FRANKFURT/GDANSK, July 29 (Reuters) - European companies

focused on clean energy are abandoning expansion plans, bracing

for lower sales or see funding of U.S projects in doubt because

of fears over what a potential election victory for Donald Trump

could mean for their sector.

Trump has dismissed President Joe Biden's policies to fight

climate change as a "green new scam" and is expected to try to

undo much of his administration's work, including the Inflation

Reduction Act (IRA) that offers tax breaks and subsidies to U.S.

and foreign companies investing in sustainable energy.

The law passed in 2022 has acted as a powerful incentive for

European companies from the sector to expand or establish their

U.S. presence, but a spectre of a second Trump presidency is

giving them a pause.

"With a Donald Trump who A) is very opportunistic, B) is

also very polemic and C) is also fairly unpredictable, you have

to ask yourself whether it makes sense to make such a bet,"

Peter Roessner, chief executive of Luxembourg-based hydrogen

firm H2Apex, told Reuters.

Under the IRA, the company could have built a hydrogen tank

production plant in the United States for around a third of the

$15 million in costs. In February, however, Roessner decided to

cancel the plan over concerns that Trump could be reelected even

though the company already had held initial talks with potential

customers.

Market bets that Trump would win back the White House in

November have intensified this month after he was shot at during

an election rally and days later secured the Republican Party

nomination.

Recent polls show a narrowing gap between Trump and Kamala

Harris, the likely Democratic candidate with similar views on

climate to Biden's. Yet Roessner's comments reflect anxiety

among Europe's clean tech firms over what a Trump presidency

could mean and how they are trying to prepare for such a

scenario.

Wood Mackenzie energy data and analytics company reckons it

would put a projected $1 trillion in low-carbon energy

investments at risk by 2050.

Consultancy Roland Berger said that while a full repeal of

the IRA was improbable, a Trump administration could still

jeopardise incentives for electric vehicles, EV charging, solar

power and energy efficiency.

German solar firm SMA Solar issued a profit

warning last month, citing a possible government change in the

United States, the world's second-largest solar market after

China, as one of the risk factors.

The world's largest maker of solar inverters initially aimed

to choose a location for a planned factory in the United States

by the end of June, but is yet to find one, saying it is still

evaluating possible sites in a number of states.

'BOARDROOM HEADACHES'

While SMA is not abandoning its expansion plans for now, the

company told Reuters on July 4 that it "is observing that the

unclear outcome of the presidential elections in the USA is

currently leading to a certain reluctance to invest in renewable

energies locally."

That hesitation is reflected in the performance of clean

tech shares, with the RENIXX index, which tracks the

world's 30 biggest renewable firms, underperforming global

stocks since the assassination attempt.

Orsted, the world's largest offshore wind farm

developer, has been hit particularly hard after Trump said in

May he would target the sector on his first day in office if he

got reelected. Orsted declined to comment.

Some renewable energy companies appear undeterred by the

uncertainty.

German wind turbine maker Nordex, for example,

last month said it would resume production at a mothballed plant

in Iowa, saying the U.S. would remain an important and

sufficiently big market in the future "regardless of political

developments".

Several others, however, report delays as prospective

partners expected to co-fund projects hold off with their

commitments.

Hydrogen firm Thyssenkrupp Nucera has spoken of

delays to final investment decisions concerning U.S. projects, a

factor that drove an outlook cut at its alkaline water

electrolysis unit earlier this year.

The company said while it continued to focus on the U.S., it

was vital how the IRA programme would look like after the

election. It said strategic investors with a long-term focus on

the cleantech sector were likely to resume projects earlier in

the face of continuing uncertainty than those who are more

opportunistic.

Norwegian rival Nel said it was yet to make an

final investment decision for a planned production facility in

Michigan, which was contingent on the demand for its products in

the U.S. market.

The uncertainly over the U.S. election outcome and its

impact is starting to affect industries beyond the clean tech

sector. For example, German machinery firm Trumpf reported

earlier this month a 12% drop in U.S. sales for its 2023/24

fiscal year, blaming "geopolitical uncertainties" that made

industrial customers cautious.

This growing complexity companies have to navigate globally

can create "analysis paralysis" when it comes to investment

decisions, said Marcus Berret, global managing director at

Roland Berger.

"Boardroom headaches have increased considerably as a

result."

($1 = 0.9220 euros)