Donald Trump’s return to the White House has put over $300 billion of potential US green infrastructure funding at risk, according to US investors and The Financial Times analysis. On his first day in office, Trump signed a series of executive orders, one of which halted federal disbursements to developers and manufacturers involved in clean energy projects. This includes loans and grants provided under two of Joe Biden’s key legislative achievements: the Inflation Reduction Act (IRA) and the bipartisan infrastructure law.
As reported by The Financial Times, nearly $50 billion in Department of Energy loans that had already been agreed, alongside $280 billion in loan requests still under review, are now on hold. These funds were intended to support energy transition projects, including renewable energy development and electric vehicle (EV) infrastructure. Among the affected funds are a $9 billion conditional loan to Michigan-based DTE Energy and a $3.5 billion loan to Oregon’s PacifiCorp, with more projects facing uncertainty.
Trump’s executive order, titled “Unleash American Energy,” mandates a pause on any disbursement of funds appropriated through Biden’s signature laws. The order has sent a shockwave through the clean energy sector, signaling Trump’s intent to reverse Biden’s industrial policies, particularly the efforts to accelerate the shift toward cleaner energy. The move to freeze funding also jeopardizes ongoing and future EV and battery manufacturing projects, increasing the risk of stranded capital, according to experts like Shay Natarajan from Mobility Impact Partners, as highlighted by The Financial Times.
The clean energy sector, already dealing with the implications of Trump’s policies, faces significant disruption as projects now risk losing crucial funding. Investors had hoped for stability with the IRA’s tax credits, which are not expected to be directly impacted by the freeze on loan disbursements. However, it’s feared that the freezing of future funding could undermine the momentum of the US’s energy transition. The infrastructure law alone offered $1.2 billion for transportation system improvements, and the IRA committed $370 billion to tax credits, grants, and loans, which were pivotal for clean energy investments.
As Trump also seeks to stop wind farm construction on federal lands and water and end “unfair subsidies” for electric vehicles, shares in companies like Tesla, Rivian, and Ørsted have taken a hit. The Financial Times further reports that Italy’s Prysmian Group, a cable manufacturer, has already scrapped plans to build a factory in Massachusetts that would have supported the offshore wind industry. Similarly, German energy giant RWE announced in November its decision to scale back US wind power investments.
The US green energy sector now faces a stark dilemma as investors fear the potential long-term consequences of this policy shift. Nearly 25 gigawatts of offshore wind projects—65% of the total projects currently in development—could be delayed or scrapped under Trump’s new administration. With a lack of investment stability, industry experts warn that attracting future capital to the US could be increasingly difficult. As Eli Hinckley of Baker Botts explained, these developments could have a “potentially very negative effect” on the US’s ability to secure long-term investments in renewable energy.
