How a new coal credit snuck into the GOP megabill

E&E News

11-07-2025

A West Virginia Republican whose family owns a sprawling coal business helped lead the quiet, last-minute effort to add a lucrative tax credit to the GOP megabill that could net the fossil fuel industry tens of millions of dollars.
Sen. Jim Justice, a longtime champion of fossil fuels, played a pivotal role in adding a provision to the One Big Beautiful Bill Act that delivered a tax win for the coal sector in a law that also claws back incentives for renewable energy projects.
By his side was fellow West Virginia Republican Sen. Shelley Moore Capito, chair of the Environment and Public Works Committee, who worked behind the scenes to tweak the House version of the package, according to her office.
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'She partnered with Senator Justice — who led this effort — in getting this [coal] provision added to the bill,' Kelley Moore, Capito's communications director, said in a statement. Capito, she added, was 'very supportive of this initiative.'
Now, companies angling to dig up metallurgical coal used for making steel — including those tied to Justice's family — are eligible for the advanced manufacturing production credit, known as 45X, first established in the inflation Reduction Act of 2022 to boost domestic production of energy components and critical minerals.
Under the new language, metallurgical coal is deemed a critical mineral and producers are eligible for a 2.5 percent tax credit through 2029, regardless of whether their coal is used to make steel in the U.S. or abroad.
Justice, in an interview with POLITICO's E&E News, said he was one of multiple people pushing for the new language. The senator said he wanted the credit to help companies dealing with dropping met coal processes and mine layoffs.
Indeed, metallurgical coal export prices have fallen by 33.6 percent in the last year, according to a July 1 report from the Energy Information Administration
'Major coal companies, metallurgical coal companies, are closing,' the senator said. 'This is just throwing a bone to the metallurgical producers to, some way, somehow, keep them going.'
Justice and Sen. Shelley Moore Capito (R-W.Va.) are seen with Justice's dog, Babydog, last month. | Francis Chung/POLITICO
Personal gain?
Justice said the language aligns with President Donald Trump's goal of upping steel production. But the senator's family is also deeply entwined with the coal sector.
Justice's family owns a company called Bluestone Coal, which produces metallurgical coal and stands to benefit from the tax credit.
According to a financial disclosure form filed last year, Justice owns more than $50 million in stock in Bluestone Resources Inc., more than $25 million in Bluestone Coal Corp. as well as more than $25 million in an inactive processing facility in Alabama.
Justice's son now controls Bluestone, according to the West Virginia secretary of state's website. The company could not be reached for comment.
William O'Grady, Justice's communications director, said that congressional leadership worked to get the provision into the bill 'because it was a priority of the President,' not because of any personal benefit to Justice.
'This tax credit will keep metallurgical coal miners employed and is right in line with the President's EO designating coal as a critical earth mineral,' O'Grady said.
'The perception that this coal tax credit was pushed to benefit the Senator is an empty condemnation by people who really just don't like the bill all together,' he added.
'Very meaningful'
Other metallurgical coal producers say the new credit will be a boon for an industry that continues to see layoffs and bankruptcies fueled by tough market conditions and depressed prices.
'2.5 percent is helpful, especially in a down market,' said Randall Atkins, founder of Kentucky-based Ramaco Resources, which mines both coal and minerals. 'I'm not quite sure that we've worked out all of the math yet, but depending on … how much coal you're producing, it could certainly be very meaningful.'
But the legislative addition has drawn blistering criticism from conservation groups and former Trump ally Elon Musk, who blasted the megabill for killing renewables while funding fossil fuels.
'Utterly insane and destructive,' Musk wrote on X shortly after the bill's passage. 'It gives handouts to industries of the past while severely damaging industries of the future.'
Conservation groups argued that the bulk of metallurgical coal in the U.S. is shipped overseas for making steel, meaning U.S. taxpayers would be funding materials intended for other countries' markets.
When asked about the export landscape, Justice said he was 'not at all' concerned about the new credit bolstering Asian steelmaking, given how 'minuscule' in size the new funding is.
At 2.5 percent, the credit is significantly less than the 10 percent advanced manufacturing production credit other critical minerals receive in the bill.
'If all we have is enough coal for the domestic market, the mine can't make it,' Justice said. 'As long as the coal is going to make steel, you know, then indirectly, we may benefit, but primarily we benefit from the standpoint that the mine is operational.'
GOP departure?
Even though Republicans moved to repeal credits for wind and solar, they were more generous to energy sources they prefer, including nuclear and geothermal. Some conservatives would have rather done away with credits altogether.
'I was very surprised to see this happen, and I was very confused about the general policy principle they were using to add this in,' said Shuting Pomerleau, director of energy and environmental policy at the center-right American Action Forum
'The conventional Republican thinking is that if a business needs to rely on tax credits to survive or to be profitable, then this business, it doesn't really have a good business case, it should just go away,' she added.
Tom Pyle, president of the conservatively-aligned American Energy Alliance, said tax credits undermine market efficiency and long-term energy affordability and that his group believes all energy sources should compete based on cost, reliability and performance — not political favoritism.
'Tax credits like the 45X provision distort energy markets by allowing the government to pick winners and losers,' said Pyle. 'The direct or indirect subsidization of any form of energy invites further government intervention and erodes the level playing field that drives innovation and consumer choice.'
Green groups argue the provision is just one of many handouts the GOP tucked in the bill to bolster the production and use of coal. The legislation also slashes coal royalty rates from 12.5 percent to 7 percent and opens 4 million acres of public land for expanded coal mining.
Cameron Walkup, an associate legislative representative at Earthjustice, blasted lawmakers for quietly adding the provision into the bill with no debate or transparency and said the language amounts to a production tax credit for an industry that already exports the vast majority of its product overseas.
'This provision was air dropped in at the last minute,' said Walkup. 'There was no debate or any substantive conversation about what this would actually mean or why it was being added.'
He added: 'It simply gives them a tax break on behalf of the American taxpayers.'