Climate Technology Finance

Offshore wind is the canary. And it’s warning that the US is ceding cleantech leadership to China. Industrial leadership isn’t about rhetoric, it’s about demand certainty, scale, and policy stability. Offshore wind in the US is exposing what happens when those foundations are pulled away. In the past year we’ve seen: - Cancelled projects and rescinded grants. Last week, over $600m in offshore-wind port and infrastructure funding withdrawn. The Revolution Wind project stopped mid-build. Confidence shaken overnight - Tax credits chopped short. The Inflation Reduction Act’s 10-year certainty replaced with compressed windows and stricter rules. Developers and investors can’t plan pipelines beyond the next election cycle. - Capital retrenching. Banks widen spreads. Developers reprice risk. Supply-chain players; yards, vessel owners, OEMs, step back or shift capacity elsewhere. These are not abstract policy tweaks; they are direct signals that the US market is becoming smaller, less predictable, and more expensive to build in. Meanwhile, China compounds. It already controls 80 to90% of global solar manufacturing capacity and has reclaimed the #1 spot in global battery supply chains. In 2024 alone, it exported $177bn of clean tech, $66bn in solar, $62bn in batteries, $48bn in EVs. Much of this went to the Global South, where US soft power has pulled back due to stupid cuts in USAID. Ports are being built, grids reinforced, and standards set with Chinese kit, not American. Offshore wind makes the warning visceral. Without ports, vessels, and transmission funded and moving, the US can’t deliver a pipeline. And once that credibility is lost, capital doesn’t wait around. It moves to Europe, Asia, or wherever projects look bankable. But this isn’t just about WTGs in the water. It’s about who sets the rules of the next energy system. By shrinking its home market and unnerving capital, the US is effectively signalling withdrawal from industrial leadership… and Beijing is racing to fill the vacuum. The canary is US offshore wind. The warning is simple: you don’t lead by making your own market smaller and your investors more nervous. You lose. 📞📧 Reach out if you need to discuss this global volatility, and how you and your business can better navigate it. ============================================== ➡ Subscribe to the loudest, most seriously caffeinated #offshorewind newsletter on LinkedIn 👉🏼 https://lnkd.in/eNZX5W76 (Image: AI + John Mac prompt)

Blackrock just took a big write-down on its Global Renewable Power Fund III. Because of two ill-fated investments in Northvolt and SolarZero. Surprisingly, a $4.8 billion fund saw its internal rate of return plummet due to just two portfolio companies faltering. This fund was BlackRock's third flagship GRP fund, part of its bet on the energy transition and a push towards renewable energy and infrastructure. Many of the funds’s assets are early-stage climate infrastructure investments in: EV charging, renewable generation, and power storage and transmission. Are they simply making bad investments or is this a prequel to what to expect? What this tells me about climate tech investing: 1. The significant impact of two companies on a $4.8 billion fund suggests that traditional risk models needs reevaluation. The conventional playbook for diversification doesn't quite work in climate tech. When companies in your portfolio are all betting on similar technological advances or regulatory shifts, they tend to sink or swim together. Traditional risk models might be missing these hidden correlations. 2. The Northvolt situation is a wake-up call - throwing money at climate tech isn't enough. These companies need investors who roll up their sleeves and get involved. We're seeing a shift from passive to active investing, where deep operational expertise is just as crucial as the capital itself. 3. SolarZero, a major player in New Zealand Energy Sector, was far from an early-stage startup when BlackRock acquired it in 2022. Despite its 50-year history , something went wrong. It hints at a broader challenge: global funds rushing into new markets might be overlooking local market dynamics and regional complexities in their eagerness to deploy capital in the renewable space. As this sector matures, we need a new framework for resilient investment strategies that can better weather the failures of individual companies while capitalizing on the overall growth trend in clean energy. #climatetech #VC #investment #newbook #fundclimatetech #blackrock Link for the news in the comments.

Last week the New York Public Service Commission rejected the petitions by Empire Wind, Beacon Wind (both are Equinor & BP affiliates) and Sunrise Wind (Orsted & Eversource) to increase their contract prices to offset the impacts of inflation, supply chain constraints and higher interest rates. The offshore wind developers now need to assess if they can make the economics of these projects work without increases in their contract prices. Given Commonwealth Wind’s, Park City Wind’s and Southcoast Wind’s experience, where the developers elected to pay security deposits and terminate the projects, it seems very unlikely that the developers will proceed with these projects under their existing contracts. This will have significant impacts on the pace of development of the US offshore wind sector. The emerging offshore wind supply chain faces a major setback, with the pace of project development noticeably slowed. This is likely to result in increased supply chain bottlenecks with the development and construction schedules for projects overlapping at a time of significant supply chain constraints including in particular limited port facilities, vessels and labor force. Nimbly, #NYSERDA issued a “10-Point Action Plan for Large Scale Renewables” shortly after the Commission issued its decision indicating how it would respond. First, NYSERDA will announce “historic awards” (i.e., one of the largest ever) of offshore and onshore renewable energy projects. This suggests that NYSERDA will go deep into the competitive bids for its 2022 offshore wind RFP, going beyond the two project awards that characterized its previous two offshore wind procurements. NYSERDA also indicated that the announcement will be accompanied by major supply chain announcements enabled by the RFP's provisions for Supply Chain Investment Plans. This will be welcome good news for the US offshore wind supply chain. Second, NYSERDA indicated that it will announce an accelerated offshore wind and onshore renewable procurement schedule including simplifying bid requirements and create an opportunity for the previously contracted projects to rebid. This can create interesting competitive dynamics as these more mature projects seek to capitalize on their anticipated higher project viability scoring (typically 10% of points for NYSERDA offshore wind RFPs).  In addition, these projects should be able to utilize the offshore wind supply chain enabled by the 2022 RFP. A second possible benefit is that this procurement can reflect progress that New York has made on coordinated transmission development, e.g., the New York City Public Policy Transmission Need. However, the transmission interconnection strategies for the first two tranches of NYSERDA offshore wind projects are well developed, limiting the ability for these projects to benefit from these developments. #offshorewind

I have been covering the fossil fuel industry for more than 20 years so I'm pretty jaded when it comes to clever accounting and marketing schemes. What I learned about carbon capture over the past several months managed to completely shock me. Some key points: - industry regularly misstates over overstates with the IPCC actually said about carbon capture. What they said was it *might* be necessary for certain hard to abate sectors, and that best-case scenario it could only ever contribute about 2% of emissions reductions needed by 2050. Translated by oil company marketers that's become "the IPCC says carbon capture is critical for reaching net zero." - CCS has been around for a long time under another name, "enhanced oil recovery" or EOR. Oil companies figured out in the 70s that injecting CO2 underground was a good way to clear any remaining oil out of a dwindling reserve. But it was expensive. Solution? rebrand it as a "climate solution" and lobby for a tax credit to fund it. Helps that Joe Manchin rammed it through for them. - 45Q is the largest blind giveaway of government money we've ever seen. There is no cap on it, it's put on tax returns so there's no transparency, no one is verifying how much CO2 is actually sequestered (esp tricky because EOR requires some amount of sequestration for a period of time, too, you're storing it til you need it; the credit pays $85/metric ton for permanently stored CO2 and $60/metric ton for CO2 used in EOR...if no one is checking and everything is self reported, what's to stop anyone claiming the credit from claiming the largest credit? - there's no connection between the tax credit and any climate benefit. if anything it incentivizes oil companies to create more carbon. - it's not structured to actually make it viable for those few hard-to-abate industries like cement, steel or ammonia to use it; it's still expensive to deploy in those contexts. But it's downright cheap for ethanol producers -- only costs them around $30/metric ton so this is as much a lifeline to them as to oil producers. - CO2 pipelines are *dangerous* -- they have "kill zones" around them - as Mark Jacobson discovered in his research, even CCS powered by wind is worse for climate (and air pollution) than just replacing fossil fuel with wind and cutting out the middle man. There's so much more. Story out now from Drilled Media and Vox: https://lnkd.in/g_PP93uE

Hot off the press: 3 detailed reports (306 pages!) informing the upcoming EU purchasing programme for permanent #CDR. Get reading: 1. An EU Purchasing Programme for Permanent #CarbonRemovals: Presents seven policy options for expanding CDR technologies and markets. Focuses on the potential role of an EU-wide purchasing programme in the short term (2025–2030) and how it could stimulate demand for permanent CDR. 2. Carbon Removals in the EU: Review of Current Carbon Removal Projects and Early-stage Financing maps Europe’s permanent CDR projects up until 2035, assessing technologies, costs, funding needs and barriers. 3. Carbon Removals in the EU: Assessment of Existing EU Funding Programmes and New Funding Models to Increase Carbon Removal Supply reviews existing EU support and explores new ways to finance early-stage CDR projects. https://lnkd.in/ehTbwDyU -- Click the 🔔 on my profile and select "all" to catch every insight I share. Knowledge drives meaningful #climateaction.

🌊 Exploring Ocean Alkalinity Enhancement (OAE) in Climate Mitigation 🌊 As we confront the escalating climate crisis, innovative solutions like Ocean Alkalinity Enhancement (OAE) are gaining attention. OAE involves increasing the ocean’s alkalinity to enhance its natural capacity to absorb and store atmospheric CO₂, thereby mitigating climate change and countering ocean acidification. 🟢Pros of OAE: • Enhanced Carbon Sequestration: By boosting the ocean’s ability to absorb CO₂, OAE could play a significant role in reducing atmospheric greenhouse gas concentrations. • Mitigation of Ocean Acidification: Increasing alkalinity can help neutralize ocean acidity, benefiting marine ecosystems and organisms sensitive to pH changes. 🔴Cons of OAE: • Environmental Uncertainties: The long-term ecological impacts of altering ocean chemistry are not fully understood, raising concerns about potential unintended consequences. • Technical and Economic Challenges: Implementing OAE at scale requires substantial investment and technological development, with current costs estimated between $100 to $150 per ton of CO₂ removed. 💡My view: I believe that while OAE and similar carbon dioxide removal (CDR) technologies offer promising avenues for addressing climate change, they should complement—not replace—urgent efforts to reduce greenhouse gas emissions. Prioritizing emission reductions remains essential, with CDR methods serving as supplementary strategies to achieve net-zero targets. A balanced approach that combines immediate emission cuts with the exploration of innovative solutions like OAE will be crucial in our fight against climate change. It’s imperative to invest in research to fully understand the implications of OAE and develop clear regulatory frameworks to ensure its safe and effective deployment. What do you think? For a great overview of this emerging technology, check out this piece in The Washington Post: https://lnkd.in/e_G6jTr6 #climate #co2 #emissions #cdr #climatetech #geoengingeering #oceans #climatescience

IMAGINE A WORLD WHERE WE NOT ONLY STOP ADDING CARBON TO THE ATMOSPHERE BUT ACTIVELY PULL IT BACK OUT. A recent report by the Swedish Environmental Research Institute provides a comprehensive review of carbon dioxide removal approaches, with an emphasis on the current costs of CO2 removal. Here are some of the key takeaways: 1. Beyond Net-Zero ↳Embracing Carbon Removal for Climate Stability Achieving net-zero emissions is no longer sufficient. Even aggressive emission reductions may not keep us below the critical 1.5°C warming threshold. This is where Carbon Removal (CDR) emerges as a critical tool in our climate mitigation approaches. By actively removing excess CO2 from the atmosphere, CDR can shift the paradigm from net-zero to net-negative emissions. 2. Diversifying the Carbon Removal Portfolio ↳Navigating the Landscape of Solutions No single solution can address the multifaceted challenge of carbon removal. Fortunately, a diverse array of CDR strategies exists, each with its own strengths and limitations. Nature-based Solutions (NbS) like afforestation and wetland restoration offer established methods for carbon sequestration. Meanwhile, innovative engineering technologies like biochar sequestration and direct air capture (DAC) hold immense promise for capturing carbon directly from the atmosphere. Exploring the full spectrum of CDR options is crucial for optimising our climate action strategies. 3. Paris Agreement Evolves ↳A New Era of Global Carbon Collaboration The Paris Agreement's Article 6 marks a significant step forward in facilitating international collaboration on climate action. It paves the way for international carbon markets, allowing for the trading of emission reductions and verified carbon removals. This opens doors for cost-effective climate action and accelerated decarbonisation efforts through global collaboration. 4. Cost Dynamics ↳Emission Reductions vs. CDR - A Strategic Analysis Evaluating the cost-effectiveness of different decarbonisation pathways is critical for maximising impact. While traditional emission reductions remain cost-competitive in many cases, innovative CDR technologies like DAC are rapidly narrowing the cost gap. Optimising the deployment mix will require strategically considering each method's cost, feasibility, and long-term storage potential. 5. Four Scenarios, One Choice ↳Prioritising Net-Negative Emissions for a Sustainable Future The IPCC's recent report presents four contrasting scenarios based on different policy decisions. Only the scenario featuring both aggressive emission reductions and large-scale CDR deployment offers a viable pathway to achieving the 1.5°C goal. The message is clear → it is paramount to prioritise the implementation of ambitious decarbonisation strategies that leverage both established and emerging solutions. #NetZero #CarbonRemoval #ClimateAction #ScienceCommunication #Research

Venture funding can get a business started, but working capital keeps companies alive. In times of fluctuating federal funding and fleet-footed investors, climate founders need a reliable #workingcapital strategy to extend runway, scale smarter, and avoid unnecessary dilution. We go deep on these under-appreciated financing instruments and the when, what, and how to wield them in Sightline Climate (CTVC)‘s Working Capital Playbook. TLDR: 💳 Debt stabilizes cash flow. Credit lines, term loans & venture debt fund operations but require assets or revenue. 💡 Hybrid instruments bridge early gaps. SAFEs & convertible notes offer flexible funding without immediate dilution. 🏗️ Grants fuel deep tech. Government & catalytic capital de-risk FOAK projects and unlock follow-on investment. 🔄 Creative financing frees up cash. Factoring, revenue-based financing & invoice advances fund growth without equity. 🏛️ Policy & community capital add leverage. Green banks, philanthropy & state incentives provide non-dilutive funding. Nerd out on the full pros & cons analysis, self-assessment questionnaire, and case studies with Enduring Planet, DexMat, Thea Energy, HSBC Innovation Banking, Rondo Energy, and Breakthrough Energy in the report below 👇 https://lnkd.in/ettJuAGv

New research from the Cambridge Institute for Sustainability Leadership (CISL)), with risk analysis from global insurance group Howden Group Holdings, demonstrates the transformative economic efficiency of risk-sharing systems to provide vulnerable countries with financial security from climate related disasters. The smallest and most vulnerable countries risk losing over 100% of their GDP from extreme climate shocks next year, according to the findings, which underlines the scale and severity of the risks faced by the Global South. Small Island Developing States (SIDS) and other vulnerable countries bear these overwhelming threats almost alone. This can be solved. The report, which models Loss and Damage (L&D) implementation, reveals these risks are insurable and proposes a solution using the power of (re)insurance and capital markets to dramatically scale up the impact of L&D funding. The modelling shows that the intolerable financial risks faced by this group of countries could be reduced to just 10% of GDP. The research outlines an action plan for L&D implementation across 100 less developed, climate vulnerable countries. It proposes leveraging donor funding to unlock vast sums from (re)insurance and capital markets to provide guaranteed financial protection to exposed communities now, and through to at least 2050.  https://lnkd.in/e-tX4AsP

As businesses face increasing pressure to address climate change, eg the EU’s Carbon Border adjustment mechanism coming into force very shortly, AI and blockchain are emerging as key technologies in the drive towards sustainability. These innovations go beyond simple compliance—they offer new ways to promote transparency, accountability, and resilience. One example of this shift is how companies like Changeblock are reshaping the carbon credit market. Through the use of AI and blockchain, they’ve created a platform where carbon credits can be traded with greater confidence and reliability. This helps to solve long-standing issues of credibility and trust, turning carbon credits into a valuable tool for sustainability. Moreover, Changeblock’s Systems Monitoring Technology (SMT) integrates AI, IoT, and blockchain to provide real-time insights into sustainability projects across the globe—from biochar projects in Zambia to clean water efforts in Kenya. This enables businesses to meet environmental standards with precision and speed, ensuring that sustainability becomes an integral part of day-to-day operations. For businesses, the challenge is no longer about whether to embrace AI and blockchain, but how to leverage them to build a future where transparency and trust underpin success. The companies that adapt now will be those that thrive in the sustainable economy of tomorrow. For more information: https://lnkd.in/dAGaMZu3 #Sustainability #AI #Blockchain #BusinessLeadership #CarbonCredits #FutureGrowth