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Biobased Chemicals

Cleantech projects will go forward soon—or not start at all

2025 may be a difficult year to begin development of sustainable chemistry plants

by Craig Bettenhausen
January 10, 2025 | A version of this story appeared in Volume 103, Issue 1

 

A group of people suits pose a groundbreaking ceremony.
Credit: Solugen
The US Department of Energy has committed a $214 million loan to help Solugen build a plant in Minnesota that would make 75,000 metric tons of glucaric acid, gluconic acid, and hydrogen peroxide by fermenting dextrose.

Takeaways

Anxious investors may move away from ambitious cleantech projects in the US.

Sustainable chemistry companies will shift toward specialties, if they can.

Political change and investor pressure will force companies to make binding decisions about clean technology projects in 2025. Some projects will accelerate so their backers can lock in government subsidies that could disappear when Donald J. Trump returns to the White House, while financiers will cut their losses on others that became too risky the morning after the election.

The June 2024 collapse of Fulcrum BioEnergy, which planned to convert trash into fuel, was an example of what happens when investors lose patience with a cleantech project. Sources formerly with Fulcrum and at similar firms say engineers sorted out the technical problems with the firm’s Nevada gasification plant but not before it ran out of cash.

The incident spooked investors, who have increased pressure on companies in their portfolios to pivot away from commodities and other high-volume chemicals and tackle products with larger margins and faster returns on investment. Bolt Threads, for example, has moved away from its emphasis on textiles made from mushrooms or bioengineered spider silk and is now focused on vegan silk ingredients for the personal care industry.

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The incoming Trump administration’s policy approach toward sustainable technology is the big wild card for the industry. Gharandip Bawa, an executive at the engineering, procurement, and construction firm Hatch, says he has not yet seen a drop in new business related to sustainable technology. But Bawa expects firms to have a harder time raising capital for front-end engineering and other early-stage aspects of cleantech projects without the backing of a climate-friendly administration.

“It’s too early to say. That’s the politically careful answer but in this case also the accurate one,” he says.

But some areas in cleantech may be safer. Michael Darcy, CEO of the biofuel maker DG Fuels, says decarbonization is a global megatrend that even a US president can’t stop. Investments in 2025, however, will likely flow to areas with more predictable policy environments. “Uncertainty is a deal killer,” Darcy says.

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