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In an exclusive interview, Deputy Treasury Secretary Wally Adeyemo laid out the three big to-do items the department is pushing to finish by January.
The Treasury Department will finalize the long-awaited rules governing the new clean hydrogen tax credit before the end of the year, Deputy Secretary Wally Adeyemo told Heatmap in an exclusive interview Monday.
It will also publish the final guidance for the advanced manufacturing and technology-neutral clean power tax credits by that time, he said.
That means that the Treasury Department will have finished the rules governing most — but not all — of the 18 tax credits created or remade by the Inflation Reduction Act, President Joe Biden’s signature climate package, by the end of his term. More than two years after that law’s passage, many of the potential beneficiaries — including electric utilities, battery manufacturers, and more — are still waiting to find out exactly how to collect its incentives.
The Treasury hasn’t just been sitting on its hands. Adeyemo told us the department has completed 75 guidance “projects” related to the IRA, a category that includes proposed and final rules as well as some non-binding FAQs and other documents. Citing an analysis from the Rhodium Group, an energy research firm, and MIT, he said that the Inflation Reduction Act has already spurred some $380 billion of private investment in 1,600 clean energy projects nationwide, potentially creating 270,000 jobs.
“This is far out-performing what I think the initial expectations for the law were at this stage,” Adeyemo said. “But as you also know, lots of people want us to finish additional rulemaking.”
The uncertainty has been especially paralyzing for the nascent clean hydrogen industry, as the final guidance for the hydrogen tax credit, section 45V of the tax code, could determine which multimillion dollar projects ultimately get developed. Chief among the Treasury Department’s concerns: It must decide how hydrogen producers who use electrolysis — sending electricity through water to split its molecules — should deal with the indirect carbon emissions associated with drawing power from the grid.
Under the scheme favored by climate advocates, would-be hydrogen makers will have to build enough new renewable capacity to satisfy their energy needs in close to real time. Under a proposal more favored by the industry, producers could buy power from existing nuclear or hydroelectric power plants that currently serve other customers, or simply offset their emissions with solar energy certificates even if they continue to operate when the sun goes down. Draft rules published in December took a strict approach to emissions — and faced fierce pushback not just from industry, but also from Democratic members of Congress and the Department of Energy. Leaders of regional clean hydrogen hubs — which have been awarded grants by a separate $7 billion federal program — argued that strict rules would be fatal to their cause.
There is a lot of money at stake — up to $3 per kilogram of hydrogen produced, equaling many billions over the lifetime of the program — to build a new industry from near-scratch. Some energy modelers fear that if the program is designed poorly, that windfall could subsidize a lot of carbon emissions. Projects that are supposed to help the U.S. cut emissions could end up creating them instead, these groups have predicted, setting the country back two to three percentage points on its greenhouse gas targets.
There are many other open questions about the hydrogen credit, including requirements for producers that make hydrogen from natural gas, instead of from water and electricity. Although hydrogen companies made a flurry of new project announcements right after the Inflation Reduction Act first passed, many have since put those plans on hold as the industry awaits the final rules.
The Treasury received more than 30,000 comments on the initial draft of the hydrogen rules. Though Adeyemo did not comment on the final rules’ substance, he called those comments “quite helpful” and asserted multiple times during our interview that the Treasury has found middle ground.
“Congress has provided a strong enough incentive here that allows us to do two things at once, which is one, make sure that we’re watching for significant indirect emissions, but at the same time creating pathways to do exactly what industry is talking about, which is accelerating the development of the industry here,” he said.
Looming over these decisions is the upcoming election, when a change in control of the White House or Congress could open up the rules to review. Adeyemo acknowledged that the final rules were unlikely to please everyone. But he said that he was “less concerned” about pushback from Congress. He argued that the tax credit was lucrative enough that companies could afford to abide by the requirements Treasury ultimately sets, and that what the industry really wants is “clarity, certainty, and flexibility.”
Companies and environmental groups on both sides of the hydrogen fight — including the energy company Constellation, which operates more than a dozen nuclear plants, and the Natural Resources Defense Council — have already threatened lawsuits if the rules do not align with their priorities. Recent Supreme Court decisions have weakened federal agencies’ ability to defend their own rules in court. But Adeyemo said the department was working hard to design the rules “in a way that is in keeping with congressional intent,” to protect them from such attacks. “We’re now going through the process of making sure that we show our work and how we’ve done that.”
The other tax credit rules the Treasury plans to finalize, while still consequential, have not left such foundational questions up in the air. Companies have already begun building battery factories, for example, under the expectation that they will be able to claim the advanced manufacturing tax credit. The technology-neutral clean power credits don’t even go into effect until next year, and the biggest uncertainty is whether facilities that burn biomass or methane captured from landfills for energy will qualify.
The news also leaves a few industries in the dark. Adeyemo said he couldn’t commit to a timeline for finalizing a tax credit for low-carbon aviation fuel, for example. Final rules for a tax credit for electric vehicle charging equipment are also on the to-do list.
“The challenge, of course, is there’s only so many people here at the Treasury Department who are doing all this work,” Adeyemo said, “so getting through all the 30,000 comments on clean hydrogen and focusing on that means that there’s going to be clear trade-offs.”
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The administration can’t have it both ways on the Clean Air Act.
The Trump administration filed lawsuits this week against four states that are pursuing compensation from oil and gas companies for climate change-related damages. But Trump’s separate aim to revoke the government’s “endangerment finding,” the conclusion that greenhouse gases pose a threat to public health and should therefore be regulated under the Clean Air Act, could directly undercut the legal basis for the suits.
In each of the cases, the Trump administration is arguing that the Clean Air Act preempts the states’ actions. But if the Environmental Protection Agency rules that the Clean Air Act does not, in fact, require the federal regulation of greenhouse gases, that argument could fall apart.
Two of the lawsuits target Vermont and New York for their new “climate superfund” laws that require the companies responsible for the greatest amount of emissions over the last three decades to pay into a fund supporting adaptation and disaster response. The Department of Justice is also suing Hawaii and Michigan to block them from suing fossil fuel companies for damages for climate change-related harms. Neither state had actually filed such a lawsuit yet, although both had expressed interest in doing so. (Hawaii went ahead and filed its suit on Thursday night.)
“I just want to start by saying that these lawsuits by the government are totally unprecedented,” Rachel Rothschild, an assistant professor of Law at Michigan State University, told me when we hopped on the phone. To her knowledge, never before has the federal government tried to preemptively stop a state from filing a liability case against companies.
In an executive order in early April, Trump had directed Attorney General Pam Bondi to “stop the enforcement” of state climate laws and actions that “may be unconstitutional” or “preempted by federal law.” The order singled out lawsuits against oil companies as well as climate superfund laws, calling both a form of “extortion” and a “threat to economic and national security.”
Nevermind that climate change is a major threat to economic and national security, and states have filed these lawsuits and created these laws because they are scrambling to find ways to pay to address the unprecedented damages brought by the increasing severity of wildfires and floods.
Even before Trump took office, Rothschild said, the federal government had warned states that they were going to need to take more responsibility for preparing for and responding to increasing natural disasters. “[States] do not have the resources alone to address this problem,” said Rothschild. “These companies have engaged in an activity that causes external harms that they’ve not taken into account as part of their business practices, they’'re imposing all the costs of those harms on states and citizens, and they should be liable to help us deal with the resulting problems. That’s a very normal activity for tort suits.”
Dozens of states have filed similar lawsuits seeking damages from oil companies. (A Justice Department press release did not say why it was singling out states that had not taken any legal action yet rather than targeting those that had.) Many of these lawsuits have been stuck in a holding pattern for years, though. “Climate superfund” laws are a new legal strategy, modeled on the federal superfund program, that some states are testing to get oil companies to pay up.
The DOJ’s lawsuits claim that states cannot fine oil companies for their emissions because that authority lies with the federal government under the Clean Air Act. That argument is underpinned by the Environmental Protection Agency’s endangerment finding, which stems from a 2007 Supreme Court ruling that greenhouse gases are a pollutant as defined by the Clean Air Act, and therefore the EPA must determine whether these emissions pose a threat to public health. The court said that if the agency finds there is enough scientific evidence to say greenhouse gases are harmful, it must develop regulations to rein them in. EPA officially made this finding in 2009.
This was a big headache for Trump during his first term. He wasn’t allowed to simply repeal Barack Obama’s greenhouse gas rules — by law, he had to replace them. If he’s able to reverse the endangerment finding, however, he could undo climate protection rules and that would be that.
At the same time, he’d make oil companies much more vulnerable. “There is great concern that reversing the finding would open the door to a lot more nuisance lawsuits against all types of energy companies,” Jeff Holmstead, a partner with Bracewell, a lobbying firm, told E&E News. “It would eliminate one of the best arguments that oil companies have used to get lawsuits against them dismissed,” he added.
EPA administrator Lee Zeldin will face an uphill battle in reversing the finding, as there is a mountain of scientific evidence that greenhouse gases cause dangerous climate change. But Zeldin may instead try to argue that the EPA did not consider the cost of addressing these emissions when it made the initial finding — and that the costs of reining them in outweigh the costs of emitting freely.
Legal experts are skeptical this argument will go anywhere, either. In 2012, the D.C. Circuit Court found that the EPA’s endangerment finding should be based on science, not economics. Cost-benefit analyses and other policy considerations are relevant if the EPA finds that greenhouse gases do, in fact, pose a threat, but they “do not inform the ‘scientific judgment’” that the law requires the EPA to make, the judge ruled. Meanwhile, the Supreme Court’s decision last year to overturn “Chevron deference,” a decades-long precedent that gave agencies broad authority to interpret their statutory mandates, could also hurt Zeldin’s case.
Rothschild, for her part, is confident that states’ superfund laws and tort suits are defensible regardless of what happens to the endangerment finding. These actions have nothing to do with the Clean Air Act, she argued, because they are not an attempt to regulate emissions. “They're trying to impose liability for local, environmental, and public health harms from past activities,” she said.
One thing is for certain: Between states’ lawsuits suing oil companies, oil companies’ countersuits, the DOJ’s new lawsuits against states, and probably future suits against any actions the Trump administration takes on endangerment, there’s going to be a whole lot of new case law about greenhouse gases over the next four years.
The fundamentals are the same — it’s the tone that’s changed.
At some point in the past month, the hydrogen fuel cell developer Plug Power updated its website. Beneath a carousel explaining the hydrogen ecosystem and solutions for transporting fuel, the company’s home page now contains a section titled “Hydrogen at Work.”
“Hydrogen is key to energy independence, providing clean, reliable power while reducing reliance on imported fuels,” the text in this new box reads. “Plug’s hydrogen and fuel cell solutions strengthen the energy grid and enhance national security, positioning the U.S. as a leader in the global energy transition.”
It is fairly ordinary website copy, but to a keen reader, the text jumps out as an obvious Trump 2.0 tell. Plug Power — like many green economy companies — has pivoted to meet the political and economic moment, where “energy independence” and “energy dominance” are in and “climate” and “sustainability” are out.
“I am actually shocked every time I look at the website of a climate tech company that still uses the language from 12 months ago, from four months ago — that doesn’t do them any good,” Peter Atanasoff, the managing director and vice president of Scratch Media and Marketing, which helps B2B technology companies and climate tech businesses achieve growth and recognition, told me.
The shift in language is more significant than just brands chasing the latest buzzwords.
The first Trump administration saw broad-based pushback from the business community against Trump’s more inflammatory positions, especially by consumer-facing brands that played to the pussy hat-wearing, brunch-and-protest attitudes of the time. The CEOs of Facebook (now Meta), Nike, and Google issued statements of disappointment when the U.S. pulled out of the Paris Climate Agreement in 2017, and Tesla CEO Elon Musk even dropped out of the president’s business council over the decision. It was, needless to say, a very different time.
During Trump’s second term, he promised “retribution.” Many of the more moderate voices from his first administration are long gone, and there’s a palpable fear among nonprofits and businesses of drawing the wrong kind of attention from Washington, losing grant funding for saying the wrong thing. “The real trigger” for resulting differences in branding between the first and second Trump administrations has been “the change of tone and change of economic policy,” Atanasoff told me. “It is explicit opposition to any of these technologies."
The administration has launched an all-out assault not just on climate policy, but also on the very language of the energy transition. In a February memo obtained by E&E News, the Federal Emergency Management Agency listed 34 words to be erased from official documentation, including “global warming,” “carbon footprint,” “net zero,” and even “green.” As I’ve covered for Heatmap, farmers applying for Department of Agriculture grants have been encouraged to resubmit proposals with climate-focused language removed and “refocus … on expanding American energy production.” And at the National Oceanic and Atmospheric Administration, scientists have quickly learned to pivot to talking about “air pollution” rather than emissions, contending with a banned-words list of their own.
Lobbyists and clean energy companies that want to be in the administration’s good graces have adapted, as well. That has changed the tenor of green business at large. Alexander Bryden, who runs the Washington, D.C. office of Browning Environmental Communications, told me over email that tweaking brand language is “typical after any change of administration, particularly when there are significant shifts in policy.” But especially for organizations in the public eye, “it’s more important than ever to highlight the historic and potential economic benefits of environmental solutions — and show how they are supported by, and benefit, people across the political spectrum.”
The actual fundamentals of green business haven’t changed, though. On the contrary, in the first quarter of 2025, venture capitalists and private equity firms invested more than $5 billion in climate tech startups in the U.S., a 65% increase from the same period a year earlier, according to PitchBook data. While there are certainly obstacles like supply chain uncertainty and tariffs to contend with, especially for clean energy manufacturing, on the whole “it’s still a great time to start a climate startup,” Tommy Leep, the founder of the software-focused venture firm Jetstream, told my colleague Katie Brigham last November. His caveat? “Just don’t call it a climate startup.”
Roger Ballentine, the president of the management consulting service Green Strategies and the chairman of the White House Climate Change Task Force under President Bill Clinton, explained this thinking to me. “It’s what I refer to as climate capitalism, which is the realization that by incorporating climate change and its risks and opportunities into your business strategy, you’re actually going to be a more successful, more profitable, and more competitive company,” he said. Even with the recent economic turbulence, “That hasn’t changed. That’s not going to change.”
Where you do see adjustments, however, is “around the edges,” per Ballentine. Companies are attempting to match the frequency of the administration and, in turn, the broader policy ecosystem — a frequency that tends to be aggressive, assertive, and heavy on words like “dominance” and “security.” It might also take the form of decreasing the volume at which companies had previously shouted their climate bona fides.
Anya Nelson, the senior vice president of public relations at Scratch M+M, said her team has also advised touting “American-made production” in brand messaging, and reframing copy to focus on “the positive impacts and immediate business benefits” of the companies, rather than more idealistic messaging about climate goals that may have had stronger resonance during the Biden administration.
At this point, you may have noticed that I haven’t quoted any corporate brand officers. That’s not because I didn’t try to talk to any. (Even Plug Power, my example at the beginning of this story, didn’t respond to a request for comment on the change in their messaging.) Though the sudden prevalence of terms like “energy dominance” becomes conspicuous once you start to look for them, no one wants to draw the wrong kind of attention from the administration. It’s part of a greater trend of clamming up that my colleagues and I have experienced across sectors in our reporting, and at a time when even the word “green” can give you a black mark, I can’t say I don’t understand.
Ballentine, the Green Strategies president, dismissed reading too much into how language itself changes under President Trump. “If yesterday a new technology company was touting itself as a climate solution, and now it’s touting itself as a way to achieve energy dominance — I don’t care,” he said.
His thinking was more pragmatic. “Good business remains good business,” Ballentine went on. “Around the edges, will things change? Yes. General belt tightening? Yes. Fundamental change of direction? No.”
It might sound like branding agencies are encouraging companies to “play along” with the administration, but Nelson of Scratch M+M stressed that wasn’t what she was trying to say. At the end of the day, “your end goal is to be a viable company, right?” she said. “To be a thriving company that is going to change the world, first and foremost, you need to make sure you don’t go out of business.” The message might be more accurately summarized as “read the room.”
A report from Heatmap’s San Francisco Climate Week event with Tom Steyer.
Last Thursday at San Francisco Climate Week, Heatmap hosted an event with a lineup of industry leaders and experts to discuss the most promising up-and-coming climate tech innovations amidst a backdrop of tariff and tax credit uncertainty.
Guests at Heatmap's event, Climate Tech's Next Winners.Sean Vranizan
First up, Heatmap executive editor Robinson Meyer sat down with Tom Steyer, the billionaire investor and co-founder of Galvanize Climate Solutions, to explore the most promising climate technologies to scale. “No one's going to adopt new technologies to be nice,” Steyer noted. “They're gonna adopt new technologies because they're better, because they're a better deal, because they're cheaper or in some ways solve a pain point for the customer.” Steyer went on to emphasize that there is at least one “transformational and disruptive” idea for every six verticals in the climate industry — for example, measuring carbon sequestration in nature with machine learning andAI, a concept that was “literally unimaginable 5 years ago.”
Tom Steyer and Robinson Meyer.Sean Vranizan
As for the Trump-sized elephant in the room, Steyer encouraged climate tech startups to focus on “good leadership” as well as the willingness to adapt in this uncertain moment. “You’re gonna have hard times, and the world is going to change, and you’re going to have to figure out what to do,“ he said. Steyer also noted that all Americans, not only those working in climate tech, should understand the energy transition as a background condition of their careers. “If you want to be a screenwriter (...) be a screenwriter. But it’s really important that you put [the energy transition] into your screenwriting. If you‘re a banker (...) be a banker with an awareness of this issue. Bank the good stuff, not the bad stuff,” Steyer explained. He finished up the discussion with a remembrance of the late Pope Francis, a “tremendous human being for the planet.”
Sam D'Amico and Nico Lauricella.Sean Vranizan
Also on Thursday was a lightning talk between Nico Lauricella, Heatmap’s CEO and editor in chief, and Sam D’Amico, the founder and CEO of Impulse Labs, which sponsored the event. D'Amico explained that in addition to being an induction stove, Impulse’s Cooktop is “a way to get battery storage into people's homes” — a “concept car” for using batteries in appliances to create a more decentralized grid. Lauricella and D’Amico also discussed the impacts of Trump’s tariffs on clean tech companies like Impulse, with D’Amico advising other founders in the room to build prototypes based on the supply chain and to make sure they have options in terms of where their products are manufactured so they can keep up with changing trade policies.
Impulse's high-power Cooktop on display at the event.Sean Vranizan
Lastly, Heatmap News staff writer Katie Brigham hosted a panel with Gabriel Kra, managing director and co-founder at Prelude Ventures, Clea Kolster, partner and head of science at Lowercarbon Capital, and Rajesh Swaminathan, partner at Khosla Ventures. The group spoke about the unique circumstances facing investors in the climate technology space, what their firms are looking for when investing in the newest climate innovations, and how AI fits into the picture.
Katie Brigham, Clea Kolster, Gabriel Kra, and Rajesh Swaminathan.Sean Vranizan
All three panelists acknowledged that it’s a delicate time for clean tech investors and companies alike. “Volatility and uncertainty are the enemies of running and planning a business,” warned Kra. The true cost of the tariffs is therefore extremely high, Kra explained. Kolster agreed that things are generally gloomy in the investment space, but also highlighted the technologies that are currently thriving. Carbon removal, she pointed out, “is going better than ever. Contracts are being inked right now, in the past few weeks.” The companies and technologies she’s excited about, Kolster added, are building “cheaper, better, faster,” as Steyer pointed out earlier in the evening.
Swaminathan added that there will always be a certain element of risk when it comes to investing in emerging technologies. “Clean tech companies have so many single points of failure,” he said. “And you have to prop up each part with the right leadership team. You have to have strong pillars so that [your company] doesn’t break.”
Guests following the discussion.Sean Vranizan
Sean Vranizan
Sean Vranizan
Sean Vranizan
Sean Vranizan
Sean Vranizan
Guests at SFCW
Sean Vranizan
Thank you to our presenting sponsor, Impulse, as well as our supporting sponsor, V2 Communications, and our event host, IndieBio.