Louisiana clean energy projects threatened by federal cuts | Business News

Louisiana economic officials and politicians have cheered the billions of dollars in industrial projects recently cropping up across the state, driven in part by lucrative federal tax credits for clean energy investments.

Now, many are worried that a rollback of those credits could threaten jobs and investments, dampening Louisiana’s “all of the above” strategy to grow its clean energy and carbon management industries along with oil and natural gas production.

Nearly $40 billion worth of new Louisiana solar farms, low-carbon ammonia and hydrogen plants, factories supplying electric vehicle battery materials and other investments stand to lose incentives if clean energy tax credits from the 2022 Inflation Reduction Act are cut, according to data from the Clean Investment Monitor, a joint project of the Rhodium Group and the Massachusetts Institute of Technology.

President Donald Trump’s domestic policy package, referred to as his “big, beautiful bill” of tax cuts and spending priorities, would quickly phase out tax credits for wind and solar, end electric vehicle subsidies and curtail a credit for clean hydrogen production, among other rollbacks. Preserved in the bill are tax credits for carbon capture and sequestration, a technology favored by the oil and gas industry. 

The bill narrowly passed the House and is facing scrutiny in the Senate. Some Republicans are opposed to the bill for its vast expansion of the federal debt, while others are expressing reservations about ending subsidies that have led to major investments in their states.

“If somebody’s already invested $100 million, they’ve gotten their land, they’ve begun their permitting, they have a business plan,” U.S. Sen. Bill Cassidy, R-Baton Rouge, said in a call last month to discuss the bill. “I think we need to look at those differently.”

Ramping up lobbying of Louisiana delegation

Projects that are expected to take advantage of some form of IRA tax credits have cropped up across the state in recent years.

Louisiana has seen some 905 megawatts of solar installations in 2024 alone, and currently has enough panels to power around 155,000 homes, according to the Solar Energy Industries Association, a trade group. Other projects seeking IRA tax credits include Clean Hydrogen Works’ proposed $7.5 billion ammonia facility in Ascension Parish that would sequester emissions underground and is expected to create 350 new jobs. Also, Monarch Energy proposed a $426 million facility in Ascension that would employ a carbon-free process to make hydrogen for use in industry and create an estimated 44 new jobs. 

In April, Illinois-based CF Industries, which operates the largest ammonia production facility in the world at a complex in Donaldsonville, announced plans to build a $4 billion low-carbon ammonia plant nine miles upriver from its existing facility. The company said in its 2024 annual report that “changes to the IRA may impact our ability to receive anticipated tax credits for our low-carbon ammonia projects, which, in turn, could negatively affect the profitability of these projects.”

With so many investments on the line, Louisiana economic development officials are ramping up efforts to convince Cassidy and U.S. Sen. John Kennedy, R-Madisonville, that protecting the IRA’s clean energy tax credits are in the state’s best interests.

Greater New Orleans Inc. is collecting signatures on a letter it plans to send to Louisiana’s senators that calls for preserving the clean hydrogen tax credits and the transferability of credits for carbon capture and other technologies. 

Jerry Bologna, president and CEO of Jefferson Parish’s economic development agency, JEDCO, said repealing the IRA tax credits would make it harder to attract investments in wind, solar and electric vehicle battery manufacturing.

The parish landed the nation’s first manufacturing facility for EV battery components last year when the Japanese chemical company UBE broke ground on a $491 million facility in Waggaman. The facility is expected to create nine permanent jobs when it begins operations in 2027. Though UBE isn’t taking advantage of IRA tax credits directly, repealing the consumer tax credit for electric vehicles could reduce demand for UBE’s products, Bologna noted.

“We want to do everything we can to protect those industries in Jefferson Parish, so we’re highly supportive of retaining those credits,” Bologna said.

Jefferson Parish is also trying to position itself as a key node for the offshore wind industry. Gulf Wind Technology, a wind turbine technology company, last year partnered with Shell on a $10 million initiative to create a wind power research hub at the Avondale Global Gateway.

The House bill would give most zero-carbon power plants, including wind and solar, a 60-day deadline to start construction, in order to qualify for tax credits.

“Nothing can move that quickly,” said Camille Manning-Broome, president and CEO of the Baton-Rouge based Center for Planning Excellence.

‘Full trust’

Of course, tax credits are only one part of the equation when companies decide where to locate factories or energy projects. Many are built to operate for decades, which means that changes in tax credits from one presidential administration to the next aren’t necessarily going to end the investments. And free market advocates argue that the tax credits unfairly pick winners and losers in the economy, which isn’t as efficient as letting consumers and businesses decide. 

Still, the credits have scrambled the political calculus around supporting industry.

Gov. Jeff Landry, an ally of Trump, has touted many of the projects that stand to gain from the IRA tax credits as wins for Louisiana and an example of the state’s “all of the above” approach to energy. 

In a written statement, Louisiana Economic Development Secretary Susan Bourgeois said it was premature to comment on the budget bill given that it’s only passed the House.

“We are tracking the bill closely, and will continue our work with local, state and federal partners to bring added investment and jobs to Louisiana,” Bourgeois wrote. “We have full trust that our federal delegation will represent the best interest of Louisiana’s economy today and in the future.”

Adam Knapp, CEO of Leaders for a Better Louisiana, a statewide economic development group, said there’s “near universal agreement” among industry groups and economic development officials that the clean hydrogen tax credit needs to be preserved in some capacity. 

The tax credit — which provides companies up to $3 per kilogram of clean hydrogen produced — has been a major driver of investments in low-carbon hydrogen and ammonia projects in Louisiana, Knapp said. 

But under the House proposal, the credit would only be available for projects that begin construction by the end of 2025. Knapp said it’s unrealistic to expect projects to break ground by the end of the year.

“You don’t build industrial grade projects in that short of time period,” Knapp said.