End of an IRA

NEWS

What Trump 2.0 means for climate tech

What happened: Donald Trump won the U.S. election last week, marking the end of an unprecedented period of investment in climate solutions. From the Inflation Reduction Act (IRA) to the Bipartisan Infrastructure Law, Biden unlocked billions in support for climate tech that a Harris presidency would have carried forward.

With a Trump admin and Republican control of the Senate and potentially Congress, the future looks bleak. But let’s take a look at what’s at stake and what might come next.

What’s at stake: Top of the list are the IRA and EV incentives. Trump has been clear that he wants to roll back the IRA. And while some money is already out the door, he’ll likely rescind any money that hasn’t been spent yet. 

The Department of Energy’s Loans Program Office will likely be scaled back or pivot to focus on fossil fuels. The LPO made notable loans to Canadian businesses like Li-Cycle's battery recycling plant and Lithium Americas Corp. processing plants in Nevada. Areas like critical minerals, which also touch on the US’ energy independence, could be more durable. 

On the EV front, Trump has also said he wants to cut tailpipe emissions standards that would have forced carmakers to sell more EVs. These changes, along with sweeping 10% tariffs and increased fossil fuel production, could slow consumer demand for EVs even more and make EV manufacturing plants in Canada less viable. 

All of this is despite the vocal support of Elon Musk, CEO of Tesla, who put up more than $75M for the Trump campaign and joined him on the campaign trail. The alliance could help disrupt potential competitors like Ford and GM, who are struggling to scale up EVs, and remove regulations for other ventures like SpaceX.

Yes, but: While Trump has talked up a “slash and burn” approach, the reality could look more like a scalpel in some areas. Congress could keep the IRA around because it benefits Republican districts (to the tune of $161 billion or 4x as much as Democratic districts). It also has a broad coalition of support from industry, the oil and gas sector (who like tax credits for CCS and hydrogen), and blue collar workers.

Ripple effects: Biden’s climate policy dragged the world forward, as governments developed their own climate tech incentives to keep pace - including Canada. Some of Canada’s subsidies for EV plants only apply as long as the Inflation Reduction Act stays in effect.

The bottom line: There’s no doubt that the results of the election is a major setback for climate. But it’s clear that the energy transition is going to continue. Technologies are improving, cost curves are coming down, and more institutional funding may be ready to step up. 

CLIMATE CAPITAL

🔋 Li-Cycle (Toronto, ON) finalized a $662 million loan from the U.S. Department of Energy to complete construction of its battery processing facility in Rochester, NY. The loan, which is $100 million more than the company originally announced, is the first for a battery recycling company and is a critical life line for the company.

⛏️ Nemaska Lithium (Bécancour, QC) received a $250 million equity investment from Investissement Québec to build lithium hydroxide mining and processing plants. Nemaska is owned jointly by the government of Quebec and Arcadium Lithium.

💰️ Longbow Capital (Calgary, AB) secured $150 million in a first close of its Energy Transition Fund II. Longbow aims to raise a total of $250 million to invest in North American companies focused on reducing emissions. 

🛫 Pratt & Whitney (Longueuil, QC) received $11.3 million from the Strategic Innovation Fund to develop low-emission aircraft engines.

💧 Loop Energy (Vancouver, BC) sold to hydrogen energy company Teralta Hydrogen Solutions. The hydrogen fuel stack company announced a corporate restructuring and delisting from TSX earlier this summer. 

🛰️ EarthDaily Analytics (Vancouver, BC) acquired New York-based data intelligence company Descartes Labs. EarthDaily provides earth observation data and change detection. The combination will leverage Descartes’ existing insurance, energy, mining, and defence business lines.

MILESTONES & PRODUCT

🏅 Accelerator Foresight Canada announced their list of Canada’s “Most Investable” cleantech companies, including Arca, Climative, and Lite-1.

💨 Carbon Upcycling partnered with Element Beauty Group to create makeup packaging from captured CO2 and recycled materials. 

🔋 Neo Battery Materials is partnering with South Korean industrial company Linde to scale-up of NEO’s silicon anode manufacturing for lithium-ion batteries.

☀️ Solar developer SolarBank is expanding into the data centre market with low-carbon infrastructure. 

♻️ Anaergia is expanding into Japan. The company, which converts organic waste to RNG and fertilizer, already has two projects in Japan, which relies heavily on imported natural gas.

🛫 Montreal’s Azzera will deploy its CELESTE platform with Flair airlines to monitor flight emissions, track Sustainable Aviation Fuel use, and use carbon credits in the aviation carbon market.

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IN THE NEWS

🤝 Atlantic provinces are exploring their own carbon pricing system. New Brunswick Premier Susan Holt and Nova Scotia’s Liberal leader are exploring a cap-and-trade carbon pricing system, similar to Quebec’s. Provinces can set up their own carbon pricing systems, as long as they meet federal criteria. The Atlantic provinces have each put forward their own systems in the past, but they didn’t meet those requirements.

📉 Canada is well behind on its efforts to reduce emissions. A report by the Commissioner of the Environment and Sustainable Development found that emissions have dropped 7.1% below 2005 levels, far from the target of 40% to 45% by 2030. Despite putting forward a number of programs, implementation has been too slow. Programs including transit, green buildings, and clean electricity regulations face significant challenges.

🏭️ A First Nation is putting the Ontario government on notice over sulphur pollution. Aamjiwnaang First Nation is at the centre of “Chemical Valley”, a cluster of petrochemical plants, and has regularly been exposed to sulphur dioxide and benzene. The First Nation is now collecting its own data on pollution to push for updated regulations on pollution.

⏸️ Umicore is pausing a battery recycling plant in Canada due to the “complex” transition to EVs. The Belgian battery materials company will supply North American customers out of its existing plant in South Korea. It’s the latest in several battery plant pauses as the industry navigates EV adoption.

BIG PICTURE

COP29 produced an early win with global carbon market mechanism 

Bowery will close its indoor farming business, once valued at $2.3B

Flood risk data meaningfully shifted homebuying behaviour, changed prices according to a new study. h/t Juan 

BP is killing 18 early-stage hydrogen projects

Deforestation in the Amazon drops by nearly 31% 

Five states where the environment won on the ballot

COMMUNITY

📅 CICE CONVERGE 2024: ​Connect with leaders, innovators, and builders from B.C.’s business and climate-first community for a half-day event focused on advancing a net-zero economy. November 26th, Vancouver.

➡️ Discover more climate events.

🏆 Women in Climate Tech Innovation: The B.C. Centre for Innovation and Clean Energy will award up to $3 million in women-led climate tech startups. Apply by Dec 6th. 

💻 OPEN Technologies is hiring a Climate Program Specialist support clients running climate programs across North America. 

➡️ Find more open roles.