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Some 40% of the projects announced in the first year of implementing the Biden administration’s signature industrial and climate infrastructure spending policies have been delayed or paused, according to a Financial Times investigation posted this week.
The Inflation Reduction Act and Chips and Science Act offered more than $400B in tax credits, loans and grants to stimulate development of a U.S. clean tech and semiconductor supply chain, but of announced projects worth at least $100M, a total of $84B has been placed on hold for several months or years or paused indefinitely, the report said, adding the total valuation of these projects was $227.9B.
Among the largest projects cited in the report that are on hold are Enel’s (OTCPK:ENLAY) $1B solar panel factory in Oklahoma, Albemarle’s (ALB) $1.3B lithium refinery in South Carolina, and LG Energy’s $2.3B battery storage facility in Arizona.
Taiwan Semiconductor Manufacturing (TSM) has delayed the start of production at its second fab – part of a planned $40B project in Arizona – by two years.
Higher than expected labor and supply chain related costs, slowing demand, and lack of policy certainty in a presidential election year have caused companies to change their plans, according to the report.
FT says the delays raise questions over the government’s ability to enact spending measures that would bring back manufacturing jobs to the U.S. and highlight the failure to enact permitting reform to facilitate the construction of major projects.
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