Crypto News: Climate tech investing in the Trump era

Today's newsletter reveals how climate tech investors and startups are dealing with the uncertainty unleashed during President Donald Trump's first three months. This is the first in a series of cleaner tech stories we're publishing over the next two weeks, covering everything from tariffs to BloombergNEF's Pioneers awards for cutting-edge startups.

You can read and share a full version of today's story on Bloomberg.com. For unlimited access to climate and energy news, please subscribe.

Four trends for the Trump years

By Coco Liu and Michelle Ma

The last six months have given the US climate tech sector an extreme case of whiplash, yet venture funding to the industry is on the rise.

After having former President Joe Biden throwing billions of dollars at everything from green hydrogen to next-generation batteries, companies are now dealing with President Donald Trump, who is considering cutting or clawing back funding for carbon-cutting solutions. The tariffs are also adding a new barrier for companies that source materials from abroad while threatening to dampen demand for US technology in other countries.

Climate tech is figuring out how to navigate the chaos of the first three months of the Trump presidency. At least some venture capitalists see sectors that dovetail with the White House's goals such as "energy dominance" and leading on artificial intelligence. And private tech funding is heading in the opposite direction of what might be expected under a president who's been vocal about his disdain for electric vehicles, wind turbines and international climate agreements. These and other key trends are shaping the industry and how venture capitalists and startups are charting a course for the next four years.

Venture funding rises — for now

It's no surprise that companies developing carbon-cutting technology and investors are feeling Trump's impact. Yet in the first quarter of 2025, venture capitalists and private equity firms poured more than $5 billion into climate tech startups across the country, a nearly 65% uptick compared to a year ago, according to data from market intelligence firm PitchBook. That bucks the global trend in climate tech investing, which dropped 10% in the quarter. The rise in US investing ends a three-year streak of declines, though the investment total is still below the 2021 peak.

It remains to be seen whether the upward trend in the US will be sustained. Many investors took a wait-and-see approach to the election, and the first quarter surge may just be them playing catch-up after a year on the sidelines.

The sectors most likely to strive and struggle

As Trump has pledged to restore America's manufacturing capacity, startups whose technology not only cuts emissions but also helps improve industrial production efficiency are "getting a lot of much-needed tailwinds," says Rajesh Swaminathan, a partner at Khosla Ventures. With the administration's tariffs making imports more expensive, it is creating "an opportunity" for startups to build next-generation factories in the US.

Swaminathan has long urged policymakers and fellow investors to support both sectors. His firm has backed geothermal startup AltaRock Energy and nuclear fusion pioneer Commonwealth Fusion Systems, and sees the technologies as key to decarbonizing power generation, particularly as artificial intelligence increases demand for baseload power.

Other sectors are likely to face challenges if the Trump administration and congressional Republicans move forward with rolling back parts of the Inflation Reduction Act. The law was a key part of the Biden administration's vision to grow American clean manufacturing capabilities and aid the burgeoning climate tech industry by providing billions in support.

Green hydrogen and direct air capture — both of which largely rely on government incentives as they attempt to get off the ground — are areas where investors are treading cautiously. The Trump administration is weighing closing the Energy Department office overseeing hubs that would support those technologies, though the hydrogen hubs may be kept "as is."

Government support is likely to wane

The government also provides support through programs such as the Energy Department's Loan Programs Office (LPO), which went into hibernation during Trump's first term before making a flurry of multi-billion-dollar investments in clean tech under former President Joe Biden.

In Santa Clara, California, sodium-ion battery maker Natron Energy Inc. applied for a big loan to help finance a planned $1.4 billion North Carolina gigafactory.

"We had positive feedback all of last year," says Wendell Brooks, the company's chief executive officer. Then the administration turned over, and Trump placed a 90-day moratorium on the disbursement of certain funding under the IRA and Infrastructure Investment and Jobs Act. Now, the fate of a potentially game-changing loan for the battery company is up in the air.

If IRA incentives and government funding vanishes, "I don't know who is going to be building these big climate projects over the next few years," says Sophie Bakalar, a partner at Collaborative Fund. "There's going to be a pretty sizable gap" that equity funding alone can't fill.

Climate tech is rebranding

Companies are increasingly talking less about climate change. For some startups, they're going a step further and trying to speak Trump's language. Texas-based geothermal company Bedrock Energy recently changed the wording in some brochures to de-emphasize "net zero" and "clean energy." Instead, it emphasizes "energy abundance," says CEO and co-founder Joselyn Lai.

Other companies are also pitching their wares harder to the defense industry, which is expected to flourish under the Trump administration. Take Eos Energy Enterprises Inc., a publicly listed energy storage company based in Edison, New Jersey. To appeal to the defense sector, the company emphasizes the safety and security of its zinc-based energy storage system. The batteries are made in the US and compliant with Defense Department procurement rules, which CEO Joe Mastrangelo says is a key part of Eos's sales pitch.

The approach appears to be working. In March, Eos secured an $8 million contract with Naval Base San Diego, in addition to a previous order serving Marine Corps Base Camp Pendleton.

Read the full story here. Subscribe to get more clean tech news and to read our whole package of stories.

Buy the dip?

40%

How much climate tech funding fell in 2024, according to BloombergNEF. Whether last quarter portends an uptick for the year or was merely a blip remains to be seen.

Not all bad news

"These mega-funds coming out for their second fund is a positive signal in many cases because it's a proof point that their first fund was successful."

Kim Zhou

CEO and co-founder of Sightline Climate

Despite last year's drop in deals, climate funds continued to raise money. That includes from firms like Brookfield Corp. and TPG Inc.

Store, baby, store

By Kyle Stock

"Drill, baby, drill" may be Texas's unofficial motto, but "store, baby, store" is becoming more accurate.

The Lone Star State may be the heart of America's oil and gas map, but it's quickly becoming the biggest installer of a technology key for renewables development: battery storage.

Last year, some 4 gigawatts of battery capacity — enough to power around 3 million homes — switched on in the state, besting the pace of similar projects in California for the first time. Before Donald Trump imposed 125% tariffs on key battery market China, Texas was set to add more than double the state's total storage capacity in 2025, according to a Bloomberg Green analysis of federal energy data.

Big batteries are addressing some of the biggest issues facing the electric grid that now has the most renewable capacity in the nation. On the supply side, they can hold the glut of wind and solar power generated across the state. On the demand side, they are helping meet the surging needs of new residents and a growing number of electric vehicles and server stacks in data centers.

"What we've done over the past couple years is really build a new industry that has proven it can execute at scale," said Randolph Mann, chief executive officer of esVolta LP, a battery startup that expects to flip the switch on at three new plants in Texas by July. "We're doing it in a way that's environmentally beneficial and we're able to execute that pretty quickly."

The recently implemented tariffs on China are going to have a strong negative impact on the battery industry, though. Without tariffs, BNEF estimated that the cost of industrial storage was set to fall 13% to $204 per kilowatt-hour this year. Now, a turnkey system will cost $266 per kilowatt-hour, a 17% increase compared to last year.

While Trump has said some nations including Vietnam are keen to negotiate over tariffs as they're on pause for 90 days, China has moved to retaliate and Trump has escalated. The differing reactions and uncertainty are set to be a drag on the industry where more than two-thirds of imported batteries come from China.

Read the whole story, including how other policy decisions could throttle the industry.

More from Green

President Donald Trump signed an executive order aimed at relaxing rules that limit water flow for shower heads, targeting an issue he has long complained makes it harder for him to properly wash his hair.

The order ends water conservation standards that restrict the number of gallons per minute that are allowed to flow through shower heads, according to people familiar with the matter, who detailed the action ahead of the signing.

"In my case, I would like to take a nice shower to take care of my beautiful hair. For 15 minutes until it gets wet. Drip, drip, drip. Ridiculous," Trump said Wednesday in the Oval Office as he signed the directive. "What you do is you end up washing your hands five times longer, so it's the same water. And we're going to open it up so that people can live."

US President Donald Trump speaks in the Oval Office. Photographer: Chris Kleponis/CNP

In other Trump news, the dirtiest coal plants are exempt from clean air rules. Talen Energy Corp.'s Colstrip in Montana is among 47 plants receiving two-year waivers from rules to control mercury and other pollutants.