H.R. 311 — Restoring Fuel Market Freedom Act of 2025

This section designates the Act as the “Restoring Fuel Market Freedom Act of 2025” and specifies that, unless otherwise provided, all amendments or repeals refer to provisions of the Internal Revenue Code of 1986.

This section repeals the alcohol fuels credit (IRC § 40). (Thus, taxpayers may not claim the credit for qualified fuels—generally, ethanol or other alcohols used as fuel—produced after the date of enactment.)

This section repeals the biodiesel and renewable diesel income tax credit (IRC § 40A). It makes conforming amendments to multiple IRC sections (e.g., §§ 25C, 30C, 38, 87, 196, 4101, 4104, 6426, and 7704) to remove or freeze references to § 40A, including revising § 87 to cover only the sustainable aviation fuel credit under § 40B; the changes apply to fuels sold or used after the date of enactment. (Thus, taxpayers may claim the § 40A credit—generally 1 cent per gallon for biodiesel or 1.7 cents per gallon for renewable diesel—for fuel sold or used on or before the date of enactment.)

This section repeals the sustainable aviation fuel (SAF) tax credit (i.e., a per-gallon credit of $1.25 plus $0.01 for each additional kilogram of CO2e reduction per million BTUs above a 50-kilogram baseline, up to $1.75 maximum, for producers and importers of SAF that achieves specified lifecycle greenhouse gas reductions compared to conventional jet fuel). (Thus, no credit is available for SAF sold or used after the date of enactment.) It also repeals the related income inclusion requirement for such fuels and makes conforming amendments to eliminate SAF references from the general business credit, alternative minimum tax adjustment, fuel registration requirements, and certain fuel tax credit provisions.

This section repeals the clean fuel production credit under IRC §45Z (i.e., a tax credit of up to $1 per gallon—or $1.75 per gallon for sustainable aviation fuel—for production of qualifying low-emission transportation fuels). It makes conforming amendments to IRC §§6417 (elective payment) and 6418 (credit transferability) and to Public Law 117-169 §13704, with the changes applying to transportation fuels produced after the date of enactment.

This section repeals the alcohol fuel mixture credit, biodiesel mixture credit, and alternative fuel mixture credit (IRC §6426), which provide producers a refundable excise tax credit—generally $0.20 to $1.00 per gallon—for blending such fuels with gasoline or diesel fuel. (Thus, the credits are available only for fuel used or sold on or before the date of enactment.)

This section repeals subsection (e) of Section 6427, which provided for payments relating to certain fuels (e.g., alternative fuels such as compressed or liquefied natural gas) not used for taxable purposes and which has expired. It also makes conforming amendments to Sections 40A(c), 40B(g), 4104(a)(2), and 6427(i) to strike cross-references to Section 6427(e), with the changes applying to fuel sold or used after enactment.