U.S. Proposed Clean Energy Tax Cuts “Better Than Expected”: European Renewable Energy Stocks Rise

On Tuesday’s trading session, major European renewable energy company stocks saw an upward trend. Analysts attribute this mainly to recent U.S. tax policy changes which were less severe than initially feared by markets—bringing about a surprisingly positive outcome compared to extremely pessimistic expectations.

On Monday prior, Republican members of Congress proposed plans aimed at adjusting clean energy tax policies as part of President Donald Trump’s extensive budget plan—aiming primarily at phasing out tax credits for clean energy initiatives—causing immediate concern within markets especially among renewable sectors.

Specifically speaking—the House Energy & Commerce Committee suggested raising $6.5 billion by repealing parts within Biden Administration’s landmark Inflation Reduction Act (IRA)—initially scheduled for vote later that day while subcommittees within House Ways & Means Committee overseeing U.S taxation also called repealing multiple IRA credits including those incentivizing electric vehicle purchases/home efficiency improvements—with many subsidies encouraging clean development being phased out/reduced by 2031 under new proposals.

Amongst proposed cuts—the “technology-neutral” 45Y tax credit garnered significant attention—applicable across wind/solar/varied other technologies without set expiration date under IRA—now facing phase-out starting calendar year 2029 reducing percentages annually until fully zeroed post-2031 under latest proposal details disclosed causing initial tension/unease worrying severe undermining U.S clean momentum impacting global-market-present European renewables’ performance/prospects

However detailed disclosures shifted general sentiment positively noted BMO Capital Markets analysts highlighting actual cut scales/paces “far better than expected” particularly moderating impacts rapidly developing fields like solar/storage alleviating concerns

RBC Capital Markets analysts echoed similarly adding although wind sector might face noticeable effects relatively “losers” overall avoiding worst-case scenarios strategist Colin Moody-led team explicitly stating “proposed legislation indeed reduces America’s attractiveness towards investments; wind relatively ‘losers’” while emphasizing “not appearing extreme feared”—balanced assessments driving positive sentiments

Reflecting shifts early European trading saw rises amongst giants like Vestas Wind Systems (CSE:VWS), Orsted (CSE:ORSTED), EDP Renovaveis (ELI:EDPR), Acciona Energia confirming relieved reactions post-disclosure

Summarizing despite challenges posed particularly towards sectors like wind extent/pacing cuts didn’t reach worst fears offsetting negatives warming sentiments driving rebounds future focus remains legislative passage/long-term impacts revealing