The Energy Chamber of Trinidad and Tobago says recent moves by the United States to eliminate tax credits for renewable energy and green hydrogen projects may open the door for more attractive investment opportunities in other regions, including the Caribbean.
The US has begun rolling back several subsidies and incentives that were introduced under the Inflation Reduction Act (IRA) of 2022. While incentives for renewable energy and green hydrogen are being reduced, tax credits related to carbon capture and sequestration (CCS) remain largely intact.
The IRA, passed under the previous US administration, was a $500 billion package designed to combat inflation and climate change by boosting clean energy, healthcare, and tax revenues. However, the Energy Chamber noted that the US House Ways and Means Committee’s draft budget reconciliation bill proposes changes including accelerated phaseout of tax credits, the elimination of transferability, and stricter conditions for eligibility, especially targeting projects linked to ‘foreign entities of concern’ (FEOC).
“These changes are expected to impact most clean energy projects in the US,” the Chamber said. “Renewable energy projects such as wind and solar, and hydrogen projects face significant setbacks, but carbon capture tax credits—known as the 45Q credits—have remained largely unchanged. These were increased from US$17 to US$85 per tonne of carbon dioxide sequestered, making them some of the most attractive incentives globally.”
The bill may also benefit biofuels, with credits possibly extended through 2031. However, the proposal to eliminate tax credits for clean hydrogen development could jeopardize green hydrogen projects in the US, potentially shifting investor interest to other markets.
“Countries like Trinidad and Tobago are actively seeking investments in renewable energy and green hydrogen, particularly for producing low-carbon methanol and ammonia,” the Energy Chamber added. It also pointed out that other Caribbean islands, including Dominica and St Kitts-Nevis, which are developing power-to-X economies using geothermal energy, could gain from this shift.
Dr. Dale Ramlakhan, Project Director of NewGen Energy Ltd, stressed the urgency for Trinidad and Tobago to capitalize on these changing global trends.
“The US policy shift creates a crucial window for Trinidad and Tobago to lead in low-carbon hydrogen. NewGen’s investment-ready status and four-year head start position us not only to attract diverted capital but to set regional benchmarks,” Ramlakhan said.
He added, “Investors seeking certainty will find no better launchpad than Trinidad and Tobago and the NewGen project. This will future-proof our energy economy and accelerate clean fuel production in green ammonia and methanol, especially as international maritime regulations push for greener fuels.”
