European clean energy firms focused are abandoning expansion plans, bracing for lower sales or see funding of U.S projects in doubt because of fears over what a potential election victory for Donald Trump could mean for their sector.
Trump has dismissed President Joe Biden’s policies to fight climate change as a “green new scam” and is expected to try to undo much of his administration’s work, including the Inflation Reduction Act (IRA) that offers tax breaks and subsidies to U.S. and foreign companies investing in sustainable energy.
The law passed in 2022 has acted as a powerful incentive for European clean energy firms from the sector to expand or establish their U.S. presence, but a spectre of a second Trump presidency is giving them a pause.
“With a Donald Trump who A) is very opportunistic, B) is also very polemic and C) is also fairly unpredictable, you have to ask yourself whether it makes sense to make such a bet,” Peter Roessner, chief executive of Luxembourg-based hydrogen firm H2Apex, told Reuters.
Under the IRA, H2Apex and perhaps other European clean energy firms could have built a hydrogen tank production plant in the United States for around a third of the $15 million in costs. In February, however, Roessner decided to cancel the plan over concerns that Trump could be reelected even though the company already had held initial talks with potential customers.
Market bets that Trump would win back the White House in November have intensified this month after he was shot at during an election rally and days later secured the Republican Party nomination.
Recent polls show a narrowing gap between Trump and Kamala Harris, the likely Democratic candidate with similar views on climate to Biden’s. Yet Roessner’s comments reflect anxiety among Europe’s clean tech firms over what a Trump presidency could mean and how they are trying to prepare for such a scenario.
Wood Mackenzie energy data and analytics company reckons it would put a projected $1 trillion in low-carbon energy investments at risk by 2050.
Consultancy Roland Berger said that while a full repeal of the IRA was improbable, a Trump administration could still jeopardise incentives for electric vehicles, EV charging, solar power and energy efficiency.
German solar firm SMA Solar issued a profit warning last month, citing a possible government change in the United States, the world’s second-largest solar market after China, as one of the risk factors.
The world’s largest maker of solar inverters initially aimed to choose a location for a planned factory in the United States by the end of June, but is yet to find one, saying it is still evaluating possible sites in a number of states.
With Reuters inputs
