By Diego Pavia, CEO at InnoEnergy
Europe’s progress on the path to electrification is undeniable. Entire sectors – once dominated by fossil fuels – are being transformed. This shift is the result of the EU’s unwavering commitment, enshrined in law through the European Climate Law, which mandates net-zero emissions by 2050.
A wave of demand- and supply-side measures has followed to accelerate decarbonisation. On the demand side, the Fit for 55 package sets ambitious emissions reduction targets. On the supply side, the Net-Zero Industry Act (NZIA) ensures that at least 40% of Europe’s clean tech needs are met with domestic production by 2030.
This is a commendable strategy, built on a rules-based framework which has created a strong pipeline of clean industrial newcomers. But with public finances stretched thin, implementation has been slow. Europe continues to struggle with translating breakthrough research into commercial, industrial-scale innovations. And in the meantime, the rules of the game are changing.
In the US, another dramatic U-turn on climate policy – combined with an America First agenda and an erratic trade policy – has made Washington an increasingly unreliable partner, both in the transition to electrification and in broader security matters.
Meanwhile, China’s dominance in clean technology is no accident. For over a decade, Beijing has pursued a deliberate industrial strategy: vast state subsidies, control of critical minerals, and aggressive global expansion. A tremendous manufacturing muscle and a sluggish internal demand has as a consequence flooded markets with low-cost exports and entrenched itself in many major clean tech supply chains. China is 5-10 years ahead. Europe must now close the gap on strategic sectors, taking learnings from Asia’s approach two decades ago.
But Europe’s long-term commitment should not be overlooked. The steady march towards cutting emissions by over 50% by 2030 presents vast investment opportunities, particularly in hard-to-abate sectors like steel, aluminium, fertilisers and cement. Unlike Washington’s shifting priorities or Beijing’s state-controlled model, the EU still has what investors crave: regulatory certainty for long-term investment.
But to fully secure its position as the global destination for clean tech investment, there are a number of decisive steps to be taken. The EU needs smart and effective trade measures to prevent market distortions while ensuring fair competition. A sharper industrial strategy – one that blends investment incentives with strategic temporary and long-term protections, like demand-side incentives, ramp up and production support, and import duties, will be critical over the next 4–5 years. They should be maintained until European clean tech firms can scale and compete with heavily subsidised Asian manufacturers.
The Clean Industrial Deal is Europe’s bid to do just that. We have the potential, the talent and the industrial base to lead the clean tech economy, but words must now translate into action.
InnoEnergy’s bold plan to take the industrialisation of clean tech to the next level
When the stakes are high and transformation is tough, Europe needs partners that can turn ambition into reality. Since 2010, InnoEnergy, with its 1400+ partner strong ecosystem, has been doing just that: industrialising homegrown clean tech innovation and scaling European champions. Companies that we invested in such as Verkor, GravitHy, Skeleton Technologies, CorPower Ocean, and Stegra – to name a few – are starting to transform entire sectors.
Despite challenging market conditions, our commitment to stay the course is maintained. In fact, we are stepping up our role as Europe’s leading early-stage impact investor.
To bridge Europe’s growth equity gap – critical for scaling companies before they generate revenue – InnoEnergy will be partnering with established European fund managers to create new funds and unlock the capital needed for expansion. As part of this effort, last year we announced the launch of the EBA Strategic Battery Materials Fund with Demeter, aimed at ensuring a secure and competitive supply chain for EU battery cell makers. As we scale up our funding arm, we hope to see similar outcomes across various value chains, supporting clean tech companies in multiple sectors.
Building on our success in developing European value chains for batteries, photovoltaics, and green hydrogen, we intend to expand into additional clean tech markets, to continue muscling up Europe’s strength in clean technologies across new emerging sectors. At the core of this effort are three criteria: traceability, sustainability, and circularity. Every value chain must be built on these principles to build long-term industrial strategy with lasting progress.
We will also continue to build and develop high-impact industrial ventures to join our growing roster of company builders, which to date include Verkor, GravitHy, FertigHy, Holosolis and Repono. These ventures are driving industrial decarbonisation and unlock new market opportunities.
With this plan in place, InnoEnergy current portfolio requires up to 2030 €160 billion of equity, project finance and debt. Is that realistic? Since 2010 our portfolio has mobilized €34 billion. Now our companies are more mature, and will mobilize this volume.
We are accelerating the next wave of European clean tech champions, strengthening the continent’s industrial base, and ensuring Europe remains at the forefront of the global energy transition.
The ambition is bold. But the course is set.
Are you joining us?
