President Trump’s actions so far do not appear to have significantly affected the sentiment of investors in US clean tech
In brief
- The “unleashing American energy” executive order signed by President Donald Trump includes an immediate pause to the disbursement of federal grants and loans under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act
- The executive order does not impact the $270bn in tax credits that make up the bulk of the funding that is available through the IRA
- It is unclear if Trump intends to make any further changes to the IRA’s implementation, but he needs congress approval to reform the tax credits or repeal the act.
US President Donald Trump has ordered an immediate pause on the disbursement of federal grants and loans under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. However, key tax credits fueling U.S. clean tech investments remain untouched.
Passed in 2022, the IRA was a flagship Biden administration policy, which aimed to channel $369bn in federal funding towards energy and climate change projects.
The 2021 $1.2tn Infrastructure Investment and Jobs Act, often referred to as the bipartisan infrastructure law, was a broad piece of legislation boosting investment into US infrastructure. It included more than $100bn in funding for clean energy and transport investment.
The measures are part of the “unleashing American energy” executive order signed on January 21st. The order aims to increase the exploration of the country’s natural resources, with particular priority being given to oil, natural gas, coal, hydropower, biofuels, critical minerals and nuclear energy resources, including by removing “burdensome and ideologically motivated regulations”.
The order, scrutinizes subsidies for electric vehicles and renewable energy projects, which the government will now consider “eliminat[ing]”. The order also ends the US’s EV mandate, which was targeting 50 per cent of vehicles sales by 2030.
However, business leaders and investors argue that the IRA’s $270 billion in tax credits—crucial for clean energy infrastructure—continue to provide stability for the sector. Industry experts suggest that while the executive order introduces uncertainty, it does not derail the core incentives driving clean energy growth.
Chad Holliday, former chair of Shell and Bank of America, emphasized that clean tech firms are more focused on the tax credits that make their projects viable. Additionally, a significant portion of IRA grants and loans had already been distributed before Trump’s inauguration, further insulating the sector from immediate financial disruption.
The Financial Times reported that US investors are concerned that more than $300bn in federal infrastructure funding could be at risk because of Trump’s action.
Investors remain cautiously optimistic, noting that structural factors such as rising energy demand and the cost-effectiveness of renewables continue to support clean energy development.
believe it is highly unlikely that Republicans will repeal the IRA outright”, in a recent briefing note. Although they suggested IRA tax credits could be phased out more quickly than under current timelines.
Lawyers from Hogan Lovells
Others believe opportunities in adjacent sectors—such as battery storage, low-carbon power generation, and carbon capture technologies—will sustain momentum in the energy transition. With congressional approval required to alter the IRA’s tax provisions, experts suggest that substantial changes to clean energy incentives remain unlikely in the near term.
Richard Lum, Victory Hill Capital Partners
We believe the conditions will remain attractive for investments in renewables-adjacent infrastructure, which are overall supportive to the energy transition.
Source: SustainableViews
