According to White House sources, Trump has signed an executive order directing federal agencies to immediately suspend fund approval under the Inflation Reduction Act (IRA).
The executive order requires “all agencies to immediately suspend” the disbursement of funds under both the IRA and the BIL, and mandates agencies to review grants, loans, and other allocations related to the IRA.
The Trump team claims this move aims to raise funds for tax cuts but fails to specify the amount to be recovered or the specific industries involved.
However, the White House Office of Management and Budget clarified in a memo on Tuesday that Trump’s order only applies to funds violating a series of policy objectives, including encouraging increased energy production and eliminating support for electric vehicles. Funds for other projects such as bridges, transportation, and highways will not be affected.
Regarding funds already disbursed, the industry widely believes they are extremely difficult to recover and are not expected to be reclaimed. Additionally, according to the Conservation Law Foundation (CLF), it is illegal for the president to reclaim funds already approved by Congress.
Trump has effectively halted IRA expenditures for 90 days, but to fully dismantle the IRA, his party needs to overcome many obstacles—especially considering that many congressional Republicans support the IRA.
But what is certain is that no more IRA funds will be disbursed until the reviewing department signs off on how the money will be used.
Foreign media points out that Trump’s suspension of the IRA could have a significant impact on the US clean energy industry. A large amount of funding will be shelved, putting many clean energy projects at risk of funding shortages, including wind, solar, and hydrogen energy.
Prior to this, the US Department of Energy had committed to providing over $170 billion in grants and loans for wind, solar, hydrogen, and electric vehicle projects. The US Environmental Protection Agency (EPA) recently reported that it had disbursed 93% of the grant funds obtained through the IRA.
It is also worth mentioning that the executive order suspends funding for the IRA, including federal incentives for solar energy. However, it is unclear how solar incentives will be affected. In the executive order “Declaring a National Energy Emergency,” solar energy was not defined as an energy resource. Most fossil fuels, oil, natural gas, and petroleum products, as well as geothermal and hydroelectric power, are defined as energy sources.
