Trump could waive Biden’s energy credits and still defeat the IRA | Wilnesh News

The fate of President Joe Biden’s landmark climate legislation, the Inflation Reduction Act, rests in the hands of the incoming Republican-controlled White House, Senate and House of Representatives.

At the White House level, President-elect Donald Trump has nominated three people to administration positions who, if confirmed by the Senate, could be critical to the future of the IRA: hedge fund executive Scott Bessant as Treasury secretary, oilfield services company free energy Executive Chris Wright leads the Department of Energy and the North Dakota Department of the Interior. Doug Burgum.

Any full repeal of the IRA would have to be passed by both houses of Congress, and Republican lawmakers have so far been reluctant to completely discredit the law’s benefits. House Speaker Mike Johnson, a Louisiana Republican, told CNBC in September that he would use a “scalpel, not a sledgehammer” against the IRA.

There’s good reason for this approach: As of the end of October, about three-quarters of clean energy investments made with IRA funds benefited from congressional districts that supported Trump in the 2020 presidential election, according to one study. Washington Post analysis The data comes from MIT and clean energy think tank Rhodium Group.

But Tanuj Deora, the former clean energy director for the Office of the Chief Federal Sustainability Officer in the Biden administration, said future actions taken by Trump Cabinet members will also be “very important” to the future of the massive legislation. These agencies have considerable authority over the interpretation and administration of IRA programs and incentives, such as tax credits and business loans.

Top priorities for Republicans heading into 2025 Extend the expiring provisions of the Tax Cuts and Jobs Act of 2017. his first 100 days Taking office next year.

The extension will cost $4.6 trillion over the 10-year budget window, It is estimated From the Congressional Budget Office.

“In addition, Trump has promised another seven to eight trillion in tax cuts in the final weeks of the (presidential) campaign,” said Keith, co-director of projects at the legal and lobbying firm Norton Rose Fulbright. Keith Martin said.

However, all of that money has to come from somewhere, and experts say the IRA provisions offer the best potential for cost savings. during an interview financial times Last October, Bessant called the IRA a “deficit doomsday machine,” suggesting Trump could dismantle it to cut spending.

IRA contains A series of targeted tax incentives Designed to promote clean technology and energy production across the country.

Among them, the renewable energy tax credit, particularly for carbon capture technology, domestic manufacturing and the transition to green economy jobs, is popular with Republicans and likely will not be affected by any potential repeal, Martin said.

But experts predict that the current phase-out date for the IRA tax credit may be brought forward, and the Trump transition team is already negotiating to completely eliminate the $7,500 consumer tax credit for electric vehicles.

Most of the final rules governing the implementation of the IRA tax credit have been finalized or are expected to be finalized by the end of this year.

But Julie McNamara, deputy policy director at the Union of Concerned Scientists, said there is still considerable concern that remaining funding could be revoked, frozen or “awarded in a manner consistent with shifting priorities” in the new administration.

She added: “Theoretically, a future Treasury could reverse the direction of interpretation and implementation, but this would take a long time and would need to be reasonable and defensible if challenged in court.”

A more pressing question, experts say, is the future of the Department of Energy’s Loan Program Office (LPO), which provides financing for green projects. Although Wright has yet to comment on the LPO, several republicans Calls for downsizing or abolishing it altogether.

As of November, private companies were seeking more than $300 billion in financing applications from LPOs. Beneficiaries of the loan program include TeslaIts chief executive, Elon Musk, co-leads Trump’s external advisory council, known as the Department of Government Effectiveness.

The Inflation Reduction Act expanded LPO lending authority and project qualification requirements.

“I think a lot of the private sector is very focused on loan programs,” said Claire Broido-Johnson, co-founder and president of Sunrock Distributed Generation, a financier and developer of commercial-scale solar projects. “Everyone is trying to get as many projects into the process as possible before the change of government.”

Martin said this need can only be met through “all of the above” energy policies, especially if Trump plans to reduce energy prices by 50% in his first year in office. as he promised.

Macchiarola and Deora said potential Trump Cabinet officials in the energy sector are consistent with this message.

“Burgum has a pretty clear record of supporting energy investments of all kinds, and given the real need for more energy infrastructure of all types, it seems difficult to imagine that someone with his background, business capabilities and governance capabilities would Trying to prevent the deployment of any reasonable technology as quickly as possible,” Deora said.

North Dakota is one of the lead Wind energy is the source of more than one-third of the state’s electricity.

As for Wright, although he rejected He works in the solar industry and the oil and gas industry because of the climate crisis, according to Trump’s statement announcing the nomination.

“He’s not necessarily against any technology, he’s just for certain technologies,” Deora said.

Ultimately, all of the above energy approaches will effectively defeat the purpose of climate policy, although this may sound reassuring to sectors that have been negatively affected by targeted attacks on renewable energy.

“Climate change is not about how many solar panels we install. Climate change is about how much carbon dioxide and methane we don’t acknowledge,” Deora said.

“The question is not whether we can stay in business and keep solar developers happy. It’s really about will we produce more fossil fuels?”