European fossil-free industry fears that Trump will win the election

Trump has dismissed President Joe Biden’s climate policy as a “new green hoax”. It is expected that a new Trump administration will change much of the climate policy that Biden has implemented.

He may reverse the Inflation Reduction Act (IRA), which provides tax cuts and subsidies to companies that invest in renewable energy, according to the Reuters news agency.

Opportunistic, polemical and unpredictable

The IRA law was passed in 2022 and has provided strong motivation for European renewable companies to set up in the US. But the prospect of a possible new presidential term for Donald Trump dampens the appetite for investment.

– With Donald Trump who is either very opportunistic, very polemical or quite unpredictable, you have to ask yourself if it makes sense, says Peter Roessner to Reuters. He is the CEO of the Luxembourg-based hydrogen company H2Apex.

With Biden’s Inflation Reduction Act, the company could build a hydrogen factory on American soil for a third of the cost of $15 million. H2Apex canceled plans in February out of concern that Trump might be re-elected.

Trying to prepare for Trump’s victory

After the assassination attempt against Trump on July 13, market analysts believe that the chances of him winning are increasing. In the latest polls, the upcoming Democratic candidate Kamala Harris has taken on the lead Trump had over Joe Biden. Nevertheless, Peter Roessner’s statement shows that the European renewable industry fears a Trump victory and is trying to prepare.

The analysis company Wood Mackenzie has concluded that projects worth 1,000 billion dollars until 2050 are at risk. Consultant in the company, Roland Berger, says that it is not possible to fully reverse the IRA Act.

– But a new Trump administration could destroy measures for electric cars, charging electric cars, solar power plants and energy saving, says Berger to Reuters.

Postpones investment decision

In a stock exchange announcement, the German solar cell company SMA Solar emphasizes a change of government in the US as one of the future risk factors.

The world’s largest solar cell manufacturer was scheduled to decide where in the US to build a new solar cell factory by the end of June. But the decision has been postponed.

– The uncertain outcome of the presidential election in the USA is now leading to a certain reluctance to invest in renewable energy, the company says to Reuters.

This hesitation is reflected in the share cure in the renewables sector. The Renixx index tracks the 30 largest renewable companies in the world. After the assassination attempt on Donald Trump, the development of the index has been lower than that of global shares.

The world’s largest sea window developer, Orsted, has been hit particularly hard. The price plunged after Donald Trump said in May that he would go after this sector on day one if elected. Orsted declined to comment.

Will stay

Other renewable companies do not appear to be deterred by a Trump 2.0 administration.

German wind turbine maker Nordex said in June it would resume production at a factory in Iowa.

– The US will continue to be a large and important market, regardless of political developments, the company said.

But there are also a number of companies reporting delays due to collaboration partners who are now withholding the money.

German hydrogen company ThyssenKrupp Nucera suggests it will delay investment decisions in the US. The company says they will be present in the US, but that it is crucial how the IRA Act will look after the election.

More headaches

Companies outside the renewables sector are also affected by the uncertainty surrounding the US election.

The German tool company Trumpf has experienced a decline in sales of 12 percent in the American market in the past year. The decline is explained by the fact that “geopolitical uncertainty” has made their customers hesitant.

– The headache has increased considerably in the boardrooms, says Marcus Berret, who is director of global operations at the research company Roland Berger.