Equinor Takes Nearly $1 Billion Impairment Charge on U.S. Offshore Wind Industry Outlook

The Norwegian state-owned energy company Equinor has reported a significant impairment charge of nearly $1 billion in its second quarter financial report, citing a shifting outlook for the U.S. offshore wind industry. While the company has stated that the Empire Wind I offshore project is back on track following a month-long stop-work order by the U.S., it has expressed concerns about the future prospects for offshore wind in the U.S.

Equinor’s CFO, Torgrim Reitan, addressed investors, stating, “Without investment tax credits and without a supportive government, we are hesitant to invest further in the U.S. offshore wind industry.” He attributed the main driver for the impairment charge to “changes in regulations for future offshore wind projects in the U.S.”

Earlier this year, Equinor clashed with the Trump administration over a stop-work order issued just days before offshore activities were set to commence on the Empire Wind I project, an 810 MW development located off the coast of New York. Despite winning the lease in 2017 and obtaining final approvals in February 2024, the company faced challenges from the administration, labeling its actions as “unlawful.”

The impairment charge primarily pertains to the future outlook of Equinor’s projects. A $192 million charge was taken to devalue the lease for Empire Wind II, a planned expansion that is now unlikely to proceed in the near future. The bulk of the charge, amounting to $763 million, is associated with Empire Wind I and the investment in the redevelopment of the South Brooklyn Marine Terminal.

Equinor had initially envisioned the terminal as a base for multiple developments, including Empire Wind II, to help offset project costs. However, with the dimming prospects for additional projects, the company has had to reassess its financial outlook.

While tax credits will continue to benefit Empire Wind I, Equinor highlighted the escalating costs due to tariffs imposed by the Trump administration. The company specifically pointed out the impact on steel and other essential materials for the project. Despite incurring significant daily costs during the work stoppage period, the impairment charge only includes a limited amount related to the pause in operations.

Despite the challenges in the offshore wind sector, Equinor reported a positive quarter overall. It emphasized its investments in U.S. offshore gas, which yielded substantial returns during the period. Additionally, the stabilized production from the Johan Castberg FPSO contributed to the company meeting its operational targets.