Latest News

Trump's tax bill gives a break to coal used in steel production

The latest version of Donald Trump's proposed tax bill includes a reduction in the price of coal used to produce steel. This subsidy could amount to hundreds of millions over a period of 10 years, for a fuel which is mainly exported to China.

In April, Trump issued executive orders directing Chris Wright, former CEO of fracking and energy secretary, to determine if metallurgical coal, or met coal, is a critical mineral. Wright did so in May.

The latest version of Trump’s One Big Beautiful Bill, released by the Senate over the weekend, allows met coal to claim a tax credit for advanced manufacturing production, which is available for critical minerals and would cover 2.5% of the cost of the fuel.

Sonia Aggarwal of Energy Innovation, an non-profit organization, said that allowing met coal get credit was insane as it could hurt efforts to switch to fuels with less carbon intensity.

Robbie Orvis is a director at Energy Innovation and estimates that the credit for met coal producers could be worth $300,000,000 over a ten-year period. He also said the subsidy might help China compete against U.S. made steel.

If Trump decides to use emergency powers, he could increase production by giving met coal the "critical mineral" classification. This is usually reserved for minerals used in high-tech defence systems.

Conor Bernstein is a spokesperson of the National Mining Association. He said that the bill promotes jobs in the United States, manufacturing, and the economy. "Providing incentives to encourage steel-making coal is a way to achieve each of these objectives."

The Metallurgical Coal Producers Association of West Virginia has not responded to our requests for comment on how the tax credit will benefit producers.

West Virginia, a top U.S. mining state, has experienced several layoffs of met coal workers in the last few months. Ben Beakes of the West Virginia Met coal Association blamed layoffs in local media on inflation. (Reporting and editing by Marguerita Choy)

(source: Reuters)