A new dawn for America – what impact on global energy?

Rinnai’s Chris Goggin looks at the potential impact the new American President, Donald Trump, may have on international energy issues such as carbon emissions, energy efficiency, net zero and climate change.  

The second presidency of Donald Trump could potentially impose a new direction of energy issues on America which could travel across the Atlantic towards Europe.  

This article’s objective is not to adopt a bipartisan stance on political matters, but instead to reflect the range of opinions being voiced by clean-energy focused multimedia, broadcast outlets and mainstream print, as well as digital publications. Domestic and international energy distribution is a complex issue that could be further complicated by the proposed policies of the new President. 

Since President Trump’s first term of presidency, America has passed the Inflation Reduction Act (IRA) that is designed to reduce the federal government budget deficit through investing in clean domestic energy production.  

The IRA ensures that tax credits are expanded for renewable projects, meaning that the potential for greater financial rewards is increased. A recent article in The Guardian newspaper has revealed that in a self-commissioned report the US, alongside India, has made the most progress in implementing climate policies since the 2016 Paris Agreement. 

As a result, multiple renowned and established big businesses from across Europe, the UK and Asia have identified America as the ideal opportunity to earn large turnovers of revenue – and all have invested accordingly. But with President Trump returning to the White House, will America continue on a net zero path? Will America remain a member of the Paris Agreement?  

The United States reverting to widespread domestic usage of fossil fuels is unlikely, despite President-elect Trump selecting the CEO of oil and gas drilling technology company Liberty Energy – Christopher Wright – as the new DOE Secretary of Energy.  

An article published by The Guardian late last year states that solar power has been added to the American grid at 300% the rate of gas capacity throughout 2023. The same article goes on to provide more detail, revealing the political cross-party complexity that the Inflation Reduction Act has created. President Trump is on record as saying he aims to repeal IRA legislation, but doing so could jeopardise 300,000 new jobs and $150 billion in manufacturing investment – most of which rest in Republican party states.   

Instead, President Trump may prefer to target fossil fuel extraction and usage despite major groundwork being completed that provides America with fertile commercial conditions that encourage foreign investment.  

If he cannot repeal the IRA, his administration is expected to reverse important Environmental Protection Agency regulations that limit emissions from power plants as well as light and heavy-duty vehicles. From the available information on the subject, it seems he would prefer to both repeal the IRA and axe environmental regulations. 

A new route to green energy? 

A Trump administration could also take a different route towards the path of green energy utilisation. Project 2025, said to be a Republican policy platform, calls for the restructuring of federal agencies such as The Department of Energy, Department of Interior and Environmental Protection Agency. Reducing or nullifying the roles of these agencies could potentially impact funding for future clean energy projects. 

A key funding program that could be cut by the Trump administration is Department of Energy Loans Programs Office, which holds around $400 billion of finances. This department has provided numerous solar, nuclear and clean hydrogen projects with federal funds, ensuring clean energy introduction into the American transmission grid. Project 2025 could also reportedly instruct the Interior Department to seek out further fossil fuels on American federal land.  

Although US domestic renewable energy distribution could remain intact under the Trump administration, America’s international commitments towards clean energy dispersal and agreed climate control measures could be scrapped. He will most likely remove America from the Paris agreement, which aims to limit global warming by no more than 2 degrees Celsius from pre-industrial levels.   

Experts from the across the world believe that a Trump administration will attempt to slow the international energy transition rather than completely reversing all progress. Huge amounts of money and labour in Republican states are reliant on renewable projects and clean energy – to jeopardise these jobs and investments could be politically counterproductive to an avowedly populist president.  

A further four years of Trump politics will mean that more American fossil fuels will be in the domestic and international markets. However, there is too much clean energy infrastructure and policy in place, and too many nations switching to cleaner fuels for a global reduction, for changes in American policy alone to have a definitive impact on the global stride towards net zero.   

By keeping UK customers informed on all international energy matters, Rinnai aims to provide insight into possible energy market manoeuvrings and, therefore, give a better understanding of global energy options and how the UK can make better product choices and more efficient energy procurement.   

www.rinnaiuk.com