Quick Brief: Continued Movements in Energy and Sustainability, Following the 2025 U.S. Inauguration
*As of Feb. 7, 2025, information may be subject to change.
This year has gotten off to an exceptionally fast start. The last few weeks have featured several new evolving policies, many of which will continue to be foundational for conversations in both Washington, D.C., and on the global geopolitical stage in the weeks to come. In the months ahead, we will review opportunities for our clients to further unlock economic value amid the new landscape, and balance operational and sustainability goals through an integrated approach. Our team of consulting experts and policy teams are continuing to monitor the current environment and will share recurring updates as available.
A brief summary from the last week few weeks following the January 20th U.S. Presidential Inauguration:
In the past several weeks, President Donald Trump signed several executive orders aimed at reshaping the U.S. energy landscape. Key actions include:
- Declaring a national energy emergency to address high energy prices and accelerating demand for supply, utilizing special powers to expedite energy production and distribution. Notably, U.S. oil and gas production has already been at all-time highs, and there is little logical ability to push much higher in the near term. Therefore, we do not expect much impact in terms of supply, for now.
- Revising environmental regulations, particularly those related to electric vehicles and household efficiency standards, to streamline energy project approvals and boost LNG exports.
- Emphasizing the development of Alaska's natural resources, including oil, gas, and minerals, to enhance energy security and economic growth.
- Withdrawing the U.S. from the Paris Climate Agreement, aiming to develop a new climate strategy aligned with economic goals.
- Temporary withdrawal of offshore wind leasing to review the ecological and economic impacts of such projects.
Managing for market volatility: A brief overview of tariff news
- Earlier in February, President Trump indicated the U.S. would introduce sweeping tariffs of 25% for imports from Mexico, 25% on non-energy imports from Canada, 10% on Canadian energy imports, and 10% on imports from China. Those tariffs were expected to go into effect February 4th.
- Shortly before they were to take effect, the U.S. and Mexico announced a 30-day pause on new tariff implementation pending further negotiations. Later in the day, the U.S. and Canada reached a similar temporary agreement.
- U.S. tariffs on China were not granted a similar pause, and China responded with retaliatory tariffs of 10-15% on U.S. energy imports, including crude oil and LNG.
- Overall, energy trade between these countries is likely to persist in most cases given strong margins and/or lack of alternatives in some cases (such as Canada’s pipeline exports to the U.S.).
- Key takeaway for energy consumers: U.S. import tariffs carry upside risk for domestic energy prices and could increase the price consumers pay for natural gas and electricity. Meanwhile, retaliatory tariffs on key exports like LNG have the potential to keep more supply in the U.S., lowering U.S. energy costs, while increasing upside risk in destination markets. While current tariff levels aren’t likely to trigger these broader price changes, U.S. trade policy is far from settled – that uncertainty stands out as a major source of energy price volatility moving forward.
For more information and a special market report from our Global Research & Analytics team on recent tariff announcements, visit this page.
Several movements in federal funding have also transpired.
The Trump administration made a decision to rescind a previous federal funding freeze that had halted federal grant money across various agencies. This freeze, announced by the Office of Management and Budget, focused on social and climate policies. After a U.S. District Judge temporarily blocked the freeze, the administration withdrew the mandate. The White House clarified that this does not signify a complete rescission of the funding freeze, indicating potential future restrictions on funding for renewable energy and decarbonization projects.
Agencies like the Department of Energy and the Environmental Protection Agency have programs that remain under review. The “Unleashing American Energy” order, meanwhile, cited disbursement pauses appropriated through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.
Longer-term, tax credits and credit transferability created under the Inflation Reduction Act (IRA) and the Investment Tax Credit (ITC) could remain as tools to make the financing of clean energy projects flexible and efficient, and as a means for sustainable infrastructure tax credit transfers.
Opportunities Continue in Tax Credits
Our team of tax credit experts recently hosted a roundtable on tax credit transfers and their impact under the IRA in late 2024. These projects continue to serve as a means for corporates to leverage their tax liability to support renewable energy ambitions while also aligning with financial and economic goals. Corporate tax incentives make up the majority of the federal spending expected to flow from the Inflation Reduction Act. In recent weeks, corporate tax incentives such as the ITC (a dollar-for-dollar credit for expenses invested in renewable energy properties, most often solar) have also been updated to the Clean Electricity Investment Credit for projects placed in services after January 1, 2025.
At Schneider Electric, we are committed to staying at the forefront of the evolving policy landscape. Our dedicated advisory team continuously monitors developments in energy, sustainability, and regulatory policies to ensure that we align our strategies with current and future requirements, while informing our clients of these developing market updates. By proactively engaging with stakeholders and adapting to changes, we aim to drive innovation and support the need for businesses to remain adaptable—utilizing sustainability and energy management strategies as drivers for unlocking business value.
Connect with our team to unlock value amid a changing market landscape: Contact Us.
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