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Trump hates Biden’s climate law. His allies make money from it

Trump hates Biden’s climate law. His allies make money from it

Authors: Valerie Volcovici and Gram Slattery

WASHINGTON (Reuters) – Donald Trump has vowed to gut U.S. President Joe Biden’s climate subsidies if elected. But many of Trump’s allies are reaping the benefits with heavy investments in solar power, electric vehicles, carbon sequestration, hydrogen and other clean energy technologies.

Reuters found that at least seven close Trump allies and fundraisers or the companies they run have stakes worth hundreds of millions of dollars in companies that are significant beneficiaries of tax breaks under the Inflation Reduction Act, Biden’s signature climate law.

They include Trump’s son-in-law Jared Kushner; his former ambassador to China and further ally Terry Branstad; and companies run by informal energy consultant and oil tycoon Harold Hamm and powerful booster Howard Lutnick.

Major oil companies such as Occidental Petroleum and Energy Transfer, whose CEOs hosted a May fundraiser in Houston for the Trump campaign with Hamm, are also investing in projects that could only be profitable if Biden’s clean energy tax credits survive.

Tesla, whose founder and CEO Elon Musk supports the Trump campaign, also benefits greatly from IRA loans for electric vehicles and solar energy.

According to Reuters reporting, these people and companies collectively hold billions of dollars in investments that qualify for lucrative IRA tax breaks and could face big losses if Trump is able to follow through on his promise to gut Biden’s climate law.

The investments are important because they increase the likelihood that some Trump allies will ask him to preserve aspects of Biden’s climate law if he wins the November election against Democratic Vice President Kamala Harris. It would add influential voices to some trade groups and lawmakers who have already advocated for specific IRA contributions.

None of the people or companies identified by Reuters would comment for this story on whether they would intervene to preserve some of the IRA.

For now, Trump’s intentions are clear.

“My plan will end the Green New Deal, which I call the Green New Scam, and rescind all unspent funds under the misnamed Inflation Reduction Act,” Trump said, laying out elements of his economic policy platform in a September speech.

Trump campaign senior adviser Brian Hughes told Reuters that broad IRA withdrawals remain a top priority if he wins the Nov. 5 election, arguing that the package contributed to inflation and increased the deficit.

Repealing any part of the IRA would require an act of Congress.

A group of 18 Republican lawmakers representing districts that received IRA-linked investments sent a letter to House Speaker Mike Johnson in August urging him not to revoke the entire IRA if the party takes control of the House and Senate.

The White House said the IRA created more than 330,000 jobs and that gutting it would hurt investments made in Republican states.

“By some estimates, most of this investment is happening in red and purple states,” White House spokesman Angelo Hernandez said.

The Biden administration has already been working to award the vast majority of IRA grants, but the bill’s tax breaks are expected to last for years.

Other investors and companies involved in clean energy projects hope that if he wins in November, Trump’s campaign rhetoric will give way to practicality.

“The innovators and energy companies we work with want policy predictability. They make hundreds of millions in investments through IRAs,” said Jeremy Harrell, CEO of the conservative Washington, D.C.-based clean energy organization ClearPath.

Frank Wolak, president of the Fuel Cell and Hydrogen Energy Association, said it would be imperative for Congress to protect the tax breaks if Trump wins the election.

“We’re just going to aggressively educate our allies in Congress about the IRA,” he said.

ALLIES WITH IRA BENEFITS

– MOSAIC

Trump’s son-in-law and former adviser to President Kushner, private equity firm Affinity Partners, invested $200 million in 2022 in Mosaic, a California-based provider of solar and home efficiency financing, according to investment data provider PitchBook.

Founded in 2011 as a crowdfunding startup, the company has been supported by a 30% IRA tax credit for residential solar, as well as consumer incentives for solar panels, electric heat pumps and other efficiency solutions by increasing consumer interest clean energy loans.

– SUMMIT CARBON SOLUTIONS

Oil magnate Harold Hamm has long been an energy adviser and political financier for Republican politicians, including Trump, and in May he hosted a fundraiser in Houston for Trump’s third presidential campaign.

His company, Continental Resources, made a $250 million strategic investment in 2022 in Summit Carbon Solutions, a carbon capture and sequestration (CCS) project that will capture CO2 from ethanol plants and other industrial sources in the Midwest.

This bill builds on the 45Q tax credit for various forms of CCS, which IRAs have dramatically increased in all cases.

While the project was proposed before the IRA was signed into law in 2022, the increased tax breaks could result in a $2.9 billion windfall for Summit investors, according to Jake Schwitzer, director of the policy group North Star Policy Action.

The summit’s top policy adviser is former Iowa Gov. Terry Branstad, who served as Trump’s ambassador to China and remains his staunch ally.

– TESLA

Tesla is a huge beneficiary of IRA tax breaks. The electric vehicle and solar energy company called the package a “significant push toward accelerating our mission” shortly after it took effect in 2022, despite CEO Musk’s public hostility to the subsidies.

– OCCIDENTAL PETROLEUM

In addition to co-hosting a fundraiser for Trump in Texas in May, Occidental CEO Vicki Hollub attended a separate April fundraiser made up of energy executives at Trump’s Mar-a-Lago estate. These events generated tens of millions of dollars for the Trump campaign.

Occidental is the recipient of the Q45 Carbon Capture Tax Credit and the recipient of a Department of Energy grant of nearly $1 billion to build a Direct Air Capture (DAC) facility to demonstrate this emerging technology at scale. The company touted its strategy of selling so-called “net zero” barrels of oil.

In May, Hollub said in a statement to Reuters: “I have spoken to policymakers on both sides of the aisle and will continue to speak to them to express our support for 45Q as it will help develop technologies such as direct air capture that remove carbon dioxide emissions from the atmosphere and protect America’s energy security.”

– ENERGY TRANSFER

Energy Transfer CEO Kelcy Warren has been a longtime supporter of Trump. The pipeline operator also participates in projects supported by IRA tax credits, including two planned CCS hubs in Louisiana and a hydrogen hub in Texas that recently secured just over $1 billion in Department of Energy funding.

— CANTOR FITZGERALD

The co-chair of Trump’s transition team, Howard Lutnick, is the CEO of Cantor Fitzgerald, a large financial services firm that has made significant investments in companies that benefit from IRAs.

As co-chair of the transition, Lutnick plays a key role in finding appointees to high-ranking positions in a potential Trump administration and has also raised major funds for Trump.

Among the companies in which Cantor Fitzgerald has invested and that have benefited significantly from IRAs is Invenergy, a renewable energy company that is a major component of the Cantor Fitzgerald Infrastructure Fund.

According to a July press release, the infrastructure fund has total net assets of over $150 million, and its investments in Invenergy represent 14.65% of the fund’s total investments.

The fund also invests heavily in NextEra Energy, the largest US developer of renewable energy.

Both companies praised IRAs as helpful to their businesses.

Cantor Fitzgerald manages over $13 billion in assets and provides a wide range of financial services.

(Reporting by Valerie Volcovici; Editing by Marguerita Choy)