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Approximately 40% of the largest U.S. manufacturing projects funded under the Inflation Reduction Act and CHIPS and Science Act have been delayed or temporarily stopped, a Financial Times (subscription) investigation found.

What’s going on: The two flagship legislative measures of the Biden administration “offered more than $400 [billion] in tax credits, loans and grants to spark development of a U.S. cleantech and semiconductor supply chain. However, of the projects worth more than $100 [million], a total of $84 [billion] have been delayed for between two months and several years, or paused indefinitely, the FT found.”

• The largest on-hold undertakings include a $2.3 billion battery storage site in Arizona, a $1.3 billion lithium refinery in South Carolina and a $1 billion solar panel factory in Oklahoma.
• In total, the 114 big projects the FT tracked came to $227.9 billion in value.

Why it’s happening: Businesses cited worsening markets, reduced demand, overproduction in China and policy uncertainty during a presidential election year as reasons for delaying their projects.

• “Slow government rollout of [CHIPS] Act funding for semiconductor projects and lack of clarity on IRA rules have left a number of projects at a standstill.”

Tough requirements: “While the IRA’s tax credits extend until 2032 and the [CHIPS] Act awards generous funds to selected applicants, companies often cannot receive funding until they achieve certain production milestones.”

Competition from China: The intent of the subsidies was to make the U.S. more competitive—but “China [still] dominates the production of clean technologies, manufacturing more than three-quarters of the world’s solar panels and batteries, and is a leading producer of semiconductors.”

What can be done: Permitting reform could help these projects and similar ones in the future, said NAM Vice President of Domestic Policy Chris Phalen.

• “In a time of global market uncertainty, manufacturers need domestic permitting and policy certainty to take advantage of these important investment opportunities and ensure U.S. manufacturing competitiveness,” he said.