(Reuters) -The White House said President Donald Trump's order this week to suspend the disbursement of funds appropriated under his predecessor's signature climate and infrastructure laws applies primarily to programs that discourage fossil fuel development. or promote electric vehicles.
As part of a series of executive orders hours after taking office on Monday, Trump ordered government agencies to suspend funding from the Inflation Reduction Act and the Infrastructure Jobs and Investment Act.
The White House Office of Management and Budget clarified in a memo, dated Tuesday, that Trump's order only applies to funds that contravene a list of stated policy objectives, including encouraging greater energy production on federal lands and eliminate support for electric vehicles. Funding for other programs, such as bridges, public transportation and roads, will not be affected.
It is unclear whether the order puts many funds at risk.
The Biden administration had said before Trump's inauguration that the vast majority of grants for clean energy programs allocated under the IRA, for example, had already been obligated and were ring-fenced, with only $11 billion earrings.
Meanwhile, most of the IRA's support for clean energy and electric vehicles comes from tax credits that can only be repealed by an act of Congress.
Robert Moczulewski, principal at tax firm Baker Tilly, said Trump's order could face legal hurdles if it delays any significant funding.
“Pausing funding already appropriated by Congress may lead to legal challenges, although the administration may 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 the production of batteries for electric vehicles, is unclear.
The Biden administration had finalized loans for several critical minerals projects in the United States in its final months, including a $2.26 billion debt package for Lithium Americas (NYSE:) and nearly $1 billion for ioneer.
Those loans are final and cannot be modified, according to two industry sources and a management source familiar with the terms of the loan.
Bernard Rowe, chief executive 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 Department of Energy to ensure that critical minerals projects “receive consideration for federal support, depending on the availability of appropriate resources.” funds.”
Representatives for Vancouver-based Lithium Americas were not immediately available for comment.
Loans for other critical minerals projects in the United States that were not completed before Biden left office could be vulnerable. That list includes 24 projects seeking a total of $45 billion, according to Department of Energy data.
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