On July 4, 2025, after months of debate and negotiation, President Donald Trump signed the keystone budgetary bill for his second administration.
Dubbed "The One Big Beautiful Bill" (BBB), it will have a profound impact both on fossil fuel and clean alternative fuel manufacturing, storage and utilization well into the future.
The enactment of the BBB represents one of the most significant shifts in U.S. energy policy since the Inflation Reduction Act (IRA) of 2022. While the IRA accelerated investment in renewables, electric vehicles and clean liquid fuels through tax credits and grants, the BBB alters the subsidy structure, cutting or reshaping many clean energy incentives while strongly encouraging oil, gas and coal production.
In the middle of these changes to fiscal policy and at the core of the liquid energy supply chain sit terminal companies. Bulk liquid terminals are specialized facilities designed to store and handle large volumes of liquid products, from crude oil, gasoline, diesel and jet fuel to bioethanol, renewable diesel, SAF and various chemicals.
In recent years, especially with the help of the IRA, bulk terminal operators have increasingly diversified, investing in new tanks, pipelines and blending facilities to accommodate renewable diesel, SAF and other low-carbon liquids, anticipating steady growth driven by climate policies and consumer demand for decarbonization.
With the BBB, companies will now need to reconsider how they invest in storage infrastructure to handle green alternatives. For example, the BBB accelerates the date by which clean hydrogen production projects must begin construction before Dec. 31, 2027, to qualify for a tax credit. Meanwhile, those with hydrogen tank infrastructure will continue to benefit from the availability of the investment tax credit for hydrogen storage, compression and liquefaction equipment under IRA section 48E and the investment tax credit for hydrogen fuel cell property.
The BBB also extends the availability of the Clean Fuel Production Credit to fuel sold through Dec. 31, 2029. Qualifying fuels produced after Dec. 31, 2025, however, must be exclusively derived from feedstock produced or grown in the U.S., Mexico or Canada. In a blow to the SAF industry, the BBB reduces the per-gallon credit for SAF from $1.75 to the amount available to other transportation fuels of $1.00, effective for fuel produced after Dec. 31, 2025.
For fossil fuel production, the BBB opens up federal lands and waters to oil and gas drilling after the Biden administration enacted curbs, mandating 30 lease sales in the GoA over 15 years. The law also reduces the royalties that producers pay the government for pumping oil and gas on federal lands, encouraging higher output.
Likewise, the BBB reinstates full deductions for intangible drilling costs, delays the methane emissions fee until 2035, and increases the carbon capture tax credit for producers that utilize CO2 to increase oil recovery.
For the American consumer, the BBB eliminates the $7,500 federal tax credit for new EV purchases and leases, as well as the $4,000 credit for used EVs, effective Sept. 30, 2025. EV sales, which historically have been more expensive than their internal combustion engine counterparts but have grown in market share with these tax credits, will likely suffer as a result while increasing reliance on gasoline-powered vehicles.
So, as federal incentives to invest in green energy storage are reshaped or eliminated, fossil fuel production expands, and as the American public returns to the gas station in larger numbers, the bulk liquid terminals industry sits at a crossroads.
The most resilient bulk liquid storage companies will be those that can navigate this complex landscape, capitalizing on the immediate growth in fossil markets while maintaining optionality to pivot toward clean liquid fuels when policy and market conditions inevitably swing again.
For more information, visit ilta.org.
