(Reuters) – The White House said President Donald Trump’s order this week pausing the disbursement of funds appropriated under his predecessor’s signature climate and infrastructure laws mainly applies to programs that discourage fossil fuel development or boost electric vehicles.
As part of a flurry of executive orders hours after taking office on Monday, Trump ordered government agencies to pause funds flowing from the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.
The White House Office of Management and Budget clarified in a memo, dated Tuesday, that Trump’s order only applies to funds that contravene a list of stated policy aims, which include encouraging more energy production on federal lands and eliminating support for EVs. Funds going to other programs, like bridges, transit and highways, won’t be affected.
It is unclear whether the order puts much funds at risk.
Biden’s administration had said prior to Trump’s inauguration on Monday that the vast majority of grants for clean energy programs appropriated under the IRA, for example, had already been obligated and were protected, with just $11 billion outstanding.
The bulk of the IRA’s support for clean energy and EVs, meanwhile, derives from tax credits that can only be revoked with an act of Congress.
Robert Moczulewski, a director at tax advisory Baker Tilly, said Trump’s order could face legal hurdles if it delays any significant funding.
“Pausing funding already appropriated by Congress may prompt legal challenges, though the administration can impose interim review processes,” he said.
The order requires U.S. agencies to consult OMB before disbursing the money.
The impact on lithium mining projects, which support EV battery production, meanwhile, is unclear.
The Biden administration had finalized loans for several U.S. critical minerals projects in its final months, including a $2.26 billion debt package for Lithium Americas and nearly $1 billion for ioneer.
Those loans are final and cannot be altered, according to two industry sources and an administration source familiar with the loan terms. Representatives for Vancouver-based Lithium Americas and Australia-based ioneer were not immediately available to comment.
Loans for other U.S. critical minerals projects that were not finalized before Biden left office could be vulnerable. That list includes 24 projects seeking a total of $45 billion, according to Energy Department data.
(Reporting by Valerie Volcovici and Ernest Scheyder; Writing by Richard Valdmanis, editing by Deepa Babington)
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