EU to miss climate goals unless cleantech innovation scaled, new report concludes

Energize Editors

Energize Editors

Newly-published research from Cleantech Group®, the global authority on clean technology innovation, with the support of Breakthrough Energy, found the EU’s venture capital investment into cleantech from 2011-2020 grew by a remarkable 7.5x to more than EUR 5 billion in 2020.

But research also discovered progress is concentrated on early-stage development and lacks scale-up investment and policy support. The EU attracted 23% of global cleantech seed-stage funding in 2020, but only 7% of global cleantech growth equity funding (compared to 54% for North America). The EU risks missing key climate targets by failing to scale clean technologies and letting promising innovators scale in North America and Asia instead.

Cleantech for Europe is a new initiative launched by Cleantech Group®, with the support of Breakthrough Energy, to help the EU lead the global clean transformation through targeted research and recommendations on EU cleantech investment and policy. The initiative connects EU policy makers to entrepreneurs and investors.

Its first position paper, published today, Making Fit for 55 a green demand shock to scale EU cleantech, analyses the EU cleantech landscape. It advocates for leveraging the EU’s upcoming Fit for 55 regulatory package to create leadership in five key innovation sectors: green hydrogen, green steel, low-carbon construction materials, sustainable aviation and soil carbon. The paper makes the case for a green demand shock that would pull EU innovators to continental scale and maximize climate impact.

“The EU’s climate future is at a crossroads. To lead the race to net zero, and gain a competitive advantage for decades, the EU needs a demand shock to scale clean technologies” said Jules Besnainou, Director, Cleantech Group.

“With the forthcoming ‘Fit for 55’ package, the EU will update almost all of its energy and climate legislation, changing the policy framework for a long time to come. With investment cycles averaging 25 years, what happens in 2050 is essentially being decided today. The stakes couldn’t be higher as only a new generation of clean technologies can lead Europe towards climate neutrality. That is why this study sheds light on persistent challenges in the European innovation ecosystem that urgently need to be addressed – from lack of growth equity and weak demand signals for green products to poor exit routes for successful entrepreneurs” said Ann Mettler, Vice President, Europe, Breakthrough Energy.

Link to research: https://www.cleantechforeurope.com/

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