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President-elect Donald Trump made no secret during his election campaign that he did not believe the United States should take an aggressive stance on climate change. From groundbreaking chants like “drill, baby, drill” to frequently criticizing everything from wind turbines to electric cars, it appears poised to cast a pall over the climate tech sector over the next four years.
Or will he?
Like many of Trump’s positions, his exact position on climate change and technologies that work to mitigate or adapt to it is difficult to determine. Moreover, some of his proposed policies could broadly benefit climate technology, even as they support oil and gas.
“If you deregulate and drill, baby, drill, you can get more natural gas and oil. You can also get heat like geothermal energy,” Leonardo Bancic, investment director at Voyager Ventures, told TechCrunch. You get geohydrogen.”
Banchik and other climate technology investors are cautiously optimistic that the policy changes being considered by the second Trump administration will not be globally detrimental to climate technology.
“A lot of the climate technology wave started during the Trump administration,” Bancic said. “No matter which administration is in power, these technologies will continue to lower the cost curve.”
Sophie Bakalar, partner at Collab Fund, agreed, adding that she wouldn’t be surprised if a second Trump administration also inspires more entrepreneurs to start building in the sector. “The climate doesn’t work on a four-year cycle, these are very long-term trends and problems,” she added.
Much of investor optimism stems from lessons learned from the clean technology cycle that collapsed more than a decade ago. Then, many companies grew too quickly, building huge factories and supply chains before demand was fully realized. They have also become overly dependent on government support, whether through grants, loan guarantees, or otherwise.
“We do not invest in companies that rely on federal subsidies or bold ESG mandates from companies. We only invest in companies that deliver tangible value to their clients independent of climate,” Bakalar said.
Joshua Posamentier, managing partner at Congruent Ventures, echoed this sentiment. “We don’t invest in anything that we think will require subsidies forever in order to have any economic unity.”
Not all skies are clear
However, some companies will be in for a tough ride. Several investors told TechCrunch that anything that relies on consumer tax breaks would be vulnerable. Some expect wind energy and related industries to be affected, given Trump’s explicit aversion to the renewable energy source. One investor predicted the EPA would see budget cuts as well.
The lack of federal support could push some once-close companies to the brink. “It will be like a distillation, a thinning of the herd,” Bossamentere said. “I think they were probably close to death already.”
Startups that survive may benefit from some clarity when approaching potential customers, said Sean Abrahamson, managing partner at Third Sphere. “What’s really been difficult, at least in the last four years, has been the gap between what (companies) say publicly, or what they feel they have to say, and then what happens when you finally meet the CFO. You’ll get a much purer signal.”
It is also possible that less climate-friendly management could harm climate venture capital funds themselves. While we’ll likely see climate startups change their messaging and branding, to avoid being associated with the sector if it doesn’t gain traction, venture firms can’t really do that, and climate-focused VC firms may see less interest, Bakalar said. LP Company for the next four years.
Silver linings
But there are plenty of sectors that could get a boost. Anything that involves drilling, as Bancic previously mentioned, including geothermal energy and geohydrogen, will likely be affected by preferred policies for oil and gas extraction. Both Busamentier and Bancic said startups connected to the network would likely benefit from the proposed permitting reforms.
Companies that generate energy will also benefit. Increased investments in artificial intelligence have prompted companies to rapidly expand their infrastructure. This rapid pace has strained electric utilities and independent power producers to the point that just under half of new AI data centers could experience power shortages by 2027.
Nuclear startups building small modular reactors and geothermal companies will likely be among the beneficiaries, Bancic said. SMR startups Kairos and X-Energy are already riding the AI wave, having signed deals with Google and Amazon, respectively. Geothermal startups are also playing the game, with Fervo Energy teaming up with Google and Sage Geosystems working with Meta to run its own data centers.
Both technologies have a potential ally in Chris Wright, whom Trump appointed to be his energy secretary. Wright sits on the board of Oklo, an SMR startup, and his company Liberty Energy has invested in Fervo.
“He works in oil and gas all day long, but he’s a smart guy,” said Busamante, who spent time with Wright in the field. There, Wright explained to Posamentier that he was electrifying his company’s hydraulic fracturing equipment because it was the better technology. “This is the guy who gets ridiculed for being anti-climate. He’s not anti- or pro-climate. He’s saying: ‘Do the economic thing.’
Investors and their portfolio companies will have to wait and see which expectations will actually come to fruition under the new administration and which will not come to fruition.
“The only constant is change and instability in the next four years,” Bossamentere said.
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