On January 20, 2025, Donald Trump was inaugurated as the 47th President of the United States of America after winning the 2024 presidential election last November. Trump’s return to the White House has brought increased uncertainty as the market holds its breath to see exactly what policies he will introduce. This is especially true for industries that have been the target of heavy criticism throughout the Trump-Vance election campaign – arguably none more so than climate and energy.
Trump’s last term in office – from 2017 to 2020 – was characterized by a deregulatory agenda intended to boost fossil fuel production and use, sensationalist climate scepticism, and high-profile withdrawals from international climate treaties. However, the administration did face legal challenges, as well as congressional resistance, in achieving its climate goals; not all the fears that accompanied Trump’s initial election came to fruition.
This administration will have the same lack of commitment and consistency on climate, but there are five key things to look out for in the initial months of Trump’s second term:
- “Drill baby, drill”.
This has been a slogan throughout the campaign, and Trump has not shied away from showing his support for America’s oil and gas industry, promising to approve new drilling pipelines on day one of his presidency. There will likely be another round of deregulation of environmental restrictions to boost fossil fuel production, along with the departure of the US from international climate regulations aimed at reducing American emissions. This will create cheaper energy for American consumers, therefore increasing consumption, and have the potential to reduce prices on a global scale. - Reluctant acceptance of the Inflation Reduction Act.
In our net zero predictions for 2025, for we predict that Trump’s administration will fail to reverse the IRA due to resistance within his own party, as over three-quarters of announced clean energy investments have gone to Republican congressional districts, providing economic growth and jobs in these regions. With the allocation of $6 billion in tax credits to more than 140 projects in the final days of Biden’s term, the groundwork has been firmly laid, making it politically and economically unviable for the incoming administration to roll back these investments. Therefore, while Trump is unlikely to expand on the IRA, existing projects and incentives will remain untouched. - A shift towards nuclear power.
The first Trump administration was mostly supportive of the US nuclear industry, providing billions in loan guarantees to facilitate the construction of Plant Vogtle and signing the Nuclear Energy Innovation and Modernization Act. In the 2024 election campaign, Trump continued to voice his support for developing US nuclear power capabilities as part of his mission to achieve energy independence. In particular, Chris Wright – Trump’s pick to head up the US Energy Department – has been vocal in his support of the use of small nuclear reactors. This also aligns with moves from major American technology firms such as Google, Meta and Microsoft, which are all considering deploying nuclear energy to power developing AI data centres. - Tariffs on renewable energy imports.
It was impossible to escape the issue of tariffs throughout President Trump’s election campaign, with his planned policies having the potential to impact most globally operating businesses and result in disruptions in global trade. These tariffs will impact imports related to renewable energy, such as solar panels and EV battery parts. Disruption in this area is especially likely as China is the largest global exporter of these resources, with battery exports to the US alone reaching $1.9 billion in 2024. Heavy tariffs here would increase the costs of renewable energy projects within the US, and potentially abroad, therefore slowing their adoption. - Banning the construction of offshore wind.
Trump has pledged that “garbage” wind turbines that “litter the country” will not be built under his watch, citing concerns over the expense of the projects and potential environmental impacts. This stance has already caused market concern, with European wind stock decreasing by 2-7% following these comments. However, not all have been deterred. In January 2025, Equinor secured a $3 billion financing package to construct 80,000 acres of offshore wind off the coast of New York, creating potential for friction between state and federal governments over who should control local energy policy.
