USA Law and Practice Contributed by: Elena Rubinov, George Casey, Heiko Schiwek, Vinita Sithapathy, Pierre-Emmanuel Perais and Clara Pang, Linklaters LLP
6.2 Key Developments in Renewable Energy and Cutting Emissions The OBBB has impacted energy and tax policy through repeals and phasing out of IRA programmes and certain energy-related credits. Although the stat- ute phases out or restricts clean-energy incentives pertaining to technologies like solar and wind, other IRA incentives (including regarding battery energy storage systems, nuclear power, carbon capture and critical minerals) remain robust under the new law. The OBBB has imposed new FEOC prohibitions to ensure American energy independence and deny tax credits to projects related to certain unfavourable jurisdictions (eg, China), which will phase in gradually and require substantial diligence by taxpayers seeking to claim IRA incentives in the future. The OBBB also gutted the technology-neutral clean energy production and investment tax credits, repealing credits for wind and solar facilities placed in service after 31 December 2027 if construction begins after the lapse of a one- year “grace period”. These rules provide clarity on emissions-rate eligibility and monetisation mechan- ics, though markets now operate under new limita- tions, early phase-outs for wind and solar, and FEOC constraints. The OBBB also rescinded certain environmental review implementation funds and other climate-relat- ed appropriations, complicating the permitting capac- ity landscape. Offshore wind permitting has been streamlined through BOEM and BSEE rule-making and process improvements. An executive order issued on 23 July 2025 added a fast track for AI data centre projects and energy and transmission infrastructure, directing: • the Council on Environmental Quality (CEQ) to expand categorical exclusions; • the Federal Permitting Improvement Steering Council to provide FAST-41 transparency and pos- sible covered-project status; • the EPA to expedite permitting; and • the Department of the Interior (DOI), Department of Energy (DOE) and Department of Defense (DOD) to identify federal sites and authorisations.
The order presumes certain federal financial supports are not “major Federal actions” under NEPA, in the absence of substantial project-specific control, which can accelerate timelines. The year 2025 has also seen a recalibration of the framework for conventional energy sources through measures including mandated oil and gas leasing, repeals of IRA royalty changes and the methane roy- alty provision, and Corporate Average Fuel Economy penalty reductions, reflecting a mixed and contested regulatory environment. The result is a challenging landscape in which developers must carefully analyse whether their projects align with current federal pri- orities, including FEOC and material-assistance tests, earlier credit phasing out, and revenue-sharing and fee changes for renewables on federal lands. 7. Due Diligence/Data Privacy 7.1 Energy and Infrastructure Company Due Diligence In the US, the buyer will generally carry out legal, financial, commercial and tax due diligence, involving reports from lawyers, accountants and other special- ists. The scope of due diligence reviews will vary. “Reverse diligence” on the buyer may be necessary or advisable, including if equity is the form of considera- tion, often focusing on foreign government ownership or control; compliance with export control, sanctions, anti-money laundering and anti-corruption regimes; and other relationships with countries of concern. Some key focus areas for legal due diligence of an E&I company would include: • asset ownership, real property rights and land access, including easements, rights of way and site-control arrangements; • environmental and permitting compliance, includ- ing federal, state and local permits, licences and authorisations and environmental assessments to identify known or potential contamination; • grid interconnection and transmission rights, pow- er-market participation requirements and FERC approvals, where applicable;
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