Key insights
- President Joe Biden revived the use of industrial policy in the US to support clean technology and slow climate change.
- His successor, Donald J. Trump, has taken an antagonistic stance toward climate solutions and has dismantled many climate programs.
- Trump continues to use industrial policy to improve national security, but analysts warn that the policy whiplash threatens both climate and security goals.
Under President Joe Biden, the US government began pouring billions of dollars into technologies intended to help slow climate change. This support was one of the most robust US examples in decades of what is known as industrial policy—government interventions designed to boost specific industries.
In contrast, Biden’s successor, Donald J. Trump, has shown little interest in fighting climate change. Over the past 18 months, his administration has dismantled many industrial investment programs intended to stem carbon dioxide emissions.
In their place, the Trump administration is implementing its own version of industrial policy to achieve the national security goals of boosting energy production and decreasing US reliance on materials from China. Trump is employing tools that are even more interventionist than those used by Biden, but industry analysts say the policy whiplash puts the country at risk of falling short of targets for both climate and security.
While many company-backed projects launched during the Biden years continue to move forward, $82 billion in clean energy manufacturing projects overall have been slowed or canceled since the start of Trump’s second term, according to The Big Green Machine, a Wellesley College initiative that tracks clean technology investments.
“Discontinuity is bad for project economics in general. The projects we’re talking about—minerals, batteries—those are yearslong projects,” says Bryan Bille, who leads policy analysis for the research firm Benchmark Mineral Intelligence. “You need to have a clear investment landscape, policy landscape.”
The pillars of the Biden administration’s climate-focused industrial policy were the 2021 Bipartisan Infrastructure Law and the 2022 Inflation Reduction Act (IRA). The laws funneled a wave of postpandemic economic stimulus to clean technology projects in both Republican- and Democratic-leaning states.
Just before Trump’s second term, researchers at the Brookings Institution predicted that the amount of funding going to Republican-voting areas would make it difficult for him to repeal climate programs. And industry analysts expected that Trump’s support for manufacturing might preserve grants for battery materials plants, despite their connection to fighting climate change.
But Trump began cutting support for battery materials plants and other clean technology manufacturing projects soon after entering office, primarily through the cancellation of grants awarded by Biden’s Department of Energy (DOE). In addition, the DOE has effectively ended many other grants by simply not responding to awardees and stalling progress, claims a report by a group of former DOE staffers.
“Carbon emissions, which were a core driver for the Biden administration, are . . . not a thought in the slightest for the Trump administration,” says Milo McBride, an energy researcher at the Carnegie Endowment for International Peace.
The Trump administration sidestepped the political armor of Biden’s industrial policy by canceling grants mostly for projects in Democratic-leaning states. In some cases, grantees successfully appealed to have their awards reinstated, arguing that the cancellations were motivated by politics rather than project merit.
A new flavor of industrial policy
At the same time, the Trump administration started rolling out new programs to advance its goals related to energy production and reliance on China. These priorities sometimes overlapped with Biden’ s climate goals, but the presidents used different tools to advance them.
Biden preferred to spread out support among technology areas and companies, says Seaver Wang, director of climate and energy at the sustainability think tank the Breakthrough Institute.
“Carbon emissions, which were a core driver for the Biden administration, are . . . not a thought in the slightest for the Trump administration.”
Under Biden, the DOE offered grants for battery recycling, carbon capture, green hydrogen, and other clean technologies. The IRA also gave a tax break to companies refining battery minerals or manufacturing battery components. The DOE offered low-interest loans for sustainable aviation fuel, low-carbon chemicals, and solar panel production. “The IRA really tried to take more of a ‘rising tide floats all boats’ approach,” Wang says.
McBride calls the IRA and other Biden-era actions a once-in-a-generation level of investment that will significantly slow climate change. A recent analysis from the Massachusetts Institute of Technology found that IRA tax credits that survived under Trump will still achieve 67% of the carbon emission reduction the law was originally expected to catalyze.
But McBride says the funding under Biden could have been more targeted at fields where the US is most equipped to compete, such as geothermal energy and areas important for national security, like rare earth minerals.
“There was a grand, everything approach,” McBride says. “It was not a utilitarian, targeted approach.”
Trump, in contrast, has been unafraid of picking winners. The administration has offered a few companies guaranteed price floors for rare earths, which are needed to make magnets that go into missiles and aircraft. It negotiated equity stakes in mining and refining companies like Lithium Americas, MP Materials, and USA Rare Earth—actions previously reserved for times of major distress, like the 2008 financial crisis or the runaway inflation of the 1970s.
Trump is also leveraging the power of the US military more than Biden did. The Department of Defense has offered rare earth companies large loans and leases for land on military bases.
The Trump administration “has shown a very clear willingness to put their finger on the scale,” Wang says. “Out of fear of political backlash or of overstepping bounds, Biden . . . stopped short of even considering direct equity investments.”
Concentrating government investment in a few companies could be a smart move for industries—such as rare earth refining—that the US is trying to build from scratch, Wang says, because it could ensure that they have the support they need to get off the ground. But he criticizes the Trump administration for taking stakes in companies without an exit strategy, an approach that creates a temptation for the government to remain involved in private businesses for too long.
Another criticism is that the phaseout of tax credits for electric cars in the Trump-backed One Big Beautiful Bill Act threatens to undermine the administration’s big swings in rare earths and critical mineral refining.
Bille, the analyst from Benchmark, notes that the phaseout dampened consumer demand for electric cars, one of the main end-uses for battery minerals and rare earths. Without demand for electric vehicles, companies can’t justify building factories that produce relatively small volumes of minerals for the defense industry.
“To bring potential projects online, you need to have a demand,” Bille says. “If you are kneecapping the demand, that will definitely hamper the business case.”
Support for clean technologies is now a moving target
While some of the Trump administration’s deals include eye-popping numbers for individual companies, support for clean technologies has been inconsistent and difficult to predict. For example, early in Trump’s second term, Ryan Melsert, CEO of American Battery Technology Company (ABTC), expressed optimism for his company’s projects. The firm had won DOE grants for lithium processing and battery recycling during the Biden administration. He said that ABTC’s projects were “well aligned with the mission” of the incoming Trump administration.
At first, that prediction seemed to bear out. The Trump administration added the company’s lithium refinery to a list of projects that would receive fast-tracked permitting. And ABTC received a letter of interest for a financing package from the Export-Import Bank of the United States.
Investing in cleantech
Investment in batteries and critical minerals rose during the Joe Biden administration. President Donald J. Trump has maintained some of that support, but investment in battery manufacturing has plummeted.
Then, in October, the DOE canceled ABTC’s lithium processing grant, alongside a long list of other clean technology projects. The firm appealed to the DOE and succeeded in having the grant reinstated more than 6 months later.
Other cleantech projects have faced similar ambiguity. Also in October, the Trump administration threatened to cut funding for carbon capture hubs in Texas and Louisiana. The decision was reversed in April, but the interruption stalled progress.
Less mature industries that rely on government grants are especially affected by this sort of policy whiplash, says Derrick Flakoll, director of North American policy for the intelligence firm BloombergNEF. “You have seen some projects go under, reboot elsewhere, or pivot,” he says.
The phaseout of electric vehicle tax credits and the chaotic process for identifying which Biden-era grants would survive appear to be taking a toll on manufacturing in the country.
US investment in battery manufacturing fell by about 47% in Trump’s first year in office, according to data compiled by Rhodium Group’s Clean Investment Monitor, a project that tracks investment in clean technology. Manufacturing announcements for such projects fell by 79% in the same period. In the final quarter of 2025, the value of cancellations of clean technology project exceeded the value of new announcements.
Critical minerals was the only area of clean technology monitored by Rhodium Group that has shown any growth since Trump took office.
Whether or not Trump achieves his goals, his embrace of industrial policy will likely embolden future policymakers, says Wang, the researcher from the Breakthrough Institute.
“He changed the norms for industrial policy led by the executive branch,” Wang says. “That willingness to use a broader toolbox more strongly will probably persist.”
