FOAK no more. Three takeaways from the US climate rollback
- Emin Askerov
- May 27
- 2 min read
Don’t play with the government. That’s a rule my father taught me. He built his business in the 90s and early 2000s in Russia. He knew first hand that the government will screw you over faster than your private sector partner and in worse ways.
For a long time, I thought that this rule applied only to authoritarian states like Russia, where the law is weak. The current passing of the “Big Beautiful Bill” in the US now shows that it is true for the West as well.
The Inflation Reduction Act was a defining legislation of the Biden presidency, which set the US on the path to becoming a major clean energy and technology power. Climate capital rushed in, projects were developed, and equipment was ordered. Only two years later, the policy, critical not only for the US but for the world, is being scrapped.
Three things stand out to me.
First, the US might lose almost 3/4 of its potential clean energy additions. The analysis by Rhodium Group, published recently in The Economist, shows that after the repeal of energy tax credits under the Inflation Reduction Act, clean energy additions to the US grid are likely to go down 4 times over the next decade. This is despite renewables being the cheapest and most readily available form of energy in the US.
Second, an analysis of the “Big Beautiful Bill" on the CTVC concluded that the bill will hit the First-of-a-Kind climate projects the most. Like the FOAK projects didn’t have enough to worry about. To remind you, the whole FOAK debate picked up right at the same time as the IRA was coming into force, and it did not subside. Now, the champions, struggling to commercialize new climate technologies, will face even more of an uphill battle.
Third, the EU stands to benefit from the US's short-sightedness. The sheer amount of talent and capital devoted to climate tech in the US is enormous. Some will find ways to advance clean technologies at home by partnering with state and local governments. Some, but not all. Those who won’t will move to Europe, the only other place on Earth, apart from China, that still cares about climate.
The US teaches us a harsh lesson - in climate tech, never confuse political winds with long-term certainty. The rug can, and will be, pulled. If you are building a FOAK, you need to plan for policy risk, just like technical or financial risks. And if you are in Europe, congratulations! The spotlight’s shifting your way!
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