Navigating Trump’s New Presidency: 12 Key Implications for Climate Tech
Introduction
Throughout 2024, our team has been hoping that Donald Trump would not manage to regain the US presidency – for the sake of our planet, the climate tech industry and our U.S. based portfolio companies. We did not have it our way.
As Donald Trump is reinstated in office, the U.S. climate policy landscape is poised for significant changes, with some wider global repercussions. Given the administration’s previous skepticism towards climate change and its rollback of environmental regulations in their initial term, similar actions are widely anticipated in Trump’s second term. This marks a concerning setback in the global battle against climate change. Nevertheless, some key advancements achieved during the Biden presidency may persevere despite the change in leadership.
To shed some more light on what is to come, in this post we explore the 12 potential key implications of the Trump election for the climate tech industry.
1. Key Landmark Legislations are expected to remain in place
Some good news first: Despite potential policy challenges, landmark legislation like the Inflation Reduction Act (IRA), Bipartisan Infrastructure Law, and CHIPS Act remain intact, offering a foundation for continued progress.
2. Europe has an opportunity to strengthen its competitive position In Climate Tech
With a shifting U.S. stance on climate change, Europe has a window of strengthening its competitive position in climate tech. By drawing in top talent and securing robust funding for European climate tech start-ups, Europe can solidify its position in the industry. With the climate tech sector projected to present significant commercial prospects in the coming decades, Europe is in a prime position to seize these opportunities by intensifying its commitment.
3. Changes In US Energy Policy could result in delayed U.S. Energy Transition
Now the bad news: Trump’s return could alter the path of US energy policy, resulting in a reduction of up to $1 trillion in previously anticipated clean energy investments over the next decade. This could usher the country in a delayed energy transition scenario and U.S. climate tech start-ups could face a more challenging funding landscape, underscoring the importance of diverse funding sources. (Wood Mackenzie Analysis)
4. Renewable Energy Growth could rely more on Private Sector and State Support
Trump’s infrastructure plans are likely to favor traditional energy, which could limit federal funding for clean tech infrastructure like EV charging and smart grids.
However, the Inflation Reduction Act (IRA) is still projected to drive $270 billion in private investments, helping renewables grow. In 2023, U.S. renewable capacity increased by 13%, thanks to state policies and corporate sustainability goals.
To sustain momentum, climate tech companies should focus on partnerships with states and forward-thinking corporations to advance clean infrastructure. IEA Report, Inside Climate News Insight
5. Increased Fossil Fuel Production could heighten emissions
Trump’s emphasis on fossil fuels could add 4 billion tonnes of CO₂ emissions by 2030. This elevates the importance of companies developing resilient, scalable solutions that can counteract rising emissions. (Business Standard Analysis)
6. Potential U.S. withdrawal from the Paris Agreement
If the U.S. exits the Paris Agreement, it will limit international climate cooperation and funding. Companies with cross-border projects and partnerships will need to strengthen ties with allies like the EU to maintain global momentum in climate action. (FactCheck Analysis)
7. Potential slowdown in U.S. EV adoption
In 2023, the U.S. saw record EV sales, with 1.2 million units sold, making up 7.6% of total vehicle sales. However, withoutless subsidies, this momentum may slow. Companies focused on EV infrastructure may need to concentrate on EV-friendly states like California. (Salt Lake Tribune Insight)
8. Rollback of Energy Efficiency Standards may impact demand
Trump’s previous term saw rollbacks in emissions standards, impacting energy efficiency requirements. If this trend continues, demand for energy-efficient technologies may decrease in the US, though states with strong climate goals could sustain growth in this sector. (FactCheck Report)
9. Funding for Climate R&D could shrink
The previous Trump administration reduced climate science funding, a trend that may continue, affecting innovation in early-stage climate tech. This reinforces the importance of alternative funding sources, such as private and international grants. (FactCheck Analysis)
10. Demand for Resilience and Adaptation Technologies could increase
With climate risks growing, demand for resilience tech—such as flood prevention, wildfire management, and climate adaptation—could rise. This could also provide growth opportunities for European climate tech start-ups focused on climate resilience, positioning them to make a direct impact in the face of increased climate threats. (Deloitte Report)
11. More challenging market environment for EU Climate Tech Companies in the U.S. Market, but big opportunities remain
Due to the reduced focus on climate action in the US, European climate tech startups may find it more challenging to collaborate with American companies or to expand into the US market. This could impact their growth and revenue potential. Nevertheless, the U.S. climate tech sector remains promising for EU companies. In 2023, U.S. renewable energy capacity grew by over 13%, reaching 300 GW. States like California and New York continue to implement aggressive climate policies, creating substantial opportunities for EU climate tech firms. Additionally, U.S. corporate commitments to sustainability are driving demand for innovative solutions, presenting a favorable environment for EU companies to expand their market presence.
12. EU–U.S. Collaboration could drive Climate Tech forward
As federal policies in the U.S. vary from president to president, the EU remains committed to climate action, with the European Green Deal channeling €1 trillion into sustainable projects by 2030. The EU–U.S. partnership through programs like Horizon Europe’s €95 billion fund presents collaborative opportunities in clean hydrogen, carbon capture, and sustainable supply chains. This creates a stable, collaborative framework for our companies with an international footprint. (EPIC Report)
Conclusion
Navigating the changing landscape of U.S. climate policy will require flexibility and resilience. At AENU, we remain committed to supporting our portfolio companies with strategic insights, resources, and connections to help them grow, innovate, and lead in sustainable solutions. Federal policies may shift, but the urgency of climate action and the demand for climate tech are only intensifying. Together with our U.S.-based portfolio companies and partners, we’re ready to continue driving impact across borders. The path may be challenging, but the potential to reshape our future is greater than ever.