America is no longer a cleantech threat for Europe

For three years European businesses have threatened to move to the US to benefit from the IRA unless they get EU deregulation. But BBB has killed IRA, rendering these always-hollow threats moot.

This week, a new analysis based on satellite data found that solar installations have dropped nearly 50% since the election of Donald Trump. Several major solar projects slated for 2025 and 2026 have halted progress. A 500 MW project in the Southwest, scheduled for completion in 2026, shows no sign of activity and is already behind schedule, according to the analysis by energy intelligence firm Kayrros. “There is now a very real risk that hundreds of projects will be delayed or cancelled, placing billions in clean energy investment at risk,” says Kayrros chief analyst Antoine Halff.

That impact comes even before the One Big Beautiful Bill Act (yes that’s it’s real name) just passed by the Republican congress undid almost all of the financial support for renewable energy and cleantech that had been in Biden’s Inflation Reduction Act (IRA). In the US, there has been shock and dismay among the investor community and a big focus on how this cedes a cleantech victory to China. Few seem to have thought about the EU, even though it was the early leader in cleantech and climate action.

For the past three years at events in Brussels I have been hearing non-stop from industry groups about how the IRA meant the US is now the world’s cleantech leader and companies were going to move to America unless the EU lavished them with subsidies and deregulated in order to suit their needs. Biden called his bill “the largest climate bill in the history not only of the United States, but literally in the history of the world,” and Europeans eagerly parroted this ridiculous premise. Never mind the fact that the IRA was not actual climate legislation but instead a series of tax rebates for clean investment. Never mind that by any reasonable definition the EU Green Deal’s Fit for 55 package is the largest climate bill in the history of the world by far. The Commission also swallowed the narrative and offered European industry a number of measures to level the playing field with the IRA, including new funding and a deregulation drive.

In the European mind, Americans always do it better. And that became the accepted narrative in this town, with business leaders continually bringing up the absurd claim that the IRA is mobilising $392 billion for American cleantech while the EU is mobilising only €200 billion. The US money was theoretical tax rebates, not actual cash. The EU was effectively offering the same amount of money, but with more predictability. A climate plan based around tax rebates was always going to have a very unpredictable outcome, not least because a future administration could so easily undo it. And that is exactly what’s happened here. So I expect at events in Brussels in the coming months we’ll hear from some contrite business voices acknowledging that Europe is the stronger and more predictable environment to build on cleantech, right? Just kidding. Industry and right-of-center politicians don’t seem to have gotten the memo about the IRA’s climate aspects being blown up. Just last week