Photo illustration: Lindsey Bailey/Axios. Photo: MANDEL NGAN/AFP via Getty Images
Energy companies and lobbying firms are starting to game out scenarios for an election that could upend generational changes to climate and environmental policy.
Why it matters: Another Donald Trump administration would mean vast regulatory rollbacks and big changes to how IRA funds get doled out.
- House Speaker Mike Johnson's staff is already prepping for a possible reconciliation bill next Congress.
The big picture: Top of mind for everyone is the coming tax debate in 2025, when parts of the 2017 Trump tax cuts will expire.
- The IRA isn't getting fully repealed. But even with divided government, lobbyists think parts of the climate law would be in play as pay-fors and negotiating wedges.
- If Republicans get unified control, expect a reconciliation bill that could severely curtail its subsidies and uncapped tax credits.
- "We're trying to be as proactive as possible" about protecting the IRA, said Brandon Hurlbut, a former Obama administration official and cofounder of Boundary Stone Partners.
Zoom in: The EV tax credit is most vulnerable to outright repeal, or a reversion to its pre-IRA caps, according to half a dozen lobbyists and industry sources.
- The offshore wind provisions are vulnerable too, given that they have "been harshly criticized by Trump on the campaign trail," said Colin Hayes, a founding partner of Lot Sixteen.
- The investment and production tax credits — the centerpiece of the law's projected emissions reduction — are seen as safe, but they could be in for caps or changes in a GOP sweep scenario.
Meanwhile, there's a long list of federal rules Trump — who's planning to be on the Hill Thursday — would likely scale back: auto emissions standards, power plant greenhouse gas rules, NEPA implementing regulations and more.
Between the lines: Many of the IRA's incentives and subsidies will be tough to claw back, given corporate support and burgeoning manufacturing in GOP areas of the Southeast.
- "There's a scenario where policies focused on reshoring domestic manufacturing capacity, like 45X for example, could appeal to the populist wing of the Republican Party and have staying power," said Emily Domenech, a senior vice president at Boundary Stone and a former GOP leadership aide.
- There are some IRA credits — such as the 45V hydrogen incentive — where industry might even prefer Trump's implementation to President Biden's.
The other side: One chemicals industry exec told Axios the IRA's subsidies won't "make a material difference" in the way business views the election.
- The law might bring a few of a given company's projects to life. But the Biden administration's regulatory regime — largely opposed by oil, gas and chemical companies — could affect everything a company does and limit Biden's support in the business community.
- At the same time, the exec said, Trump's more likely to start a damaging trade war.
What they're saying: "Industry covets certainty. One of the major problems with the Biden administration has been the lack of certainty because of his political tightrope walk," said Bracewell's Frank Maisano.
- But Trump 2.0 would raise similar concerns because of his "scattershot approach" to policy, Maisano said. "Pick your poison."
