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Republican Attacks on Biden’s Climate Law Raise Concerns Ahead of Election


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

Former President Donald J. Trump, the front-runner for the Republican nomination, has repeatedly attacked central elements of the Inflation Reduction Act, including tax credits for purchasing electric vehicles. As a result, corporate executives have begun facing questions in recent weeks about the possibility that the legislation could be rolled back or changed in ways that could affect their clean energy investment decisions.

Republican lawmakers have tried, unsuccessfully, to repeal much of the law since it was passed entirely with Democratic votes in 2022. Company officials and energy researchers say a broad repeal of the law remains unlikely, given that many new projects are creating jobs and generating 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 impede achievement of the Biden administration’s climate goals.

“We’ve got to win the presidency and both houses” of Congress, said Representative Frank Pallone Jr., the top Democrat on the House Energy and Commerce Committee. “Otherwise it’s all going to be on the chopping block.”

The Inflation Reduction Act contains various tax credits and other subsidies to incentivize companies to deploy more clean energy projects. It also includes tax breaks for consumers to offset the cost 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 swath” of the law’s provisions would most likely be on Republicans’ “target list.”

For instance, a new administration could enforce stricter requirements for the types of electric vehicles that qualify for the $7,500 tax credit, Mr. Pyle said. Some Republican lawmakers have already pushed for tougher limits on electric vehicle components in an effort to bolster domestic manufacturing and reduce the country’s reliance on China. That could cut 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, a managing director at ClearView Energy Partners, said a Republican administration could also try to limit the locations that are eligible for tax credits that offset the cost of installing electric vehicle charging stations. The Biden administration has released guidance that would allow a broad range of locations, covering much of the country outside major cities, to qualify.

Mr. Trump has assailed major aspects of the law on the campaign trail, including the tax credits for electric vehicles, which he said were for “rich people” to purchase “luxury electric cars.”

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

He has also targeted wind power, arguing that natural gas is a much cheaper option and that wind installations “ruin 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 corporate earnings calls. In January, John Ketchum, the chief executive of NextEra Energy, an energy company that develops and operates renewable projects across the country, was asked about the sustainability of the provisions in the Inflation Reduction Act in the event of a “Republican trifecta.” In response, Mr. Ketchum said he thought any repeal was unlikely because many of the benefits were flowing to Republican states and rural communities.

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

For now, company executives operating in the clean energy space 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 the announced major clean energy projects and 67 percent of all announced jobs related to them have been in Republican districts, according to an analysis from E2, an environmental nonprofit organization.

“It’s not like it’s going to be a cakewalk for Republicans to do this,” Mr. Pyle said.

And some changes to the law could be welcomed by American industries.

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

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

“If you really look at our development portfolio and where we’ve been making investments, it has primarily benefited Republican districts,” Mr. Carroll said.

White House officials have made the same point in warning of Republican attempts to alter the climate law.

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

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

Lori Esposito Murray, the president of the Committee for Economic Development at the Conference Board, said the issue was 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 be considering that the policies may change,” Ms. Murray said. “How significant those changes will be remains to be seen.”

Jeanna Smialek contributed reporting.



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