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President-elect Donald Trump has reaffirmed his opposition to wind energy, stating he intends to halt all new wind farm projects due to perceived inefficiency and reliance on subsidies. He has criticised offshore wind energy, linking it to whale deaths despite no scientific evidence from the National Oceanic and Atmospheric Administration (NOAA). Experts suggest that while some offshore wind projects, such as RWE's Gulf of Mexico initiative, may face delays, the renewable energy momentum from the Biden administration is unlikely to reverse immediately. Critics, including Senator Ron Wyden and clean energy groups, argue that Trump’s policy would increase energy costs and hinder progress on sustainable energy alternatives. (The Hill)
Why does this matter? The US currently has a wind capacity of around 152 GW, according to the US Energy Information Administration (EIA), up by 46% since 2019 and 135% from over a decade ago. The country also has the second-largest wind capacity behind China and accounts for 10% of US energy generation with an industry supporting over 120,000 jobs. Trump's move to pull the plug on wind projects would have a direct impact on Rio Tinto given that it partners with companies working on renewable projects.
Trump, who recently derided UK North Sea developments, labelled wind turbines a “disaster” and “garbage” during a press conference at his Florida resort. He also claimed wind power is the “most expensive” form of energy. Contrary to this, a recent report by financial services firm Lazard noted that wind energy has been the most affordable source of electricity in the US for around a decade. Moreover, 90% of decommissioned wind turbines are recyclable, although more innovations are needed to recover materials used in blades, generators and nacelle covers.
Ahead of Trump's inauguration into his second term in office outgoing President Joe Biden announced a ban on new offshore oil and gas drilling across 625 million acres of coastal waters, including the Atlantic, Pacific, eastern Gulf of Mexico and parts of Alaska’s Bering Sea. Trump, who has pledged to ramp up domestic fossil fuel production, declared he would overturn the ban as soon as he takes office. However, legal precedents mean that Trump will likely need to take Congressional action to achieve this.
Furthermore, the Biden administration has just finalised rules for clean electricity investment and production tax credits under the Inflation Reduction Act (IRA), a federal law that Trump aims to dismantle. Designed to reduce US emissions 40% by 2030, the credits apply to projects starting after 31 December 2024, including renewable energy, energy-efficient buildings and electric vehicles. With over 900 clean energy projects announced since the IRA passed in 2022, officials argue that rolling back incentives could hinder innovation and competitiveness while raising costs.
Meanwhile, European Commissioner for Climate Action Wopke Hoekstra has warned that global efforts to tackle climate change would be threatened if Trump again withdraws the US from the Paris Agreement as he did in his first term. Hoekstra said that such a move, which is reportedly under consideration, would leave no choice but for other countries to “double down on climate diplomacy”. Nevertheless, the EU will continue to engage with the US on climate issues, critical in light of 2024 having been confirmed as the hottest year since records began.