Energy, because Trump scares Orsted, Thyssenkrupp Nucera and more
The possibility that Trump will dismantle or scale back the Inflation Reduction Act is giving pause to European clean energy companies looking to invest in the United States. All the details
European companies that make energy devices and machinery are preparing for periods of lower sales in the United States, and in some cases are even considering canceling their expansion plans, if Donald Trump wins the election and return to the White House. The ex-president and candidate of the Republican Party, in fact, criticized Joe Biden's energy policy – he called it green new scam , in reference to the Green New Deal – and could drastically reduce it , if not dismantle it completely.
TRUMP'S CRITICISM OF THE INFLATION REDUCTION ACT
In particular, Trump is very critical of the Inflation Reduction Act , a law approved in 2022 worth 369 billion dollars which provides subsidies and tax breaks both to encourage the spread of zero-emission energy sources and to incentivize American companies and foreign companies to open “clean technology” plants – that is, solar panels, wind turbines, electrolyzers, batteries, nuclear reactors or electric vehicles – in the United States.
This funding, which Trump could block if re-elected, has pushed numerous European companies to invest in clean energy projects in the United States. For example, the Luxembourg-based hydrogen technology company H2Apex explained to Reuters that, thanks to the credits guaranteed by the Inflation Reduction Act, it could build a factory in America for the production of hydrogen tanks at a third of the costs. Last February, however, it decided to cancel the project because it was worried about Trump's victory in the November elections.
Polls have shown Trump ahead of Biden for months – a lead that widened after the July 13 attack – but the competition seems to have become more open after the president's resignation and the start of Kamala Harris' electoral campaign , the probable candidate of the Democratic Party. Harris and Biden think alike on the energy transition and climate action, so it is likely that a Harris presidency would continue what the previous one started.
1000 BILLION INVESTMENTS AT RISK?
Consulting firm Roland Berger considers a repeal of the Inflation Reduction Act unlikely even if Trump wins; however, his administration could eliminate or cut public incentives for the purchase of electric vehicles and the installation of charging stations and photovoltaic panels. According to Wood Mackenzie, Trump's return will put at risk 1000 billion in investments in low-emission energy by 2050.
THE SITUATION FOR SMA SOLAR, ORSTED AND MORE
German solar device company Sma Solar issued an earnings warning last month, citing among its risk factors the possibility of a government change in the United States, which is the second largest solar market in the world. world after China. Sma Solar is the largest global manufacturer of inverters for solar panels and by the end of June it should have selected a site in the United States for the construction of a factory; site which however has not yet been identified.
Sma specified to Reuters that it has not abandoned these expansion plans; However, it said it was “noticing that the unclear outcome of the presidential election in the United States is currently leading to some reluctance to invest in renewable energy at the local level.”
The Danish company Orsted, for example – the largest developer of offshore wind farms – was affected by Trump's statements, which said he wanted to cancel offshore wind farm projects on his first day in office. Yet Nordex, a German company that makes wind turbines, has made it known that it wants to reactivate operations at its plant in Iowa because the United States remains an important market "regardless of political developments".
THYSSENKRUPP'S FEARS ABOUT GREEN HYDROGEN
Thyssenkrupp Nucera, an Italian-German hydrogen electrolyzer company, spoke of delays in final investment decisions on its projects in America: while saying it wanted to continue to focus on the United States, it specified that it is essential to understand what will happen to it of the Inflation Reduction Act after the election.
Nel, a Norwegian company operating in the same sector, has yet to make a final investment decision for a manufacturing site in Michigan, which it says depends on levels of demand for its products in the US market. To date, a real market for "clean" hydrogen – i.e. that obtained from zero-emission electricity using electrolysers – does not exist, given its higher price compared to the variant obtained from methane.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/donald-trump-inflation-reduction-act-aziende-europee/ on Tue, 30 Jul 2024 06:22:57 +0000.