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EQNR's US Wind Projects Incur $955M Impairment Over Regulatory Changes
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Key Takeaways
Equinor reported $955M in impairments tied to U.S. offshore wind projects in Q2 earnings.
Policy shifts, rising costs, and reduced incentives hurt Empire Wind and South Brooklyn asset values.
$763M of impairments stem from Empire Wind 1 and South Brooklyn; Phase 2 may not proceed without tax credits.
Equinor ASA (EQNR - Free Report) , a Norwegian integrated energy company, stated that it has incurred impairment costs of $955 million associated with its U.S. offshore wind projects. During its second-quarter earnings release, the company mentioned that the impairment charges were largely due to regulatory changes under President Trump and increased tariff exposure.
Regulatory Shifts Under Trump Administration Trigger Setbacks
The regulatory environment is impacting the offshore wind industry in the United States, and EQNR believes that this may lead to a loss of synergies for its future offshore wind projects. Under President Trump, offshore wind leases were suspended, which dealt a huge blow to the sector. Equinor’s Empire Wind project in New York also received a stop-work order in April 2025. This was, however, lifted later.
The Biden administration offered significant federal support to renewable energy developments. However, President Trump, on his first day of office, suspended offshore wind leases, indicating that the government would scale back federal support for the sector. As a result, investors who had hoped for the expansion of the offshore wind sector were met with uncertainty regarding the financial viability of these projects.
Equinor mentioned that the impairment charges impacted its net operating income in the second quarter. The company also reported that nearly $763 million, out of the $955 million in impairment, is associated with Empire Wind 1 and the South Brooklyn Marine Terminal. The remaining amount was related to the lease of the Empire Wind 2 project. According to a company spokesperson, several factors, including uncertainty surrounding U.S. tariffs, the changing regulatory landscape in the offshore wind sector and the withdrawal of tax credits, have significantly impacted the value of the South Brooklyn terminal. This onshore terminal was developed to cater to offshore wind farm installations.
Withdrawal of Tax Credits & Tariffs Heightens Uncertainty
Equinor’s chief financial officer (CFO), Torgrim Reitan, mentioned that the heavy impairment charges were incurred primarily due to the shift in the regulatory policies, specifically the withdrawal of investment tax credits for new offshore wind projects. The investment tax credits serve as a significant incentive for these projects, and the development of these projects would become less attractive without the incentive.
EQNR’s CFO further noted that the impact of tariffs and the executive order halting the approval process for new offshore wind projects also contributed to the same. Per Equinor, the South Brooklyn Marine Terminal was likely to serve not only the Empire Wind but also two additional wind farms. This was expected to drive returns for the onshore terminal. However, the current regulatory scenario has made it highly unlikely that other wind farms would utilize the South Brooklyn Marine Terminal, thereby impacting its value.
The U.S. tariffs on steel had driven the cost of the Empire Wind project upward by $300 million. Furthermore, the company also mentioned that it would receive tax credits for the first phase of the Empire Wind project, but it will not receive the same for the second phase. Without the tax credit, the company is not likely to proceed with the development of Empire Wind Phase 2.
Venture Global is primarily involved in the production and export of liquefied natural gas, sourced from the abundant gas basins in North America. It is the second-largest exporter of natural gas in the United States. The company is well-positioned to capitalize on the rise in LNG demand, partly driven by the growth of data centers and the global shift toward lower-emission fuels.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.
Eni is a leading global integrated energy company with a prominent focus on liquefied natural gas businesses. As natural gas has a lower carbon footprint compared with other fossil fuels, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it to capitalize on the mounting global demand in the future.
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EQNR's US Wind Projects Incur $955M Impairment Over Regulatory Changes
Key Takeaways
Equinor ASA (EQNR - Free Report) , a Norwegian integrated energy company, stated that it has incurred impairment costs of $955 million associated with its U.S. offshore wind projects. During its second-quarter earnings release, the company mentioned that the impairment charges were largely due to regulatory changes under President Trump and increased tariff exposure.
Regulatory Shifts Under Trump Administration Trigger Setbacks
The regulatory environment is impacting the offshore wind industry in the United States, and EQNR believes that this may lead to a loss of synergies for its future offshore wind projects. Under President Trump, offshore wind leases were suspended, which dealt a huge blow to the sector. Equinor’s Empire Wind project in New York also received a stop-work order in April 2025. This was, however, lifted later.
The Biden administration offered significant federal support to renewable energy developments. However, President Trump, on his first day of office, suspended offshore wind leases, indicating that the government would scale back federal support for the sector. As a result, investors who had hoped for the expansion of the offshore wind sector were met with uncertainty regarding the financial viability of these projects.
Equinor mentioned that the impairment charges impacted its net operating income in the second quarter. The company also reported that nearly $763 million, out of the $955 million in impairment, is associated with Empire Wind 1 and the South Brooklyn Marine Terminal. The remaining amount was related to the lease of the Empire Wind 2 project. According to a company spokesperson, several factors, including uncertainty surrounding U.S. tariffs, the changing regulatory landscape in the offshore wind sector and the withdrawal of tax credits, have significantly impacted the value of the South Brooklyn terminal. This onshore terminal was developed to cater to offshore wind farm installations.
Withdrawal of Tax Credits & Tariffs Heightens Uncertainty
Equinor’s chief financial officer (CFO), Torgrim Reitan, mentioned that the heavy impairment charges were incurred primarily due to the shift in the regulatory policies, specifically the withdrawal of investment tax credits for new offshore wind projects. The investment tax credits serve as a significant incentive for these projects, and the development of these projects would become less attractive without the incentive.
EQNR’s CFO further noted that the impact of tariffs and the executive order halting the approval process for new offshore wind projects also contributed to the same. Per Equinor, the South Brooklyn Marine Terminal was likely to serve not only the Empire Wind but also two additional wind farms. This was expected to drive returns for the onshore terminal. However, the current regulatory scenario has made it highly unlikely that other wind farms would utilize the South Brooklyn Marine Terminal, thereby impacting its value.
The U.S. tariffs on steel had driven the cost of the Empire Wind project upward by $300 million. Furthermore, the company also mentioned that it would receive tax credits for the first phase of the Empire Wind project, but it will not receive the same for the second phase. Without the tax credit, the company is not likely to proceed with the development of Empire Wind Phase 2.
EQNR’s Zacks Rank & Key Picks
Currently, EQNR carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Venture Global Inc. (VG - Free Report) , Galp Energia SGPS SA (GLPEY - Free Report) and Eni S.p.A (E - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Venture Global is primarily involved in the production and export of liquefied natural gas, sourced from the abundant gas basins in North America. It is the second-largest exporter of natural gas in the United States. The company is well-positioned to capitalize on the rise in LNG demand, partly driven by the growth of data centers and the global shift toward lower-emission fuels.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. After the initial exploration phase, Galp estimated that the Mopane prospect could hold nearly 10 billion barrels of oil. This discovery allows Galp to diversify its global presence, with the potential to become a significant oil producer in the region.
Eni is a leading global integrated energy company with a prominent focus on liquefied natural gas businesses. As natural gas has a lower carbon footprint compared with other fossil fuels, it will play an important role in the global energy transition process. Eni’s participation in the natural gas market will allow it to capitalize on the mounting global demand in the future.