Over 60% of IRA Investments Now At Trump’s Mercy
February 9, 2025
ByAlex Kimani– Feb 09, 2025, 6:00 PM CST
- The Biden administration signed the historic Inflation Reduction Act (IRA) in 2022.
- Trump has repeatedly lambasted the IRA, describing it as the “biggest tax hike in history”.
- The IRA has so far survived Republican-led attempts to repeal major parts, but could be under serious threat under a second Trump administration.
It’s more than a week since President Donald Trump froze federal grants, and the clean energy sector is beginning to feel the heat. Billions of dollars in fully obligated grants, including those under the Inflation Reduction Act (IRA), remain frozen despite two court orders requiring the Trump administration to release the money.
“Look, we’re frustrated, right?” Mike Foley, the administrator of Cuyahoga Green Energy, a public microgrid and renewable energy utility in Cuyahoga County, Ohio, told Politico. “These were hard grants to get. We want to move forward with them and do the work.” Foley’s company and its partners are working on three IRA grants worth hundreds of millions of dollars.
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He is not alone. Hundreds of projects like that one are waiting for a green light from Trump’s new EPA team. On Tuesday, EPA’s acting financial chief, Gregg Treml, sent a memo advising that IRA and infrastructure funds would be released following a court order on Monday. However, a list of programs released later by the agency showed that all but one IRA grant program remained frozen.
The Biden administration signed the historic Inflation Reduction Act (IRA) in 2022, allowing hundreds of renewable energy companies to benefit from $369 billion in tax breaks and subsidies for clean energy. In the previous year, the Biden administration passed the Infrastructure Investment and Jobs Act (IIJA), with the act authorizing $1.2 trillion in spending for transportation and infrastructure; $43 billion (not including loans and tax incentives) in flexible spending to be used for battery manufacturing, retooling auto industry facilities, retraining and rehiring existing auto workers and grid updates while more than $7.5 billion would go to support the buildout of EV infrastructure.
Related: Uruguay’s Green Energy Success Story Takes an Unexpected Turn
Politico estimates that companies have announced plans to build or expand an estimated 555 manufacturing facilities thanks to generous IRA benefits. But here’s the kicker: less than half of the 230 facilities that were slated to commence by the end of 2024 beat the deadline, meaning that over 60% of IRA investments are now at the mercy of the Trump administration.
Trump has never hidden his disdain for clean energy (especially ‘windmills’). He has repeatedly lambasted the IRA, describing it as the “biggest tax hike in history”. Trump pledged to rescind any “unspent” funds under the IRA should he ascend to the Oval Office, again.
“To further defeat inflation, my plan will terminate the Green New Deal, which I call the Green New Scam,” the former president said before the Economic Club of New York in September.
The IRA has so far survived Republican-led attempts to repeal major parts, but could be under serious threat under a second Trump administration, the fact that Red States have actually benefited more from its bounty than blue states notwithstanding. Trump may lack the power to unilaterally roll back the climate law, but all bets are off with the GOP having a majority both in the House and Senate. Even without approval by Congress, Trump can certainly make its “implementation more difficult”, as Shannon Rinehart, portfolio manager at Threadneedle, has pointed out. His administration could hobble the climate law through executive action by revising treasury department rules yet to be finalized, holding back some of its loans and grants and/or tightening limits on tax credits.
Investments dedicated to the booming electric vehicle sector could also face pushback under Trump. The auto industry has already announced more than $100 billion in EV investments, creating more than 100,000 American jobs. Last year at a Detroit rally, Trump attacked the sector, claiming that EVs are “too expensive” and “don’t go far enough”. At first, Trump appeared to have softened his anti-EV stance after cozying up to Tesla Inc. (NASDAQ:TSLA) CEO, Elon Musk. However, one of Trump’s many “Unleashing American Energy” directives recently released pledges ‘‘…to eliminate the “electric vehicle (EV) mandate” and promote true consumer choice, which is essential for economic growth and innovation, by removing regulatory barriers to motor vehicle access; by ensuring a level regulatory playing field for consumer choice in vehicles; by terminating, where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles; and by considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable.’’
Meanwhile, last year, energy analytics firm Wood Mackenzie predicted that a second Trump presidency could place a huge part of renewable energy investments at risk, increase carbon emissions by 1 billion tonnes more by 2050 and delay peak fossil fuel demand by 10 years beyond current forecasts. WoodMac projected~$7.7T in overall spending by the U.S. energy sector through 2050 under policies enacted under Biden, a figure that could be cut by $1T under Trump through reduced policy support for low carbon energy and infrastructure improvements.
By Alex Kimani for Oilprice.com
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