The global transition to a net-zero future hinges on a competitive ClimateTech industry. Europe's energy autonomy and the goal of a 55% greenhouse gas emission reduction by 2030 require robust ClimateTech innovation. The industry's projected value of EUR 600 billion by 2030 underscores its significance. However, both China and the US have surged ahead in clean energy investments, emphasizing the need for rapid action in Europe.

The recent decision by Marvel Fusion, a German nuclear fusion startup, to establish a laser fusion factory in collaboration with Colorado State University highlights the urgency of strengthening Europe's ClimateTech position. 

“If the EU does not match some form of support like the US and China, the fusion energy industry and others such as batteries are unlikely to develop well and survive in the EU,” said Lucio Milanese, Co-Founder of Proxima Fusion, a European ClimateTech startup featured in the report as a case study.

To support the net-zero transformation, substantial public and private investments are essential. However, the current investment landscape falls short. The International Energy Agency (IEA) estimates that annual global clean energy investments of USD 4.5 trillion are needed by 2030. The EU alone requires EUR 1.5 trillion annually between 2021-2030, which is EUR 700 billion more per year than current levels. According to the study, EUR 560 billion of this would have to come from the private sector and EUR 140 billion from the public sector.

“Europe […] needs to make public financing approvals more efficient and increase investment volumes in European ClimateTech,” said Markko Waas, CEO & Founder of Claims Carbon, a European ClimateTech startup featured in the report as a case study. 

Current annual clean energy investments in the EU are around EUR 400 billion, leaving a substantial gap. The public investment gap for energy alone is approximately EUR 40 billion annually, with an additional EUR 160 billion from the private sector required. Allianz, for its part, will invest an additional EUR 20 billion by 2030 in ClimateTech and CleanTech solutions globally. It is already a major investor in green energy infrastructure, including wind and solar farms, green hydrogen, and green ammonia.

While the EU budget allocates over EUR 578 billion for the green transformation, national initiatives are also emerging. Germany recently announced a EUR 212 billion climate and transformation fund, while France plans a EUR 500 million annual tax credit in support of wind, solar power, heat pumps, and batteries. Benelux and Nordic countries are also launching ambitious climate-related industrial policies. It’s a start, but much more is needed. 

While ClimateTech investments have grown, further efforts are required to create a globally competitive industry. Policy recommendations include streamlining funding, creating a common EU platform for funding access, supporting long-term financing through blended financing, and mandating procurement of climate tech solutions.

“French public and private investors are well positioned to fund EV infrastructure. However, standardization at the European level is crucial, for example in the case of CO2 emission certificates,” said Vincent Gaillard, Deputy CEO of Electra, a European ClimateTech startup featured in the report as a case study.

Other recommendations involve attracting institutional capital, improving capital market conditions, increasing collaboration between the private sector and research institutions, and reducing bureaucratic hurdles.

“If companies want to do an IPO, they will do one. Unfavorable market conditions in Europe will lead to IPOs abroad,” said Arthur Singer, Co-Founder of STABL, a European ClimateTech startup featured in the report as a case study.

Europe has a tremendous opportunity to lead in the ClimateTech industry. However, urgent and concerted efforts are needed from policymakers, investors, and scientific institutions. The time to act is now.

Download the report here.