US President Donald Trump has released his fiscal year (FY) 2026 discretionary budget request outlining high-level spending priorities for the coming year. This “skinny budget” serves as a policy blueprint signalling the administration’s preferred direction ahead of the formal appropriations process. The subsequent comprehensive budget request, compiled with input from the various federal agencies, will outline Administration policy and funding priorities and the economic outlook for the coming fiscal year. Following discussions in both the House and Senate, the final budget will be approved by Congress ahead of the US fiscal year, which begins on 1 October.

The discretionary budget aims to cut more than $163bn from non-defence federal spending for FY2026, a 22.6% reduction on the current year. Defence spending would increase by 13% and appropriations for the Department of Homeland Security by nearly 65%. Within the Department of Energy (DOE), funding is reoriented toward technologies that align with the administration’s energy, industrial and national security priorities.

DOE released a statement from Secretary of Energy Chris Wright, which said this is “a consequential moment in American history.” Wright said the Energy Department “has an opportunity to help the nation restore energy dominance, lead the world in innovation, and modernise our nuclear weapons stockpiles”. He added: “To succeed, we must instil a culture of transparency, performance, and common sense. This administration’s budget proposal for the Energy Department supports those efforts and will ensure that the Department accomplishes its mission while also fulfilling President Trump’s promise to restore the responsible stewardship of the American taxpayer’s dollars.”

The budget calls for the cancellation of more than $15bn in unplanned and unobligated Infrastructure Investment & Jobs Act (IIJA) funding previously allocated to DOE. This relates to funding for renewable energy demonstration projects, direct air capture and clean energy deployment initiatives.

It represents a reorientation of funding toward “research and development of technologies that could produce an abundance of domestic fossil energy and critical minerals, innovative concepts for nuclear reactors and advanced nuclear fuels, and technologies that promote firm baseload power”, a White House press briefing noted. However, the cancelled IIJA funds would “not impact any currently awarded projects”.

The Budget also ends funding to electric vehicle and battery makers and cancels the Carbon Dioxide Transportation Infrastructure Finance and Innovation Act.

Overall, the budget request cuts some $4.7bn from the Department of Energy’s federal funding. This includes:

  • The Office of Energy Efficiency & Renewable Energy (EERE) would face a $2.57bn (74%) reduction from FY 2025 levels. It would be reoriented toward early-stage research and development, eliminating funding for climate-oriented deployment initiatives and what the administration describes as “Green New Scam interests”. This proposal supports technologies that promote fossil-fuel power and other priorities, such as bioenergy. The budget criticises EERE’s regulatory footprint.
  • The Office of Fossil Energy & Carbon Management faces a proposed $270m (31%) reduction eliminating programmes the administration believes focus on climate policy rather than fossil energy innovation. It would return to its original purpose of researching technologies that expand domestic fossil energy and critical mineral production.
  • The Office of Nuclear Energy would see a $408m (24%) cut, with remaining funding focused on what the administration considers “essential” to national nuclear leadership, including reactor development, advanced nuclear fuels and support for the Idaho National Laboratory.
  • The Office of Science would face a $1.15bn (14%) reduction, largely tied to climate and renewable energy research. The budget preserves funding in emerging national priority areas, including artificial intelligence (AI), quantum information science, fusion and critical minerals.
  • The Office of Environmental Management (EM) would be reduced by $389m (5%) including a reduction of about $178m for the transfer of responsibilities for the Savannah River Plutonium Processing Facility to the National Nuclear Security Administration. EM performs activities at 14 active cleanup sites and operates a geologic disposal facility (Waste Isolation Pilot Plant near Carlsbad, New Mexico). The Budget maintains the Hanford site in Washington at the 2025 enacted level but reduces funding for various cleanup activities at other sites.
  • ARPA-E (Advanced Research Projects Agency-Energy) would be reduced by $260m (57%), seen by the administration as a return to “fiscally responsible” levels for high-risk, high-reward research. The budget criticises past ARPA-E projects as signalling federal overreach into speculative technologies.

The discretionary budget does not cover all DOE offices, including the Loan Programmes Office, Office of Clean Energy Demonstrations, Office of Manufacturing & Energy Supply Chains, Office of Electricity, Grid Deployment Office and others.