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Yahoo
31-01-2025
- Business
- Yahoo
How Trump's Executive Order Can Change American Energy Policy
One of President Donald Trump's executive orders from his first week in office called for "unleashing American energy" and making significant changes to US energy policy. The document makes an about-face on many Biden era programs, tries to block the landmark Inflation Reduction Act, and calls for new fossil fuel pipelines, among other things. "It is a lot of words, it is not very specific in certain areas," said Louise Bedsworth, executive director at the Center for Law, Energy, and the Environment at the University of California Berkeley. The message shows a marked departure from the renewable energy push of the Biden era. "It's this ping-pong" in policy priorities, Bedsworth said, which can be very destabilizing to an industry. But what can this executive order actually do, and how will it affect you as a consumer? Here's what the experts say you should be looking out for. Many, many things. Experts said these elements stand out: The order aims to "encourage energy exploration and production on Federal lands and waters." Generally, "energy exploration" refers to digging and drilling for fossil fuels. It rescinds many of President Joe Biden's executive orders related to climate change. It terminates "all activities, programs, and operations associated with the American Climate Corps." It aims to make permitting for fossil fuel pipelines faster and easier. It immediately pauses all federal funds being sent out through the Inflation Reduction Act. A lot of these measures rely on federal agencies, and in large part the executive order is asking agency heads to come back in 60 or 90 days with an action plan. So it remains to be seen what will actually change within federal agencies, Bedsworth said. "It's going to be very challenging to track all those pieces and understand, where did we land?" she said. Executive orders seem like powerful documents, but they do not have the power to change the law; that would require an act of Congress. So here's a breakdown of what the energy executive order can actually accomplish: Some of these actions also toe the line of executive power, Bedsworth said, which means, "a lot of this, we'll end up seeing in the courts." "If nothing else, it creates a lot of uncertainty," Bedsworth said. The Inflation Reduction Act in particular is home to many consumer-level programs, including the EV tax credit as well as home energy credits, which give big discounts on solar panels and heat pumps. The executive order can pause funds being distributed by the IRA, but cannot permanently block them without an act of Congress. Plus, many of the incentives for consumers are structured as tax incentives through the IRS, not as direct funding from the government, so they are less likely to be impacted. Even if the funding streams remain in place, however, there will likely be less government outreach and education to help consumers access them. "You're ultimately going to see a cooling, at a minimum, in the messaging," Bedsworth said. Of course, none of this stops you as the consumer from going out and buying an EV, for example. "The technology is getting better, the cost is going down, so the ability to own an EV is still there," says Elaina Farnsworth, CEO of SkillFusion, which trains workers to build electric infrastructure. And if you already purchased clean energy technology last year, like solar panels for your home, and are hoping to claim a tax credit during this year's tax season, you should be safe: Experts say it's unlikely Trump would interfere with the IRS in distributing those tax credits for 2024 purchases.
Yahoo
30-01-2025
- Automotive
- Yahoo
What Trump's Executive Order Means for Electric Vehicles
President Donald Trump signed a flurry of executive orders during his first week in office, giving the impression that he took sweeping action on many of his campaign promises. But as critics have been quick to point out: Executive orders can't change the law, and only have power to direct government officials and agencies. So what should you make of Trump's executive order on "Unleashing American Energy," which promises to end government support of electric vehicles? "It says a lot, it's blustery … It purports to do a huge range of things," many of which an executive order can't do, said Ted Lamm, associate director at the Center for Law, Energy & the Environment at the University of California, Berkeley. What will the order actually mean for you the next time you go to buy an electric vehicle? Here's what the experts say you can expect going forward. The phrase that sticks most is, "It is the policy of the United States … to eliminate the 'electric vehicle (EV) mandate' and promote true consumer choice." That paragraph goes on to call for the "elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs." The thing is, there is no federal EV mandate. Trump's use of the phrase "electric vehicle mandate" probably refers to a mix of three things: The $7,500 EV tax credit for consumers; the EPA emissions standards that aim to phase in more EVs and more efficient combustion vehicles; and tax credits that incentive domestic manufacturing of batteries and EVs. None of those things, however, amount to a "mandate," which implies that consumers and automakers have no choice but to make and drive EVs. According to experts, many of the executive order's claims would require an act of Congress to accomplish. Here's a breakdown of what the order can (and can't) accomplish on its own: Of course, even the actions that are within the power of an executive order can be (and likely will be) challenged in court. At the end of the day, this executive order creates more confusion than it does tangible impacts for consumers, experts said. "It's clearly just a rhetoric piece," said Aubrey Gunnels, CEO and co-founder at 3V Infrastructure, an investment firm that supports EV charging infrastructure. That said, the new administration's policies could have some tangible impacts. Here's what to expect: If you bought an EV in 2024 and are planning to claim the EV tax credit this tax season, you should be OK, according to Lamm. "It would be pretty shocking" for Trump to go against Congress and attempt to block the IRS from issuing those credits, Lamm said. If you're planning to buy an EV in 2025, the EV tax credit may or may not be available for you. As of now, it still is, but Trump could ask Congress to repeal that provision of the Inflation Reduction Act in the future. But Lamm says even that is unlikely. "Getting rid of it is politically pretty costly," he said. The biggest effect on EVs would happen if the tax policies are eliminated, which would require an act of Congress, according to the energy consulting firm Wood Mackenzie. "This is yet to be determined, but Wood Mackenzie does expect any remaining EV credits to contain stricter eligibility criteria around critical mineral sourcing to promote mineral security," said Max Reid, principal analyst at the firm, A weakening of tailpipe emissions standards or changes to California's ability to enforce its own standards could also weaken EV adoption, according to WoodMac. "While the extent of subsidy cuts and details on new emissions norms are unclear, we expect the trajectory of EV sales to be slower than previous forecasts," Reid said. Experts say that these actions may slow the transition to EVs, but in the long run they won't stop it altogether. "The momentum in the industry has already surpassed the turning point," said Virginia Klausmeier, founder and CEO at Sylvatex, a material tech company that works on EV batteries. Plus, if the consumer tax credits did get repealed, EVs are on track to get cheaper over the coming years and become the more affordable option even without government discounts, Gunnels said.
