Republican attacks on Biden's climate law are raising concerns ahead of the election

The United States has experienced an increase in clean energy projects, representing more than $200 billion new investments since President Biden signed a comprehensive climate bill into law over a year ago. But the election and the potential for a Republican takeover are raising concerns that key parts of the law could be upended.

Former President Donald J. Trump, the frontrunner for the Republican nomination, has repeatedly attacked central elements of the Inflation Reduction Act, including tax breaks for purchasing electric vehicles. As a result, business leaders have faced questions in recent weeks about the possibility that the legislation could be rolled back or changed in ways that could impact their clean energy investment decisions.

Republican lawmakers have tried unsuccessfully to repeal much of the law since it passed entirely with Democratic votes in 2022. Company officials and energy researchers say a broad repeal of the law remains unlikely as many new projects create jobs and generate investment. in Republican districts.

But a Republican administration would most likely try to influence the programs in other ways, such as through regulatory changes that would not require an act of Congress. That could have a significant impact on which companies and industries benefit from the programs and could hinder the achievement of the Biden administration's climate goals.

“We have to win the presidency and both houses” of Congress, said Rep. Frank Pallone Jr., the top Democrat on the House Energy and Commerce Committee. “Otherwise it's all on the chopping block.”

The Inflation Reduction Act includes several tax credits and other subsidies to encourage companies to deploy more clean energy projects. It also includes tax breaks for consumers to offset the costs of electric vehicles, heat pumps and other energy-efficient appliances.

Thomas Pyle, the president of the American Energy Alliance, which represents fossil fuel interests, said a “large portion” of the bill's provisions would most likely be on Republicans' “target list.”

For example, a new administration could impose stricter requirements on the types of electric vehicles that qualify for the $7,500 tax credit, Mr. Pyle said. Some Republican lawmakers have already pushed for stricter limits on electric vehicle parts in an effort to boost domestic production and reduce the country's dependence on China. That could reduce the number of eligible vehicles, potentially hindering progress toward the Biden administration's goal of having electric vehicles make up half of new car sales by 2030.

Kevin Book, managing director at ClearView Energy Partners, said a Republican administration could also try to limit the number of locations eligible for tax credits that offset the cost of installing electric vehicle charging stations. The Biden administration has released guidelines allowing a wide range of locations, covering much of the country outside major cities, to qualify.

Mr. Trump has done that important aspects attacked of the bill on the campaign trail, including the electric vehicle tax breaks, which he said were aimed at “rich people” to buy “luxury electric cars.”

“We are a nation whose leaders demand all electric cars, despite the fact that they don't go far, cost too much and whose batteries are produced in China,” Trump said. a meeting in New Hampshire last month.

He also has targeted wind energyarguing that natural gas is a much cheaper option and that wind installations are 'ruining our plains and fields'.

The Trump campaign did not respond to repeated requests for comment.

Questions about a possible rollback of the law have begun to permeate calls about corporate profits. In January, John Ketchum, the CEO of NextEra Energy, an energy company that develops and operates renewable projects across the country, was asked about the sustainability of the Inflation Reduction Act's provisions in the event of a “Republican trifecta.” In response, Mr. Ketchum said he thought a repeal was unlikely because many of the benefits flowed to Republican states and rural communities.

“It certainly benefits Democrats for obvious reasons, but it also has a big benefit for Republicans,” Mr. Ketchum said.

For now, clean energy business leaders are betting that Republicans would have a hard time repealing the legislation even if they controlled both chambers of Congress. Since the passage of the Inflation Reduction Act, more than half of announced major clean energy projects and 67 percent of all announced jobs related to them have been in Republican districts, according to an analysis by E2, a nonprofit environmental organization.

“It's not like it's going to be a piece of cake for Republicans to do this,” Mr. Pyle said.

And some changes in the law could be welcomed by the US industry.

A Republican administration could make it easier for companies to access lucrative tax breaks for hydrogen production, said Sasha Mackler, executive director of the energy program at the Bipartisan Policy Center. Biden administration officials have proposed strict limits on the credit aimed at encouraging hydrogen production with the least impact on carbon emissions. Most hydrogen is currently made from natural gas, through a process that produces greenhouse gases. Environmental groups and some hydrogen developers have praised the rules, but other companies and industry groups have criticized the proposal.

David Carroll, chief renewables officer at Engie North America, an energy company that builds and operates large-scale solar, wind and battery storage projects, said in an interview that officials were watching potential rollbacks “very, very closely.” While he acknowledged there was a chance the law could be reversed or changed, he said the number of jobs it had brought to Republican-led states like Indiana and Texas would likely play a major role in lawmakers' decision-making.

“If you really look at our development portfolio and what we have invested in, it has primarily benefited Republican districts,” Mr. Carroll said.

White House officials have made the same point by warning of Republican efforts to change the climate law.

“Extreme Republicans in Congress would harm their own constituents by repealing the Inflation Reduction Act, which would eliminate more than 100,000 jobs already created in their districts while raising prices for prescription drugs, health care and utility bills.” , said White House spokesman Michael Kikukawa. said in a statement.

Still, there is an expectation among energy researchers and business groups that Republicans would try to do so roll back parts of the lawpartly because lawmakers will try to offset the costs of extending Trump's tax cuts, which are set to expire in 2025. The estimated cost of the Inflation Reduction Act's energy incentives has actually doubled since it was passed, largely because forecasters believe the legislation will be more popular than they initially expected.

Lori Esposito Murray, chair of the Conference Board's Economic Development Committee, said the issue is reminiscent of Republicans' repeated attempts to repeal the Affordable Care Act, which underwent some changes but largely remained a “viable program.” .

“Business leaders need to keep in mind that policies can change,” Ms Murray said. “How significant these changes will be remains to be seen.”

Jeanna Smialek reporting contributed.