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Trump’s new bill affects tax credits that benefited the clean energy sector and climate startups.
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It’s spooked some climate founders who worked in industries relying on government subsidies.
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Many are now pivoting to new brands and geographies, and investors expect a reset.
The Trump administration’s proposed overhaul of green energy tax credits has jolted the climate tech sector — and investors and founders in the ecosystem are scrambling to make fallback plans.
Cleantech stocks tumbled in May after a bill cutting tax credits for clean energy incentives passed through the Republican-controlled House of Representatives.
Now, founders and investors are concerned about the knock-on impact this could have on the country’s climate tech ecosystem, which was burgeoning under the Biden-era Inflation Reduction Act, or IRA. They told Business Insider that Trump’s bill has stifled startup growth ambitions, pushing them to scale back, pivot to new geographies, or shut down entirely.
“There will be a graveyard of companies,” Matthew Nordan, general partner at clean tech fund Azolla Ventures, told BI. “And a lot of startups will hibernate to try to weather the storm.”
Early-stage startups are already beginning to feel the heat. In April, Spencer Gore, founder and CEO of Bedrock Materials, a sodium-ion battery startup, made an unusual announcement on LinkedIn: the startup would be returning most of its $9 million raised to investors and ceasing operations.
The company had plenty of operational cash, but “it was the techno-economics that led us to pull the plug,” Gore told BI, adding that the market conditions for climate tech startups in the US were hampered by waning industrial policy.
A byproduct of the new tax bill — and growing political backlash against ESG incentives — is that Europe is becoming more attractive for climate techs to set up shop.
“There’s a dramatic retrenchment to Europe occurring within climate tech startups now. It’s broad-based, and the EU is doing the opposite of what the US is doing right now,” Nordan told BI.
Sam Kanner, the CEO of floating wind turbine startup Aikido, an Azolla portfolio company, told BI he’s considering moving his company to Europe. Trump’s executive orders have “put a chill on investor sentiment and project development in the US,” he said. There are “no longer any grant opportunities” through the Department of Energy or other agencies, he added, which means its “go-to-market strategy is now completely focused on Europe.”
-
Trump’s new bill affects tax credits that benefited the clean energy sector and climate startups.
-
It’s spooked some climate founders who worked in industries relying on government subsidies.
-
Many are now pivoting to new brands and geographies, and investors expect a reset.
The Trump administration’s proposed overhaul of green energy tax credits has jolted the climate tech sector — and investors and founders in the ecosystem are scrambling to make fallback plans.
Cleantech stocks tumbled in May after a bill cutting tax credits for clean energy incentives passed through the Republican-controlled House of Representatives.
Now, founders and investors are concerned about the knock-on impact this could have on the country’s climate tech ecosystem, which was burgeoning under the Biden-era Inflation Reduction Act, or IRA. They told Business Insider that Trump’s bill has stifled startup growth ambitions, pushing them to scale back, pivot to new geographies, or shut down entirely.
“There will be a graveyard of companies,” Matthew Nordan, general partner at clean tech fund Azolla Ventures, told BI. “And a lot of startups will hibernate to try to weather the storm.”
Early-stage startups are already beginning to feel the heat. In April, Spencer Gore, founder and CEO of Bedrock Materials, a sodium-ion battery startup, made an unusual announcement on LinkedIn: the startup would be returning most of its $9 million raised to investors and ceasing operations.
The company had plenty of operational cash, but “it was the techno-economics that led us to pull the plug,” Gore told BI, adding that the market conditions for climate tech startups in the US were hampered by waning industrial policy.
A byproduct of the new tax bill — and growing political backlash against ESG incentives — is that Europe is becoming more attractive for climate techs to set up shop.
“There’s a dramatic retrenchment to Europe occurring within climate tech startups now. It’s broad-based, and the EU is doing the opposite of what the US is doing right now,” Nordan told BI.
Sam Kanner, the CEO of floating wind turbine startup Aikido, an Azolla portfolio company, told BI he’s considering moving his company to Europe. Trump’s executive orders have “put a chill on investor sentiment and project development in the US,” he said. There are “no longer any grant opportunities” through the Department of Energy or other agencies, he added, which means its “go-to-market strategy is now completely focused on Europe.”
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