Global Energy Transition Stalls as Tariffs Clash with Saudi's Green Ambitions

Saudi Arabia's ambitious renewable energy projects are advancing amid a broader global debate over tariffs and trade policies that critics argue hinder the energy transition. The kingdom recently awarded 4.5 gigawatts (GW) of renewable capacity under its National Renewable Energy Programme (NREP), including record-low-cost solar and wind projects, according to a Reuters report. These developments highlight Saudi Vision 2030's goal to diversify energy sources, yet concerns persist over how international trade barriers, such as U.S. tariffs on Indian goods, could disrupt cross-border energy collaboration, as noted in an Outlook India report.

The awarded projects, valued at over $2.4 billion, include the 1,500 MW Dawadmi Wind IPP and 1,400 MW Najran Solar PV IPP, both achieving historic low LCOE (Levelised Cost of Energy) rates, the Reuters piece reports. A consortium of TotalEnergies and Aljomaih Energy & Water also secured a 400 MW solar plant in As Sufun, set to power 68,400 homes by 2027, according to an ESG News article. These initiatives underscore Saudi Arabia's pivot toward renewables, with the Ministry of Energy stating that total tendered capacity will reach 64 GW by year-end, as described in the Reuters coverage.

However, the global energy transition faces headwinds from protectionist policies. The U.S. has maintained a 50% tariff on Indian goods since 2023, which New Delhi deems "unfair and unreasonable," a point raised in Outlook India; India and the U.S. are nearing a bilateral trade agreement, with energy security discussions intensifying as part of broader negotiations. Such tariffs, critics argue, create market distortions that impede investment in clean energy infrastructure, particularly in emerging economies.

Meanwhile, U.S. energy policy shifts are reshaping domestic opportunities. Executive Order 14318, issued in July 2025, aims to fast-track AI data center and energy infrastructure projects, prioritizing dispatchable baseload sources like nuclear and natural gas. Terrestrial Energy, a U.S. nuclear innovator, was selected for the Department of Energy's Fuel Line Pilot Program, advancing its molten salt reactor technology. The move aligns with President Trump's push to bolster domestic energy security but raises questions about the balance between fossil fuels and renewables in the U.S. strategy.

Market reactions to energy partnerships also highlight volatility. American Rebel Holdings (AREB) saw its stock surge 75% following a strategic energy pact, according to a Meyka blog post, though analysts caution that past volatility—marked by an 80.9% net income decline—signals risks for investors. The company's pivot into energy-linked markets underscores how sectoral shifts can drive stock performance, even as broader trade tensions persist.

Experts warn that tariffs and trade barriers risk slowing the global energy transition. "Tariffs create artificial scarcity and inflate costs at a time when decarbonization requires rapid, scalable solutions," said a source close to the Saudi energy ministry. The kingdom's renewable projects, which rely on international EPC contractors like Energy China and PowerChina, could face delays if supply chain disruptions worsen, as noted by PV Magazine.

As Saudi Arabia and other nations push renewable targets, the interplay between trade policy and energy infrastructure will remain critical. With COP30 approaching, the need for coordinated global action—rather than fragmented trade barriers—has never been clearer.