Key Takeaways:
- Policy Shifts: The new U.S. administration and 2024 global elections are reshaping climate policies, influencing energy transition and industrial strategies.
- Tech Innovation: Green hydrogen, carbon capture, and climate intervention technologies are gaining traction, with major projects set to launch in 2025.
- Investment Growth: Tax equity and credit transfer markets are expanding, driving funding for renewable energy and decarbonization projects.
A Transforming Policy Landscape
2025 marks a turning point for climate policy and sustainable finance. With the U.S. administration signaling significant changes in energy regulations, project permitting and environmental reviews could see major shifts. These changes, alongside evolving trade and industrial policies, will influence global climate negotiations at COP30 in November.
“I’ll be closely watching climate, industrial and trade policy developments—both domestically and internationally,” said Heather Zichal, Global Head of Sustainability at JPMorgan Chase. “With the U.S.’s role expected to shift in the climate negotiations, I’ll be tuning in to how global players like China, Brazil, and Europe will step up to the plate and drive the agenda.”
Meanwhile, the demand for liquefied natural gas (LNG) is expected to rise, particularly for powering data centers and industrial energy needs.
“Data center energy demands, ongoing transition needs, and global market dynamics continue to drive LNG growth,” said Kathleen Milazzo, Managing Director, Energy, Corporate Banking.
Decarbonization and Climate Technology Advancements
Despite policy uncertainties, the drive toward clean energy continues. Investment in renewables, nuclear power, and carbon capture is accelerating globally. Europe is leading with large-scale carbon capture and storage projects.
“In Northwest Europe, we’re seeing significant momentum around large carbon-capture and storage hubs,” said Hannes Kofler, Managing Director, Energy, Power & Renewables, Investment Banking. “Operators and emitters are moving from planning into action, finalizing investment decisions, and beginning construction.”
Green hydrogen is set to scale, with Europe’s first industrial-scale plants expected to come online this year. “Europe’s first industrial-scale green hydrogen plants are expected to come online in 2025, drawing close attention from investors,” Kofler added.
Additionally, emerging climate intervention technologies are gaining investor confidence.
“Watch for innovative companies securing venture capital funding in 2025, particularly in carbon removal,” said Dr. Sarah Kapnick, Global Head of Climate Advisory at JPMorgan.
Innovative Financing Structures for Sustainability
New financial mechanisms, including tax equity and credit transfer markets, are playing a crucial role in expanding decarbonization efforts. Investors are focusing on methane reduction, carbon capture, and clean energy manufacturing.
“The tax credit transfer market is entering a new phase of growth,” explains Rubiao Song, Head of Energy Investments, JPMorgan. “Corporate participation is unlocking significant capital for renewable development in the years ahead.”
Large-scale tax equity deals are shaping the market as hybrid tax equity and credit transfer structures streamline funding. “The closing of some mega tax equity deals—whether investment tax credit (ITC) or production tax credit (PTC)—will demonstrate how deeply the market has developed since the Inflation Reduction Act,” Song added.
Client-Led Decarbonization Efforts
Several companies are leading the transition:
- Generate Capital secured $1.2 billion in corporate credit facilities to advance sustainable infrastructure.
- Constellation Energy announced a $26.6 billion acquisition of Calpine Corporation, creating the largest clean-energy portfolio in the U.S.
- AtmosZero is commercializing Boiler 2.0, a scalable solution to decarbonize steam.
- Atomo Coffee is reimagining coffee production by eliminating coffee beans to reduce environmental impact.
As businesses navigate sustainability trends in 2025, investment in green innovation and regulatory adaptation will be critical to success.
