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On a surprise agreement, DOE loans, and pipeline permitting
Current conditions: More than 7 million Americans are under risk of tornadoes Tuesday, including in the Mississippi, Ohio, and Tennessee valleys • There is “dreary” weather ahead for the Northeast as rain and cold return • It will feel like 107 degrees Fahrenheit today in Xingtai, China, where the average this time of year is 86 degrees.
The Trump administration has lifted its stop-work order on Empire Wind, an offshore wind project by Equinor that had already started construction south of New York’s Long Island when the Department of the Interior ordered it paused on April 16. New York’s governor, Democrat Kathy Hochul, apparently secured the agreement for construction to resume after three “roughly one-hour calls with President Donald Trump, the most recent on Sunday,” in which she emphasized the energy and job-creating benefits of the project, The Washington Post reports. In a statement, Marguerite Wells, executive director of the Alliance for Clean Energy, cheered the move, saying, “Today, I am reminded how proud I am to be a New Yorker. We thank Governor Hochul for being an early and continuous champion for offshore wind and for bringing her advocacy to the highest levels of government.”
As my colleagues Emily Pontecorvo and Jael Holzman previously reported, the stop-work order on Empire Wind had seriously jeopardized New York State’s chance of meeting its climate and clean energy goals, with offshore wind viewed as the route away from New York City’s reliance on fossil fuels. In AM yesterday, I also covered a report that the offshore wind industry was preparing to respond “with strength” to the roadblocks and opposition from the Trump administration. It reportedly cost Equinor $50 million per week to hold the project while the Trump administration deliberated its merits.
The Department of Energy plans to cancel seven major loans and loan guarantees, including a New Jersey transmission project and a low-income rooftop solar program, Semafor reports, per a “former DOE official close to the process.” The programs had all been conditionally approved under Biden, and also included a low-carbon ammonia factory by Monolith Nebraska, as well as a battery factory, a plastics recycling facility, and two others that had already been canceled by their developers. In sum, the canceled financing amounts to nearly $8.5 billion — which admittedly isn’t much of the roughly $41 billion in Biden-era LPO agreements that were yet unfinalized when Trump took office. At the same time, “it’s revealing that the administration would let these projects — most of which are in sectors where the U.S. is already far behind China — fall by the wayside, rather than take steps to prop them up,” Semafor’s Tim McDonnell notes.
A House Rules Committee document points to potential changes to the reconciliation bill as negotiations continue — including, perhaps, to permitting. The original bill stipulated that CO2, hydrogen, and petroleum pipelines could pay a $10 million fee to bypass the standard permitting process, a move that critics decried as a “pay-to-play privilege for gas pipelines.” Activists and Democrats had slammed the provision, with Evergreen Action arguing it “makes a farce of our permitting process and essentially legalizes corruption,” and that “Americans will be severely impacted by gas pipelines built through their communities.” But in the new version of the bill, the language describing the expedited pipeline permitting “is gone,” Notus writes.
There is still a long way to go in negotiations, as hardliners and moderates remain at odds. The Rules Committee’s vote on a final version of the reconciliation bill is scheduled for 1 a.m. Wednesday morning, in order to stay on track for a possible floor vote this week — although others are skeptical of the feasibility of that timeline.
Clean power manufacturing is expected to grow from supporting 122,000 American jobs today to more than 575,000 by 2030 if all announced manufacturing facilities become operational, a new report by the American Clean Power Association found. The report similarly expects the economic output generated by those facilities to grow from contributing $18 billion to the U.S. GDP today to $86 billion by the end of the decade. “Today’s report shows that the manufacturing activities across the clean energy sector drive a ripple effect of economic growth that extends far beyond factory walls, reaching every corner of the country,” Jason Grumet, the CEO of ACP, said in a statement.
While clean energy manufacturing has taken a hit under the Trump administration, with more than $8 billion in projects canceled, closed, or downsized in the first quarter of 2025 due to concerns about access to Inflation Reduction Act tax credits and loan financing, as well as greater economic turbulence, ACP found that many investments are concentrated in rural areas and Republican states. With 200 manufacturing facilities in the pipeline, the report calls for preserving energy tax credits, “facilitating a true all-of-the-above energy strategy,” and creating “a stable and strategic trade environment,” among other policies.
An anti-nuclear protest near Lingen, Germany, in 2023.David Hecker/Getty Images
Germany’s longtime opposition to treating nuclear power on par with renewables in EU energy policy appears to have ended. France, which gets about 70% of its power from atomic energy, had long pushed for broader adoption in Europe — and been stymied by Germany’s former chancellor, Olaf Scholz, who was skeptical of labeling atomic energy “green.” But the nation will pivot to join France under Germany’s new conservative chancellor, Friedrich Merz, leaving Austria as the last remaining holdout in the EU, Reuters reports. “When France and Germany agree, it is much easier for Europe to move forward,” Lars-Hendrik Röller, who served as chief economic adviser to former German Chancellor Angela Merkel, told the Financial Times. The pivot is not just about meeting energy needs, however; as one German official also told FT, “We are now actually finally open to talk to France about nuclear deterrence for Europe. Better late than never.”
“I only drained about 25 miles of range from the battery after powering my fridge and other devices for days.” —Scooter Doll, writing for Electrek about how he used his Rivian R1S as a backup energy source for three days after last week’s tornadoes knocked out his power.
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On the Senate Finance Committee’s budget proposal, the NRC, and fossil-fuel financing
Current conditions: A brush fire that prompted evacuations in Maui on Sunday and Monday is now 93% contained • The Des Moines metro area issued its first-ever ban on watering lawns due to record nitrate concentrations in nearby rivers • For only the fourth time since 1937, Vancouver, British Columbia got no rain at all in the first half of June. The dry streak may finally break tonight.
The Senate Finance Committee published its portion of the budget reconciliation bill on Monday night, including details of its highly anticipated plan to revise the nation’s clean energy tax credits. Though the Senate version slightly softens the House’s proposed phase out of tax credits, “the text would still slash many of the signature programs of the Inflation Reduction Act,” my colleagues Emily Pontecorvo and Robinson Meyer write in their breakdown of the bill. Other changes to be aware of include:
There’s more, too, which you can read here.
President Trump fired Chris Hanson, a Democrat and his first-term appointee to the U.S. Nuclear Regulatory Commission, on Friday. Trump “terminated my position … without cause, contrary to existing law and longstanding precedent regarding removal of independent agency appointees,” Hanson said in his announcement, published Monday. Since the creation of the NRC, which regulates nuclear power, no commissioner has ever been fired from the body.
After being appointed by Trump in 2020, Hanson was promoted to chair the commission by President Biden in 2021. His term ended in January, after which he returned to serving on the board, Notus reports. Trump’s decision to fire Hanson comes on the heels of his recent flurry of executive orders aimed at quadrupling U.S. nuclear capacity, including a measure seeking to “simplify and accelerate the NRC’s licensing procedure, giving the body 18 months to issue new rules and guidance designed to shorten the timeline for processing new applications to 18 months at the longest,” as my colleagues Matthew Zeitlin and Katie Brigham explained last month. News of Hanson’s firing was met with “serious dismay” by attendees of the American Nuclear Society conference underway in Chicago, per Katy Huff, an assistant professor at the University of Illinois at Urbana-Champaign. In a statement, ANS argued that a “competent, effective, and fully staffed [NRC] is essential to the rapid deployment of new reactors and advanced technologies.”
Banks increased fossil fuel financing by more than one-fifth in 2024, marking the first time that fossil fuel financing has failed to decline since 2021, a new report by the Rainforest Action Network and other environmental groups found. Among the world’s top 65 largest banks, coal, oil, and gas assets rose by $162 billion, to $869 billion, with JPMorgan Chase seeing the biggest increase of more than a third to $53.5 billion, followed by Citigroup, Bank of America, and Barclays. In a statement to the Financial Times, JPMorgan said it believed its own data “reflects our activities more comprehensively,” and said it provided $1.29 in clean-energy financing for every dollar financing fossil fuels. However, as the report argues, “Banks are abandoning their previously announced emissions reduction targets in favor of temperature trajectories that allow for more fossil fuel finance. Though they may also increase financing of renewable energy, banks’ continued fossil fuel finance entrenches climate chaos and undercuts clean energy development.” Read the full findings here.
Drivers in Europe are becoming more unwilling to consider switching to an electric vehicle, outpacing even the growing reluctance seen in the United States, according to a new survey published by Shell on Tuesday. In Europe, 41% of respondents said they’d consider switching to an EV, down from 48% last year, while in the U.S., the number fell only 3 percentage points, to 31%. “Europe surprised us,” David Bunch, Shell’s chief for mobility and convenience, said, per Reuters. “The single biggest barrier to entry is the cost of the vehicle.”
While Shell — the world’s second-biggest fossil fuel company by revenue and profit — might seem an unlikely source for an electric vehicle survey, the company also has the most extensive EV charging network in the UK. Its findings weren’t all negative, either: in China, interest in buying an electric vehicle was as high as 89%. Additionally, Shell found that nine in 10 EV drivers would consider purchasing an electric vehicle again, and 60% said they worry less about running out of charge than they did a year ago, Bloomberg reports. Separately, International Energy Agency data shows that electric vehicle adoption continues at a healthy pace worldwide, exceeding 17 million sales globally in 2024, or a share of more than 20%.
Global electric car sales, 2014-2024
IEA
The United Kingdom on Tuesday announced its commitment of £7.9 billion, or more than $10 billion, to the nation’s most extensive flood defense infrastructure program in its history. The program will not only include traditional construction, such as flood barriers, but also nature-based solutions like reforestation and wetland restoration, according to Business Green. In its announcement, the government said that for every £1 invested, it expected to prevent £8 in economic damage. “Protecting citizens is the first duty of any government,” Environment Secretary Steve Reed said in a statement, adding, “As our changing climate continues to bring more extreme weather to the nation, it's never been more vital to invest in new flood defences and repair our existing assets.” Separately, the U.K. Treasury also announced Tuesday a plan to spend £1 billion, or about $1.3 billion, on “funding to repair bridges, tunnels, and flyovers that are facing increased impacts from extreme weather and heavier vehicles,” Business Green adds.
Republicans in Los Angeles who don’t have air conditioning are “more likely to consider climate change a human-caused threat and more likely to support individual and government action to address climate change” than Republicans who have central air, a recent study published by the American Meteorological Society found. There was no similar divide among Democrats.
Wind and solar are out. Clean, firm power is in.
The Senate Finance committee published its highly anticipated tax proposal for Trump’s One Big, Beautiful Bill on Monday night, including a new plan to revise the nation’s clean energy tax credits.
Senate Republicans widened the aperture slightly compared to the House version of the bill, extending tax credits for geothermal energy, batteries, and hydropower, and preserving “transferability” — a crucial rule that allows companies to sell their tax credits for cash — for years to come.
But the text would still slash many of the signature programs of the Inflation Reduction Act. It would be particularly damaging for Republicans’ goals of creating a domestic mining industry, because it kills incentives for refining critical minerals while yanking away subsidies for the electric cars and wind turbines that might use those minerals.
Consumer tax credits for energy efficiency upgrades, including heat pumps, would still be terminated, as would credits for homeowners to lease or purchase rooftop solar. The Senate bill also cuts a tax deduction for energy efficiency upgrades in commercial buildings one year after the bill’s passage, which was not in the House version.
There was no mercy for the IRA’s tax credit to produce clean hydrogen, despite a last-minute appeal from more than 250 organizations in early June. That policy would still be terminated this year.
Here’s a rundown of the rest of the major changes.
Like the House bill, the Senate’s proposal would terminate tax credits for new, used, and leased electric vehicles. But while the House had extended the program by one year for automakers that had yet to sell 200,000 eligible vehicles, the Senate version would simply end the program in 180 days — or roughly six months — after the bill’s passage.
Depending on when the bill is passed, the Senate version could work out better for some experienced EV automakers, such as Tesla and General Motors. These automakers are set to lose their eligibility for tax credits on December 31 under the House text. But the Senate bill’s 180-day period could allow them to eke out another month or so of eligibility — especially if congressional negotiations over the One Big, Beautiful Bill Act go late into the summer.
Newer EV automakers, such as Rivian or Lucid, come out worse under the Senate text as compared to the House bill since they haven’t sold as many vehicles.
Homeowners interested in electric vehicle chargers would get a longer runway than the House had proposed — but a much shorter one than is on the books right now. Under current law, homeowners can claim the charger tax credit through 2032. The Senate version would terminate the 30% tax credit for installing a home charger one year after the bill is enacted.
The Inflation Reduction Act achieved massive greenhouse gas reductions by including a set of new “technology-neutral” tax credits that subsidized any new power plant as long as it didn’t emit carbon dioxide. Under current law, these new tax credits will remain effective and on the books for decades to come — expiring only when emissions from the country’s power sector fall about 95% below their all-time high.
The Republican reconciliation bills have dismantled these provisions. The House text proposed immediately winding down tax credits for all clean energy sources — except nuclear — and allowed just a 60-day “grace period” for new projects to start construction to claim the credits. Even then, new power plants would have to enter service by 2028 to qualify.
Senate Republicans have countered with a plan that is designed to maintain support for every electricity source that isn’t wind and solar. The GOP Senate caucus favors technologies that can provide power on demand around the clock — such as geothermal, nuclear, hydropower, and batteries — but technically the Senate text allows any zero-carbon, non-solar, non-wind source to qualify for the clean electricity tax credits for the next decade.
The Senate draft erases the provision in the Inflation Reduction Act that would have kept these tax credits in place until the entire United States power sector reduces its emissions. Instead, it adopts the IRA’s alternate phase-out period, with the tax credits beginning to wind down for projects that start construction in 2034.
Tax credits for wind and solar, however, would begin to phase down for projects that start construction next year, and terminate after 2027, with one big exception.
An odd addendum to the wind and solar phase-out would exempt projects that are at least 1 gigawatt, are at least partially on federal land, and have already received a “right-of-way grant or lease” from the Bureau of Land Management as of June 16. It’s unclear which, if any, projects would be helped by this provision. According to the BLM website, it has not granted a right-of-way to any projects that are 1 gigawatt or larger except for the Lava Ridge wind farm, which has been canceled. If the Senate changes the date, however, the Esmeralda 7 solar farm in Nevada may benefit, as the project is more than 6 gigawatts, and is in the final stages of its environmental review.
The Senate text would not do anything to change the eligibility timeline for existing nuclear plants to claim a tax credit, called 45U, designed to keep them solvent. It would keep the schedule written into the Inflation Reduction Act, which has the credit terminating at the end of 2031. It would, however, impose new foreign sourcing restrictions on nuclear fuel, forbidding existing power plants from claiming the tax credit if their fuel comes from Russia, China, Iran, or North Korea. (It makes an exception for power companies that signed a long-term contract to buy foreign fuel before 2023.) The United States formally banned the import of nuclear fuel from Russia last year.
The Inflation Reduction Act subsidized the production of certain clean energy equipment — including solar panels, wind turbines, inverters, and batteries — as well as some of their subcomponents. Under current law, those tax credits will begin to phase out by 25% increments in 2030, so companies can claim 75% of the credit in 2030, 50% in 2031, and zero in 2033.
The IRA also created a new permanent tax credit that covered 10% of the cost of refining or recycling critical minerals.
The new Senate text changes these phase-out deadlines, often for the worse. First, as in the House bill, wind turbines and their subcomponents would no longer qualify for the tax credit starting in 2028. Second, the tax credit for critical minerals would start phasing out in 2031. Under the new calendar, companies would be able to claim 75% of this credit in 2031, 50% in 2032, and zero in 2034.
In practice, this means that the Senate GOP text would end the IRA’s permanent tax credit for producing many critical minerals, which would damage the financial projects of many mineral processing and refining projects. Other types of equipment remain on the Inflation Reduction Act’s original phase-out schedule.
The new Senate text also slightly expands the type of battery components that qualify for the credit. And — in a potentially significant change for some companies — it forbids companies from stacking tax credits for their vertically integrated production process starting in 2027.
While the House did not touch the tax credit for carbon sequestration, the Senate has put forward a key change favored by many proponents of the technology. Under current law, project operators get the highest-value credit if they simply inject captured carbon underground for no other purpose than to keep it out of the atmosphere. Smaller amounts are available for projects that use captured CO2 to nudge more oil out of the ground, also known as “enhanced oil recovery,” or if they use the CO2 in products like cement.
Under the Senate proposal, all carbon sequestration projects, no matter the nature of the carbon storage, would qualify for the same amount.
The biggest clean energy killer in the House-passed bill was a strict sourcing rule for the tax credits that would disqualify projects that use any component, subcomponent or mineral from China. As Heatmap’s Matthew Zeitlin wrote last week, the rules appeared “unworkable” to many companies because they seemingly disqualified projects even if they used a relatively small amount of an otherwise irrelevant Chinese-sourced material — such as a spare bolt or a gram of steel.
Under the House bill, manufacturers would also not be allowed to license a Chinese company’s technology. This measure appeared to directly target Ford, which has proposed manufacturing electric vehicle batteries using technology licensed from the Chinese firm CATL, one of the world’s best producers of EV batteries.
The Senate proposal changes the House provision by adding a complicated new set of definitions about what might qualify as a federal entity of concern. It also introduces a new “safe harbor” formula describing the amount of Chinese-sourced material that can keep a project from receiving a tax credit. We’re still figuring out how these new rules work together, and we’ll update this article as we understand them better.
The House bill also would have severely curtailed a crucial component of the tax credit program called transferability, which allowed developers that couldn’t take full advantage of the subsidies to sell their credits for cash to other companies. The text stripped this option from the tax credits for clean manufacturing (45X), carbon sequestration (45Q), and clean fuels (45Z) beginning in 2028. Without transferability, most carbon sequestration projects will struggle to pencil out, my colleague Katie Brigham reported.
The Senate proposal would restore transferability for the duration of all remaining tax credits.
But it throws another wrench in plans to scale up nuclear, geothermal, and other large capital-intensive projects, because it restricts zero-carbon power plants’ ability to use modified accelerated cost recovery to fund their projects.
Trump just quasi-nationalized U.S. Steel. That could help climate policy later.
The government is getting into the steel business. The deal between Japan’s Nippon Steel and U.S. Steel, long held off by the Biden administration due to national security and economic concerns, may finally happen, and the government will have a seat at the table. And some progressives are smarting over the fact that a Republican did it first.
On Friday, Nippon Steel and U.S. Steel announced “that President Trump has approved the Companies’ historic partnership,” which would include $11 billion in new investments and “a Golden Share to be issued to the U.S. Government” as well as “commitments” that include “domestic production” and “trade matters.”
The New York Times reported that this “Golden Share” would give the president, including Trump’s successors, the ability to appoint or veto some of the company’s directors, and require the government to sign off on a wide range of corporate decisions, like moving production overseas or idling or closing plants or the procurement of raw materials.
The Trump administration will likely use its oversight to encourage domestic production of steel, in tandem with its tariffs on steel imports. The unique arrangement “will massively expand access to domestically produced steel,” Secretary of Commerce Howard Lutnick wrote on X.
While neither the administration nor the two companies involved in the deal have mentioned decarbonizing steel — and in fact existing steel decarbonization programs have floundered in the first months of the Trump’s second term — it is this government oversight of steel production that could, with a different administration, help steer the steel industry into greener pastures.
A future president could wield a golden share to encourage or require the significant capital investments necessary to decarbonize some of U.S. Steel’s production, investments that the Biden administration had trouble catalyzing even with direct government financial support.
And considering that steel makes up for some 7% of global emissions, decarbonization is a necessary — if costly — step to substantially reducing global emissions.
“It’s honestly embarrassing that Republicans beat us to actually implementing a golden share or something like it,” Alex Jacquez, who worked on industrial policy for the National Economic Council in the Biden White House, told me.
When the steel giant Cleveland Cliffs first hinted that it would not go forward with $500 million worth of federal grants to help build a hydrogen-powered mill, it cited “fears that there won’t be buyers for the lower-carbon product,” thanks to a 40% price gap with traditional steel, Ilmi Granoff wrote for Heatmap., This tracked what steel producers and buyers were telling the Biden administration as it tried to convene the industry to see what it needed to go green.
“The largest issue by far in advancing green steel production in the U.S. is demand. It’s still not price competitive and not worth capital investment upgrades, given where the market is right now and without stable demand from customers who are going to pay a premium for the product,” Jacquez said. “There’s no case to make to shareholders for why you’re investing.”
When the Roosevelt Institute looked at barriers to transition to clean steel, specifically a Cleveland-Cliffs project, among familiar community concerns like what it would mean for steel employment, there was “corporate inertia and focus on short-term shareholder value over long-term public value and competitiveness.”
While the Trump administration sees shareholder demands leading to insufficient domestic production of any steel, a future administration could be a counterweight to investors not wanting to make green steel investments.
Shareholder reticence is a “huge obstacle,” one of the report’s authors Isabel Estevez, co-executive director of the industrial policy think tank I3T, told me.
“Of course investors are not going to green light investments that don’t produce the same returns as doing nothing or doing something else would do,” Jacquez said.
And when green steel projects have gotten canceled, in the U.S. and abroad, it’s been dismal shareholder returns that are often the explicit or implicit justification, as well as the high cost of producing green hydrogen necessary to fuel green steel operations. “We are not only pushing the boundaries of what is technologically feasible with this project. We are also currently pushing the boundaries of economic viability. Or, as it stands today: beyond it,” the chief executive of ThyssenKrupp told the North Rhine-Westphalia parliament, according to Hydrogen Insight.
And the resulting Trump administration retrenchment from the Biden administration’s climate policy has made the environment even less friendly for green steel.
Earlier this month Cleveland-Cliffs scrapped the hydrogen-fuel steel project and said instead it would try to extend its existing coal-fueled blast furnace. And the Swedish company SSAB earlier this year withdrew from a prospective project in Mississippi.
Would these outcomes be any different with a “golden share”? When the Roosevelt Institute looked at steel decarbonization even full-on nationalization was considered as one of the “sticks” that could push along decarbonization (many steel companies globally are either state-owned or have some state investment). The golden share, at least as reported, will seem to put the government in the driver’s seat of a major player of the steel industry, while still maintaining its private ownership structure.
“Assuming the nature of the golden share allows the public sector to make certain requirements about the way that profits are used, it could be very valuable for encouraging U.S. Steel to use their profits to make important investments,” Estevez told me.