The Trump administration will pay $1 billion to a French energy company to abandon two offshore wind leases in the United States, marking a major escalation in its campaign against renewable energy projects.
The Department of Interior announced on Monday that TotalEnergies had agreed to what officials described as a refund arrangement for wind projects planned off the coasts of North Carolina and New York. The company is expected to redirect the funds into fossil fuel investments.
The administration has repeatedly attempted to halt offshore wind construction, but federal judges overturned those directives on multiple occasions. Officials described the agreement as an “innovative agreement,” adding that “the American people will no longer pay for ideological subsidies that benefited only the unreliable and costly offshore wind industry.”
Environmental groups strongly criticised the arrangement, portraying it as an alternative strategy to block clean energy expansion. Lena Moffitt, executive director of Evergreen Action, said, “After losing again and again in court on his illegal stop work orders, Trump has found another way to strangle offshore wind: pay them to walk away.”
In his second term, President Donald Trump has prioritised fossil fuel development, arguing that expanding oil and gas production will lower household energy costs, improve reliability and strengthen US leadership in artificial intelligence.
TotalEnergies had already paused its US offshore wind plans after Trump’s election victory. The company has now pledged not to pursue new offshore wind projects in the country. Chief executive Patrick Pouyanné stated that the firm renounced development in exchange for reimbursement of lease fees, “considering that the development of offshore wind projects is not in the country’s interest.”
Pouyanné said the refunded funds would support construction of a liquefied natural gas plant in Texas and expansion of oil and gas operations, describing it as a “more efficient use of capital” in the US. Under the arrangement, reimbursement will be capped at the value of the original lease purchases once those investments are completed.
Interior Secretary Doug Burgum welcomed the company’s shift, saying, “We welcome TotalEnergies’ commitment to developing projects that produce dependable, affordable power to lower Americans’ monthly bills.”
Democratic governors in affected states condemned the deal. New York Governor Kathy Hochul said Trump was “using a pay not to play scheme” to pressure the company, calling it “an outrageous abuse of taxpayer dollars.” She maintained the state’s commitment to an “all of the above approach” that includes renewables and nuclear power.
North Carolina Governor Josh Stein also criticised the agreement, stating it was “a terrible deal for the people of North Carolina and our country.” He added, “Our state has the offshore wind potential to power millions of homes with renewable American made energy. It’s ludicrous and wasteful that the Trump administration is spending $1 billion in taxpayer money to pay off a company to stop it from investing private dollars to create the clean energy we need.”
The policy shift marks a sharp departure from the Biden administration’s strategy, which promoted offshore wind as a key climate solution. Trump began reversing those energy policies on his first day in office through executive orders supporting oil, gas and coal expansion.
Globally, offshore wind capacity continues to expand rapidly, with China leading new installations. Despite federal opposition, developers and states have successfully challenged construction suspensions in court, allowing several East Coast projects to proceed.
On Monday, Dominion Energy announced that Coastal Virginia Offshore Wind, one of the projects targeted by the administration, had begun delivering electricity to the grid.
Ted Kelly, clean energy director at the Environmental Defense Fund, criticised the proposed settlement, calling it “an outrageous misuse of taxpayer dollars to prevent Americans from having clean, affordable power exactly when they need it most.”
TotalEnergies initially acquired the Carolina Long Bay lease in 2022 for about $133 million, with plans to generate more than 1 gigawatt of power, enough for around 300,000 homes. A second lease covering waters off New York and New Jersey was purchased the same year for $795 million, with projected capacity of 3 gigawatts, sufficient to power nearly one million homes. The company remains active in major offshore wind developments across Europe and Asia.
Faridah Abdulkadiri
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