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Plus cheese and eggs, if you want to go all the way.
It was burrito night — I had some tortillas, salsa, guacamole and red onion in my refrigerator, but all our meat was still frozen, and I didn’t have any beans handy. So I did what any climate reporter with an interest in food systems would do and grabbed a pack of meatless “carne asada” I’d picked up out of curiosity and threw it into the mix. The end result was more “huh” than “wow,” but it held its own — with a little help from some hot sauce.
Growing, raising, processing and transporting food is responsible for roughly a quarter of worldwide greenhouse gas emissions, nearly 60% of which comes from meat production, according to one estimation. If you're concerned about your personal carbon impact, eating less meat is probably on your to-do list. But what if you still like a carne asada burrito? Thankfully, there are plenty of companies working on satisfying your cravings, no animals involved.
There are lots of other food system concerns that won’t make it into this guide — things like agricultural livelihoods, water use, and animal well-being. But if you’re curious about how fake meats work, what they taste like, and their emissions impact, here’s what you’ll want to know.
Ben Kelley, owner and proprietor of Kelley Farms Kitchen, a vegan restaurant in Harpers Ferry, WV. Ben and his wife Sondra started Kelley Farms after going vegan themselves more than a decade ago. The cafe offers a mix of housemade and commercially available meat alternatives.
Ismael Montanez, the program manager at University of California Berkeley’s Alt Meat Lab, where he’s focused on food and sustainability broadly. He is co-founder and former CTO of plant-based lamb company Black Sheep Foods and eats both meat and plant-based replacements.
Andrea Cecchin, senior agriculture and carbon researcher at HowGood, a sustainability ratings company. Cecchin told me he and his family limit the amount of meat they eat but are focused on a wider plant based diet.
It’s a multi-trillion dollar question, frankly. While the worldwide food system is far more complex than individual consumer choices, shifts in demand for food products, especially among higher-income individuals, have created changes, such tripling the price of quinoa during a boom in its popularity in mid-2010s. The U.S. and China’s growing middle classes also drove a spike in pork demand, only to have that growth slow and reverse in the past few years over health concerns.
The plant-based meat alternatives currently available at your grocery store may be highly processed, but they’re different from the cultivated or “lab-grown” meat coming from a new batch of food companies that seek to “grow” meat from scratch on the cellular level. In theory, this would create direct replacements for things like steaks or fish without actually requiring us to raise actual animals. Almost all of these products are still in the research and development stage, however, and none are currently commercially available in the U.S.
Let’s not mince words: There is no such thing as carbon-neutral beef. How to reduce cattle’s climate impact is an area of active research, encompassing supplements and dietary changes, breeding programs to create animals that process food more efficiently, and even methane-sucking gas masks. There are also ranchers committed to using specific grazing techniques that encourage extra retention of soil carbon, thereby offsetting emissions from cows, but “the science is not there yet” on the scale of sequestration needed for fully carbon-neutral meat, Cecchin says. “Climate-friendly” or “low-carbon” meat labels have been criticized for a lack of data transparency and only represent a 10% reduction in beef emissions overall.
The process of making plant-based mock meats is basically the reverse of their animal version, Montanez explained. While meat is made by processing animals into specific cuts or parts, plant-based replacements use protein-packed flours and other ingredients to build the “meat” back up.
Almost all fake red meat products will have a smaller greenhouse gas impact than their animal versions, Cecchin explained. Compared to a beef burger, the alternatives “really bring down the carbon footprint — the amount of water we need to use, and the amount of land that we use” per unit of food. But for other products, the savings are less clear. Chicken, for instance, has a much lower footprint, meaning replacements have to compete against a “very efficient industry and a very efficient meat.”
Processing details are rarely public, making it difficult to declare other meat replacements automatic emissions winners. “It’s really company by company, and could even be year by year as processing efficiencies change,” Cecchin said, adding that he hopes more companies will show clear evidence of their total emissions, including being specific about what they are comparing against.
Fake animal products are also not the same nutritionally as actual animal products, in ways that can be positive or negative depending on your specific dietary needs. An allergy to soy or wheat gluten would immediately knock out a good portion of these options, and my carne asada came with a warning to anyone “sensitive” to fungi.
There are generally more carbs, less fat, and more fiber in substitutes compared to meat, but protein levels can vary widely, and sodium levels can be high (e.g. Impossible burgers have just as much fat and more salt than a 80% lean beef burger of the same size, though zero cholesterol). As with any processed or prepared food, a look at the nutritional label is well worth it.
The experts all enjoyed the big-name beef replacements — Cecchin even said he has chosen Impossible and Beyond patties over regular burgers while eating out. If you have a little more time, though, Kelley said to skip the fast food fake burgers and make them yourself. Making good tasting meat replacements isn’t all that different from cooking meat itself: spices, technique and how it integrates into a meal makes all the difference. This is the case whether he’s using Impossible beef on the restaurant griddle or hand-making a black bean and chickpea patty. “Just like a raw piece of chicken,” he said, “it's about how you cook it.”
Everyone I spoke to said most breaded chicken replacements match their animal versions pretty well — Montanez even called them “most consistently tasty” than their actual meat equivalents, which for him was enough to justify the slight additional cost. He said he thinks Impossible’s chicken nuggets are the “most convincing” — although he also cautioned that he doesn’t eat a lot of breaded meat products in the first place.
Morningstar Farms’ Chik Patty has been a go-to at-home lunch in my house for nearly three decades, primarily because of that consistency and ease of preparation. (The “buffalo” flavor is by far the best, in my opinion.) Kelley uses Gardein’s Chick’n on one of their most popular sandwiches at the restaurant — they’re a big fan of the company and product.
Don’t expect a lot of options for raw chicken alternatives, however. Montanez suspects the economics of competing with relatively cheap meat isn’t attractive to companies, especially when prepared breaded versions, both animal and plant-based, are already popular.
“Emulating the flavor of American chicken is relatively easy and shouldn't be seen as a significant achievement,” Montanez said. “What’s truly interesting is creating a versatile analog that can withstand the same cooking conditions as real chicken.”
Kelley’s favorite meat replacement is Beyond’s bratwurst sausage, made with pea protein and avocado oil. He uses it in a variety of meals at his cafe, as well as to grill up at home, sometimes adding it to pasta.
Steak and other meats that include marbled fats have been a particularly tricky nut to crack for fake meat producers because the traditional extrusion process makes it difficult to capture fat alongside protein. Montanez told me Juicy Marbles has developed a process capable of doing both, which it’s used to create filet and loin products.
Montanez’s favorite fake bacon is only available in a vegan deli in Berkeley, California, but generally both he and Kelley haven’t found full bacon strips that really match the experience of eating bacon. “There's no way to hold it after you cook it without it drying out,” Kelley said. Instead, he likes using soy [bacon] crumbles in various dishes, including in his potato salad.
The pepperoni and other fermented charcuterie from Prime Roots is “quite impressive, even from a meat eater’s perspective,” Montanez told me. The company starts its process with koji, a strain of fungus that has been part of Japanese cuisine for hundreds of years, including in the product of soy sauces and sake.
The deli slices Kelley uses in sandwiches like reubens or Italian hoagies are made with seitan or a mix of seitan and soy, from a variety of companies. But the Tofurky brand (not just turkey) is one of their favorites. “We are always testing new recipes of our own and using reliable and ethical companies that we grew up loving,” he said.
Kelley has yet to be convinced by most seafood replacements, he told me. “All the seafood is kind of just the same as the chicken replacements,” he said. Instead, he uses unripe jackfruit – a common meat replacement with a stringy texture – hearts of palm, and spices to replicate crab cakes. Having an exact match isn’t always a priority for Kelley, who’d rather highlight an ingredient that serves as a replacement rather than calling it by its faux name. His lobster roll replacement is made with hearts of palm, but it’s not “vegan lobster” on his menu, it’s a “hearts of palm” roll.
Texture is a “very difficult thing in seafood,” Montanez said. “I haven't seen anything myself where it is 100% convincing,” but he points out companies like Impact Food that are making plant-based sushi without extrusion or fermentation, currently available in some New York and California restaurants.
Montanez also called out vegan cheese as a category that struggles to match its original, citing texture, not flavor, as the sticking point, especially when it needs to work in a multitude of different recipes. “You might see a vegan cheese that’s okay applied in pieces,” he said, “but it's only as good if you put it in pizza oven temperatures.” An exception to the rule for him is Climax Foods’ blue cheese, which almost pulled off a Judgment of Paris-like upset in a food competition this year before being removed from the running.
Montanez identified Quorn as a brand that’s not trying to replicate meat exactly, but tastes good on its own. The British company has a wide range of no-meat products that feel like they could have a home in a Tesco, from a vegan Yorkshire ham to mini sausage rolls to “picnic eggs.”
Approaches to fake meat taste fall on a spectrum. On one end are companies that try to replicate as closely as possible the taste, texture, and smell of some specific meat product — say, a chicken nugget. (Your personal mileage may vary when it comes to replicas of more complicated meat cuts such as steaks or pork chops.) On the other end are brands that offer a functional, hopefully flavorful replacement for meat in a meal but otherwise aren’t trying to fool anyone.
The former approach involves more materials science and chemistry, Montanez told me. For example, Impossible makes a soy version of a key molecule in meat known as heme and combines it with a carefully calibrated proportion of sugars, fats, and water to induce the Maillard reaction, the process that makes meat brown and form a crust. It’s possible to create a similar meaty flavor profile without heme (Impossible has a patent on their version), but they have their own complications.
“It’s those sugars reacting with the proteins and creating these molecules that ultimately result in a meaty aroma or flavor,” Montanez said.
Kelley Farm’s menu is a good example of the wider ingredient possibilities of meat replacements beyond this approach. In addition to Impossible patties, Beyond brats, and Gardein’s Chick’n, the restaurant also serves deli meat replacements made with seitan (basically textured wheat gluten); folded eggs made from mung beans; BBQ pulled pork made from jackfruit, which mimics that stringy texture naturally (I’ve had both Kelley Farms’ barbeque sandwich and commercial jackfruit BBQ versions and would happily eat either again); and a burger patty that’s their own mix of chickpeas and black beans.
It’s also worth noting that there is a more literal approach to eating a plant-based diet that’s already the standard in many other countries — that is, rather than replacing meat products with fake meat products, just eat more plants. If you feel like you’re missing out on protein, beans, lentils, tofu, and certain grains like quinoa, farro or teff, have high amounts.
Highly engineered meat substitutes are often more expensive than the animal products they are replacing, so if you’re struggling with hunger, have specific dietary requirements, anxiety around food, or an eating disorder, concerns about emissions shouldn’t even enter the picture.
For that matter, just reorienting your approach to eating meat saves a lot of carbon on its own. Kelley told me he reaches for meat replacements when he’s craving something specific, while Cecchin prefers meat alternatives when he’s eating out.
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The assembly line is the company’s signature innovation. Now it’s trying to one-up itself with the Universal EV Production System.
In 2027, Ford says, it will deliver a $30,000 mid-size all-electric truck. That alone would be a breakthrough in a segment where EVs have struggled against high costs and lagging interest from buyers.
But the company’s big announcement on Monday isn’t (just) about the truck. The promised pickup is part of Ford’s big plan that it has pegged as a “Model T moment” for electric vehicles. The Detroit giant says it is about to reimagine the entire way it builds EVs to cut costs, turn around its struggling EV division, and truly compete with the likes of Tesla.
What lies beneath the new affordable truck — which will revive the retro name Ford Ranchero, if rumors are true — is a new setup called the Ford Universal EV Platform. When car companies talk about a platform, they mean the automotive guts that can be shared between various models, a strategy that cuts costs compared to building everything from scratch for each vehicle. Tesla’s Model 3 and Model Y ride on the same platform, the latter being essentially a taller version of the former. Ford’s rival, General Motors, created the Ultium platform that has allowed it to build better and more affordable EVs like the Chevy Equinox and the upcoming revival of the Bolt. In Ford’s case, it says a truck, a van, a three-row SUV, and a small crossover can share the modular platform.
At the heart of the company’s plan, however, is a new manufacturing approach. The innovation of the original Model T was about the factory, after all — using the assembly line to cut production costs and lower the price of the car. For this “Model T moment,” the company has proposed a sea change in the way it builds EVs called the Ford Universal EV Production System. It will demonstrate the strategy with a $2 billion upgrade to the Ford factory in Louisville, Kentucky, that will build the new pickup.
In brief, Ford has embraced the more minimalist, software-driven version of car design embraced by EV-only companies like Tesla and Rivian. The vehicles themselves are mechanically simpler, with fewer buttons and parts, and more functions are controlled by software through touchscreen interfaces. Building cars this way cuts costs because you need far fewer bits, bobs, fasteners, and workstations in the factory. It also reduces the amount of wiring in the vehicle — by more than a kilometer of the stuff compared to the Mustang Mach-E, Ford’s current most popular EV, the company said.
Ford is in dire need of an electric turnaround. The company got into the EV race earlier than legacy car companies like Toyota and Subaru, which settled on more of a wait-and-see approach. Its Mustang Mach-E crossover has been one of the more successful non-Tesla EVs of the early 2020s; the F-150 Lightning proved that the full-size pickup truck that dominates American car sales could go electric, too.
But both vehicles were expensive to make, and the Lightning struggled to make a dent in the truck market, in part because the huge battery needed to power such a big vehicle gave it a bloated price. When Tesla started a price war in the EV market a few years ago, Ford began hemorrhaging billions from its electric division, struggling to adapt to the new world even as carmakers like GM and Hyundai/Kia found their footing.
The big Detroit brand has been looking for an answer ever since, and Monday’s announcement is the most promising proposal it has put forward. Part of the production scheme is for Ford to build its own line of next-gen lithium-ion phosphate, or LFP batteries in Michigan, using technology licensed from the Chinese giant CATL. Another step is to employ the “assembly tree,” which splits the traditional assembly line into three parallel operations, which Ford says reduces the number of required workstations and cuts assembly time by 15%.
Affordability has always been a bugaboo for the American EV industry, a worry exacerbated by the upcoming demise of the $7,500 tax credit. And while Ford’s manufacturing overhaul will go a long way toward building a light-duty pickup EV that sells for $30,000, so too will a fundamental change in thinking about batteries, weight, and range. The F-150 Lightning isn’t the only pickup with a big battery and an even bigger price. That truck’s power pack comes in at 98 kilowatt-hours; large EV pickups like the Rivian R1T and Chevy Silverado EV have 150 or even 200 kilowatt-hour batteries, necessary to store enough power to give these heavy beasts a decent driving range.
InsideEVs reports, however, that the affordable Ford truck may have a battery capacity of just over 50 kilowatt-hours, which would dramatically reduce its cost to make. The trade-off, then, is range. The Slate small pickup truck that made waves this year for its promised price in the $20,000s would have just 150 miles of range in its cheapest form. Ford hasn’t released any specs for its small EV truck, but even using state-of-the-art LFP chemistry, such a small battery surely won’t deliver many more miles per charge.
Whatever the final product looks like, the new Ford truck and the infrastructure behind it are another reminder that, no matter the headwinds caused by the Trump administration, EVs are the future. Ford had been humming along through its EV struggles because its gas-burning cars remained so popular in America, and so profitable. But those profits collapsed in the first half of 2025, according to The New York Times. Meanwhile, Ford and every other carmaker are struggling to catch up to the Chinese companies selling a plethora of cheap EVs all over the world. Their very future depends on innovating ways to build EVs for less.
Governors, legislators, and regulators are all mustering to help push clean energy past the starting line in time to meet Republicans’ new deadlines.
Trump’s One Big Beautiful Bill Act put new expiration dates on clean energy tax credits for business and consumers, raising the cost of climate action. Now some states are rushing to accelerate renewable energy projects and get as many underway as possible before the new deadlines take effect.
The new law requires wind and solar developers to start construction by the end of this year in order to claim the full investment or production tax credits under the rules established by the Inflation Reduction Act. They’ll then have at least four years to get their project online.
Those that miss the end-of-year deadline will have another six months, until July 4, 2026, to start construction, but will have to meet complicated sourcing restrictions on materials from China. Any projects that get off the ground after that date will face a severely abbreviated schedule — they’ll have to be completed by the end of 2027 to qualify, an all-but-impossibly short construction timeline.
Adding even more urgency to the time crunch, President Trump has directed the Treasury Department to revise the rules that define what it means to “start construction.” Historically, a developer could start construction simply by purchasing key pieces of equipment. But Trump’s order called for “preventing the artificial acceleration or manipulation of eligibility and by restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built,” an ominous sign for those racing to meet already accelerated deadlines.
While the changes won’t suppress adoption of these technologies entirely, they will slow deployment and make renewable energy more expensive than it otherwise would have been. Some states that have clean energy goals are trying to lock in as much subsidized generation as they can to lessen the blow.
There are two ways states can meet the moment, Justin Backal Balik, the state program director at the nonprofit Evergreen Action, told me. Right now, many are trying to address the immediate crisis by helping to usher shovel-ready projects through regulatory processes. But states should also be thinking about how to make projects more economical after the tax credits expire, Balik said. “Green states can play a role in tilting the scale slightly back in the direction of some of the projects being financially viable,” he said, “even understanding that they’re not going to be able to make up all of the lost ground the incentives provided.”
In the first category, Colorado Governor Jared Polis sent a letter last week to utilities and independent power producers in the state committing to use “all of the Colorado State Government to prioritize deployment of clean energy projects.”
“Getting this right is of critical importance to Colorado ratepayers,” Polis wrote. The nonprofit research group Energy Innovation estimates that household energy expenses in Colorado could be $170 higher in 2030 than they would have been because of OBBB, and $310 higher in 2035. “The goal is to integrate maximal clean energy by securing as much cost-effective electric generation under construction or placed in service as soon as possible, along with any necessary electricity balancing resources and supporting infrastructure,” Polis continued.
As for how he plans to do that, he said the state would work to “eliminate administrative barriers and bottlenecks” for renewable energy, promising faster state reviews for permits. It will also “facilitate the pre-purchase of project equipment,” since purchasing equipment is one of the key steps developers can take to meet the tax credit deadlines.
Other states are looking to quickly secure new contracts for renewable energy. In mid-July, two weeks after the reconciliation bill became law, utility regulators in Maine moved to rapidly procure nearly 1,600 gigawatt-hours of wind and solar — for context, that’s about 13% of the total energy the state currently generates. They gave developers just two weeks to submit proposals, and will prioritize projects sited on agricultural land that has been contaminated with per- and polyfluoroalkyl substances, the chemicals known as PFAS. (When asked how many applications had been submitted, the Maine Public Utilities Commission said it doesn't share that information prior to project selection.)
Connecticut’s Department of Energy and Environmental Protection is eyeing a similar move. During a public webinar in late July, the agency said it was considering an accelerated procurement of zero-carbon resources “before the tax increase takes effect.” The office put out a request for information to renewable energy developers the next day to see if there were any projects ready to go that would qualify for the tax credits. Officials also encouraged developers to contact the agency’s concierge permit assistance services if they are worried about getting their permits on time for tax credit eligibility. Katie Dykes, the agency’s commissioner, said during the presentation that the concierge will engage with permit staff to make sure there aren’t incomplete or missing documents and to “ensure smooth and efficient review of projects.”
New York’s energy office is planning to do another round of procurement in September, the outlet New York Focus has reported, although the solicitation is late — it had originally been scheduled for June. The state has more than two dozen projects in the pipeline that are permitted but haven’t yet started construction, according to Focus, and some of them are waiting to secure contracts with the state.
Others are simply held up by the web of approvals New York requires, but better coordination between New York agencies may be in the works. “I assembled my team immediately and we are trying to do everything we can to expedite those [renewable energy projects] that are already in the pipeline to get those the approvals they need to move ahead,” Governor Kathy Hochul said during a rally at the State University of New York’s Niagara campus last week. The state’s energy research and development agency has formed a team “to help commercial projects quickly troubleshoot and advance towards construction,” according to the nonprofit Evergreen Action. (The agency did not respond to a request for more information about the effort.)
States and local governments are also planning to ramp up marketing of the consumer-based credits that are set to expire. Colorado, for example, launched a new “Energy Savings Navigator” tool to help residents identify all of the rebate, tax credit, and energy bill assistance programs they may be eligible for.
Consumers have even less time to act than wind and solar developers. Discounts for new, used, and leased electric vehicles will end in less than two months, on September 30. Homeowners must install solar panels, batteries, heat pumps, and any other clean energy or efficiency upgrades before the end of this year to qualify for tax credits.
Many states offer additional incentives for these technologies, and some are re-tooling their programs to stretch the funding. Connecticut saw a rush of demand for its electric vehicle rebate program, CHEAPR, after the OBBB passed. Officials decided to slash the subsidy from $1,500 to $500 as of August 1, and will re-assess the program in the fall. “The budget that we have for the CHEAPR program is finite,” Dykes said during the July webinar. “We are trying to be good stewards of those dollars in light of the extraordinary demand for EVs, so that after October 1 we have the best chance to be able to provide an enhanced rebate, to lessen the significant drop in the total level of incentives that are available for electric vehicles.”
As far as trying to address the longer-term challenges for renewables, Balik highlighted Pennsylvania Governor Josh Shapiro’s proposal to streamline energy siting decisions by passing them through a new state board. “One of the big things states can do is siting reform because local opposition and lawsuits that drag forever are a big drag on costs,” Balik told me.
A bill that would create a Reliable Energy Siting and Electric Transition Board, or RESET Board, is currently in the Pennsylvania legislature. (New York State took similar steps to establish a renewable siting office to speed up deployment in 2020, though so far it’s still taking an average of three years to permit projects, down from four to five years prior to the office’s establishment.) Connecticut officials also discussed looking at ways to reduce the “soft costs” of permitting and environmental reviews during the July webinar.
Balik added that state green banks can also play a role in helping projects secure more favorable financing. Their capacity to do so will be significantly higher if the courts force the federal government to administer the Greenhouse Gas Reduction Fund.
When it comes to speeding up renewable energy deployment, there’s at least one big obstacle that governors have little control over. Wind and solar projects need approval from regional transmission operators, the independent bodies that oversee the transmission and distribution of power, to connect to the grid — a notoriously slow process. The lag is especially long in the PJM Interconnection, which governs the grid for 13 mid-Atlantic States, and has generally favored natural gas over renewables. But governors are starting to turn up the pressure on PJM to do better. In mid July, Shapiro and nine other governors demanded PJM give states more of a say in the process by allowing them to propose candidates for two of PJM’s board seats.
“Can we use this moment of crisis to really impress the urgency of getting some of these other things done — like siting reforms, like interconnection queue fixes, that are all part of the economics of projects,” Balik asked. These steps may help, but lengthy federal permitting processes remain a hurdle. While permitting reform is a major bipartisan priority in Congress, as my colleague Matthew Zeitlin wrote recently, a deal that’s good for renewables might require an about-face from the president on wind and solar.
The Danish government is stepping in after U.S. policy shifts left the company’s New York offshore wind project in need of fresh funds.
Orsted is going to investors — including the Danish government — for money it can’t get for its wind projects, especially in the troubled U.S. offshore wind market.
The Danish developer, which is majority owned by the Danish government, told investors on Monday that it would seek to raise over $9 billion, about half its valuation before the announcement, by selling shares in the company.
Publicly traded companies do not typically raise money by selling stock, which is more expensive for the company, tending instead to finance specific projects or borrow money.
But the offshore wind business is not any industry.
In normal times, Orsted and other wind developers will conduct “farm-downs,” selling stakes in projects in order to help finance the next ones. Due to “recent material adverse development in the U.S. offshore wind market,” however, the early-morning announcement said, “it is not possible for the company to complete the planned partial divestment and associated non-recourse project financing of its Sunrise Wind offshore wind project on the terms which would provide the required strengthening of Orsted’s capital structure” — a long way of explaining that it can’t find a buyer at an acceptable price. Hence the new equity.
While the market had been expecting Orsted to raise capital in some form, the scale of the raise is about twice what was anticipated, according to Bloomberg’s Javier Blas.
About two-thirds of the stock sale will be used to continue financing Sunrise Wind, a 924-megawatt planned offshore wind project off the coast of Long Island, according to Morgan Stanley analysts. Construction began last summer, just days after Orsted took full ownership of the project by buying out a stake held by the utility Eversource.
Despite all the sound and fury around offshore wind in the United States, the company said in its earnings report, also released Monday, that “we successfully installed the first foundations at Sunrise Wind, following completion of the wind turbine foundation installation at Revolution Wind,” a 704-megawatt project off the coasts of Rhode Island and Connecticut. “Construction of our offshore U.S. assets is progressing as expected and according to plan,” the company said.
But the report also said Orsted took a hit of over a billion Danish kroner in the first half of this year due to tariffs and what it gingerly refers to as “other regulatory changes, particularly affecting the U.S.,” a.k.a. President Donald Trump.
The president and his appointees have been on a regulatory and financial campaign against the wind sector, especially offshore wind, attempting to halt work on another in-construction New York project, Empire Wind, before Governor Kathy Hochul was able to reach a deal to continue. All future lease sales for new offshore wind areas have been canceled.
Even before Trump came back into office, the offshore wind industry in the U.S. had been hammered by high interest rates, which raised the cost of borrowed money necessary to fund projects, and spiraling supply chain costs and project delays, which also increased the need for the more expensive financing.
“Because of the sharp rise in construction costs and interest rates since 2021, all the projects turned out to be value-destructive,” Morningstar analyst Tancrede Fulop wrote in a note about the Orsted share issue. The company took large losses on scuttled projects in the U.S. and already cancelled its dividend and announced a plan to partially divest many other projects in order to shore up its balance sheet and fund future projects.
While the start-and-stop Empire Wind project belongs to Equinor, Orsted’s Scandinavian neighbor (majority-owned by the Norwegian government), Orsted management told analysts on its conference call that “the issues surrounding Empire Wind's stop-work order from April 2025 had negatively impacted financing conditions for Sunrise,” according to Jefferies analyst Ahmed Furman.
Equinor, too, has had to take a bigger share of Empire Wind, buying out the stake held by BP in January of this year. BP had bought 50% stakes in three Equinor wind projects in 2020, but last year wrote down its investment in the offshore wind sector in the U.S. by over $1 billion.
Why could Orsted not simply pull out of Sunrise Wind? “Orsted and our industry are in an extraordinary situation with the adverse market development in the U.S. on top of the past years’ macroeconomic and supply chain challenges,” Rasmus Errboe, who took over as the company’s chief executive earlier this year, said in a statement. “To deliver on our business plan and commitments in this environment, we’ve concluded that a rights issue is the best solution for Orsted and our shareholders.”
The Danish government will maintain its 50.1% stake in the company, putting the small Scandinavian country with its low-boiling trade and territorial conflicts against the Trump administration in direct capitalist conflict with the American president and his least favorite form of electricity generation.
In the immediate wake of the announcement, Jefferies analyst Ahmed Farman wrote to clients that the deal would “obviously de-risk the [balance sheet], but near-term dilution risk seems substantial,” citing the unexpected magnitude of the raise and no sign pointing to new growth. “As a result, we expect the initial stock reaction to be quite negative.”
And so it has been: The stock closed down almost 30%, its biggest-ever single-day drop and below the price at which it went public in 2016, according to Bloomberg data.