The White House says the order to freeze IRA payments only applies to some programs Reuters
(Reuters) – The White House said President Donald Trump’s order this week pausing funds approved under his predecessor’s signature climate and infrastructure bills mostly applies to programs that discourage fossil fuel development or encourage electric vehicles.
As part of a series of executive orders hours after taking office on Monday, Trump ordered government agencies to freeze funding from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.
The White House Office of Management and Budget clarified in a memo Tuesday that Trump’s order only applies to funds that run counter to a list of stated policy goals, which include encouraging more energy production on federal lands and ending subsidies for electric vehicles. Funds that go to other programs, such as bridges, transportation and highways, will not be affected.
It is unclear whether the order puts large funds at risk.
The Biden administration said before Trump’s inauguration on Monday that the vast majority of grants for clean energy programs awarded under the IRA, for example, were already obligated and protected, at just $11 billion.
Most of the IRA’s support for clean energy and electric vehicles, meanwhile, comes from tax credits that can only be revoked by an act of Congress.
Robert Moczulewski, director of tax consultancy Baker Tilly, said Trump’s order could face legal hurdles if it delays any significant funding.
“Pausing funding already appropriated by Congress may prompt legal challenges, although the administration may impose interim review procedures,” he said.
The order requires U.S. agencies to consult with OMB before disbursing money.
Meanwhile, the impact on lithium mining projects, which support EV battery production, is unclear.
The Biden administration has finalized loans for several U.S. key mineral projects in recent months, including a $2.26 billion debt package for Lithium Americas (NYSE: ) and nearly $1 billion for Ioneer.
Those loans are final and cannot be changed, according to two industry sources and an administrative source familiar with the terms of the loan. Representatives for Vancouver-based Lithium Americas and Australia-based Ioneer were not immediately available for comment.
Loans for other U.S. key mineral projects not completed before Biden leaves office could be vulnerable. That list includes 24 projects seeking a total of $45 billion, according to the Department of Energy.
