Trump Halts Inflation Reduction Act (IRA) Funding

White House Clarifies Scope of Inflation Reduction Act & Infrastructure Law Funding Freeze

January 23, 2025 – On Tuesday, the White House released a memorandum clarifying the extent of the recently announced freeze on federal funding from the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA), commonly known as the bipartisan infrastructure law.

According to the Office of Management and Budget (OMB), the freeze specifically applies to grants and loans connected to “programs, projects, or activities that may be implicated by the policy established in Section 2 of the order.” However, the executive order itself does not explicitly list which parts of the two laws are affected. Instead, it provides broad directives aimed at increasing domestic energy production, strengthening national and economic security, and rolling back the electric vehicle mandate.

Despite the pause, the memo states that agency leaders still have the authority to distribute funds as needed, provided they first consult with the OMB. This clarification leaves room for discretion at the agency level, ensuring that some programs may continue receiving funding while the broader policy review unfolds.

Trump Freezes IRA Funding (2025)

In a decisive move to reshape U.S. energy policy, President Donald Trump has issued an executive order halting the disbursement of funds from both the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). These laws, central to former President Joe Biden’s agenda, had allocated substantial federal funding for clean energy initiatives and infrastructure projects.

The executive order, titled “Terminating the Green New Deal,” mandates a comprehensive review of these programs. Federal agencies are given a 90-day window to assess and report their spending recommendations to the Office of Management and Budget and the National Economic Council. This pause specifically targets programs such as the National Electric Vehicle Infrastructure Formula Program and the Charging and Fueling Infrastructure Discretionary Grant Program, both of which are under scrutiny for their grant and loan issuance processes.

This action underscores the administration’s intent to dismantle previous climate policies. In addition to the funding freeze, President Trump has withdrawn the United States from the Paris Agreement and revoked the executive order that aimed for 50% of new vehicles sold in the U.S. to be electric by 2030. He has been a vocal critic of electric vehicle mandates and the tax credits provided under the IRA.

The White House has clarified that the funding pause applies only to programs that may be implicated by the new policy direction. Agency heads retain the discretion to disburse funds as necessary, following consultation with the Office of Management and Budget.

President Donald Trump holds up a signed executive order during an indoor inauguration parade on Jan. 20 in Washington, D.C. Trump signed an order pausing the Inflation Reduction Act’s funding disbursement. Anna Moneymaker via Getty Images

These developments signal a significant shift in federal energy policy, with a clear focus on promoting traditional energy sources and reevaluating the nation’s approach to clean energy and infrastructure investments.

Trump Moves to Scrap EV Mandate, Targets IRA Tax Credits

In a sweeping reversal of Biden-era climate policies, President Trump has officially rescinded the 2021 executive order that set a goal for half of all new cars sold in the U.S. to be electric by 2030. He has long criticized what he calls government overreach in the electric vehicle (EV) sector, including tax credits designed to incentivize EV adoption under the Inflation Reduction Act (IRA).

Unlike grants and loans, tax credits make up the bulk of IRA funding. According to a Biden administration official, about 84%—or roughly $96.7 billion—of IRA clean energy grants had already been allocated before Trump took office, Reuters reported Friday.

Under Biden’s leadership, the Department of Energy secured 53 project deals totaling an estimated $107.57 billion in committed investment. These deals included major funding packages for U.S. manufacturing, such as $1.4 billion to support Qcells’ new solar cell plant in Georgia and $9.6 billion for Ford’s battery production facilities in partnership with SK On. With the new administration shifting priorities, the fate of these clean energy investments remains uncertain. Trump has also said to draw out of the Paris Climate Agreement.