Donald Trump’s swift rollback of Joe Biden’s climate initiatives has put over $300 billion in federal infrastructure funding at risk, sending shockwaves through the clean energy sector. Within hours of being sworn in for a second term, Trump signed executive orders halting disbursements tied to Biden-era legislation, including the Inflation Reduction Act (IRA) and the bipartisan infrastructure law, the Financial Times reported.
The halted funds include nearly $50 billion in Department of Energy (DoE) loans already approved and another $280 billion in pending loan requests. These funds had been critical to fostering the energy transition Biden championed. “All agencies shall immediately pause the disbursement of funds appropriated” through the acts, said an executive order titled “Unleash American Energy.”
The decision has directly impacted projects such as a $9 billion conditional loan to Michigan’s DTE Energy and a $3.5 billion loan to Oregon-based utility PacifiCorp. While DTE has not responded to inquiries, PacifiCorp confirmed ongoing discussions with the DoE regarding loan conditions.
Rob Barnett, senior analyst at Bloomberg Intelligence, expressed skepticism about the future of these projects. “If you had grants, loan guarantees, funding that was sort of tied in with the IRA and the money’s not out the door yet, it’s going to be very hard to see that money go out the door under the Trump administration,” he told the Financial Times.
Trump’s late-night blitz of executive orders included a clear intent to dismantle Biden’s industrial and environmental policies. His actions have already created ripples across industries, with shares in Tesla, Rivian, Ørsted, and other clean energy firms tumbling on Tuesday. Shay Natarajan of Mobility Impact Partners noted that federal funding for EV and battery manufacturing would now be harder to access, raising concerns about stranded capital for ongoing projects.
The IRA and the 2021 infrastructure law were pivotal to Biden’s efforts, allocating $1.2 trillion for transportation improvements and $370 billion in tax credits, grants, and loans to promote clean energy. While the IRA’s tax credits remain unaffected, they are a fraction of the broader investment ecosystem now facing uncertainty.
Preempting Trump’s move, Biden officials rushed nearly $50 billion in loan commitments to developers after his re-election loss in November. Despite these efforts, investors are scaling back. Italian cable manufacturer Prysmian Group recently scrapped plans for a Massachusetts factory tied to offshore wind projects, while German energy giant RWE has reduced its US wind power ambitions.
Nearly 25GW of offshore wind projects—representing 65% of US developments—are unlikely to proceed under the Trump administration, Rystad Energy estimated. “When you start to make it look like there’s a lack of stability in the investment that you thought you were making into the US, that has a potentially very negative effect, long term, on our ability to attract capital,” Eli Hinckley, a partner at Baker Botts, warned.
Trump’s moves have reignited partisan battles over renewable energy and infrastructure, as investors, utilities, and policymakers brace for long-term repercussions.
Above article is written taking reference from the Financial Times
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