General Partner and Chief Executive Officer Pegasus Technology Venture Capital Company | Chairman of Entrepreneurship World Cup. (アニス・ウッザマン).
As the world grapples with climate change and rising energy prices, green technology is more important than ever. Entrepreneurs can benefit by coming up with green technology business ideas to meet the growing market demand. Investors are also paying more attention to the renewable energy sector to improve the world while reaping positive financial returns. Let’s take a look at the latest trends in green technology and related venture capital.
Green investment: stronger than ever
While environmentally friendly solutions such as electric vehicles and solar power may have once been considered fringe products, they are now mainstream as we work together to fight climate change. According to PwC’s Climate Tech 2020 report, venture capital investment in decarbonization solutions totaled $418 million in 2013. That figure hit $16.1 billion in 2019 before climbing to $87.5 billion invested in climate technology between July 2020 and July 2021, according to the Climate Technology 2021 report. The sector has expanded to include carbon removal, agriculture, food waste, renewable energy and decarbonisation of the built environment. The report states that 14 cents of every dollar of venture capital investment goes to climate technology.
The growth of green energy
Renewable energy is on track to set another global record in 2022, despite obstacles such as supply chain bottlenecks and rising costs, according to the International Energy Agency (IEA). Wind, solar and other renewable capacity has increased significantly as businesses and governments see their climate benefits. The falling cost of producing sustainable energy is also helping to drive mass adoption. While there are newer technologies that will take more time to become mainstream, I expect major technological advancements in 2023.
Businesses have evolved their corporate responsibility initiatives to focus more on sustainability. For example, Google claims that Google Maps’ Eco-Routes feature has reduced greenhouse gas emissions by more than 500,000 metric tons. Its approach to climate change includes guiding consumers to make better choices, decarbonizing their operations and supply chains, and using its technology to help businesses and cities determine their carbon impact.
Meanwhile, Apple has made its own operations carbon-neutral and is working toward a 2030 carbon-neutral goal. That means encouraging suppliers to use clean energy and focusing on its Power for Impact program, which aims to help provide clean energy to communities around the world. Intel has committed to achieving net-zero greenhouse gas emissions from its operations by 2040. The company is also working towards its goals of net positive water, zero waste in landfills and 100% renewable electricity.
I expect partnerships — and financial investments — between corporations and greentech start-ups to become more common. Companies now understand that we can’t cool the planet just by reducing emissions; we need to remove carbon from the atmosphere. The UN climate report calls it essential. Frontier, a partnership of Stripe, Alphabet, Shopify, Meta and McKinsey, has invested an initial $925 million in five startups offering carbon dioxide removal (CDR) services. Another group, the Pioneer Alliance — which includes Microsoft, Alphabet, and Salesforce — has pledged $500 million by 2030 to remove CDRs.
Entrepreneurship and innovation
A number of successful startups are innovating in this area, especially in carbon removal. Brilliant Planet is using algae as an affordable solution for large-scale carbon sequestration. The London-based company grows microalgae in open ponds on desert land, enabling its solution without the use of fresh water. Brilliant Planet has built a 30,000 square meter production facility and the world’s largest algae growth pond in Morocco to enable its future growth.
Climeworks absorbs carbon dioxide directly from the air using direct air capture technology. This carbon is permanently stored in the ground so it can never contribute to climate change again. Its website allows anyone to buy or gift climate products; more than 16,000 people in 56 countries have taken action. Also focused on removing carbon, the Blue Planet System aims to mineralize carbon dioxide and store it in the built environment. This helps to offset the negative impact of concrete, which accounts for 8% of global CO2 emissions.
I have no doubt that entrepreneurial innovation will increase across a range of cleantech solutions. More and more companies and governments are interested in electric and hydrogen vehicles, and some states are already banning gasoline vehicles in the future. Solar and wind energy technologies continue to evolve, and there is a growing focus on efficient and affordable renewable energy. Storing renewable energy is crucial, making battery innovation a key aspect of future research.
looking to the future
There is no sign of a slowdown in green tech and venture capital, so now is the time for start-ups, corporations and investors to capitalize on the industry’s success. As we move forward, it remains difficult to predict which elements of green technology will become the most important, so due diligence is more important than ever. Let’s hope that by working together, startups, corporations, and investors will collaborate to find the innovative solutions our world needs more than ever.
The information presented here is not investment, tax or financial advice. You should consult a licensed professional for advice regarding your specific situation.
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