Coal: Trump Announces Plan to Revive Plants and Exports Worth Up to $850 Billion

Federal Support Focused on Infrastructure and Export

The financial package unveiled by the White House is divided into three distinct parts. The $425 million allocated to 13 existing coal power plants aims at modernizing the facilities, within a sector whose share in US electricity production has decreased from more than half in 1990 to less than one-fifth today.

The $75 million allocated to the West Gateway terminal in Oakland is part of an export strategy, primarily targeting Asian markets where demand remains strong according to cited sources. Finally, up to $350 million is directed towards four additional projects, including new capacities in Alaska and West Virginia.

The US administration emphasizes consumer protection against energy price volatility. The use of the Defense Production Act, a measure typically employed for exceptional situations, reflects the political will to expedite support that would have taken longer to secure through ordinary budgetary channels.

U.S. Energy Mix and AI-Driven Electricity Demand

The argument presented by the White House explicitly ties support for coal to the rising electrical needs generated by artificial intelligence data centers. This justification comes at a time when regulatory pressure on Big Tech is intensifying on both sides of the Atlantic.

This plan potentially alters expectations regarding the trajectory of the U.S. electricity mix. The forced maintenance of coal capacities could marginally impact decisions between coal, natural gas, and renewables, the three segments competing to meet base and peak demand.

However, the announced volumes remain limited given the structural decline of the sector over three decades. The measure does not challenge the long-term trend but introduces a temporary support factor for American coal chain players and export terminal operators.

Regulatory and Legal Risks for Portfolios Exposed to Decarbonization

Environmental NGOs have already announced their intention to challenge the measure in court, according to Reuters, denouncing it as a costly subsidy for an energy source deemed highly polluting. The use of the Defense Production Act to support a fossil fuel industry could also face institutional challenges regarding the scope of its application.

The federal plan could be partially blocked or modified by legal actions, institutional counterweights, or a change in political majority, which limits its predictability in the medium term. Portfolios built around decarbonization goals are thus exposed to a more volatile regulatory environment, with an increasing divergence between the trajectory outlined by Washington and European climate frameworks.

On the macroeconomic level, this plan adds to a series of signals for international investors to consider: Brent crude around $95 per barrel following the announcement of a conditional ceasefire between Israel and Lebanon, and a Fed funds range maintained at 3.5%–3.75% in a context of inflation estimated around 3.5% according to statements from Fed officials. The trajectory of U.S. interest rates remains contingent on upcoming inflation and activity data, and the positions expressed today may change rapidly.