"Cleantech is absolutely crucial to meeting our climate ambitions."
Head of Timmermans Cabinet, EUROPEAN COMMISSION
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.
"We now need to operationalise ambitious targets."
VP Europe, BREAKTHOUGH 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.”
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.
"Scaling innovation isn't only about funds. We need the right people as well."
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.
"We do not lack money in the markets. It is in the wrong places due to the wrong incentives."
Rapporteur, Taxonomy Regulation, EUROPEAN PARLIAMENT
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.
"Cleantech VC has two pain points.
Regulations and mesurement of what is green. There is no tool that can define what is green and what is not."
Founding Partner, WORLD FUND
Both agreed with MEP Pietikäinen that measuring what qualifies as a green investment is an issue.
"We need a global standard to mobilise large sums of capital into transition, the taxonomy today is not designed for that."
Vice Chairman, BLACKROCK
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.”
"There is a correlation between the worst buildings and energy poverty."
Deputy Director General, DG ENER
Energy efficiency can help EU countries to mitigate electricity price volatility, said MEP and Energy Efficiency Directive Rapporteur, Niels Fuglsang.
"When we become more efficient and save energy we will import less gas, and this will help consumers save money."
Rapporteur, Energy Efficiency Directive, EUROPEAN PARLIAMENT
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.
"The other part of building decarbonisation is the construction sector: how we use and reuse materials."
Executive Director, BUILDING TRANSPARENCY
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."