European CEOs See Opportunity in Trump’s Climate Stance, but not Everyone’s Cheering

The majority of European CEOs, at least those who spoke publicly about Donald Trump’s decision to pull the U.S. out of the Paris Accord, are putting on a brave face. Apart from expressing disappointment, they also showed resilience, positing that cleaner energy sources will thrive regardless. Some even suggested that countries outside the U.S. had gained the upper hand.

“The industries he’s trying to protect, coal, they’re dying industries,” Richard Branson, CEO of Britain’s Virgin Group, said of Trump’s decision.

“Hundreds of thousands of jobs could have been created in the clean energy sector if he had given it his support.”

To be sure, it’s not yet clear exactly what U.S. legislation will be affected by Trump’s move, and to what extent any new rules he proposes, or relaxes, could end up saving American companies money.

Big U.S. and European auto manufacturers all issued statements pledging a commitment to reducing greenhouse gas emissions. The lowdown, however, is that U.S. companies could benefit from a relaxation of Obama era emissions standards rules, at least in the near term.

Renewable energy sources, including wind and solar power, are still being held back by their relatively high cost and limited reliability. But things have changed in recent years, as technological advancement makes projects less reliant on government subsidies.

Investment in clean energy capacity in the U.S. outpaced fossil fuels last year, with around 22GW of wind, solar, geothermal and other renewable facilities connected to the grid.

“Hundreds of thousands of jobs could have been created in the clean energy sector if he had given it his support,” Branson said.

Shell CEO Ben van Beurden said Trump had given companies outside the U.S. an edge.

“The U.S. has a major crop of companies that deliver technologies that are going to be relevant in the energy transition,” van Beurden told the Financial Times. “And one way or another, they also will find themselves probably more disadvantaged than advantaged by the U.S. pulling out of Paris. So I cannot see where the upside is.”

At a big energy conference in Russia, several European CEOs told Bloomberg that renewables would become a greater part of the world’s energy mix, even if governments tried to prop up the fossil fuel sector.

“I’m absolutely convinced that in the medium term, the movement will not be stopped, the shift to a new energy system: decentralized, decarbonized, digitalized,” Gerard Mestrallet, the chairman of French utility Engie, said. “And that is due to technology … and also to a cultural revolution in the minds of people.”

French oil giant Total will continue factoring the effects of man-made global warming into its strategy, CEO Patrick Pouyanne said, while adding: “The United States cannot do anything about the evolution of technologies.”

Like in the U.S., it was hard to find many CEOs enthusiastically supporting Trump’s decision. But, obviously, that doesn’t mean they don’t exist. Indeed, a poll last year by PwC showed climate change was among issues of least concern to the world’s CEOs.

If the recent actions of European steelmakers are anything to go by, it’s clear that not everyone agrees that stricter curbs on emissions are nothing but good for European business.

Last week, the heads of 76 steelmakers, including Belgium’s Arcelor-Mittal and Germany’s ThyssenKrupp wrote to European Union leaders urging them not to impose more carbon costs, arguing it would put them at a competitive disadvantage to countries with softer rules.

“In its current form, the EU emissions trading system favors steel imports from third country competitors that do not have such costs and which have a far higher carbon footprint than steel made in the EU,” the letter said.

It was referring to developing countries such as China. Now, U.S. rivals could be on their backs, too.