Article
Understanding foreign entity of concern (FEOC) provisions in the OBBBA of 2025
New compliance expectations and what they mean for your next energy project
July 30, 2025 · Authored by Robert Moczulewski, Jiyoon Choi, Matt Kaden, Beckett Woodworth
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, would extend foreign entity of concern (FEOC) restrictions, previously limited to the section 30D clean vehicle credit in the Inflation Reduction Act (IRA), to six additional clean energy tax credits:
- 45U zero-emission nuclear production credit
- 45Y tech-neutral clean electricity production credit
- 48E tech-neutral clean electricity investment credit
- 45X advanced-manufacturing production credit
- 45Q carbon capture credit
- 45Z clean fuel production credit
Prior law: Inflation Reduction Act FEOC definition
The IRA applied FEOC restrictions to the 30D clean vehicle credit. As defined in the IRA, a FEOC was an entity that met any of the following criteria:
- A designated foreign terrorist organization;
- An entity included on the Specifically Designated Nationals (SDN) and blocked persons list;
- An entity owned by, controlled by, or subject to the jurisdiction or direction of a foreign government;
- An entity involved in criminal activity under various U.S. national security laws; or
- An entity that is engaged in conduct detrimental to U.S. national security or foreign policy.
New law: OBBBA FEOC definition
The OBBBA expands upon the IRA’s FEOC definition and creates two new FEOC categories: (1) Specified Foreign Entities, and (2) Foreign Influenced Entities. Both categories are considered Prohibited Foreign Entities (PFEs). Any PFE is a FEOC.
Specified Foreign Entity (SFE)
The OBBBA definition of a SFE adds new criteria on top of the IRA’s 30D FEOC definition. Credit restrictions are extended to
