White House says order pausing IRA disbursements only applies to some programs (updated)

Ioneer

22/01/2025 23:02

(Adds statement from lithium company in paragraph 13)
       Jan 22 (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 on 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, such
as bridges, transit and highways, will not be affected.
    It is unclear whether the order puts much funding at risk.
    Biden's administration had said prior to Trump’s
inauguration 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, 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  LAC.TO  and
nearly $1 billion for ioneer  INR.AX . 
    Those loans are final and cannot be altered, according to
two industry sources and an administration source familiar with
the loan terms. 
    Bernard Rowe, CEO of Australia-based ioneer, said he does
not believe Trump's move will affect his company's loan, adding
that the executive order directs the Energy Department to ensure
critical minerals projects "receive consideration for federal
support, contingent on the availability of appropriated funds."
    Representatives for Vancouver-based Lithium Americas 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 and Rod Nickel)
 ((richard.valdmanis@thomsonreuters.com; +1 617 312 6022;
Reuters Messaging:
richard.valdmanis.thomsonreuters.com@reuters.net))