The “Unleashing American Energy” Executive Order
The “Unleashing American Energy” Executive Order, signed by President Trump on his first day in office, ordered Federal agencies to pause all disbursements under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. During this pause, the agencies are directed to review their processes, policies, and programs to ensure that financial disbursements of appropriated funds align with the administration’s overall energy goals. The order also abolishes the White House Office on Clean Energy Innovation and Implementation that former President Biden established.
Regulatory Freeze Pending Review
Another Day-1 Executive Order, “Regulatory Freeze Pending Review,” suspends the development of new regulations and prevents the publication of any pending, but not yet finalized, regulations until they are reviewed by a White House appointee for compliance with the new administration’s energy policy. Since these orders have been issued, there has been much speculation on how they will impact the green energy funding and incentives – especially via tax credits – in the Inflation Reduction Act.
Impact on Electric Vehicle Charging Infrastructure
The pause does directly impact the disbursement of funds for electric vehicle charging stations made available through the National Electric Vehicle Infrastructure Formula Program (NEVI) and the Charging and Fueling Infrastructure Discretionary Grant Program (CFIDGP). This immediate suspension of funding will certainly impact EV charging infrastructure. The impacts on the manufacturing and installation of EV charging stations remain to be seen, but there will be delays and disruptions at a minimum.
Potential Effects on Clean Energy Tax Credits
The language of the “Unleashing American Energy” Executive Order speaks to disbursement of grant funding but does not specifically address tax credits. Generally, revocation of tax credits requires Congressional action. The new clean energy tax credits established under IRC sections 30C, 45Z, and 48 seem to be unaffected. Similarly, any transferable tax credits established under IRC Section 6418 do not seem to be directly impacted. However, the Direct Pay rules codified under IRC Section 6417 may be affected by the Executive Order, and specifically by the language that “All agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 or the Infrastructure Investment and Jobs Act.” In the case of Direct Pay, these funds were appropriated in Public Law 117-169 and therefore would seem to be subject to the pause on disbursement. For tax exempt entities with Direct Pay projects, this will likely impact the timing of any direct payments that have been previously claimed but not yet received.
Navigating the Changing Energy Policy Landscape
Ultimately, President Trump’s “Unleashing American Energy” Executive Order signals a significant shift from the prior administration’s energy policy, and the pause may signal an upcoming broader elimination of incentives for clean energy and electric vehicles. We are helping clients stay informed through this ever-changing legislative and regulatory landscape, as these developments will be crucial to understanding how the new energy policy will be implemented.
If you need further guidance or have any questions on this topic, we are here to help you navigate these changes and how they may directly or indirectly impact your organization. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
