Silke Mayr HIF Global, a US-based green fuels company, plans to build a $7 billion e-methanol plant in Matagorda County, Texas. The factory will use renewable energy to convert captured carbon dioxide and green hydrogen into clean e-methanol fuel. This project is set to be the largest of its kind in the world, creating thousands of jobs and providing a more sustainable fuel for ships and aircraft. However, the company has yet to commit fully, as it awaits key decisions from Congress on tax credits that support clean hydrogen production.
The future of billions in federal green energy funding now depends on ongoing budget negotiations in Washington. Lawmakers are debating major cuts that could reduce or eliminate incentives vital to projects like HIF Global’s. The Senate is reviewing a budget bill, while the House has already proposed slashing clean hydrogen credits and other green energy supports.
Lee Beck, HIF Global’s senior vice president for global policy and commercial strategy, emphasized the importance of these tax credits. She explained that the credits help lower technology costs and allow the US to stay competitive with China, a global leader in clean hydrogen. Beck said, “We don’t plan to depend on credits forever, but they’re critical to get started.” Without this support, the company might look to build elsewhere, where political backing is stronger.
The uncertainty comes as the US government’s approach to renewable energy has faced setbacks. Since January, several green energy initiatives have been rolled back. The US withdrew from the Paris Agreement, and renewable projects on federal lands, especially wind farms, were paused. Funding programs under the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), designed to boost clean energy through grants, loans, and tax breaks, have also been suspended.
Adie Tomer from the Brookings Institution warned that the US is moving in the opposite direction of other industrial nations. Legal challenges to the funding pauses are ongoing and may reach the Supreme Court. Meanwhile, federal agencies must decide on individual cases without clear guidance.
Industry experts express frustration over policy delays and instability. Jessie Stolark, leader of the Carbon Capture Coalition, said the lack of clarity harms project development. “If these first-of-their-kind projects fail, the entire carbon management sector suffers in the long run,” she explained. Many companies that received initial funding are unsure if later-stage financing will come through.
Congress’s budget talks also threaten the future of the IRA and IIJA incentives. Lawmakers are considering cuts to clean energy tax credits to address other fiscal priorities. Even if the IRA remains, many credits may be shortened or weakened, impacting consumer incentives for electric vehicles, home energy improvements, and renewable manufacturing.
Policy consultant Ashur Nissan highlighted the political tensions around these credits. Many beneficiaries are located in Republican districts, yet opposition remains strong due to concerns about costs. The Cato Institute has called for full repeal, warning of “unlimited liability” for taxpayers from underestimated program expenses.
Clean energy investment data reflect this uncertainty. The Clean Investment Monitor reported a 3.8% drop in green energy investments in the first quarter of 2025, totaling $67.3 billion. This marks the second consecutive quarterly decline. Hannah Hess of the Rhodium Group pointed to inflation, interest rates, supply chain challenges, and political risks as factors. She also noted a record six cancelled battery manufacturing projects worth nearly $7 billion, tied closely to policy uncertainty.
In response to shifting political and funding climates, green companies are adjusting their messaging. LanzaJet, which produces sustainable aviation fuel, now focuses less on climate urgency and more on using local feedstocks to appeal to a wider audience. CEO Jimmy Samartzis explained this approach as strategic. The company is still waiting for a $3 million grant approved last August from the Federal Aviation Authority, but the funds remain frozen due to broader federal funding halts. “It’s authorized, but we can’t access it yet,” he said, illustrating the challenges faced across the clean energy sector.
The future of clean energy projects like HIF Global’s Texas megaproject depends heavily on congressional decisions in the coming weeks. Lawmakers’ choices on tax incentives will influence whether billions in private and federal investments can drive the US toward a greener economy or stall amid political gridlock.