Trump has suspended more than $300 billion in US green infrastructure funding
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Donald Trump’s return to the White House puts more than $300 billion in federal infrastructure funding at risk, U.S. investors said as they grappled with the scale of the move to vote for Joe Biden’s climate agenda.
Within hours of his inauguration on Monday, Trump signed several executive orders reversing Biden’s policies, including one that ended federal payments to manufacturers and infrastructure developers.
According to a Financial Times analysis, the funds affected include two of Biden’s signature legislative accomplishments — the Inflation Reduction Act and the Bilateral Infrastructure Act — and nearly $50 billion in energy loans already agreed to and $280 billion in loan requests under review. DOE loan portfolio.
The Trump administration said in an order titled “Unlock America’s Energy,” that “all agencies will immediately freeze funding.”
Among the costs now at risk are a $9bn conditional loan to Michigan-based utility DTE Energy and another $3.5bn to Oregon-based PacifiCorp.
DTE did not immediately respond to a request for comment. PacifiCorp said it is working with the department on loan guarantee conditions.
“If there were grants, loan guarantees, IRA-linked funding and the money isn’t out the door yet, it’s going to be very difficult to see the money go out the door under the Trump administration,” Robb said. Barnett, a senior analyst at Bloomberg Intelligence.
The executive order was among dozens Trump signed in a flash of the night after he was sworn in for a second term as president and pledged to end Biden’s “Green New Deal” and boost fossil fuel production.
Trump’s move to end funding sent shockwaves through the clean energy sector and signaled Biden’s willingness to dismantle industrial policy, particularly his programs to accelerate the energy transition.
“The executive orders indicate that it will be difficult to obtain federal funding for EV and battery manufacturing, increasing the risk of tied up capital for manufacturing projects already underway,” said Shay Natarajan of Mobility Impact Partners, a New York-based private equity fund.
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Both programs greatly expanded the Office of Energy Loan Programs, which was responsible for disbursing $400 billion to developers and has been a favorite target of Republican attacks.
Investors say they fear another $300bn worth of future federal funding – mostly from the infrastructure bill – will also be blocked by Trump’s move.
Unlike money at the credit bureau, IRA tax credits — the main type of subsidy in the law — can’t be affected. The credits have been a major driver of investment, with manufacturers committing more than $130 billion since the law was passed, according to an FT analysis.
Fearing that Trump would move to halt the payments, Biden officials pledged nearly $50 billion in loans to developers in the weeks leading up to his re-election victory in November.
Trump wants to stop building wind farms on federal lands and waters and has said he will end “unfair subsidies” for electric vehicles. Shares of Tesla, Rivian, Ørsted and other EV and wind companies fell on Tuesday.
This week, Italian cable maker Prysmian Group said it was canceling plans to build a factory in Somerset, Massachusetts, which would make cables for the offshore wind sector.
Other investors backed off their renewable energy plans in the US before Trump’s return. German energy giant RWE announced in November that it was pulling its US wind power plan.
About 25GW of offshore wind projects, 65 percent of U.S. development projects, will not be advanced under the Trump administration, Rystad Energy said Tuesday.
Eli Hinckley said, “When you start pretending that there is a lack of stability in the investment that you think you’re making in America, it has a long-term negative impact on your ability to attract capital.” Partner at Baker Botts.
Additional reporting by Claire Bushey, Christian Davies, Harry Dempsey, Kana Ingaki, Laura Pitel, Rachel Millard, Attracta Mooney, Stephen Morris, Patricia Nilsson.
