2025 climate solutions trends: Scrutiny, humility and surprises (probably!)

BY: AMY HARDER

Read this article and more of the latest on climate & tech at ciphernews.com.

It can be tempting to look at the year ahead through a red-tinted lens — after all, Washington, D.C., is fully controlled by Republicans after last year’s elections — but here at Cipher, our first lens is global climate solutions, and everything else is secondary.

So, with that throat-clearing exercise done, here are the trends I’m watching this year. As with my reflection column, all these prognostications benefit greatly from my Cipher colleagues around the globe.

Every year since 2018, I’ve looked both back and ahead at the trends shaping the past year and the year to come, including a (sometimes humbling) reality-check of what I had predicted at the year’s start. For a quick review, here are my Cipher outlooks for?2024 (both looking ahead and back), 2023 and 2022; and while reporting at Axios in?2021, 2020, 2019 and 2018.

1. Cleantech scrutiny

I’ll be assessing the prospects for cleantech through multiple lenses:

• How aggressively Republicans in Washington look to repeal or rewrite the Inflation Reduction Act (IRA), the mammoth climate law from 2022, and other related climate policies.
• To what degree the financial sector, particularly private equity firms, invest in cleantech.
• Macroeconomic challenges, like interest rates and supply chain challenges.

Eric Toone, chief technology officer of Breakthrough Energy (which also supports Cipher), said a lot of climate tech companies founded in the last decade are entering a new phase many call the messy middle (also known as the missing middle or the Valley of Death).

“The companies that got started at the beginning of Cleantech 2.0 are really coming into their own now, and it’s a very different set of needs,” said Toone, who assesses the technical viability of one of the world’s largest portfolios of climate tech startups. “We’re working with these companies to get factories built and to become viable businesses.”

2. Humility, surprises and more

If the first Trump administration taught us anything, it was to be humble. We don’t fully know what’s in store on many fronts, including climate and energy.

First, to reiterate the conventional wisdom: You probably know by now that President-elect Donald Trump has regularly dismissed the seriousness of climate change. He has made it clear he is going to seek to expand fossil fuel production and withdraw from the Paris Climate Agreement (again). He has also criticized cleantech, particularly offshore wind and electric cars (minus Tesla).

But, but, but! Here are a few potential scenarios I’m watching that could be unexpected boosts for climate tech:

• We could see support grow for technologies like geothermal, hydrogen and carbon capture, which are important for slashing emissions but also have close ties to the oil and gas industry.
• Trump has called for more domestic manufacturing of critical minerals (Reuters has more in this article), which are key for a variety of technologies, including those central to cleantech.
• A permitting bill has been under congressional discussion and both renewable energy developers and fossil-fuel producers see an upside in such revamped policy. Importantly: Any change runs the risk of prompting even more lawsuits if key stakeholders (such as Indigenous communities) are ignored.

I’m reminded of a couple of developments in the first Trump administration that bucked conventional wisdom, which suggests such surprises could occur again:

• In 2019, Trump signed one of the biggest public lands and conservation bills into law.
• Congress boosted clean-energy research despite Trump’s efforts to slash such budgets, MIT Tech Review wrote at the time.
• Wind and solar continued to grow during the first Trump administration, so much so that you can’t see any dip in this chart from Canary Media.

3. Real race over artificial intelligence.

If last year was the beginning of the AI race, we’re now entering a new phase?where harsh realities come to bear. The pool of possible new energy sources is widening as power demands grow more acute and the pressure to use clean energy lessens with Trump moving into the White House.

Here’s more from Cat Clifford, our senior science and economics correspondent:

• As massive tech companies build data centers to get ahead in the global AI race and try to keep their carbon budgets in check, nuclear energy has been getting a lot of time in the spotlight. Meta, Google and Amazon all recently announced moves into nuclear.
• Nuclear isn’t the only sector exploiting the opportunity powering voracious data centers, though. For example, Exxon Mobil is designing a natural gas power plant with carbon capture technology to provide electricity to data centers. And Google recently announced a plan to build $20 billion worth of renewable energy and storage by 2030 that will be co-located with data centers.
• Check out the chart below for the sheer amount of electricity demand growth anticipated in the coming years.

4. Europe’s existential competition.

Cipher’s chief Europe correspondent Anca Gurzu writes:

• Can Europe tackle its industrial and manufacturing competitiveness challenges while maintaining its ambitious climate goals? The European Union has prioritized this topic amid high energy prices and growing deindustrialization, with experts calling for IRA-style funding to prop up European industries.
• All eyes are on the European Commission’s upcoming Clean Industrial Deal, to be presented in February, meant to boost the bloc’s competitiveness by supporting cleantech manufacturing and stay the course with decarbonization goals.

5. Tariffs, China, Brazil, oh my!

OK, this is a bit of a catchall for key geopolitical trends we’ll be watching, which all intersect thanks to the global nature of the topics we cover. Let’s briefly break it all down.

Cipher’s DC-based correspondent, Amena Saiyid writes:

• Trump is threatening to impose at least 25% tariffs on all imports from Mexico and Canada and an additional 10% tariff on all Chinese goods (check out this WSJ article chock full of essential charts). Plus, a two-year moratorium that had blocked tariffs on solar panels and related parts from Southeast Asian countries recently expired; Trump is expected to continue, or even intensify, these tariffs when he takes office.
• This likely means many low-cost foreign products, such as solar panels and their parts, will become more expensive for consumers and less competitive in domestic and international markets (even while overall prices of solar panels keep going down).
• It also means other countries may retaliate with their own tariffs on U.S. goods or restrict exports to the country, just as China has done recently with select rare earth minerals.

These geopolitical dynamics could boil over at the 30th annual United Nations climate conference, set for this November in Belém, Brazil, a city of more than a million people at the gateway to the Amazon River and rainforest. Expect a lot of talk about the importance of preserving natural resources like the rainforest with a backdrop of oil production (Brazil is Latin America’s largest such producer).

More from Anca:

• COP30, as it’s known, will focus on taking stock of countries’ updated climate targets for 2035, which will be critical in telling us just how ambitious countries are in their plans to reduce emissions and keep temperature increases in check. Analysts have described COP30 as potentially the most consequential summit since the 2015 conference where the Paris Climate Agreement was adopted.

What did we miss? What are you watching? Let me know: [email protected].

Editor’s note: Breakthrough Energy, where Eric Toone is the chief technology officer, also supports Cipher.