European firms cite the US’s willingness to embrace disruptive technologies as a key reason for locating their greentech projects in the country, underscoring that Inflation Reduction Act (IRA) incentives aren’t the only factor drawing investors across the Atlantic. 

UK and EU investors including UK tyre start-up Enso and Norwegian solar firm NorSun collectively announced some $1.16bn-worth of US sustainability-related projects at the SelectUSA Investment Summit in Maryland from June 23-26.  

On the event sidelines, European firms told fDi that the US’s pro-tech culture is boosting its credentials for green investments, giving the country an edge over their home region despite the latter’s political and corporate leadership on sustainability. 

“Industries in the US are less shy to adopt new technologies than in Europe,” said Michael Suess, executive chairman of advanced materials provider Oerlikon. The Swiss-headquartered group is moving its additive manufacturing activities — which has a smaller environmental footprint than traditional manufacturing — out of its original hub in Germany and consolidating operations in North Carolina due to the US’s greater market acceptance for disruptive technologies and growing customer base such as semiconductor firms.

“The US has a totally different market dynamic [to Europe]…. As a tech company, I need a high-tech environment, and the best environment is where we are going,” said Suess. 

Igor Kocis, CEO of Slovakian-founded geothermal power technology provider GA Drilling, “fully agrees” that the US is more receptive to disruptive technologies than elsewhere in the world. It is one reason why the firm in 2022 chose Houston as the launchpad to commercialise its drilling solution, which accesses geothermal resources more efficiently than current methods. 

Europe is a “great environment to create ideas”, but when looking to scale a project, you must go “where you can find the best talent, where there are [fewer regulatory] restrictions on activities needed to finalise disruptive systems,” he added. “We definitely found that in the US.”

Mr Kocis also pointed to US government processes being quicker than EU-level decisions, a less risk-averse attitude among US businesses, and the level of entrepreneurship among the average employee being stronger than in Europe. “This hunger for innovation and to do things better and faster is higher here,” he added.

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A $1.16bn windfall

Among early-stage firms, the US’s availability of risk capital is another draw. “Everyone who’s in the venture space knows that Americans are able not just to invest in disruptive technologies, but also disruptive technologies at scale,” said Gunnlaugur Erlendsson, CEO of London-headquartered start-up Enso. 

At the Investment Summit, the low-emission tyre manufacturer announced plans to build a $500m carbon-neutral technology campus in the US, with shortlisted states including Colorado, Nevada, Texas and Georgia. “We’d love to do this in the UK as well as in Europe. But in terms of timing, the demand we’re getting already from the US market is driving our decision,” said Mr Erlendsson. “As well as the partnerships we have with investors and other partners who want to see us succeed at scale.”  

Other reasons why Enso chose the US for its campus — which will integrate research, development and production — is the country’s comparatively speedy planning processes and lower energy costs. 

Other European firms to announce cleantech projects at the Investment Summit include Norwegian solar energy company NorSun which is planning a $620m wafer manufacturing project in Oklahoma, Schneider Electric which pledged $24m to expand its manufacturing facility in South Carolina, and Italian transformer producer Westrafo which is building a $12m facility in Ohio. 

Cleantech-related investment in the US has surged since the IRA was introduced in August 2022, with many European business leaders saying the incentives play a big role in their investment location decisions. But foreign cleantech firms at the Investment Summit told fDi that while IRA makes the US a conducive business environment, it is not the main reason they are investing in the country.

Their comments come despite Europe’s leading sustainability credentials. The region outpaces the US on regulations such as supply chain rules and its carbon border adjustment mechanism, corporate social responsibility standards, and inflows into funds dedicated to environmental, social and governance assets.

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