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Why permitting reform could break the political alliance that produced America’s most significant climate law

The U.S. climate coalition is under serious strain.
The tension has been brought to a head by last month’s debt-ceiling compromise, which enacted a variety of reforms to the National Environmental Policy Act and exempted the long-debated Mountain Valley Pipeline from federal environmental review. While environmental groups have decried the concessions as “a colossal error … that sacrifices the climate,” clean-energy trade groups are praising them “an important down payment on much-needed reforms.” This gulf now threatens to disintegrate the political alliance that, less than a year ago, won the Inflation Reduction Act (IRA), its most tangible accomplishment and by far the country’s most significant climate law.
The differences over permitting reform aren’t just a disagreement about tactics. Rather, they reflect fundamental changes within three of the most important factions within the climate coalition — the environmental movement, the clean energy industry, and the Washington-centric group I’ve termed the green growthers. Facing these changes and their implications is critical to preserving the political foundations of federal climate action.
Ever since passage of the IRA unlocked massive fiscal resources for decarbonization, the climate coalition has been split on how best to put that money to work. While nearly everyone recognizes the need to substantially increase the pace at which clean energy infrastructure gets deployed, division centers on the question of permitting reform. To even name the debate is to invoke a factional diagnosis: the view that environmental laws are hobbling decarbonization by preventing clean energy infrastructure from getting built quickly enough — or even at all. This perspective has rapidly gained momentum across a bipartisan community that includes self-styled centrists within the climate coalition.
Permitting reform is unraveling the climate coalition because it reawakens a fundamental, unresolved disagreement over how to decarbonize. Its timing adds to these tensions: bipartisan legislation to curtail national environmental law has arrived, not accidentally, just as the clean energy industry has become most capable of splitting from the broader climate coalition that helped create it.
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The oldest faction in today’s climate coalition, and the most diffuse, is the environmental movement. Its mainstream wing has roots in the principles of preservation, and its largest organizations have spent multiple generations fighting for clean air and water, and ecologically healthy lands and species.
Its environmental justice wing, by contrast, emerged as racial justice activists combined civil-rights and environmental-protection principles to address historically unequal pollution burdens that have concentrated health risks and environmental damages in disempowered communities of color. Only in the last few years, after decades of discoordination, disinterest, and exclusion, have preservationist institutions become more attentive to the legacy of environmental racism. The movement has now coalesced, however incompletely, around a broader and more inclusive environmental vision.
Though preservationist and environmental-justice approaches can still lead to different priorities, the new environmental movement is at its most unified when it opposes fossil fuel production. The movement’s history of civil disobedience and legal combat have taught it to keep fossil fuels in its crosshairs — not only because of the social and environmental harm fossil fuel projects cause, but also because fights against fossil fuels mobilize the public, clarify the stakes, and yield tangible improvements for local communities and environments.
Though both wings of the environmental movement fought hard for the IRA, the law does almost nothing to directly constrain fossil fuel production. Instead, the IRA largely aims to reduce greenhouse gas emissions not by preventing those emissions, but rather by boosting the production and use of low-carbon energy — along with generous subsidies for storing carbon dioxide, often in conjunction with oil production or fossil fuel combustion. Accordingly, the environmental movement has redoubled its efforts to pair the law’s clean energy subsidies with new fossil fuel restrictions.
The environmental movement’s discomfort with a subsidies-only approach to decarbonization is probably better known than the shifting politics of the clean energy industry. As the new environmental movement has coalesced, clean energy has matured into a fully-fledged industry, both in the U.S. and around the world. Until the past few years, the nascent clean energy industry wielded little political muscle, depending instead on the political support and lobbying assistance of environmental groups. Not that long ago, renewable energy was more expensive, less familiar to regulators, and supported by fewer subsidies than fossil energy systems. As a result, clean energy companies depended heavily on the environmental movement’s political support to survive and grow.
Over the past half a decade, technological progress and policy victories achieved in coalition with the environmental movement have vaulted key technologies like wind, solar, and batteries into commercial maturity. Those gains are now locked in. The IRA provides at least 10 years of new federal clean energy tax credits, ending the boom-and-bust cycle of short-term extensions that held the clean energy industry together for most of the previous two decades. With falling costs and fiscal tailwinds, the clean energy industry no longer relies on the environmental movement’s lobbying muscle for commercial success.
The clean energy industry’s maturation has led to more profound differences with the environmental movement that eclipse a simple re-alignment in relative power. As the clean energy industry has grown, it has come to share the fossil energy industry’s preference for more permissive regulatory regimes and fewer environmental protections. In the pre-commercial era, climate-conscious jurisdictions like California drove clean energy development through supportive environmental policy. In recent years, though, the clean energy industry has grown faster and profited more in places like Texas, and for the same reason the fossil fuel industry has: because Texas offers open markets and few restrictions on energy development. As the clean energy industry’s policy priorities have shifted, its growing lobbying apparatus has followed suit, leading groups like the American Clean Power Association to collaborate with fossil fuel companies in pursuit of environmental deregulation.
Activists and policymakers focused on rapid, massive clean energy development make up a third critical faction of the national climate movement. Many in this group work in and around the Biden administration and have come to the climate fight not from the environmental movement, but from other areas such as industrial policy, national defense, some strands of organized labor, and electoral politics. They have brought their prior priorities — job creation, domestic manufacturing, and stable energy prices — to their climate politics. In the wake of the IRA, they remain focused on lowering the remaining barriers to rapid clean energy development.
These often center-left climate actors have only cohered into a distinct faction in the past five years, as enthusiasm for so-called “supply-side progressivism” has given them a common language with which to articulate a set of climate solutions founded on proactive government support for private reindustrialization. For some green growthers, deregulation is a necessary precondition to decarbonization, and since many also believe that clean energy will — with the IRA’s help — outcompete fossil fuels, they see fewer risks to reforming environmental law than the environmental movement does.
In part, the conflict over permitting reform has grown bitter because the term gets used to refer to many different policy proposals. Depending on the speaker and the audience, it can mean sweeping changes to how environmental laws govern new infrastructure projects; tailored tweaks to environmental review; more resources to strengthen administrative capacity and expedite permitting reviews; or changes to the process for building transmission lines and connecting power plants to the grid. This tangle of meanings has undermined the climate coalition’s ability to negotiate its internal differences and prioritize consensus solutions to the challenge of rapid clean-energy development.
More fundamentally, though, the environmental movement, the clean energy industry, and the green growthers are clashing over permitting reform because it has forced them to confront their ongoing disagreement about how to achieve decarbonization.
To many in the environmental movement, and especially on the climate left, most permitting reform proposals double down on what they see as a worrying tenet of the IRA: its dependence on competition and market dynamics to slash fossil fuel production. The environmental movement is familiar from long experience with this kind of market thinking, which promises that present development and the damage it entails will eventually unlock future benefits. As the environmental movement as a whole has become more concerned with historical pollution burdens, that bargain looks worse, and less trustworthy, than ever.
Many permitting reform proposals, including the newly-enacted language of the debt-ceiling deal, exacerbate these concerns by targeting the environmental movement’s oldest and most effective legal tools for defeating fossil fuel projects. At the same time, these proposals still omit any of the constraints on fossil fuels that the environmental movement believes necessary for decarbonization.
The environmental movement has responded with deployment-focused proposals of its own that aim to speed clean energy development without weakening environmental law. However, even the most straightforward of these proposals — such as appointing a fifth commissioner to the Federal Energy Regulatory Commission — have repeatedly been deprioritized by clean-energy groups and green growthers. In the wake of the debt ceiling deal, which included none of the environmental movement’s reform priorities but substantially weakened environmental review, the movement is mobilized and angry.
To the green growthers, by contrast, rapid decarbonization cannot happen without permitting reform. According to the IRA’s market-decarbonization logic, the best and most politically plausible way to drive fossil fuels out of American energy markets is to displace them with cheaper and more abundant clean energy. At the same time, events such as the gas-price shock of 2021 — and its damage to Biden’s popularity — has reinforced their existing belief that suppressing fossil fuel extraction without first creating massive new clean energy production will risk serious political backlash. This theory of change has led green growthers to be simultaneously sympathetic to the clean energy industry’s deregulatory wishlist, and skeptical of the environmental movement’s focus on constraining fossil fuel production.
These factions’ divergent theories of decarbonization have offered a wedge to those within the climate coalition who believe rapid, effective clean energy development has become incompatible with rigorous environmental and social protections. Anti-coalitional voices, especially within portions of the clean energy industry, increasingly see permitting reform as an opportunity to split the climate coalition, excising the environmental movement from the climate coalition and creating a new, climate-inflected industrial alliance.
Most green growthers understand that such a split would deprive the existing coalition of its popular wing at a critical moment, threatening the political viability of climate progress. Though the growthers believe that the IRA’s clean-energy manufacturing boom will build a powerful new political coalition in favor of decarbonization, that coalition does not yet exist.
Environmental protection, by contrast, is extremely popular across America today, and the environmental movement has repeatedly proven its ability to mobilize public support. Though the clean energy industry no longer needs the environmental movement’s political muscle to turn a profit, the climate coalition as a whole may struggle to maintain political support for decarbonization without it, especially as climate change destabilizes the country’s energy systems and the right continues to oppose rapid decarbonization.
To understand why, you don’t need to look farther than Texas, which is something of a proving ground for the three factions’ competing beliefs about how deregulation may shape decarbonization.
In recent years, Texas provided strong evidence for the clean energy industry’s assertions that, whatever the environmental and social costs, less regulation can speed the deployment of renewable energy. It likewise bolstered green growthers’ claims that cheap, plentiful renewables can displace fossil energy.
But suddenly, Texas is also proving the environmental movement’s counter-argument. The state’s legislature has just created a new set of generous rules and tax subsidies that support new gas-fired power plants while hampering clean energy development. Though state lawmakers are transparently motivated by gas-industry lobbying and culture-war fixations, they have justified the legislation by arguing that Texas’ increasingly unreliable grid needs more gas plants to keep the lights on.
Such claims, however dishonest, will only grow more plausible to many voters as climate-exacerbated disasters and the energy transition itself strain infrastructural systems in the years to come. Without permitting structures or robust state environmental laws, Texan climate activists are ill-equipped to fight a possible new wave of gas plants, and Texas’ future decarbonization is now in peril.
Whereas last year, Texas’ clean energy boom seemed likely to continue driving fossil fuels out of the market and emissions down, now Texas’ new IRA-style subsidies and weak environmental protections look more likely to leave the state with more energy production of all kinds. Though Texas will continue to add clean energy, its decarbonization remains in doubt.
Permitting reform is threatening the national climate coalition because it cuts to the heart of a longstanding philosophical disagreement about what it will take to actually achieve decarbonization. It has arrived as the climate coalition’s major factions are transforming in ways that themselves sharpen the conflict. Good-faith advocates of decarbonization in all camps should be concerned that, in the wake of the debt-ceiling deal, a new round of fractious permitting-reform fights will split the climate coalition into separate camps with irreconcilable theories of climate action.
The result, though ideologically purifying, would be politically disastrous.
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With policy chaos and disappearing subsidies in the U.S., suddenly the continent is looking like a great place to build.
Europe has long outpaced the U.S. in setting ambitious climate targets. Since the late 2000s, EU member states have enacted both a continent-wide carbon pricing scheme as well as legally binding renewable energy goals — measures that have grown increasingly ambitious over time and now extend across most sectors of the economy.
So of course domestic climate tech companies facing funding and regulatory struggles are now looking to the EU to deploy some of their first projects. “This is about money,” Po Bronson, a managing director at the deep tech venture firm SOSV told me. “This is about lifelines. It’s about where you can build.” Last year, Bronson launched a new Ireland-based fund to support advanced biomanufacturing and decarbonization startups open to co-locating in the country as they scale into the European market. Thus far, the fund has invested in companies working to make emissions-free fertilizers, sustainable aviation fuel, and biofuel for heavy industry.
It’s still rare to launch a fund abroad, and yet a growing number of U.S. companies and investors are turning to Europe to pilot new technology and validate their concepts before scaling up in more capital-constrained domestic markets
Europe’s emissions trading scheme — and the comparably stable policy environment that makes investors confident it will last — gives emergent climate tech a greater chance at being cost competitive with fossil fuels. For Bronson, this made building a climate tech portfolio somewhere in Europe somewhat of a no-brainer. “In Europe, the regulations were essentially 10 years ahead of where we wanted the Americas and the Asias to be,” Bronson told me. “There were stricter regulations with faster deadlines. And they meant it.”
Of the choice to locate in Ireland, SOSV is in many ways following a model piloted by tech giants Google, Microsoft, Apple, and Meta, all of which established an early presence in the country as a gateway to the broader European market. Given Ireland’s English-speaking population, low corporate tax rate, business-friendly regulations, and easy direct flights to the continent, it’s a sensible choice — though as Bronson acknowledged, not a move that a company successfully fundraising in the U.S. would make.
It can certainly be tricky to manage projects and teams across oceans, and U.S. founders often struggle to find overseas talent with the level of technical expertise and startup experience they’re accustomed to at home. But for the many startups struggling with the fundraising grind, pivoting to Europe can offer a pathway for survival.
It doesn’t hurt that natural gas — the chief rival for many clean energy technologies — is quite a bit more expensive in Europe, especially since Russia’s invasion of Ukraine in 2022. “A lot of our commercial focus today is in Europe because the policy framework is there in Europe, and the underlying economics of energy are very different there,” Raffi Garabedian, CEO of Electric Hydrogen, told me. The company builds electrolyzers that produce green hydrogen, a clean fuel that can replace natural gas in applications ranging from heavy industry to long-haul transport.
But because gas is so cheap in the U.S., the economics of the once-hyped “hydrogen economy” have gotten challenging as policy incentives have disappeared. With natural gas in Texas hovering around $3 per thousand cubic feet, clean hydrogen just can’t compete. But “you go to Spain, where renewable power prices are comparable to what they are in Texas, and yet natural gas is eight bucks — because it’s LNG and imported by pipeline — it’s a very different context,” Garabedian explained.
Two years ago, the EU adopted REDIII — the third revision of its Renewable Energy Directive — which raises the bloc’s binding renewable share target to 42.5% by 2030 and broadens its scope to cover more sectors, including emissions from industrial processes and buildings. It also sets new rules for hydrogen, stipulating that by 2030, at least 42% of the hydrogen used for industrial processes such as steel or chemical production must be green — that is, produced using renewable electricity — increasing to 60% by 2035.
Member countries are now working to transpose these continent-wide regulations into national law, a process Garabedian expects to be finalized by the end of this year or early next. Then, he told me, companies will aim to scale up their projects to ensure that they’re operational by the 2030 deadline. Considering construction timelines, that “brings you to next year or the year after for when we’re going to see offtakes signed at much larger volumes,” Garabedian explained. Most European green hydrogen projects are aiming to help decarbonize petroleum, petrochemical, and biofuel refining, of all things, by replacing hydrogen produced via natural gas.
But that timeline is certainly not a given. Despite its many incentives, Europe has not been immune to the rash of global hydrogen project cancellations driven by high costs and lower than expected demand. As of now, while there are plenty of clean hydrogen projects in the works, only a very small percent have secured binding offtake agreements, and many experts disagree with Garabedian’s view that such agreements are either practical or imminent. Either way, the next few years will be highly determinative.
The thermal battery company Rondo Energy is also looking to the continent for early deployment opportunities, the startup’s Chief Innovation Officer John O’Donnell told me, though it started off close to home. Just a few weeks ago, Rondo turned on its first major system at an oil field in Central California, where it replaced a natural gas-powered boiler with a battery that charges from an off-grid solar array and discharges heat directly to the facility.
Much of the company’s current project pipeline, however, is in Europe, where it’s planning to install its batteries at a chemical plant in Germany, an industrial park in Denmark, and a brewery in Portugal. One reason these countries are attractive is that their utilities and regulators have made it easier for Rondo’s system to secure electricity at wholesale prices, thus allowing the company to take advantage of off-peak renewable energy rates to charge when energy is cheapest. U.S. regulations don’t readily allow for that.
“Every single project there, we’re delivering energy at a lower cost,” O’Donnell told me. He too cited the high price of natural gas in Europe as a key competitive advantage, pointing to the crippling effect energy prices have had on the German chemical industry in particular. “There’s a slow motion apocalypse because of energy supply that’s underway,” he said.
Europe has certainly proven to be a more welcoming and productive policy environment than the U.S., particularly since May, when the Trump administration cut billions of dollars in grants for industrial decarbonization projects — including two that were supposed to incorporate Rondo’s tech. One $75 million grant was for the beverage company Diageo, which planned to install heat batteries to decarbonize its operations in Illinois and Kentucky. Another $375 million grant was for the chemicals company Eastman, which wanted to use Rondo’s batteries at a plastics recycling plant in Texas.
While nobody knew exactly what programs the Trump administration would target, John Tough, co-founder at the software-focused venture firm Energize Capital, told me he’s long understood what a second Trump presidency would mean for the sector. Even before election night, Tough noticed U.S. climate investors clamming up, and was already working to raise a $430 million fund largely backed by European limited partners. So while 90% of the capital in the firm’s first fund came from the U.S., just 40% of the capital in this latest fund does.
“The European groups — the pension funds, sovereign wealth funds, the governments — the conviction they have is so high in climate solutions that our branding message just landed better there,” Tough told me. He estimates that about a quarter to a third of the firm’s portfolio companies are based in Europe, with many generating a significant portion of their revenue from the European market.
But that doesn’t mean it was easy for Energize to convince European LPs to throw their weight behind this latest fund. Since the American market often sets the tone for the global investment atmosphere, there was understandable concern among potential participants about the performance of all climate-focused companies, Tough explained.
Ultimately however, he convinced them that “the data we’re seeing on the ground is not consistent with the rhetoric that can come from the White House.” The strong performance of Energize’s investments, he said, reveals that utility and industrial customers are very much still looking to build a more decentralized, digitized, and clean grid. “The traction of our portfolio is actually the best it’s ever been, at the exact same time that the [U.S.-based] LPs stopped focusing on the space,” Tough told me.
But Europe can’t be a panacea for all of U.S. climate tech’s woes. As many of the experts I talked to noted, while Europe provides a strong environment for trialing new tech, it often lags when it comes to scale. To be globally competitive, the companies that are turning to Europe during this period of turmoil will eventually need to bring down their costs enough to thrive in markets that lack generous incentives and mandates.
But if Europe — with its infinitely more consistent and definitively more supportive policy landscape — can serve as a test bed for demonstrating both the viability of novel climate solutions and the potential to drive down their costs, then it’s certainly time to go all in. Because for many sectors — from green hydrogen to thermal batteries and sustainable transportation fuels — the U.S. has simply given up.
Current conditions: The Philippines is facing yet another deadly cyclone as Super Typhoon Fung-wong makes landfall just days after Typhoon Kalmaegi • Northern Great Lakes states are preparing for as much as six inches of snow • Heavy rainfall is triggering flash floods in Uganda.
The United Nations’ annual climate conference officially started in Belém, Brazil, just a few hours ago. The 30th Conference of the Parties to the UN Framework Convention on Climate Change comes days after the close of the Leaders Summit, which I reported on last week, and takes place against the backdrop of the United States’ withdrawal from the Paris Agreement and a general pullback of worldwide ambitions for decarbonization. It will be the first COP in years to take place without a significant American presence, although more than 100 U.S. officials — including the governor of Wisconsin and the mayor of Phoenix — are traveling to Brazil for the event. But the Trump administration opted against sending a high-level official delegation.
“Somehow the reduction in enthusiasm of the Global North is showing that the Global South is moving,” Corrêa do Lago told reporters in Belém, according to The Guardian. “It is not just this year, it has been moving for years, but it did not have the exposure that it has now.”

New York regulators approved an underwater gas pipeline, reversing past decisions and teeing up what could be the first big policy fight between Governor Kathy Hochul and New York City Mayor-elect Zohran Mamdani. The state Department of Environmental Conservation issued what New York Focus described as crucial water permits for the Northeast Supply Enhancement project, a line connecting New York’s outer borough gas network to the fracking fields of Pennsylvania. The agency had previously rejected the project three times. The regulators also announced that the even larger Constitution pipeline between New York and New England would not go ahead. “We need to govern in reality,” Hochul said in a statement. “We are facing war against clean energy from Washington Republicans, including our New York delegation, which is why we have adopted an all-of-the-above approach that includes a continued commitment to renewables and nuclear power to ensure grid reliability and affordability.”
Mamdani stayed mostly mum on climate and energy policy during the campaign, as Heatmap’s Robinson Meyer wrote, though he did propose putting solar panels on school roofs and came out against the pipeline. While Mamdani seems unlikely to back the pipeline Hochul and President Donald Trump have championed, during a mayoral debate he expressed support for the governor’s plan to build a new nuclear plant upstate.
Late last week, Pine Gate Renewables became the largest clean energy developer yet to declare bankruptcy since Trump and Congress overhauled federal policy to quickly phase out tax credits for wind and solar projects. In its Chapter 11 filings, the North Carolina-based company blamed provisions in Trump’s One Big Beautiful Bill Act that put strict limits on the use of equipment from “foreign entities of concern,” such as China. “During the [Inflation Reduction Act] days, pretty much anyone was willing to lend capital against anyone building projects,” Pol Lezcano, director of energy and renewables at the real estate services and investment firm CBRE, told the Financial Times. “That results in developer pipelines that may or may not be realistic.”
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The Southwest Power Pool’s board of directors approved an $8.6 billion slate of 50 transmission projects across the grid system’s 14 states. The improvements are set to help the grid meet what it expects to be doubled demand in the next 10 years. The investments are meant to harden the “backbone” of the grid, which the operator said “is at capacity and forecasted load growth will only exacerbate the existing strain,” Utility Dive reported. The grid operator also warned that “simply adding new generation will not resolve the challenges.”
Oil giant Shell and the industrial behemoth Mitsubishi agreed to provide up to $17 million to a startup that plans to build a pilot plant capable of pulling both carbon dioxide and water from the atmosphere. The funding would cover the direct air capture startup Avnos’ Project Cedar. The project could remove 3,000 metric tons of carbon from the atmosphere every year, along with 6,000 tons of clean freshwater. “What you’re seeing in Shell and Mitsubishi investing here is the opportunity to grow with us, to sort of come on this commercialization journey with us, to ultimately get to a place where we’re offering highly cost competitive CO2 removal credits in the market,” Will Kain, CEO of Avnos, told E&E News.
The private capital helps make up for some of the federal funding the Trump administration is expected to cut as part of broad slashes to climate-tech investments. But as Heatmap’s Emily Pontecorvo reported last month from north of the border, Canada is developing into a hot zone of DAC development.
The future of remote sensing will belong to China. At least, that’s what the research suggests. This broad category involves the use of technologies such as lasers, imagery, and hyperspectral imagery, and is key to everything from autonomous driving to climate monitoring. At least 47% of studies in peer-reviewed publications on remote sensing now originate in China, while just 9% come from the United States, according to the New York University paper. That research clout is turning into an economic advantage. China now accounts for the majority of remote sensing patents filed worldwide. “This represents one of the most significant shifts in global technological leadership in recent history,” Debra Laefer, a professor in the NYU Tandon Civil and Urban Engineering program and the lead author, said in a statement.
The company is betting its unique vanadium-free electrolyte will make it cost-competitive with lithium-ion.
In a year marked by the rise and fall of battery companies in the U.S., one Bay Area startup thinks it can break through with a twist on a well-established technology: flow batteries. Unlike lithium-ion cells, flow batteries store liquid electrolytes in external tanks. While the system is bulkier and traditionally costlier than lithium-ion, it also offers significantly longer cycle life, the ability for long-duration energy storage, and a virtually impeccable safety profile.
Now this startup, Quino Energy, says it’s developed an electrolyte chemistry that will allow it to compete with lithium-ion on cost while retaining all the typical benefits of flow batteries. While flow batteries have already achieved relatively widespread adoption in the Chinese market, Quino is looking to India for its initial deployments. Today, the company announced that it’s raised $10 million from the Hyderabad-based sustainable energy company Atri Energy Transitions to demonstrate and scale its tech in the country.
“Obviously some Trump administration policies have weakened the business case for renewables and therefore also storage,” Eugene Beh, Quino’s founder and CEO, told me when I asked what it was like to fundraise in this environment. “But it’s actually outside the U.S., where the appetite still remains very strong.”
The deployment of battery energy storage in India lags far behind the pace of renewables adoption, presenting both a challenge and an opportunity for the sector. “India does have an opportunity to leapfrog into a more flexible, resilient, and sustainable power system,” Shreyes Shende, a senior research associate at Johns Hopkins’ Net Zero Industrial Policy Lab, told me. The government appears eager to make it happen, setting ambitious targets and offering ample incentives for tech-neutral battery storage deployments, as it looks to lean into novel technologies.
“Indian policymakers have been trying to double down on the R&D and innovation landscape because they’re trying to figure out, how do you reduce dependence on these lithium ion batteries?” Shende said. China dominates the global lithium-ion market, and also has a fractious geopolitical relationship with India, So much like the U.S., India is eager to reduce its dependence on Chinese imports. “Anything that helps you move away from that would only be welcome as long as there’s cost compatibility,” he added
Beh told me that India also presents a natural market for Quino’s expansion, in large part because the key raw material for its proprietary electrolyte chemistry — a clothing dye derived from coal tar — is primarily produced in China and India. But with tariffs and other trade barriers, China poses a much more challenging environment to work in or sell from these days, making the Indian market a simpler choice.
Quino’s dye-based electrolyte is designed to be significantly cheaper than the industry standard, which relies on the element vanadium dissolved in an acidic solution. In vanadium flow batteries, the electrolyte alone can account for roughly 70% of the product’s total cost, Beh said. “We’re using exactly the same hardware as what the vanadium flow battery manufacturers are doing,” he told me minus the most expensive part. “Instead, we use our organic electrolyte in place of vanadium, which will be about one quarter of the cost.”
Like many other companies these days, Beh views data centers as a key market for Quino’s tech — not just because that’s where the money’s at, but also due to one of flow batteries’ core advantages: their extremely long cycle lives. While lithium-ion energy storage systems can only complete from 3,000 to 5,000 cycles before losing 20% or more of their capacity, with flow batteries, the number of cycles doesn’t correlate with longevity at all. That’s because their liquid-based chemistry allows them to charge and discharge without physically stressing the electrodes.
That’s a key advantage for AI data centers, which tend to have spiky usage patterns determined by the time of day and events that trigger surges in web traffic. Many baseload power sources can’t ramp quickly enough to meet spikes in demand, and gas peaker plants are expensive. That makes batteries a great option — especially those that can respond to fluctuations by cycling multiple times per day without degrading their performance.
The company hasn’t announced any partnerships with data center operators to date — though hyperscalers are certainly investing in the Indian market. First up will be getting the company’s demonstration plants online in both California and India. Quino already operates a 100-kilowatt-hour pilot facility near Buffalo, New York, and was awarded a $10 million grant from the California Energy Commission and a $5 million grant from the Department of Energy this year to deploy a larger, 5-megawatt-hour battery at a regional health care center in Southern California. Beh expects that to be operational by the end of 2027.
But its plans in India are both more ambitious and nearer-term. In partnership with Atri, the company plans to build a 150- to 200-megawatt-hour electrolyte production facility, which Beh says should come online next year. With less government funding in the mix, there’s simply less bureaucracy to navigate, he explained. Further streamlining the process is the fact that Atri owns the site where the plant will be built. “Obviously if you have a motivated site owner who’s also an investor in you, then things will go a lot faster,” Beh told me.
The goal for this facility is to enable production of a battery that’s cost-competitive with vanadium flow batteries. “That ought to enable us to enter into a virtuous cycle, where we make something cheaper than vanadium, people doing vanadium will switch to us, that drives more demand, and the cost goes down further,” Beh told me. Then, once the company scales to roughly a gigawatt-hour of annual production, he expects it will be able to offer batteries with a capital cost roughly 30% lower than lithium-ion energy storage systems.
If it achieves that target, in theory at least, the Indian market will be ready. A recent analysis estimates that the country will need 61 gigawatts of energy storage capacity by 2030 to support its goal of 500 gigawatts of clean power, rising to 97 gigawatts by 2032. “If battery prices don’t fall, I think the focus will be towards pumped hydro,” Shende told me. That’s where the vast majority of India’s energy storage comes from today. “But in case they do fall, I think battery storage will lead the way.”
The hope is that by the time Quino is producing at scale overseas, demand and investor interest will be strong enough to support a large domestic manufacturing plant as well. “In the U.S., it feels like a lot of investment attention just turned to AI,” Beh told me, explaining that investors are taking a “wait and see” approach to energy infrastructure such as Quino. But he doesn’t see that lasting. “I think this mega-trend of how we generate and use electricity is just not going away.”