eu cleantech
quarterly briefing
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3q23

Welcome to your Q3 2023 Briefing

JULES BESNAINOU
Executive Director
To anyone closely following clean technologies in Europe, this last quarter provided a slew of significant milestones.

This was a quarter of stand-out fundraising achievements for EU cleantech scale-ups. Battery-producer Verkor made headlines with a €2 billion fundraise for their gigafactory in Dunkirk – of which €850 billion was raised from venture investors in a Series C, and the rest by a combination of EIB debt and French subsidies. H2 Green Steel announced a €1.5 billion equity round to build the world’s first green steel plant and to set up the giga-scale electrolyser production needed to power it.

H2 Green Steel also made the news by being the first cleantech scale-up to be selected for a large-scale grant under the EU Innovation Fund, which typically go to legacy industrial companies instead of newcomers.

Overall, Cleantech Group tracked €3.7 billion of equity investments into EU cleantech this quarter, making it the third largest quarter in history, and a significant increase on both the previous quarter and last year’s Q3. This is especially impressive in a context of global downturn for venture capital. This quarter also offered the narrowest-ever gap between EU and North American investment into cleantech Congratulations to all the exceptional cleantech companies who made this happen.

But these good news hide a darker reality: that if the EU doesn’t mobilise for the scale-up of clean technologies, companies like Verkor and H2 Green Steel may be the exception, not the rule. Indeed, a massive funding gap remains to scale clean technologies in Europe. Evidence of that was provided by the bankruptcy of Volta Trucks, taking place despite significant traction with partners and demand from customers.

In our recently published open letter to the European Commission, we estimate the EU is facing an investment gap of €50 billion to scale just six of the Net Zero Industry Act technologies by 2030. The gap is likely much larger, when considering the wider set of critical clean technologies needed to achieve the EU’s climate and industrial ambitions.

Cleantech investment is now a top political priority for the EU. Last week, the Commission released its first ever report on cleantech investment. But its findings are overly optimistic, and downplay the impact of the Inflation Reduction Act (IRA), pointing to a lack of data. In fact, recent research by Rhodium Group shows that since the IRA was passed, the US received $213 billion in new clean investment across the economy—a 37% increase from the previous year and a 165% increase from five years ago. The EU needs to acknowledge it risks lagging in the global cleantech race, and step up support to meet its ambitions.

Yes, the EU has been an early-mover in the green transition, and yes, the Green Deal paves the way for the wide deployment of clean energy across the Continent. But the picture is much more challenging when looking at cleantech manufacturing. Our early lead in technologies like electrolysers, long-duration energy storage, green steel and cement needs to be actively nurtured into actual industrialisation. With an EU election looming and a new Commission to take over next year, now is the time to do everything we can, collectively, to make cleantech an even bigger priority than it has become.

Executive Summary

Q3 saw €3.7 billion of equity investments into EU cleantech, the third largest quarter in EU history, and a significant increase on both the previous quarter and last year’s Q3
Late-stage investment increased by 52% on last quarter, in spite of an 18% decrease in deal volume
Early-stage investments dropped in both size and volume
This quarter provides the narrowest-ever gap in EU-North America investment
Europe is leading one of the most mature pathway to steel decarbonisation, Hydrogen Direct Reduction of Iron
The US is leveraging the IRA to compete
For hydrogen-powered steel to actually reduce emissions, the only option is to only use green hydrogen
CBAM will protect European green steel from being undercut, while simultaneously providing incentives for global steel decarbonisation
Read more about H2 Green Steel, which this quarter raised a massive 1.5 billion Euro round to build the world’s first green steel plant
European Parliament upcoming vote on Net Zero Industry Act
EU Institutions to negotiate the details of Electricity Market Design reform and the Critical Raw Materials Act
State of play on the Strategic Technologies for Europe Platform
EU anti-subsidy investigation into Chinese Electric Vehicles
The latest on the European Performance of Buildings Directive
A new package to boost the wind’s industry competitiveness
New EU Commissioners in charge of the green transition
New Commission initiatives
COP28
Carbon Border Adjustment Mechanism entering into force
Cleantech transition dialogues

01

Q3 2023: another strong quarter for EU cleantech investment

3.7
billion

invested in EU Cleantech in Q3 2023

Deal volume fell sharply, while amounts invested increased substantially in continued defiance of expectations.

Investment into EU cleantech
continues to defy headwinds

European cleantech investment continued to defy global headwinds for venture capital (VC), growing stronger than in North America, but less than strongly than in Asia Pacific.
The number of deals closed fell sharply from 189 to 139. Late-stage deal volume fell slightly (from 39 to 32) whereas early-stage deal volume fell considerably (from 150 to 107) back to 2022 levels following a particularly active first half of 2023.
Late-stage investment (series B and growth equity) increased by 52% on last quarter (building on an impressive previous increase of 104%), all the more impressive considering the 18% decrease in deal volume (compared to an increase of 2.9% last quarter). Early-stage investment decreased by 13% on last quarter, while deal volume decreased by 29%. Hence, average EU deal sizes increased across both early- and late-stage deals.
Although EU cleantech investment is holding up better than in North America so far in 2023, with Q3 being the narrowest ever gap in EU-North America investment, EU venture investment in Q3 still only amounts to 64% of North American investment.
EU27 Cleantech Seed, Series A, Series B and Growth investment, 2018 – Q3 2023
EU27 Cleantech Venture and Growth deals by stage, 2018 - Q3 2023

Q3 deal distribution:
geography & sector

Cleantech venture capital deals took place in 17 out of 27 EU member states, compared to 19 last quarter and a quarterly average of 17 in 2022. Efforts must be redoubled to ensure that the cleantech revolution is a growth opportunity for an increasing number of EU countries.
Looking at deal count, the most active countries were Germany, the Netherlands, France, Sweden and Spain. Germany retained its substantial lead from last quarter, whereas activity in France continued to slow down, falling from second to third place after having been tied with Germany for first place in Q1. Deal activity expanded in Sweden and the Netherlands.
Materials & Chemicals sector innovation garnered the largest share of investment this quarter (44%), the largest share ever attained for this sector, which averaged a 5% share of total EU cleantech venture investment between 2020 and 2022. Meanwhile, the share of cleantech venture investment going into Transportation & Logistics collapsed, garnering just 5% of EU investment in Q3 (compared to 27% last quarter).
The strong traction for the Materials & Chemicals sector was driven primarily by Sweden-based innovator H2 Green Steel, which raised a €1.5 billion growth equity round, the 2nd largest ever cleantech equity round in Europe, and a huge milestone for deeply decarbonizing the steel industry, which accounts for roughly 8% of global CO2 emissions.
Deals by Member State, Q2 2023
EU cleantech VC investment by sector, Q2 2023
Q12024_early_Sensors
Sensors
France
€15M
€15M
Q12024_early_Alternativeproteins
Alternative proteins-Q124
Germany
€15M
€15M
Q12024_early_wastemanagementq124
Waste management-q124
France
€21M
€21M
Q12024_early_industrialmaterials
Industrial Materials
France
€23M
€23M
Q12024_early_carbonremovals
Carbon Removals
Germany
€25M
€25M
Q12024_early_energystorage
Energy Storage
Finland
€26M
€26M
Netherlands
€15M
€15M
Q12024_early_transportation
Transportation
Croatia
€99M
€99M
Austria
€20M
€20M
Italy
€15M
€15M
AB2023_early_Construction
Construction
Germany
€45M
€45M
AB2023_early_Hydrogen Fuel Cells
Hydrogen Fuel Cells
France
€46M
€46M
AB2023_early_Nuclear fission
Nuclear fission
France
€50M
€50M
AB2023_early_Supply chain Logistics
Supply chain & Logistics
Germany
€50M
€50M
AB2023_early_EV Charging
EV Charging
Germany
€70M
€70M
AB2023_early_Heat pumps
Heat pumps
Sweden
€86M
€86M
AB2023_early_Carbon Management
Carbon Management
Germany
€100M
€100M
AB2023_early_Green IT
Green IT
France
€100M
€100M
France
€90M
€90M
AB2023_early_Electric Vehicles
Electric Vehicles
France
200M
200M
3Q23__Others__Logistics
Transportation & Logistics
Germany
€177M
€177M
3Q23__Others__Hydro
Green Hydrogen
Germany
€169
€169
Netherlands
€130M
€130M
3Q23__Others__CRM
Critical Raw Materials
Ireland
€184
€184
3Q23__Others__Plastic
Plastic Alternatives
Netherlands
€338M
€338M
Germany
€130M
€130M
3Q23__Others__Energy
Energy & Power
Germany
€685M
€685M
3Q23__Others__EV
EV Batteries
Sweden
1100M
1100M
France
€650
€650
France
€600M
€600M
3Q23__Late__Energy
Energy & Power
Sweden
€45M
€45M
3Q23__Late__Hydro
Green Hydrogen
Portugal
€61M
€61M
3Q23__Late__Agri
Agriculture & Food
Belgium
€72M
€72M
Netherlands
€32M
€32M
3Q23__Late__Solar
Solar
Lithuania
€93M
€93M
3Q23__Late__Construction
Buildings & Construction
France
€106M
€106M
Ireland
€26M
€26M
Netherlands
€25M
€25M
3Q23__Late__EV
EV Batteries
France
€850M
€850M
3Q23__Late__Steel
Green Steel
Sweden
€1500M
€1500M
3Q23__Early__Geo
Geospatial Imagery
Germany
€17M
€17M
3Q23__Early__Transportation
Transportation & Logistics
Germany
€18M
€18M
Spain
€16M
€16M
3Q23__Early__Quantum
Quantum Computing
France
€19M
€19M
3Q23__Early__Energy
Energy & Power
Germany
€25M
€25M
3Q23__Early__Agriculture
Agriculture & Food
Denmark
€30M
€30M
3Q23__Early__Plastic
Plastic Alternatives
Germany
€36M
€36M
Finland
€23M
€23M
3Q23__Early__Construction
Buildings & Construction
Germany
€45M
€45M
Germany
€22M
€22M
2Q23__Late__Carbon
Carbon Management
Luxembourg
€34M
€34M
2Q23__Late__Agri
Agriculture
France
€162
€162
2Q23__Late__EV
EV Charging
France
€252M
€252M
Germany
€153M
€153M
Finland
€66M
€66M
Ireland
€57M
€57M
2Q23__Late_Energy
Energy, Energy Storage & Networks
Germany
€433
€433
Germany
€370M
€370M
Sweden
€90M
€90M
Italy
€41M
€41M
2Q23__Early__Electro
Electronic Devices
Germany
€20M
€20M
2Q23__Early__Biotech
Biotechnology
Germany
€20M
€20M
2Q23__Early__Construction
Buildings, Building Materials & Construction
France
€29M
€29M
France
€20M
€20M
2Q23__Early__Logistics
Transportation, Supply Chain & Logistics
Germany
€41M
€41M
Germany
€29M
€29M
France
€21M
€21M
Austria
€18M
€18M
2Q23__Early__Green-IT
Green IT
France
€91M
€91M
2023-Q1-chart__series-B__geo
Geothermal
France
€45M
€45M
2023-Q1-chart__series-B__waste
Waste Management
Netherlands
€50M
€50M
2023-Q1-chart__series-B__agrifood
Agriculture & Food
Denmark
€65M
€65M
Denmark
€47M
€47M
2023-Q1-chart__series-B__buildings
Buildings & Construction
Austria
€93M
€93M
Germany
€44M
€44M
2023-Q1-chart__series-B__blockchain
Blockchain
No items found.
2023-Q1-chart__series-B__solar
Solar
Germany
€215M
€215M
Italy
€117M
€117M
Sweden
€29M
€29M
2023-Q1-chart__series-A__solar
Solar
Ireland
€15M
€15M
2023-Q1-chart__series-A__heatpumps
Heat Pumps
Netherlands
€15M
€15M
2023-Q1-chart__series-A__fusion
Nuclear Fusion
France
€15M
€15M
2023-Q1-chart__series-A__energy
Energy & Power
Slovakia
€16M
€16M
2023-Q1-chart__series-A__agrifood
Agriculture & Food
Netherlands
€21M
€21M
2023-Q1-chart__series-A__geospatial
Geospatial imagery
Latvia
€28M
€28M
2023-Q1-chart__series-A__transportation
Transportation and Logistics
Germany
€42M
€42M
France
€21M
€21M
Germany
€15M
€15M
2023-Q1-chart__series-A__buildings
Buildings
Sweden
€42M
€42M
2023-Q1-chart__series-A__carbon-management
Carbon Management
Germany
€101M
€101M
2022-Q3-chart__transportation-logistics
Transportation & Logistics
Belgium
€20M
€20M
2022-Q3-chart__carbon-management-02
Carbon Management
Sweden
€45.7M
€45.7M
Germany
€10.9M
€10.9M
2022-Q3-chart__food-waste
Food waste
Sweden
€65.7M
€65.7M
2022-Q3-chart__energy-services
Energy Services
Germany
€214.7M
€214.7M
2022-Q3-chart__green-steel
Green steel
Sweden
€297.8M
€297.8M
2022-Q3-chart__advanced-materials
Advanced Materials, Fuels & Chemicals
Netherlands
€15.1M
€15.1M
Denmark
€11.7M
€11.7M
Netherlands
€11.2M
€11.2M
Denmark
€10.2M
€10.2M
2022-Q3-chart__alternative-proteins
Alternative Proteins
France
€16.8M
€16.8M
Finland
€15.3M
€15.3M
2022-Q3-chart__energy
Energy, Energy Storage & Networks
Netherlands
€30.5M
€30.5M
France
€13.9M
€13.9M
Netherlands
€12.3M
€12.3M
2022-Q3-chart__electric-vehicles-02
Electric Vehicles
Germany
€50.3M
€50.3M
2022-Q3-chart__supply-chain-logistics
Supply Chain & Logistics
Germany
€153.7M
€153.7M
2022-Q3-chart__crop-inputs-02
Crop Inputs
Slovenia
€14.5M
€14.5M
2022-Q3-chart__biomass-waste
Biomass & waste to energy
Germany
€37.7M
€37.7M
2022-Q3-chart__fuel-cells
Fuel Cells
Denmark
€54.4M
€54.4M
2022-Q3-chart__electric-vehicles
Electric Vehicles
Netherlands
€159.7M
€159.7M
2022-Q3-chart__hydrogen
Hydrogen
Germany
€271.3M
€271.3M
2022-Q3-chart__agriculture-food
Agriculture & Food
France
€485.3M
€485.3M
2022-Q3-chart__carbon-management
Carbon Management
Sweden
€11.6M
€11.6M
2022-Q3-chart__hvac
HVAC
Czech Republic
€15.7M
€15.7M
2022-Q3-chart__solar
Solar
Sweden
€22.9M
€22.9M
2022-Q3-chart__crop-inputs
Crop Inputs
France
€23.9M
€23.9M
2022-Q3-chart__construction
Construction
Spain
€37.9M
€37.9M
2022-Q3-chart__ev-charging
EV Charging
France
€180M
€180M
Denmark
€47.2M
€47.2M
Netherlands
€19.9M
€19.9M
Lithuana
€7.2M
€7.2M

Q3 Eu Cleantech
top deals and activities

(Seed and series A)
Early-stage innovation funding drops slightly

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{{3Q23__Early__Plastic}}

{{3Q23__Early__Agriculture}}

{{3Q23__Early__Energy}}

{{3Q23__Early__Quantum}}

{{3Q23__Early__Transportation}}

{{3Q23__Early__Geo}}

(Series B and Growth Equity)
Two megadeals drive late-stage funding growth, but scale-up funding gap remains

{{3Q23__Late__Steel}}

{{3Q23__Late__EV}}

{{3Q23__Late__Construction}}

{{3Q23__Late__Solar}}

{{3Q23__Late__Agri}}

{{3Q23__Late__Hydro}}

{{3Q23__Late__Energy}}

As cleantech matures, the scale-up journey requires a shift from equity financing to debt – a snapshot of top Q3 deals

investor news

€200m

SET Ventures announced its €200M fourth fund with €127M committed to invest in the next generation of technology leaders that will shape the carbon-free energy system of the future.

€200m

NordicNinja, the largest Japanese VC in Europe, announced a second €200 million fund. NordicNinja tackles the world’s carbon footprint with a focus on climate tech, deeptech, and digital society.

€50m

World Fund secured €50 million from KfW Capital and Lithuanian utility Ignitis Group. World Fund is backing entrepreneurs who build climate tech that can save at least 100Mt CO2e emissions per year.

€40m

Greencode Ventures held the first close of the new fund, at €40M. Greencode Ventures specialise in green transition with rapidly scaling digital solutions.

€40m

The European Investment Fund is investing €40 million, with support from the InvestEU programme, into the European climate tech growth equity fund Blume Equity. Blume Equity invests in companies supporting the transition to a low carbon economy and a more sustainable environment.

€20m

The European Investment Fund committed €20 million to the Vireo Electrification Fund I. The Vireo Electrification Fund invests into early-stage start-ups that develop new technologies in the areas of energy supply, mobility, transport, buildings and industry to accelerate the electrification of the energy sector.

02

In focus: Green Steel

€1.488
billion

invested into green steel in eu27

Compared to €243 million in North America

in focus
Green Steel

The EU recently revised its carbon market to reduce the hand-out of “free allocations” and provide a stronger push to the decarbonisation of key industrial sectors, including steelmaking.
Furthermore, the EU has agreed on the implementation of the world’s first Carbon Border Adjustment Mechanism (CBAM), which applies a levy at the EU’s external border for six energy-intensive and traded sectors including iron & steel. The aim is to establish a level playing field with foreign competitors, preventing cheap and carbon-intensive imported steel from undercutting EU steelmakers, while simultaneously providing incentives for global steel decarbonisation.
The revision of the carbon market will gradually level the playing field for sustainable frontrunners in Europe. European steel industry incumbents are also responding to those signals by making their own investments into green steel.
EU energy and climate policy under the Green Deal is also stimulating demand for green steel from large consumers of steel such wind park developers (e.g., Ørsted), automakers (e.g., Volvo) and construction companies (e.g., Skanska) aiming to reduce their environmental footprint. For example, H2 Green Steel has secured offtake agreements with BMW, Scania, Stellantis, and Miele, reducing project risk and making it easier for H2 Green Steel to attract additional equity investments and debt financing.
Europe’s robust energy andclimate policy framework is paying off, as Europe is emerging as a globalleader in green steel production. However, it must redouble its efforts toaccelerate decarbonisation and consolidate its leadership position.
Europe has a competitive advantage in one of the more mature pathways to steel decarbonisation, known as Hydrogen Direct Reduction of Iron (HDRI, e.g., H2 Green Steel, GravitHy). Meanwhile the US is leading innovation in alternative pathways that are emerging, such as aqueous electrolysis (e.g., Electra Steel) and molten oxide electrolysis (e.g., Boston Metal) – and the US Inflation Reduction Act (IRA) has earmarked billions of dollars in subsidies toward steel decarbonisation.
Finally, HDRI only reduces emissions if the hydrogen being used is green, so it will be key for Europe to accelerate the decarbonisation of its power sector by rapidly deploying renewables, while scaling up its electrolyser manufacturing capacity.
VC investment into Green Steel: EU27 vs. North America, 2018 - Q3 2023

eu innovator profile

H2 Green Steel is a developer of large-scale, integrated, digitalised and automated steel plants with near-zero carbon impact by using renewable hydrogen as a reducing agent instead of fossil fuels.
Founded in 2020 and headquartered in Stockholm, Sweden.
Recently raised €1.5bn in growth equity to help finance the world’s first large-scale green steel plant and Europe’s first giga-scale electrolyzer.
The 2nd largest ever cleantech equity round in Europe, this deal is a huge milestone for deeply decarbonising the steel industry, which accounts for roughly 8% of global CO2 emissions – a share which is set to grow absent solutions like the one being developed by H2 Green Steel.
By 2025-26, H2 Green Steel will produce 2.5 million metric tons of steel per year that is 95% decarbonised - i.e., 95% less carbon intensive than conventional primary steel produced using a blast furnace – and plans to produce 5 million tons per year by 2030 in its plant in in Boden, in the north of Sweden.
In time, H2 Green Steel plans to expand production to Iberia, Brazil, and North America, and to achieve complete carbon neutrality.

03

Cleantech policymaking continues at pace

Critical parts of the Fit for 55 package; the series of legislative proposals aiming at reducing the EU’s net emissions by at least 55% by 2030, are being finalised

latest from eu policy

Sustainable products

The European Institutions finalised rules empowering consumers for the green transition. These rules contain measures to improve consumer information on product durability as well as on a ban on greenwashing and other unfair commercial practices. One such measure prohibits environmental claims that a product has a neutral, reduced, or improved environmental impact if said claims are based on unverified greenhouse gas emissions offsetting schemes

Carbon Border Adjustment Mechanism

The EU’s CBAM officially entered into force on October 1, 2023. This initial period, also known as transitional, will last until January 2026. During this period, emissions on goods under certain categories (iron and steel, cement, fertilisers, aluminum, electricity and hydrogen) should be reported when they are imported into the EU. A new accounting mechanism for greenhouse gases (GHG) is being established at the moment, which should yield global convergence on reporting of GHG for the products covered.

Clean Transition dialogues

The European Commission will be organising  a series of clean transition dialogues with the industry to support industrial decarbonisation. The first dialogue already took place and focused on hydrogen.

Taxonomy

The European Commission launched a tool which allows stakeholders to submit suggestions based on scientific and/or technical evidence on new economic activities that could be added to the EU Taxonomy or on potential revisions of existing activities.

New EU Commissioners in charge of the green transition

After the departure of Frans Timmermans from the European Commission, known as the EU Green Deal chief, to stand in the Dutch general elections, his climate action portfolio was assigned to Wopke Hoekstra as Commissioner for Climate Action and Maroš Šefčovic as Executive Vice-President for the European Green Deal.

Electric Vehicles (EV) subsidy investigation

The European Commission initiated am anti-subsidy investigation on imports of EVs originating in China. The investigation will focus on whether: (i) EV imports from China are being subsidised by the Chinese government including indirectly; (ii) there is injury to the EU EV industry from these subsidies; (iii) imposing countervailing measures such as import tariffs would be in the EU's interests.

Wind Power Package

The European Commission launched the Wind Power Package which puts forward a set of actions to support wind energy manufacturing. These actions focus on: permitting, auctions, skills, access to finance and supply chains.

One of the most innovative actions proposed in the package is the issuance of manufacturing guarantees to help free up working capital from manufacturers. We have been advocating for such a tool covering cleantech manufacturing as a whole.

Microplastic pollution

The European Commission proposed new rules in the form of a directive to prevent microplastic pollution from pellets. The new rules include measures to avoid pellet spills, containment of spilled pellets to ensure they do not pollute the environment and ways to clean up after a spill or loss event.

Europe’s position on COP28

Member States adopted Europe’s negotiating position for COP28. Overall, they stress the need for a "global phase out of fossil fuels and a peak in their consumption already in this decade“ and call for the tripling of installed renewable energy capacity and the doubling of the rate of improvement in energy efficiency by 2030.

Energy Performance of Buildings

The European Parliament and Member States are one step closer from agreeing on the final shape of the rules governing energy efficiency and deployment of renewable energy in the building sector. The final agreement is expected in December. Compromises reached in key areas include: minimum energy performance standards, finance, zero emissions buildings definitions, energy performance certificates and e-mobility provisions.

04

What the future holds

What to watch out for

Net Zero Industry Act (NZIA)

In November 2023, the European Parliament as a whole will adopt its position on NZIA, the proposed framework to simplify the investment and regulatory environment for cleantech manufacturing. Its position will differ somewhat from the initial NZIA proposal on topics such as the list of technologies under its scope, deployment target and public procurement.

Electricity Market Design (EMD)

The European Parliament and Member States have started negotiating on the final shape of EMD. Key themes to look out for: public investment support in renewable or low carbon electricity through contracts for difference, power purchase agreements between producers and off-takers, and grid flexibility incentives.

Critical Raw Materials Act (CRMA)

The European Parliament and Member States will enter into negotiations on what the final rules on  CRMA will look like. Key topics to watch: CRM strategic projects which can benefit from streamlined access to finance, measures to improve the circularity of CRMs, and  recovery of CRM from products and waste.

Strategic Technologies for Europe Platform (STEP)

The European Parliament and Member States will soon be entering into negotiations over STEP, the proposed funding arm to boost Europe’s technology competitiveness on cleantech, deeptech, biotech and digital tech. STEP largely relies on the repurposing of funds under existing EU instruments and comes with an additional budget of €10 billion. The recently adopted position of the European Parliament calls for an additional top up of STEP of €3 billion.

European Commission new initiatives

The European Commission unveiled its work programme for 2024 entitled ‘Delivering today and preparing for tomorrow’. Key initiatives for cleantech include: a non-legislative initiative on establishing a 2040 climate target and a communication on water resilience.

COP28

COP28 will be taking place from 30 November to 12 December 2023 in Dubai. At COP28, countries will make a formal assessment of their work to date under the Paris Agreement. Other key topics to watch: developing standards for carbon removals, accounting standards to avoid double counting of emission reductions and operationalization of the loss and damage fund.

What we have been reading

International Energy Agency (IEA) Net Zero Roadmap

In September 2023, the IEA updated its Net Zero Roadmap that aims to set out a pathway to a net zero world by 2050. From the report, it is clear the cleantech innovation is already delivering. In 2021, IEA had estimated that technologies not yet available on the market would deliver nearly half of the emissions reductions needed for net-zero in 2050. Now, the IEA indicates that the number of emissions reduction potential has  fallen to just around 35%.  The IEA also calls for more investment toward clean technologies. In 2023, USD 1.8 trillion globally will be invested in clean energy in 2023. This needs to climb to around USD 4.5 trillion a year by the early 2030s to be in line with net zero emissions by 2050.

IEA report on grids

In October 2023, the IEA published a report taking stock of the world’s electricity grids. The report mentions that over the past five years, investment in power capacity has seen a significant increase of nearly 40%, surpassing USD 750 billion in 2022. In contrast, spending on grid infrastructure has remained relatively stable, hovering around USD 300 billion annually.

International Monetary Fund (IMF) World Economic Outlook

In October 2023, the IMF published its World Economic Outlook, an analysis of  global economic developments during the near and medium term. For the Eurozone, it provides a growth  forecast of 0.7% in 2023 and 1.2% in 2024, down from forecasts earlier this year of 0.9% and 1.5%.

European Securities and Markets Authority (ESMA) study on ESG funds names

In October 2023, ESMA issued a study on the use of language related to ESG factors in EU investment fund names and documentation. The study finds that funds with ESG language in their name provide more extensive ESG disclosures in their investment strategy, while fund managers tend to prefer using generic language to name funds rather than more specific E or S words.

European Investment Fund (EIF) Venture Capital (VC) Survey 2023

In October 2023, the EIF launched a paper looking on the market sentiment and issues related to scale-up financing and EU strategic autonomy. The paper highlights a large share of VCs declared difficulties in finding co-investors, a gloomy exit environment and challenges for securing equity financing for VC portfolio companies.
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Cleantech Investors
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