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Here are three more questions to ask after a weird few weeks of policymaking.
Let’s start with a quick recap: In late-January, the Biden administration turned the energy world on its ear by announcing that it would pause approvals of new export facilities for liquified natural gas — a decision greeted with joy by activists and indignation by lawmakers. A few weeks later, The New York Timesreported that the administration was planning to ease up on planned regulations on car tailpipe emissions that would have pushed U.S. vehicle sales to become mostly battery-electric by 2030.
Then, on Thursday, the Environmental Protection Agency announced that it planned to delay its proposed regulations to rein in emissions from the country’s existing fleet of natural gas power plants. The administration still plans to finalize the tailpipe regulations, along with new, more stringent rules for existing coal plants and new natural gas plants on its original timeline, likely in the next few weeks. Oh, and it also launched a war on Chinese EVs.
This has left many with an understandable sense of whiplash. As the Times’ Lisa Friedman put it, “The weakening of the Biden administration’s two most ambitious climate rules would call into question the ability of the United States to meet the president’s goal of cutting United States emissions roughly in half by the end of this decade.” But … does it? There’s a lot we still don’t know about the administration’s plans, including what the new tailpipe rule will say and how the EPA will approach revising those gas plant regulations.
Here are a few more questions to consider.
Climate advocates were dissatisfied with the EPA’s original proposal for existing natural gas plants. The Natural Resources Defense Council estimated, based on EPA’s analysis, that the rules for existing plants accounted for only about 20% of the proposal’s overall emission reductions. Along with groups like Clean Air Task Force and Evergreen Action, the NRDC was concerned that the majority of gas plants weren’t covered by the rule, and that the compliance timeline was too slow. Others, including the Center for Biological Diversity and Earthjustice, were concerned about the rule’s reliance on carbon capture and the lack of restrictions on other emissions of concern from gas plants, like methane and nitrous oxide.
Industry, for its part, also didn’t like it. The Edison Electric Group, the main trade group for electric utilities, argued that the technological fixes the EPA was proposing to reduce emissions from existing plants — either carbon capture or a blend of clean hydrogen and natural gas — were not mature enough and therefore that the rule was not achievable.
In justifying the decision to delay, EPA administrator Michael Regan sent mixed signals. In an interview with Bloomberg, Regan said it was a way to achieve both “more flexibilities” and “more pollution reduction.” The first reads as an appeal to industry, the second to environmentalists.
Groups from both sectors claimed the news as a victory. The American Petroleum Institute’s president of policy, economics and regulatory affairs, Dustin Meyer, welcomed the delay, stressing the gas fleet’s importance to grid reliability as electricity demand grows. Emily Sanford Fisher, executive vice president for clean energy at the Edison Electric Institute, told the Washington Post, “we appreciate that EPA has acknowledged our concerns.” Meanwhile, Earthjustice seemed to take to heart the EPA’s pledge to make the rule tougher on toxic, non-carbon pollutants like formaldehyde. The group’s president, Abigail Dillen, called it a “more ambitious strategy.”
It’s hard to imagine how the EPA could make the rule tougher on pollution while also making it more flexible. In reality, what the delay could achieve is no rule at all.
Not all environmental groups are optimistic. The Sunrise Movement accused Biden of “caving to pressure from the gas lobby” and said the delay leaves the fate of power plant regulations up to the results of the upcoming election. Frank Sturges, an attorney at Clean Air Task Force, said in a press release that he was “extremely disappointed” by the news. The group estimates that the share of power plant emissions from gas plants will nearly double by 2040 without the regulations. “The shot clock is winding down for reducing power plant emissions, and rather than taking the shot to eliminate emissions from existing gas plants, EPA has chosen to sit on the bench,” Sturges said. — Emily Pontecorvo
It’s easy to forget about the non-presidential races during a presidential election year. But it is House and Senate elections in states like Ohio, Montana, Arizona, West Virginia, and Maine that might actually be the best predictors for how the country moves forward — or doesn’t — in the green energy transition.
The EPA’s decision to delay some of its power plant regulations appears to be at least partially a concession to these imperiled Democrats, even as the Biden administration has tried to play up its climate bona fides to general election voters. In December, five senators — Ohio’s Sherrod Brown, West Virginia’s Joe Manchin, Arizona’s Mark Kelly and Kyrsten Sinema (an Independent who caucuses with the Dems), and Montana’s Jon Tester — signed a letter opposing the EPA’s power plant emission rule, calling it a threat to jobs as well as the price and reliability of electricity, concerns that are common among centrist voters.
The letter isn’t just grumbling among the ranks; these are critical stakes. Intelligencer has described the 2024 Senate race as “the best for the GOP in living memory,” in part thanks to Manchin's impending retirement. If Democrats only lost the West Virginia seat and Trump won the election, the GOP would win the Senate majority with a vice-president-tie-breaking 50-50 split.
And that’s the best case scenario for climate policy in the event of a Biden loss. Democrats are defending three total seats in states that Trump carried in 2020 (Ohio, West Virginia, and Montana, which he won by 16 points) plus five others in states that Biden won, but barely (like Arizona, where Sinema has yet to commit to running for reelection). Meanwhile, Brown, Tester, and possibly Sinema are all running in “toss-up” elections that could break either way. Shoring up support for them in states where the economy will likely play better than the environment among voters is good politics, even if it’s questionable climate policy.
The same dilemma exists in the House, even if seizing control of the lower chamber looks more promising for the left. Sure enough, several Democratic Representatives also sent a letter opposing the EPA rules after their Senate colleagues did, with North Carolina’s Donald Davis and Maine’s Jared Golden among the electorally threatened signatories. Marie Gluesenkamp Perez, who represents the rural southwest corner of Washington state, also faces an uphill race and has expressed disapproval of the regulations; Ohio’s Marcy Kaptur, in a Republican-leaning district, has likewise spoken publicly against them.
It was because of the 2020 Democratic trifecta that Biden was able to pass the Inflation Reduction Act and the bipartisan infrastructure bill, and it’s partially because of the 2022 flip of the House and the current 50-50 Senate that progress has ground to a halt. What happens to the climate agenda in 2026 and beyond will depend on a Biden win — but not just. — Jeva Lange
One other wildcard is what weakening the rules could mean for union support. Biden has staked his presidency on transitioning to a zero-carbon energy system — and also on meeting union demands and creating a more fair economy. While both ideas are broadly appealing to Biden’s coalition (and especially to young voters), they can sometimes come into conflict on the specifics.
Shawn Fain, the popular leader of the United Auto Workers, has repeatedly expressed concern about Biden’s support for a rapid EV transition, fearing that it will set back the legacy American automakers. That is one reason Fain initially withheld the union’s endorsement of Biden’s reelection bid.
According to the Times, Fain has also repeatedly raised the proposed rules’ stringency with White House officials. In comments filed with the EPA, the union asked that the final rule ramp up its carbon requirements at a slower rate than initially proposed.
The power plant rules could also attract some skepticism from labor. Although the International Brotherhood of Electrical Workers endorsed Biden nearly a year ago, it fought an earlier version of the EPA’s power plant rules in 2014.
Changing how labor unions feel about the rules isn’t only important to Biden’s ability to sell the rules politically; it may also help him in court. The EPA and Biden administration would much rather have the unions on their side when GOP-led states sue over the regulations, as they almost certainly will. — Robinson Meyer
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On budget negotiations, Climeworks, and DOE grants
Current conditions: It’s peak storm season in the U.S., with severe weather in the forecast for at least the next six days in the Midwest and East• San Antonio, Texas, is expected to hit 108 degrees Fahrenheit today• Monsoon rains have begun in Sri Lanka.
The House Budget Committee meeting to prepare the reconciliation bill for a floor vote as early as next week appears to be a go for Friday, despite calls from some Republicans to delay the session. At least three GOP House members, including two members of the Freedom Caucus, have threatened to vote no on the budget because a final score for the Energy and Commerce portion of the bill, which includes cuts to Medicaid, won’t be ready from the Congressional Budget Office until next week. That is causing a “math problem” for Republicans, Politico writes, because the Budget Committee “is split 21-16 in favor of Republicans, and Democrats are expecting full attendance,” meaning Republicans can “only lose two votes if they want to move forward with the megabill Friday.” Republican Brandon Gill of Texas is currently out on paternity leave, further reducing the margin for disagreement.
House Speaker Mike Johnson is also contending with discontent in the ranks over cuts to clean energy tax credits. “It’s not as bad as I thought it was going to be, but it’s still pretty bad,” New York Republican Andrew Garbarino, a co-chair of the House Bipartisan Climate Solutions Caucus, told Politico on Thursday. But concerns about the cuts, which would heavily impact Republican state economies and jobs, do not appear to be a “red line” for many others, including Georgia’s Buddy Carter, whose district benefits from Inflation Reduction Act credits for a Hyundai car and battery plant that is among the targets for elimination. You can learn more about the cuts Republicans are proposing to the IRA in our coverage here.
The Swiss carbon removal company Climeworks is preparing for significant cuts to its workforce, citing the larger economic landscape and the Trump administration’s lack of consistent support. The company currently has 498 employees, but is undergoing a consultation process, indicating it is looking to cut more than 10% of its workforce at once, SwissInfo.ch reports. “Our financial resources are limited,” Climeworks’ co-founder and managing director Jan Wurzbacher said in comments on Swiss TV.
Though Interior Secretary Doug Burgum is a known proponent of carbon capture, and there had been excitement in the industry that Trump’s attempts to expedite federal permitting would benefit carbon storage sites, the administration has also hollowed out the Department of Energy’s carbon removal team, my colleague Katie Brigham has reported. The ongoing funding cuts and uncertainty have made it difficult to get information from the government that could affect Climework’s Project Cypress in Louisiana, although Wurzbacher stressed that “we are not currently aware that our project would be stopped.”
Energy Secretary Chris Wright announced in a Thursday memo that the department will be reviewing at least $15 billion worth of grants awarded to “power grid and manufacturing supply chain projects” under the Biden administration, Reuters reports. “With this process, the Department will ensure we are doing our due diligence, utilizing taxpayer dollars to generate the largest possible benefit to the American people and safeguarding our national security,” Wright said in his statement.
The memo goes on to note that the DOE plans to prioritize “large-scale commercial projects that require more detailed information from the awardees for the initial phase of this review, but this process may extend to other DOE program offices as the reviews progress.” Projects that don’t meet the DOE’s standards could be denied, as could projects of grantees who fail to “respond to information requests within the provided time frame, does not respond to follow-up questions in a timely manner.” As of last week, Wright told lawmakers, “we’ve canceled zero” existing projects so far, E&E News writes; the agency will reportedly be reviewing at least 179 different awards during its audit.
The number of National Weather Service offices ending 24-hour operations and severe weather alerts is increasing. On Thursday, The San Francisco Chronicle confirmed that California’s Sacramento and Hanford offices, which provide information to more than 7 million people in the Central Valley, have been forced to reduce service due to “critically reduced staffing.”
Eliminating 24-hour service is especially concerning for the Central Valley and surrounding foothills, where around-the-clock weather updates can be critical. “These are offices that have both dealt with major wildfire episodes most of the past 10 years, and we are now entering fire season,” Daniel Swain, a climate scientist at UCLA and UC Agriculture and Natural Resources, told the Chronicle. “That’s a big, big problem.” Swain additionally shared on LinkedIn a map he’d put together of regions in the U.S. that no longer have full-service weather coverage, including “a substantial chunk of Tornado Alley during peak tornado season and the entirety of Alaska’s vast North Slope region.” The NWS is additionally seeking to fill 155 vacancies in coastal states that could face risks as the Atlantic hurricane season begins at the end of the month, The Washington Post reports. An estimated 500 of 4,200 NWS employees have been fired or taken early retirements since the start of Trump’s term.
Heatmap’s “most fascinating” EV of 2025 just got pushed back to 2026. The Ram 1500 Ramcharger — which has a 140-mile electric range as well as a V6 engine attached to a generator to power the car when the battery runs out — is now set to launch in the first quarter of next year due to “extending the quality validation period,” Crain’s Detroit Business reported this week. Parent company Stellantis also pushed back the launch of its fully electric Ram 1500 REV until summer 2027, with a planned model year of 2028. “Our plan ensures we are offering customers a range of trucks with flexible powertrain options that best meet their needs,” Stellantis spokeswoman Jodi Tinson told Crain’s in an email. Though you now have even longer to wait, you can read more about the car Jesse Jenkins calls “brilliant” here.
GMC
The 2026 GMC Hummer EV just got even more ridiculous. “Thanks to the new Carbon Fiber Edition,” the 9,000-pound car “can zoom to 60 miles per hour in 2.8 seconds,” InsideEVs reports.
A conversation with Jillian Blanchard of Lawyers for Good Government about the heightened cost of permitting delays
This week I chatted with Jillian Blanchard, vice president of climate change and environmental justice with Lawyers for Good Government, an organization that has been supporting beneficiaries of the Inflation Reduction Act navigate the uncertainties surrounding tax credits and grant programs under the Trump administration. The reason I wanted to chat with Jillian is simple: the IRA is under threat for the first time under a Republican Congress. I wanted to understand how solar and wind projects could be impacted by the House Republican reconciliation bill and putting IRA tax credits in doubt. I learned a lot.
The following conversation was lightly edited for clarity.
Okay, Jillian, what’s the topline here? How would the GOP reconciliation bill impact individual projects’ development?
There are big chunks of the reconciliation bill that will have dramatic impacts on project development, including language that would repeal or phase out bipartisan and popular tax credits in a way that would make it very, very difficult to invest in projects. I can get into the weeds next.
But it’s worth saying first – the group of programs aside from tax credits that [House Republicans] would repeal represents every single part of America. Hundreds of projects that will not go forward if these programs are not going well. And they have several legally obligated grants that EPA has already mucked up in a litany of ways. But what they’re proposing to do is to pull the rug out from under those programs. On top of that they want to pull any unobligated funding out.
I think it’s extremely misrepresentative to say these are not big cuts. They’re significant cuts to clean air and clean water across the board.
Help me get into the weeds about how phasing out the credits will make it harder to invest in a project.
Right now, a bank might want to invest a certain amount of money in a clean energy project because they know on the back end they can get 30% or 40% back on their investment. A return through tax credits. They can bank on that, because tax credits are a guarantee.
Was that an intentional pun? “Bank”?
Yeah, it is. I love a good pun. You opened the floodgates, that was a mistake.
But anyway, the program itself was supposed to be around until at least 2032 and the bank could bank on those tax credits. That’s a big runway, because projects could get delayed and you could lock in the credit as soon as you started construction.
Now they’re doing a phase-out approach where if your project is not placed into service before a certain date, you don’t avoid the phase out. You don’t get any protections if you’re starting your project now or next year. It has to be placed in service before 2028 or else your project may not be eligible. You are constructing it, you are financing it, but then through no fault of your own – a storm or whatever – then suddenly that project is no longer entitled to get 30% or 40% back.
That’s a big risk. And banks don’t like risk.
Opposition on the ground also delays projects the way a storm does. Would this empower those opponents?
Oh, totally. Totally. If anyone wants to fight a project, a bank might be even less likely to invest in it. The NIMBYs for that particular project become a risk.
What would you tell a developer at this moment who is wondering about the uncertainty around the IRA?
I would tell them that now is the time to speak up. If they want to stay in this business and make sure their energy stays as low-cost as it already is, they need to speak up right now, no matter what their political party affiliation is. Make it clear solar isn’t going away, wind isn’t going away, storage isn’t going away. These are markets America needs to be competitive with the rest of the world.
Investors are only just now starting to digest what the proposed cuts will mean, especially for energy storage.
Is Wall Street too sanguine about the House of Representatives’ proposal to gut the Inflation Reduction Act? When the House Ways and Means Committee unveiled its language on the law on Monday — phasing out tax credits, implementing strict restrictions on business relationships with Chinese companies, and altering when projects are eligible for credits — some investors responded to the cutbacks by driving up the prices of some clean energy stocks.
The residential solar company Sunrun traded up on Tuesday by 8.6%, and the American solar manufacturer First Solar was up over 22%. (Stock movements on Monday were largely in response to the pause of the U.S.-China trade war, also announced that morning.)
“The early drafts of a Republican tax and spending bill weren’t as bad for renewables as feared,” wrote Barron’s. Morgan Stanley analysts used the same language — “not as bad as feared” — in a note to clients on the text. “Industry was bracing for way worse,” Don Schneider, the deputy head of public policy for Piper Sandler and a former Republican staffer on the Ways and Means Committee, wrote on X.
While many analysts — and, to be honest, journalists at Heatmap — have issued dire warnings about how the various provisions of the Ways and Means language could together make much of the IRA essentially impossible to use, even before the tax credits phase out, investors on Wall Street and in Washington seem to have shrugged them off. Some level of cutting was all but inevitable, and “not as bad as it could have been” is reason enough to celebrate — plus there’s also “it’ll probably change, anyway.”
There’s something to this. A group ofmoderate Republicans criticized the language on Wednesday as too restrictive, specifically citing changes to three overarching features of the tax credits: when projects would be eligible for tax credits, where companies are able to source components and materials, and whether companies are allowed to freely buy and sell tax credits generated by their projects. (Wouldn’t you know it, these complaints largely echo what Heatmap has written in the past few days.)
In the Senate, meanwhile, Republican Kevin Cramer of North Dakota, said that the text as written would be too damaging to advanced nuclear and enhanced geothermal generation. The phase-out timelines in the Ways and Means language are “too short for truly new technologies,” Cramer told Politico.
Pavan Venkatakrishnan, an infrastructure fellow at the Institute for Progress, told me that he expects the bill to evolve in a way to meet the concerns of Senate Republicans like Cramer.
“Given considerations both political and procedural, like the more flexible reconciliation instructions Senate Finance is afforded relative to House Ways and Means and the disproportionate impact current text entails for technologies Republicans traditionally favor, like nuclear, geothermal, and hydropower, I think it’s fair to say that this text will change over the coming weeks,” he said.
Finally, days after the Ways and Means committee made its thinking public, Wall Street seems to be catching on to the implications. The new foreign entities of concern rules pose a particularly huge danger to the renewable energy sector, according to Jefferies analyst Julien Dumoulin-Smith, and especially to energy storage, which would be the key provider of reliability on a renewable-heavy grid. Energy storage looks to account for almost 30% of new generator additions this year, according to the Energy Information Administration.
“We think the market got it wrong for storage,” Dumoulin-Smith wrote in a note to clients. The market has yet to “digest and fully interpret the implications of proposed tariff and tax policy, which as currently written do not bode well for storage,” he said. The foreign sourcing language “is more restrictive than initially thought, with some industry stakeholders calling the proposal a near repeal on IRA.”
The storage supply chain is intensely entangled with China. Many companies, including Tesla,have been forced to disclose to investors just how reliant they are on China for their storage businesses.
China alone accounted for 70% of battery imports in 2024, according to industry analysts at BloombergNEF, over $14 billion worth. About a quarter of the metals used in battery manufacturing — especially graphite — came from China, BNEF figures show. For specific battery chemistry like lithium iron phosphate, which is popular for stationary storage products, the supply chain is essentially 100% Chinese.
Wall Street revenue and profit estimates “do not adequately capture the extent of risks” facing the U.S. storage industry, Dumoulin-Smith wrote. The storage company Fluence’s stock fell around 1.5% today, and is down over 5.5% since close of trading on Monday, as the market began to digest the House language.
It is possible that the foreign sourcing rules will be loosened and phase-outs for tax credits and transferability lengthened, Venkatakrishnan told me, but not in a way that would endanger the overall structure of the bill. Cuts to the Inflation Reduction Act are a key source of revenue for the Republican bill-writers to ensure as many of the tax cuts they want can fit within the budgetary scope they’ve given themselves.
“Any adjustments will be made with an eye toward ensuring budgetary offsets are sufficient to enable success of the broader enterprise,” Venkatakrishnan said. In other words, as much as some lawmakers may want to see these tax credits preserved, ultimately, they’ve got to pass a bill to ensure Trump’s tax cuts stick around.