On September 10, the "One Big Beautiful Bill Act" (OBBBA) signed by U.S. President Trump significantly adjusted energy policy, profoundly impacting supply chains and investment flows while strengthening government support for traditional fuels. The legislation, targeting "energy dominance," reverses key provisions of the Inflation Reduction Act (IRA) through a series of cost-reduction measures that promote domestic localization. AUS GLOBAL noted that Rystad Energy pointed out that OBBBA's strict foreign content reviews and restrictions on Specified Foreign Entities (SPEs) will force companies to establish more resilient but potentially more expensive independent supply chains. For example, biofuel North American feedstock requirements will reshape global trade patterns, creating clear "winners" and "losers" in international commodity markets.

Compared to the IRA's original timeline, OBBBA compressed construction cycles for projects in multiple key sectors, accelerating the termination of tax incentives for wind, solar, and clean hydrogen. In contrast, biofuels received several additional years of support, while consumer tax incentives for electric vehicles (EVs) and residential solar were eliminated. AUS GLOBAL believes this differentiated approach demonstrates clear policy selectivity, prioritizing sectors with cost-effectiveness and energy security attributes.

Another major adjustment involves time limits on clean electricity production and investment tax credits (45Y and 48E). New regulations require solar and wind projects to begin construction within 12 months and become operational by the end of 2027, rather than the originally planned post-2032 timeline. Rystad Energy expects developers to accelerate equipment orders to comply with OBBBA's one-year safe harbor period, enabling projects to qualify for tax incentives during 2029-2030. Meanwhile, OBBBA introduces strict restrictions on clean energy manufacturing and supply chains, requiring equipment components to gradually achieve up to 90% domestic or "friend-shoring" ratios. For solar developers, meeting Foreign Entity of Concern (FEOC) requirements will be a costly and challenging process.

Regarding traditional energy, U.S. shale oil companies, particularly those with substantial federal land mineral rights, will directly benefit from OBBBA's reduced royalty fees and tax incentives. While this policy may not necessarily trigger a new period of high growth in shale oil, short-term investment and economic improvements will provide marginal benefits to related companies. Long-term, reduced federal royalty fees will help lower the marginal cost of new natural gas supply. Additionally, Rystad Energy stated that restoring 100% accelerated depreciation policy for tangible capital expenditures will reduce short-term development breakeven points by $1-2 per barrel for most core unconventional fields, benefiting all companies regardless of their reliance on federal lands.

Like the IRA, OBBBA's impact extends far beyond domestic borders, set to profoundly influence the global clean technology investment landscape. U.S. policy is shifting from promoting green technology acceleration toward emphasizing a defensive strategy focused on domestic energy security. AUS GLOBAL believes this shift not only makes the global energy transition environment more complex and uncertain but also brings new opportunities and challenges to international markets.