Cleantech is in correction mode. Last year’s CleanTech Forum, in Palm Springs, was brimming with measured optimism, although there were whispers of some impending corporate failures wafting down the halls.

Clean technology fortunes between the commercially viable and the questionable had already begun to diverge in 2023, a trend that will only deepen.. At this year’s forum in San Diego, there was a full-throated acknowledgement of a much-needed cleantech shakeup in the offing.

This year will almost certainly see further retrenchment from the US$40 billion capital flows into clean technology companies and national and corporate climate commitments of 2023, according to BloombergNEF.

Companies with weaker economics or technical fundamentals are struggling, while venture and growth dollars for new industrial technologies are waning. Dozens of cleantech companies have seen their values drop and financial flows dry up as financing becomes more difficult to obtain. Further declines and eventual consolidation in the industry seems inevitable.

Still, that’s in Silicon Valley’s DNA: test, crash and burn until a unicorn rises. On repeat.

To be clear, there’s plenty of optimism, too: project financing and job creation for clean technology manufacturing facilities have never been stronger. Meanwhile, government measures, such as the U.S. Inflation Reduction Act, and climate-focused investors will sustain the best companies as they commercialize.

North America’s manufacturing renaissance is underway with technologies graduating from demonstration to deployment. Factories for electric vehicle batteries, electrolyzers, carbon dioxide pipelines, and low-carbon steel, cement, and ammonia plants are coming online across the continent.

Other bright spots are the opportunities in emerging economies, especially in Asia Pacific. Highly susceptible to climate change’s impacts as they raise their standards of living, India, South Korea, and China, for example, are bucking the Western downturn and are happy hunting grounds for clean technology investors and entrepreneurs.

By the end of the year, the role of politics, another key variable in forward climate trajectory, will also become clearer. Electoral unease has already manifested in the rollback of climate policies around electric vehicles and strengthened oil and gas licensing in the U.K., and calls for axing the carbon tax in Canada.

In the conference halls of San Diego Bay Mission Resort there were whispers of further headwinds with a potential return to a Donald Trump presidency. But with Red States securing most of the capital flows emanating from IRA incentives, climate policies may yet not be dumped by Trump. Of course, another Joe Biden term could cement climate policies in the American economy.


Vivan Sorab is Senior Manager, Clean Technology, at the RBC Climate Action Institute.

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