Restoring Fuel Market Freedom Act of 2025
HB311, titled the Restoring Fuel Market Freedom Act of 2025, would repeal a set of federal tax credits and related provisions for fuel production and blending. Specifically, it eliminates the alcohol fuels credit, biodiesel fuel credit, sustainable aviation fuel credit, clean fuel production credit, and the alcohol fuel, biodiesel, and alternative fuel mixtures credit, along with several associated references and conforming rules in the Internal Revenue Code. The bill also removes or revises related reporting, income inclusion, and excise-tax provisions that currently reference those credits.
The measure is structured as a series of amendments to the Internal Revenue Code of 1986, with effective dates generally applying to fuels produced, sold, or used after enactment. It would therefore change the tax treatment of producers, importers, blenders, and certain taxpayers who currently benefit from these credits, and it would also affect related administrative and compliance provisions tied to fuel registration and tax reporting. In practical terms, the bill would reduce or eliminate federal tax incentives supporting ethanol, biodiesel, sustainable aviation fuel, and other alternative fuel mixtures.
HB311 would substantially amend federal tax law by repealing multiple energy-related credits in the Internal Revenue Code and striking numerous cross-references to those credits throughout the code. The affected provisions include sections 40, 40A, 40B, 45Z, 6426, and related conforming sections, which would alter tax liability, eligibility for credits, and reporting obligations for fuel producers, importers, blenders, and taxpayers claiming related benefits. The bill would also remove certain expired or obsolete fuel payment provisions and update excise-tax and income-tax rules that currently depend on the repealed credits.
No committee transcript or vote record was provided, so there is no documented floor or committee debate to gauge support or opposition. Based on the bill text and sponsor framing, the measure appears to be presented as a deregulatory or market-oriented rollback of federal fuel subsidies. The title and structure suggest support from members favoring reduced federal intervention in fuel markets, while the targeted repeal of clean fuel and biofuel incentives would likely draw opposition from stakeholders benefiting from those credits.
The main point of contention is the repeal of tax incentives for alternative fuels, especially biodiesel, ethanol, sustainable aviation fuel, and the clean fuel production credit. Supporters are likely to argue that these credits distort markets, while opponents are likely to argue that they encourage domestic production, lower-carbon fuels, and investment in emerging energy sectors. Additional friction may arise over the bill’s impact on existing business models, tax planning, and compliance systems for fuel producers and blenders that currently rely on these provisions.