These days it can feel hard to find good climate and clean energy news at the federal level. Early phase-out of renewable electricity tax credits, cancellations of grant programs for innovative clean technology pathways, and permits for renewable energy projects under immense scrutiny; these are challenging times.
Despite the challenges, there are reasons to be optimistic about the future of clean energy. The Fiscal Year 2026 (FY26) congressional appropriations process included some key bright spots of bipartisan collaboration on clean energy. At C2ES, we’re building on the momentum of these positive signals from the 2026 process as the 2027 funding process kicks off this month.
What is the appropriations process and how does it work?
The Constitution grants Congress authority to spend tax dollars, commonly referred to as the “power of the purse.” Each year, Congress decides how to spend or appropriate funding across the federal government. This multi-step process kicks off every spring, starting with stakeholder input to Members of Congress and a proposed budget from the President. From there, the budget takes shape through debate in the appropriations committees, drafting of legislative text, passage through both chambers and ending with the President signing them into law.
The appropriations process is one of the few laws required to be passed every year, and because it requires more than a simple majority vote in the Senate, it can be a place for bipartisan policy wins even during times of intense political polarization.
What happened for clean energy in the Fiscal Year 2026 (FY26) appropriations process?
The FY26 appropriations process began in February 2025, which also was a time with a new President, new Congress, and an unprecedented spotlight on federal funding and the workforce from the Department of Government Efficiency (DOGE). The intense debate around funding continued throughout the year in the forms of impounded federal funds, recissions packages, and the longest government shutdown in U.S. history with a full Department of Energy (DOE) reorganization happening in tandem.
Despite these roadblocks, Congress drafted and debated appropriations bills through 2025 and passed three mini packages to appropriate funding across eleven of twelve appropriations bills for FY26 by January 2026. Throughout the course of the negotiations, C2ES saw funding numbers for key clean energy offices increase from the severe cuts proposed in the President’s Budget Request and the first House-passed bill.
Notable setbacks include zeroed out funding for the Office of Clean Energy Demonstrations, which eliminates federal investment in American innovation on new energy technology. While the office received no funding for FY26, the program is still eligible for funding in future years. Clean energy funding was also rolled back elsewhere at DOE, including the reprogramming of funding for programs looking at carbon dioxide removal, hydrogen technologies, and more.
Despite the setbacks, positive signals in the FY26 Energy and Water bill included language asserting that DOE “shall not terminate a federal award … on the basis that the federal award no longer effectuates program goals or agency priorities.” Language like this, as is seen in many of the other appropriations bills for FY26, is intended to protect congressional intent, reassert the power of the purse, protect private and public sector investments, and prevent unlawful terminations of grants at agencies.
Where C2ES priorities landed in FY26
Each year, C2ES requests and supports the development and passage of funding for clean energy projects and durable climate policies. In FY26, C2ES requested $1,505,500,000 across the ten requests. Of that request, roughly $1,132,500,000 was awarded in the final passed text.
For C2ES appropriations priorities, programs saw funding maintained or proposed cuts moderated significantly.
- We saw the Energy Information Administration, which focuses on the collection and analysis of energy information for informing policymaking and efficient markets, maintain $135,000,000 in funding on par with FY24 funding.
- The Industrial Technologies Office (ITO), which focuses on funding research, development, and demonstration work focused on the U.S. industrial base, was funded at $205,000,000, below $245,000,000 in FY24.
- The Bioenergy Technologies Office (BETO), which focuses on funding technological innovation and development for the biomass to bioenergy supply chain, was funded at $245,000,000, from $275,000,000 in FY24.
- The Hydrogen Fuel Technologies Office (HFTO), which focuses on research, development, and demonstration of hydrogen fuel cell technology, was funded at $160,000,000 from $170,000,000 in FY24.
We saw our other priorities including nuclear, critical minerals, carbon management, and long-duration energy storage also all receive moderate cuts or sustained funding levels.
Looking ahead to the FY27 appropriations process
In line with the DC summer weather, the FY27 appropriations process is now heating up with budget hearings for FY27 already in full swing in the House. We saw last year that Congress remains invested in this process and that they place real value in their responsibility as the financial arbiters of the federal government.
In a time of heightened political polarization, C2ES sees immense value in the appropriations process as must-pass bipartisan legislation that can help solve our greatest energy and climate challenges.
We are engaged in the process and actively advocating for our priorities for this fiscal year. Sustained support for clean energy and emerging technologies is essential not only for our climate and emission reductions goals, but for fostering an American energy system that can meet the evolving needs we face with affordability, grid stability, the AI revolution, and more.
Follow C2ES throughout the appropriations process to learn more about our clean energy priorities, keep tabs on the funding debate, and support passage of a budget that delivers clean, affordable, reliable energy for all.