Trump’s Tax Law Delivers Billions in Support for Fossil Fuel Industry, Critics Say

President Donald Trump’s latest tax-and-spending legislation, referred to by supporters as the “Big Beautiful Bill,” is drawing sharp criticism from environmental and economic experts who say the measure provides extensive benefits to the fossil fuel industry while scaling back support for renewable energy and environmental protections, Rolling Stone reports.

The legislation, passed last week, includes a range of provisions aimed at boosting domestic oil, gas, and coal production through expanded tax breaks, royalty reductions, and deregulation. Supporters argue the bill promotes energy independence and job creation, but critics contend it comes at significant cost to the environment and to public revenue.

At the heart of the bill are several tax incentives for oil and gas producers. These include the permanent extension of tax breaks from the 2017 tax law, such as “bonus depreciation,” which allows companies to write off the full cost of equipment and drilling investments in the first year. The extension alone is projected to cost taxpayers $65 billion.

The bill also expands the ability of fossil fuel companies to deduct “intangible drilling costs,” including labor and supplies. Previously, these deductions were limited under the corporate alternative minimum tax (AMT), which ensures large, profitable companies pay a baseline level of taxes. The new law creates a carveout allowing fossil fuel companies to apply these deductions when calculating their AMT liabilities—potentially saving the industry more than $1 billion.

At the same time, the bill reduces or eliminates several tax incentives established under the Inflation Reduction Act for renewable energy development. According to analysts, the rollback could slow progress toward meeting US emissions targets and undermine investments in clean energy jobs.

“The bill is a substantial reorientation of federal energy policy,” said Jennifer Krill, executive director of the environmental group Earthworks. “It prioritizes fossil fuel expansion while pulling back from commitments to renewable energy and environmental justice.”

The legislation increases tax credits for carbon capture technologies, particularly those used to enhance oil recovery—injecting captured carbon into aging wells to extract more oil. These provisions could result in $14.2 billion in new subsidies over the next decade.

Additional measures reduce the royalty rates that fossil fuel companies pay to extract oil and gas on public lands, which the think tank Resources for the Future estimates could cost taxpayers $6 billion over 10 years.

The bill also mandates new oil and gas lease sales in the Gulf of Mexico, Alaska’s Cook Inlet, and the Arctic National Wildlife Refuge. These requirements reverse recent administrative actions that had paused or canceled lease auctions in these areas.

In a controversial move, the bill also includes a provision allowing companies to pay fees in exchange for expedited environmental reviews under the National Environmental Policy Act (NEPA). Critics argue the fast-track process could limit public input and weaken oversight of major industrial projects.

The coal industry also stands to benefit from the legislation, which opens up additional federal land for coal mining and introduces a new tax credit for metallurgical coal used in steel production. Though modest in size, the credit has been described as a political reward to certain regional producers.

Mike Sommers, president of the American Petroleum Institute, said the bill reflects many of the group’s policy priorities.

“It includes almost all of our priorities,” he told CNBC.

While the bill’s proponents argue that it supports US energy production and economic growth, critics say it shifts the country away from climate action at a time when global warming risks are rising.

“There’s a real question here of long-term strategy,” said Lukas Shankar-Ross of Friends of the Earth. “These tax breaks and deregulations could entrench fossil fuel dependence and divert investment away from sustainable alternatives.”