This article first appeared in Sifted’s Climate tech newsletter, sign up here.
Donald Trump’s victory in the US presidential election ushers in a worrying and uncertain future for the fight against climate change. The 78-year-old president-elect has in the past labelled the crisis a “hoax” and promised to “drill baby drill”. He also appears likely to pull the US from the Paris Agreement, again.
For European climate tech, the question rests on what Trump decides to do with the subsidies offered to green tech companies under Joe Biden’s Inflation Reduction Act (IRA). Since the IRA was announced in 2022, Sifted has covered the climate tech companies that have headed stateside to take advantage of those incentives.
Trump has repeatedly railed against the bill and promised to block any more funds from the package being spent. Acting on those promises will be easier said than done: repealing it would require the Republicans to hold a majority in both the House and the Senate (while they’ve secured the Senate, as I write this, who controls the House hangs in the balance). There’s also speculation over whether Trump will try to repeal it, given the package has created manufacturing jobs in many predominantly Republican-voting states.
Lena Thiede, general partner at Planet A, says Trump’s re-election is a setback for green innovation worldwide, weakening the IRA and benefitting oil and gas interests. “However, unlike 2016, economic momentum and popular support still drive the green transition, even among some Trump supporters,” she adds.
“For global climate policy, it’s code red: sub-state action will be essential. It’s also a wake-up call for Europe to step up self-reliance and competitiveness — green tech innovators will play a huge role here.”
When the IRA bill was announced, it left policymakers in Brussels scrambling to draw up subsidies that could keep European tech companies on the continent (a tough task, in the face of a $468bn package). Any uncertainty over the future of the subsidies could bring the centre of gravity back to Europe.
“This can be an opportunity for Europe to see it as an advantage to keep the best tech — which has previously scaled in the US — at home,” says Daria Saharova, founding partner at World Fund. “But that’s only an advantage and possible if we mobilise enough private and public capital to support it.”
Saharova’s colleague at World Fund, Danijel Višević, agrees, saying the election could help Europe grow closer together and increase investments that focus on the continent’s resilience.
That said, there are obvious downsides for Europe if Trump’s promised tariffs come into force; they could cut off a key market for European climate tech exports. Likewise, if sustainability regulation in the US loosens under Trump, companies working on carbon accounting or reporting software could take a hit if the US is one of their markets.
This article first appeared in Sifted’s Climate tech newsletter. Want more stories like this? Sign up here.
Read the orginal article: https://sifted.eu/articles/trump-election-european-climate-tech/
