President Donald Trump suspended all Inflation Reduction Act funding disbursements in an executive order Monday, part of a sweeping set of directives to begin setting the new administration's energy agenda.
The action, dubbed “Terminating the Green New Deal,” also pauses all funding disbursements for the Infrastructure Investment and Jobs Act, commonly known as the Bipartisan Infrastructure Law. The two laws were hallmarks of former President Joe Biden's domestic policy agenda, rolling out billions of dollars in federal funding for clean energy construction and manufacturing projects.
Federal agencies have 90 days to submit reviews and spending recommendations to the Office of Management and Budget and National Economic Council.
However, the White House on Tuesday issued a memorandum clarifying the funding disbursement freeze.
The Office of Management and Budget said the pause on the disbursement of grants and loans applies only to “funds supporting programs, projects, or activities that may be implicated by the policy established in Section 2 of the order.”
Section 2 of the executive order, however, does not discreetly list portions of the two laws for which money should be paused. It instead includes broader language to direct agency actions, touching on issues such as encouraging energy exploration, protecting economic and national security and eliminating the electric vehicle mandate.
The memo does note that “agency heads may disburse funds as they deem necessary after consulting with the Office of Management and Budget.”
While it is not uncommon for new presidential administrations to pause funding disbursements for review, Trump’s executive order underscores his commitment to roll back the Biden administration’s climate policies. Trump also signed a separate executive order Monday withdrawing the U.S. from the Paris Agreement.
The funding pauses were part of a larger “Unleashing American Energy” executive order, which specifically called out the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program for review of their processes for issuing grants, loans and contracts.
The various moves were part of a broader slate of executive actions from Trump as he sets his energy agenda, focused on unleashing “America’s affordable and reliable energy and natural resources.”
Trump also called for the end of the “electric vehicle mandate,” and revoked President Biden’s 2021 executive order that called for half of new vehicles sold in the U.S. to be electric by 2030. The president has been critical of the mandate in the past, as well as of EV tax credits provided under the IRA.
Tax credits make up much of the IRA’s spending, compared to grants and loans. A Biden administration official told reporters Friday that roughly 84%, or $96.7 billion, in IRA clean energy grants were obligated before Trump took office, according to a Reuters report.
Under the Biden administration, the Energy Department announced 53 deals amounting to approximately $107.57 billion in committed project investment. The list includes major funding deals for manufacturing projects, such as $1.4 billion for Qcells’ upcoming Georgia solar cell factory and $9.6 billion for Ford Motor Co.’s joint venture battery factories with SK On.
