The U.S. Department of Energy has scrapped $7.5 billion in clean-energy awards across 223 projects, while Europe is responding by doubling down with €250 billion in green investment.
What’s happening: The US Department of Energy cancelled $7.5 billion in clean-energy awards, terminating 223 projects, and began reviewing nearly $100 billion in loans. Meanwhile, the EU has allocated over €250 billion for green measures under NextGenerationEU, with member states already receiving €66 billion in direct benefits from clean investments.
Why this matters: Commercial and public buildings use 32% of global energy and produce 34% of energy-related CO₂ emissions globally, according to the International Energy Agency.
A dramatic divergence in climate policy is emerging between the United States and Europe, with the US Department of Energy cancelling billions in clean-energy funding while European nations accelerate green investment programmes.
Earlier this month, the DOE terminated $7.5 billion in clean-energy awards, affecting 223 projects across building operations, clean power, and emissions-cutting technologies. The department also launched a review of nearly $100 billion in loans and conditional commitments approved by the previous administration.
The EU, by contrast, currently has over €250 billion available for green measures under the NextGenerationEU framework. According to the European Commission, member states have already gained €66 billion in direct benefits from investments in clean transportation, building renovations, and renewable energy initiatives.
Buildings sector most vulnerable
Energy experts warn the building sector will face the most significant impact from the US funding freeze. Commercial and public buildings together use approximately 32% of global energy and produce 34% of energy-related CO₂, according to the International Energy Agency.
In the US alone, commercial buildings emit about 830 million tonnes of CO₂ each year: roughly equivalent to Germany’s entire annual emissions.
Donatas Karčiauskas, CEO of Exergio, a company that reduces energy waste through AI-based optimisation of building operations, said: “If clean-tech solutions continue to be de-funded, this will become a major issue for corporate budgets. At the moment, the EU offers far more predictable frameworks, while the US seems to be entering a pause-and-review cycle. For industries such as the building sector, it shows that policies are not prioritising sustainable solutions. Buildings, however, run every day and consume energy regardless of funding timelines.”
Karčiauskas explained: “If the grants in the US had gone through, many firms would have gone ahead or even built novel technologies to boost their energy efficiency. Without that push, companies will remain running on older setups, wasting even more energy.”
Software solutions offer immediate savings
With large-scale federal funding uncertain, building owners face pressure to find cost-effective alternatives. Operational software fixes are emerging as a practical option for businesses unable to afford major equipment upgrades.
Karčiauskas said: “The realistic step now is software on top of existing controls. On the good note, we’ve already seen such solutions deliver even better results than some deep renovations or major upgrades. For example, existing AI tools can read site data, identify waste, and apply small corrections. The result is steadier temperatures, fewer fault hours, smoother run profiles, and, most importantly – energy savings up to 30%.”
He cited a specific example: “We implemented an AI-based energy optimisation system that is many times cheaper than deep renovations or hardware-based technologies. It led to more than one million euros in savings for the business, one of the largest shopping centres in Lithuania. It’s possible to reduce energy waste now, but it wouldn’t be possible to scale these solutions without sustained funding.”
State regulations continue regardless
Despite the federal funding freeze, businesses cannot afford to wait for policy clarity. Cities and states across the US continue implementing climate regulations independently.
New York limits building emissions and requires regular reporting from firms. Washington, DC enforces fixed compliance cycles. California will soon mandate large companies report their emissions on a set schedule.
Karčiauskas said: “When we’re talking about clean tech and energy waste, we should talk about global policies and solutions. It doesn’t matter who’s doing better, but how to be better. The fact that the EU is in a leading position now doesn’t mean it can’t get complicated with the upcoming budgets, too. If governments around the world can’t agree, businesses have to take action, and it will benefit them too, not only the climate.”
The funding divergence between the US and Europe creates an uncertain landscape for clean-tech companies, with businesses forced to balance regulatory compliance against limited federal support for sustainable infrastructure investments.
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