The U.S. Energy Department (DoE) is reportedly contemplating substantial reductions, potentially halting nearly $10 billion in federal funding for clean-energy projects. This move could jeopardize high-profile collaborations with Exxon Mobil (NYSE:XOM) and Occidental Petroleum (NYSE:OXY).
What Happened: The proposed cuts could disrupt contracts with energy companies involved in hydrogen, carbon capture, long-duration energy storage, and other technologies, The Wall Street Journal reported. These reductions are a part of President Donald Trump's broader initiative through the Department of Government Efficiency (DOGE) to reduce the size and cost of government, and could result in thousands of job losses at the Department of Energy (DOE), according to the report.
DOGE’s efforts, overseen by Trump advisor Elon Musk, have already resulted in significant contract reductions and job cuts across the federal workforce. The $10 billion figure represents potential funding slashes in two DOE offices and a portion of the DOGE-driven cancellations being considered across the Energy Department.
Several key partnerships are at risk, including projects with Exxon, NextEra Energy (NYSE:NEE), and Occidental Petroleum, as the DOE considers cutting support. Additionally, funding for four regional hydrogen hubs--mainly in Democratic-leaning areas--is also under review.
DOE did not respond to Benzinga’s request for comment.
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Why It Matters: The proposed cuts follow President Trump’s earlier move to freeze billions in federal funding, affecting projects in clean energy, conservation, and transportation across the United States. This move in February has created uncertainty for thousands of workers and local economies.
Moreover, in April 2025, Trump unveiled plans to revive U.S. coal production, marking a dramatic policy reversal from the climate-focused agendas of the Biden and Obama administrations. This shift in policy and the proposed funding cuts could significantly impact the clean energy sector and its stakeholders.
Meanwhile, DOGE has drawn severe criticism for its mass firings. Billionaire entrepreneur Mark Cuban warned that abruptly cutting federal programs, agencies, and jobs without considering the economic impact could harm local economies. He noted that in some cities, up to 9% of the workforce depends on government jobs, and sudden cuts could lead to job losses, falling home values, and economic decline.
iShares Global Clean Energy UCITS ETF (NASDAQ:ICLN) and Invesco Solar ETF (NYSE:TAN) climbed 1.77% and 1.19%, respectively, on Thursday.
While shares of Occidental Petroleum and Exxon Mobil rose 3.28% and 2.62%, respectively, during the same period.
- READ MORE: Trump Administration To Lay Off Nearly 90% Of CFPB Employees In Major Downsizing: Report
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
