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Can cleantech in Europe get the investment it needs? And whose new technologies will win out?
We spoke to several industry executives who revealed that cleantech businesses need significant investment in the form of both government subsidies and the private sector. But the question is, will it be forthcoming? And which technologies currently being developed are most likely to benefit most from these much-needed cash injections to push their innovations forward?
Carbon capture grabs attention
Of the technologies in the market today, carbon capture has gained some real interest from the media and, in turn, the investor community.
Econic Technologies is a unique catalyst technology business that recycles waste carbon dioxide into a feedstock in the plastics manufacturing industry. It has raised $25 million to date from investors such as IP Group (a UK-based intellectual property business investing in technology companies).
Econic’s CEO, Dr Rowena Sellens, emphasised that in the process of gaining investment, “early-stage cleantech firms need to show that they are economically viable and are not reliant on carbon taxes or subsidies to succeed”.
Taking a longer-term view
Nicky Chambers is the former CEO of Origen Power another carbon capture company whose technology efficiently breaks down limestone into lime and high purity CO₂ that can then be used or stored safely underground at low cost. He spoke to us about the current challenges facing cleantech companies.
Because of investor appetite for this sector, says Chambers, “investors are used to the current markets, so they cannot see the disruption. They definitely need to start looking longer term if we are going to make the transition and also realise that the economics of now will not be the economics of 2050.”
For the investor community, the increase in pressure from governments and large industrial parent companies to grow their sustainability footprint is yet to register.
Returns still triumph over the potential impact of these cleantech businesses on climate change and the environment.
Former CEO of the Green Investment Bank (now the Green Investment Group under Macquarie ownership), Shaun Kingsbury, spoke to us about how, unsurprisingly, “investors, as always, are looking for good risk-adjusted returns”.
Despite a growing body of evidence showing that major shareholders are challenging investors to look for strong, sustainable businesses. Kingsbury emphasised that from his experience of the investor community, “only a very, very small minority of investors are willing to trade returns for green impact”.
French dimension
Through Odgers Berndtson’s Head of Cleantech in Canada, Elaine Grotefeld, we also spoke to French investor Demeter, where Investment Director Maureen Le Baud has led several investments for the company into the cleantech space since joining in 2016.
On the breakdown of investor appetite, Le Baud mentioned that at Demeter they have seen “very few insurance companies or banks investing in so-called ‘Venture Cleantech’ funds”, and that whilst there are a few European VCs dedicated to the cleantech sector, “most invest quite early stage” with cleantech start-ups needing to look for strategic investors for later-stage funding rounds.
Innovation across Europe
Across Europe, there are numerous exciting innovations,
As Dr Rowena Sellens comments “improvements in sustainability…is moving up the agenda as the industry comes under increased pressure from customers, consumers and shareholders to recognise that society can’t just wait for climate change to just go away.”
Aside from the benefits of carbon capture technologies, the global transportation market promises a greater reduction in emissions. Better electric vehicle charging infrastructure is growing. For example, Chargemaster (created by BP in collaboration with leading electric vehicle manufacturers) and Pod Point, which claims to be “building the charging infrastructure needed to enable mass adoption of electric vehicles”, with investment from Legal & General.
Lilium, a Munich start-up that has attracted more than $100 million in funding, is developing flying electric taxis.
“Nothing like the Lilium Jet has ever existed before,” say Lilium’s founders. “Its iconic design and pioneering technology bring the vision of fully-electric transition flight to reality. It’s the new mobility service for the modern, urbanised age.”
The Netherlands to Sweden
In the Netherlands, another exciting cleantech business that promises a major impact on fossil fuel usage is Black Bear. The business has developed a technology that results in the upcycling of all used tyres into their finalised Carbon Black product. These are “sustainable, one-to-one replacements of many ASTM furnace Carbon Blacks in tyres, inks, coatings and technical rubber goods”. The company’s long-term goal is “to upcycle all waste tyres and thus reduce oil use, with CO2 emission reductions equivalent to planting more than one billion trees”.
Meanwhile, in Sweden, Ferroamp has created ‘EnergyHub’, a product that allows the average consumer to store, use and manage their own solar energy in the home. “EnergyHub-based solar production gives you solar when the sun is shining, but also the unique phase balancing that gives you the lowest possible main fuse so you can charge an electric car as efficiently as possible. All data is stored in our cloud service, so you can monitor the system’s function and reduce your electricity costs.”
Even in the field of renewable energy, cleantech start-ups are providing advances that promise both efficiencies and more critically, reductions in costs that will drive an increase in certain technologies. One good example is Oxford [UK] PV™, whose perovskite solar technology will “accelerate the growth of solar energy generation globally.”
Clearly, the cleantech sector across Europe is delivering and will continue to deliver solutions for the world’s climate change challenges, providing the funding keeps flowing. The question is: can they do it fast enough?
