European clean energy companies are abandoning development plans, bracing for weaker sales, or doubting funding prospects for United States-based projects due to worries about a possible return of “President Donald Trump,” as American elections near.
Trump has called President Joe Biden’s climate change policies a “green new scam” and is expected to try to undo much of the present administration’s work, including the Inflation Reduction Act (IRA), which gives tax breaks and subsidies to American and foreign companies investing in sustainable energy.
The 2022 law has encouraged European sector companies to grow or establish a US presence, but a second Trump presidency is causing them to pause.
“With Donald Trump who A) is very opportunistic, B) is highly controversial, and C) is very unexpected, you have to ask yourself whether it makes sense to take such a risk,” H2Apex CEO Peter Roessner told Reuters.
The corporation could have developed a hydrogen tank production unit in the United States for a third of USD 15 million under the IRA. Though the company had begun conversations with possible consumers, Roessner cancelled the idea in February 2024 due to concerns that Trump could be reelected.
Trump’s shooting at an election rally and Republican Party nomination days later increased market predictions that he would take back the White House in November this year.
Trump and Kamala Harris, the likely Democratic nominee with Biden-like climate beliefs, are closing the survey gap (in terms of who is ahead in the Presidential race). However, Roessner’s statements show Europe’s clean tech corporations’ concern about a Trump presidency and their preparations.
It might jeopardise USD 1 trillion in low-carbon energy investments by 2050, according to Wood Mackenzie.
Consultancy Roland Berger warned that while a full IRA repeal was unlikely, a Trump administration might threaten electric car, electric vehicle charging, solar power, and energy efficiency subsidies.
SMA Solar, a German solar company, warned of a possible government change in the United States, the world’s second-largest solar market after China, recently. While investigating sites in many states, the world’s top solar inverter maker hopes to locate a place for a planned production in the US by June 2024.
Boardroom Headaches
SMA told Reuters that it “is noting that the undetermined conclusion of the presidential elections in the USA is currently leading to certain hesitancy to invest in renewable energies locally.” Because of that hesitation, clean tech shares have underperformed global stocks since the assassination attempt. The RENIXX index measures the world’s 30 largest renewable enterprises.
Trump stated in May 2024 that he would attack the sector on his first day in office if reelected, hurting Orsted, the world’s largest offshore wind farm developer. Some renewable energy companies, however, seem unfazed by uncertainties.
German wind turbine company Nordex has already announced restarting production at a mothballed Iowa plant “regardless of political changes” because the United States will remain a major market for the venture.
However, some others claim delays as possible co-funding partners back out. Hydrogen producer Thyssenkrupp Nucera lowered its alkaline water electrolysis unit projection earlier in 2024 due to delays in US project investment choices.
The corporation stated it would be crucial to how the IRA programme will appear following the election while focusing on the world’s largest economy. It stated that strategic investors with a long-term emphasis on cleantech were more likely to resume projects earlier than opportunistic investors during uncertainties.
Norwegian rival Nel said it had yet to decide whether to invest in a Michigan production site, depending on US demand for its products. Election uncertainty in the world’s largest democracy is also affecting businesses outside of cleantech. German machinery giant Trumpf recently reported a 12% reduction in US sales for its 2023–24 fiscal year, citing “geopolitical uncertainty” that made industrial clients apprehensive.
Marcus Berret, global managing director at Roland Berger, while uttering these few words, “boardroom headaches have increased significantly,” said rising global complexity might cause “analytical paralysis” in investment decisions.