Executive Order Overview
On January 20, 2025, newly inaugurated President Trump signed the Unleashing American Energy executive order. Section 7 of this order halts the disbursement of funds allocated through the Inflation Reduction Act of 2022 (IRA), specifically targeting funds for electric vehicle (EV) charging stations. Additionally, the order mandates a review of the processes, policies and programs for issuing grants, loans, contracts or any other financial disbursements of these allocated funds.
Review Process and Agency Recommendations
During the 90-day review period, each agency is required to assess and submit policy recommendations to both the Director of the National Economic Council (NEC) and the Director of the Office of Management and Budget (OMB). Disbursements may only resume if they align with the accepted recommendations.
Impact on Tax Credits and Funding
The order does not address federal tax credits directly, and any changes to these will likely be addressed through pending tax legislation. As Cherry Bekaert tax advisors have previously noted, changes to IRA incentives are expected, but a full repeal of the Energy Tax Credits is unlikely. The full scope of how the order will affect funding, especially for loans already closed but not disbursed and grant programs beyond the specifically called out electric vehicle charging programs are not known. However, the White House published a clarifying memo stating that Section 7 halting IRA funding only applies to Section 2 which mentions electric vehicle incentives.
How Cherry Bekaert Can Help
Cherry Bekaert’s Energy Tax Credit & Incentives professionals are here to help you evaluate how these developments may affect your current and future projects. Businesses should consider how paused funding and potential policy shifts could influence their financial strategies and project timelines. Stay informed and prepared as we continue to closely monitor these changes.
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