As Cleantech for Europe announced record 2021 investment figures, the second Cleantech for Europe Summit on 12 January 2022 dived into the numbers, examined the trends to watch during 2022, and hosted a series of lively debates around how policy can turn these positive signals into EU climate and industrial leadership.
“Europe will not and cannot reach its 2030 targets without paying a lot of attention to cleantech innovation,” said Ann Mettler, VP Europe of Breakthrough Energy.
Policy can significantly impact the trajectory to net zero, said Diederik Samson, Head of EVP Timmermans Cabinet. When the EU laid out its hydrogen strategy in 2020, the 2030 target of 6GW looked ambitious. One year later the project pipeline already exceeds this figure. In light of innovation’s positive impact on progress towards climate neutrality, Diederik Samsom urged innovators to strive to bring clean technologies to market. “Europe needs you,” he said. “We will do whatever we can to support you.”
Deploying cleantech innovation at scale
Anders Forslund, CEO of Swedish aviation scale up Heart Aerospace, recounted his company’s journey towards a battery-powered aircraft. "We've shown that you can build an electric motor the size of a jet engine. Now it's about scaling up.”
Europe is strong in research and innovation, and is seeing a huge groundswell of demonstration projects for industrial innovation. But as Per Klevnäs, Partner at Material Economics explained, "the financing conditions are not there for scale-up investment decisions which will drive cost reductions". Policy can play a role, said Forslund, for instance "by showing airlines there is an incentive structure to invest in new technologies".
However, policy and funding are not the only barriers to scaling up innovation, Jean-David Malo, Director of the European Innovation Council commented.
A policy framework to unlock private climate investment
Opening the second panel discussion, EU lawmaker Sirpa Pietikäinen, Rapporteur for the Taxonomy Regulation, talked about the need for harmonised, science-based indicators to measure what is green. Capital is not lacking, but needs to be redirected.
Marilyn Waite, Managing Director of the Climate Finance Fund, added that it is "important to distinguish between the value of a stock, and the dry powder we can actually deploy."
Panellists expressed diverging views on the funding available for cleantech ventures: BlackRock Vice Chairman Philipp Hildebrand sees capital being “reallocated in line with the journey to net zero”, whereas venture capital investor and World Fund Founding Partner Danijel Visevic that constraints around fundraising from institutional investors mean that many brilliant founders cannot raise the funds they need to grow their businesses.
Both agreed with MEP Pietikäinen that measuring what qualifies as a green investment is an issue.
The Path to a Net Zero Building Stock
In the final session of the Summit, DG ENER’s Deputy Director-General (DDG) Mechthild Wörsdörfer and EU lawmaker Niels Fuglsang shared their vision of an innovative regulatory framework to decarbonise and improve the EU’s building stock. The Renovation Wave Strategy aims to double the renovation rate and foster deep renovations. “75% of EU buildings are energy inefficient,” said DDG Wörsdörfer, “There is a correlation between the worst buildings and the energy vulnerable.”
Energy efficiency can help EU countries to mitigate electricity price volatility, said MEP and Energy Efficiency Directive Rapporteur, Niels Fuglsang.
Regulation has been a powerful catalyst for innovations in building operational efficiency, said Demeter IM Managing Partner Stéphane Villecroze. We can expect a tipping point in financing building renovations, where public funding is no longer needed.
If progress has been made on the operational front, the construction sector, and especially how we use and reuse materials, is an issue still to be tackled, said Building Transparency Executive Director Stacy Smedley.
"The discussion needs to move from regional to global, to harmonise policy and compliance so that clean products can scale across regions," she added.