European cleantech continues to deliver! EU cleantech investment outperformed both the US and Asia Pacific, with deal sizes increasing notably and late-stage investment doubling since last quarter, despite slightly fewer deals taking place overall.

​​Cleantech deals are happening in more European Union Member States than ever, with deal distribution growing both since last quarter and over last year’s average. This demonstrates that cleantech’s continued growth is not only a once-in-a-generation opportunity for France, Germany or Sweden, but for all of Europe,  from the Atlantic to the Black Sea.

​​While the numbers do look good for Europe quarter-over-quarter, particularly when compared to other economies, the global contraction of venture capital at large since last year leaves EU cleantech VC investment 39% lower in the first half of 2023 than it was in the same period last year.​​

The continued resilience of cleantech innovators and investors should be read as a call to action. Right now, policymakers in Brussels are charged with delivering the Green Deal Industrial Plan, at a time when sustainable policy comes under threat. ​​

Indeed, despite pushback against the 2035 ban on internal combustion engines, investments moved ahead into next generation vehicles. In fact, EV charging infrastructure topped this quarter's biggest deals. This goes to prove that we need strong policy signals and ambitious climate commitments to continue to attract investment in European cleantech.
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While investments have continued to move ahead, securing an ambitious EU Green Deal is vital to keep money flowing into the innovative technologies and companies that can ensure Europe achieves its climate goals while reaping the economic rewards of the green transition. The current set of files moving through the institutions must be designed for maximum effect to achieve their stated purpose of enabling the scale-up of clean technologies.

The historic opportunity that the cleantech transition presents us with is rapidly shrinking. Time is of the essence, as the next 18 months could make or break the EU's chance to be the global leader in this sector. Therefore, if EU institutions allow the laser focus of the Net-Zero Industry Act on cleantech to be broadened to the whole economy, polluters included, we risk squandering our competitiveness in the global cleantech race.

Furthermore, Europe needs to mobilise several times more public funding than what is offered in the Commission’s confusing and less than adequate Strategic Technologies for Europe Platform (STEP) proposal. If STEP does not deliver predictable and sufficient amounts of public funding for cleantech while preserving the integrity of the single market, private investment won’t be unlocked at a level even close to what’s needed to deploy net-zero technologies at an economy wide scale. An EU Sovereignty Fund providing dedicated financial support to strategic cleantech sectors for a net-zero economy is crucial for securing Europe’s competitiveness and resilience.

This is not a time for business as usual – nor for lowered ambition. Instead, policymakers must step up their game, and ensure that the 2020s do not become European cleantech’s lost decade.