new legislation scales back some funding for critical minerals, the U.S. has brought renewed focus to the sector through other actions. For example, in March, President Trump issued an executive order allowing mining and processing projects to receive immediate approval or expedited federal review.
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