How Trump’s 2026 Budget Cuts Could Impact the Chemical Industry

The first swipe at President Trump’s budget plan has been inked and awaits Congress. The proposal calls for $163 billion in cuts to federal spending. Sent to Susan Collins, chair of the Committee on Appropriations, the cover letter from Russell T. Vought, director of the U.S. Office of Management and Budget, states:

This letter provides President Trump's recommendations on discretionary funding levels for fiscal year (FY) 2026. They are being provided in advance of the President's full fiscal plan to reach balance and restore confidence in America's fiscal management, so that your Committee may commence with debate and consideration of appropriations bills for the upcoming fiscal year.

The recommended funding levels result from a rigorous, line-by-line review of FY 2025 spending, which was found to be laden with spending contrary to the needs of ordinary working Americans and tilted toward funding niche non-governmental organizations and institutions of higher education committed to radical gender and climate ideologies antithetical to the American way of life.

We also considered, for each program, whether the governmental service provided could be provided better by State or local governments (if provided at all). Just as the Federal Government has intruded on matters best left to American families, it has intruded on matters best left to the levels of government closest to the people, who understand and respect the needs and desires of their communities far better than the Federal Government ever could.

The 46-page document details major discretionary funding changes the Trump administration seeks.

According to Lynn Bergeson, Chemical Processing's compliance columnist and managing director of Bergeson & Campbell, P.C., a Washington, D.C.-based law firm that concentrates on conventional, biobased and nanoscale chemical industry issues, "To those of us in the chemical community, the cuts are unsurprising and many are grateful they do not seem to affect the core chemical programs in OCSPP [Office of Chemical Safety and Pollution Prevention]. It remains unclear if Congress will accept the massive reductions in energy-related programs and in R&D."

Here is an amended version of the proposed changes showcasing areas that may impact the chemical industry. The descriptions are verbatim from the original document.

Increase

Rail Safety and Infrastructure Grants

The administration is committed to improving the safety, efficiency, and reliability of passenger and freight rail network. The tragic disaster in East Palestine, Ohio, which the previous administration failed to adequately respond to, illustrated the need for a significant investment in this sector. Therefore, the budget provides $500 million for Rail Safety and Infrastructure grants, a 400-percent increase over 2025 levels, to improve the safety of America’s railways and to protect their neighboring communities.

Proposed increase: $400 million

Cuts

Hazardous Substance Superfund

EPA’s Superfund program is charged with cleaning up contaminated areas and responding to emergencies, such as oil spills and natural disasters. The Congress imposed large taxes in IIJA and the Inflation Reduction Act to help finance the Superfund program. Between these $1.6 billion in taxes estimated to be available in 2026 and litigation recoveries from responsible parties, there is no need for additional funding for Superfund cleanup, which is reflected in the Budget.

Proposed cut: $254 million

Office of Research and Development

The President is committed to Making America Healthy Again. This framework includes ensuring that the American people have clean air and water, and is making investments that benefit human health. The Budget puts an end to unrestrained research grants, radical environmental justice work, woke climate research, and skewed, overly-precautionary modeling that influences regulations— none of which are authorized by law. Instead, the Budget provides $281 million for statutorily required research in support of core mission areas that help the American people.

Proposed cut: $235 million

Environmental Justice

EPA’s environmental justice program is eliminated in line with the vision the President set forth in Executive Order 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” and Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit Based Opportunity,” terminating radical preferencing and restoring and protecting civil rights for all Americans. This elimination would put an end to taxpayer funded programs that promote divisive racial discrimination and environmental justice grants that were destined to go to organizations that advance radical ideologies.

Proposed cut: $100 million

Atmospheric Protection Program

The Atmospheric Protection Program is an overreach of Government authority that imposes unnecessary and radical climate change regulations on businesses and stifles economic growth. By prioritizing climate change over job creation and energy independence, the program has burdened American industries with costly mandates, ultimately hurting consumers and taxpayers. This program is eliminated in the 2026 Budget.

Proposed cut: $100 million

Cybersecurity and Infrastructure Security Agency (CISA)

The Budget refocuses CISA on its core mission—Federal network defense and enhancing the security and resilience of critical infrastructure—while eliminating weaponization and waste. The Budget also removes offices that are duplicative of existing and effective programs at the State and Federal level. The Budget eliminates programs focused on so-called misinformation and propaganda as well as external engagement offices such as international affairs. These programs and offices were used as a hub in the Censorship Industrial Complex to violate the First Amendment, target Americans for protected speech, and target the President. CISA was more focused on censorship than on protecting the Nation’s critical systems, and put them at risk due to poor management and inefficiency, as well as a focus on self-promotion.

Proposed cut: $491 million

IIJA Cancellation

The Budget cancels over $15 billion in Green New Scam funds committed to build unreliable renewable energy, removing carbon dioxide from the air, and other costly technologies burdensome to ratepayers and consumers. The Budget also ends taxpayer handouts to electric vehicle and battery makers and cancels the Carbon Dioxide Transportation Infrastructure Finance and Innovation Act—a Biden Administration program of so little interest that not a single dollar has been awarded to date. This amount consists of unplanned and unobligated balances, meaning the cancellation would not impact any currently awarded projects.

Proposed cut: $15.247 billion

Energy Efficiency and Renewable Energy (EERE)

The Budget reorients EERE programs to early-stage research and development programming, eliminating funding for Green New Scam interests and climate change-related activities like the Biden Administration’s Justice40. EERE has also been responsible for a slew of unpopular regulations, harmful to Americans in their day-to-day lives, such as banning gas stoves and incandescent light bulbs. This proposal would support technologies that promote firm baseload power and other priorities established in relevant Executive Orders, such as bioenergy.

Proposed cut: $2.572 billion

Office of Science

The Budget reduces funding for climate change and Green New Scam research. The Budget maintains U.S. competitiveness in priority areas such as high-performance computing, artificial intelligence, quantum information science, fusion, and critical minerals.

Proposed cut: $1.148 billion

Advanced Research Project Agency‒ Energy (ARPA-E)

The Budget reduces funding for ARPA-E, to a fiscally responsible level for high risk, high reward research advancing reliable energy technologies and other critical and emerging technologies. Green New Scam technologies are not supported. Examples of previous ARPA-E projects include $4 million for a “wearable thermal regulatory” system to regulate body temperatures to reduce use of air conditioning units and heaters, and $2 million for virtual reality experiences to eliminate the need for travel on the claim that every roundtrip trans-Atlantic flight emits enough carbon dioxide to melt 30 square feet of Arctic ice. ARPA-E also spent more than $55 million on “Plants Engineered to Replace Oil,” a program to eliminate the use of food crops in the production of transportation fuels.

Proposed cut: $260 million

Office of Nuclear Energy

The Budget reduces funding for non-essential research on nuclear energy to focus on what is truly needed to achieve national dominance in nuclear technology. This includes developing innovative concepts for nuclear reactors, researching advanced nuclear fuels, and maintaining the capabilities of the Idaho National Laboratory.

Proposed cut: $408 million

Office of Fossil Energy

The Budget restores the name and function of the Office of Fossil Energy to its original purpose, which is funding for the research of technologies that could produce an abundance of domestic fossil energy and critical minerals.

Proposed cut: $270 million

National Institute of Standards and Technology

NIST has long funded awards for the development of curricula that advance a radical climate agenda. NIST’s Circular Economy Program pushes environmental alarmism with its university grants.

Proposed cut: $325 million

International Trade Administration (ITA)—Global Markets

To advance the America First Trade Policy, the Budget refocuses ITA’s footprint to align with key geostrategic interests, including: countering China’s malign and predatory market influence in developing nations; securing access to critical energy and mineral resources; building affordable, resilient, and sustainable supply chains; and facilitating and accelerating investments that create American jobs.

Proposed cut: $145 million

Renewable Energy Programs

The Budget proposes to eliminate support for Green New Deal technologies. The elimination is consistent with the President’s first-day executive actions, including Executive Order 14154, “Unleashing American Energy,” and a Presidential Memorandum pausing all onshore and offshore wind leasing and permitting.

Proposed cut: $80 million

General Research and Education

The Budget cuts funding for: climate; clean energy; woke social, behavioral, and economic sciences; and programs in low priority areas of science. NSF has fueled research with dubious public value, like speculative impacts from extreme climate scenarios and niche social studies, such as a grant to the University of Nebraska to create “affinity groups” for bird watchers and a $15.2 million grant to the University of Delaware to develop and evaluate policy interventions to “achieve sustainable equity, economic prosperity, and coastal resilience in the context of climate change.” Similarly, Columbia University received $13.8 million to “advance livable, safe, and inclusive communities.” Funding for Artificial Intelligence and quantum information sciences research is maintained at current levels.

Proposed cut: $3.479 billion