As the corporate decarbonization commitments increase, so does the confusion about what these claims represent. […]
European Commission President Ursula von der Leyen has just announced a new partnership towards achieving net-zero emissions with Breakthrough Energy Catalyst, part of a group of organisations, founded by Bill Gates. For the European cleantech ecosystem, this translates to a mobilised investment of up to €820M between 2022-2026 to build large-scale, commercial demonstration projects. The European Investment Bank will also be joining the partnership.
“With our European Green Deal, Europe wants to become the first climate-neutral continent by 2050. And Europe has also a great opportunity to become the continent of climate innovation. (…) Our partnership will support EU businesses and innovators to reap the benefits of emission-reducing technologies and create the jobs of tomorrow,” says Ursula von der Leyen.
Making cleantech solutions competitive in Europe
At this point, the world needs to get from 1 billion tons of carbon dioxide to zero, while still meeting human basic needs. The Breakthrough Energy Catalyst program aims to support the financing and development of decarbonisation technology solutions through public-private partnerships. Bringing together both sectors can increase investments in large-scale demonstration projects, which are urgently required.
The European Commission and Catalyst will invest together in a portfolio of climate-smart technology projects, based in the EU. The partnership is targeted at technologies with a high-impact potential to reduce greenhouse gas emissions in line with the Paris Agreement, but which are currently too expensive and uncompetitive with incumbents to get scaled. Catalyst will address the early deployment funding gap for these technologies and provide a structure to accelerate their commercialisation.
Initially, the partnership targets the following sectors:
- Green hydrogen;
- Sustainable aviation fuels;
- Direct air capture;
- Long-duration energy storage.
Investments in these areas are expected to have the biggest potential to deliver on the European Green Deal ambitions, including the transition towards sustainable industries in Europe.
What are the financing opportunities?
Partnership support will take the form of grants and financial instruments. EU funding will come from the Horizon Europe program and the Innovation Fund. Interested financial institutions include the European Investment Bank. In addition, Catalyst will mobilize equivalent finance from private capital and philanthropic projects towards the selected projects.
This follows after Horizon Europe and Breakthrough Energy Ventures successfully established a €100M investment fund back in 2019 to fight climate change. It has already made possible investments across major energy-related sectors.
The partnership will also be open to EU member states, wanting to contribute national investments through InvestEU or at a project level. Potential InvestEU implementing partners are invited to express interest in a call, open until 30 June 2021. The Commission will organize a public information session before the deadline to present the partnership opportunities.
In the upcoming months, the European Commission and Breakthrough Energy will work further on finalizing the setup steps for the partnership program.
“Our commitment to developing these innovations will make the difference between a future where everyone can live a healthy, productive life, and one where we constantly deal with crises,” says Bill Gates.