Is climate tech dead under Trump? No. Will some climate companies go under? Absolutely.
Grants, tax credits, and government incentives for clean energy and sustainability are set to be cut drastically under the Trump administration. ESG policy will be deprioritized. Inevitably, companies that relied entirely on subsidies to be economically viable will go out of business. But does this mean climate tech as a whole is doomed? No, because the businesses that should survive are the ones that were built to last in the first place.
People do not wake up thinking about climate change. They think more on a day-to-day basis about their families, jobs, health, financial security. They do not actively want to destroy forests or pollute beaches, but protecting nature is not their top priority. The same goes for businesses. Profitability, cost reduction, and competitive advantage come first. If sustainability happens as a result? Great. But it has never been the primary driver of business decisions, and it never will be.
Take the example of direct air capture, which aims to remove carbon dioxide directly from the atmosphere. No matter how much technology improves, the fundamental physics and economics make it impossible to scale affordably. The carbon dioxide in the air is so diluted, at around 420 parts per million, that trying to capture it is a fight against entropy. DAC can only survive through government subsidies, oil industry partnerships, and hype, which is now fading. My expectation is that most companies in this sector will not survive.
Sustainability alone simply isn’t a strong enough business case. Recent decisions by major oil companies further illustrate how quickly corporate priorities shift when profitability is at stake. BP, once celebrated for its ambitious commitment to the energy transition, recently announced substantial cuts in renewable energy investments; the company simultaneously increased its annual spending on oil and gas projects by 20%, to approximately $10 billion annually. Others like Shell and Equinor have also slowed their energy transition plans, cutting investments in wind, solar, hydrogen, and other low-carbon projects.
Are you shocked to see companies like this scaling back their ESG or decarbonization effort? I’m not.
We live in a capitalist world. If oil becomes more profitable, companies will pivot. If sustainability doesn’t serve the bottom line, it will be deprioritized. The number one responsibility of a business is to make profits. That’s why we need to stop being naïve about how we get climate tech to scale.
Green businesses will win when they make financial sense, not because of goodwill. The climate tech companies that survive under Trump, and any administration, will be the ones that:
- Perform as well as, or better than, the incumbent solutions; and
- Are lower-cost, making adoption a no-brainer for industries and consumers.
Take a company like Helios, which can reduce iron at a temperature four times lower than traditional blast furnaces while fully eliminating carbon emissions from the process. You end up with 100% green steel at up to 20% lower cost than conventional steel. That is an easy choice for any customer. All 44 of our portfolio companies at At One Ventures share a common thread with Helios: They leverage disruptive deep tech that upends the unit economics of industries damaging the planet.
Similarly, Tesla’s rise to dominance in the electric vehicle market was not driven primarily by consumers’ environmental concerns but by the fact that it produced cars that were innovative, desirable, and increasingly affordable. Solar energy offers another instructive example: Over the past decade, photovoltaic panel costs have dropped more than 90%, making solar economically competitive — even subsidy-free — in many regions around the world.
Furthermore, businesses increasingly recognize the financial risks posed by climate change itself. Extreme weather events, supply chain disruptions, and soaring insurance costs are already prompting companies to invest in resilient climate technologies, even under the Trump administration. Companies offering solutions that minimize operational risk and increase resilience, such as drought-resistant agricultural technologies, climate-resilient infrastructure, and more efficient logistics, will thrive because their value proposition aligns with businesses’ core economic interests.
Yes, many climate tech companies will fail in the coming months. And they should, because they were never built on solid economics to begin with. But the ones that create real value, whether through efficiency, lower costs, or better performance, will thrive no matter who’s in office.
Climate tech isn’t about politics. It’s about economics. Make the green solution the best solution, and it will win, under Trump, under Biden, under anyone. That’s how we build industries that last.
Laurie Menoud is the co-founder of At One Ventures. The opinions represented in this contributed article are solely those of the author, and do not reflect the views of Latitude Media or any of its staff.
