Around €40 billion is being injected into the European economy by the EU executive in a bid to stimulate green job creation. Another €3.9 billion of the European economic recovery plan has been ring-fenced for green R&D and infrastructure projects.
Adding in investments by national governments brings the total to around €90 billion. However, critics say this is a fraction of the €150 billion invested by China and the funds have yet to trickle down to SMEs.
The European Commission has published an eco-innovation brochure highlighting areas where growth is envisaged, including tourism, recycling, hospitality and buildings. Three quarters of the proposals for eco-innovation projects submitted to the Commission in 2008 came from SMEs.
The document stresses the importance of targeting smaller businesses in developing new green industries, but also notes that between 60% and 70% of industrial pollution is produced by small businesses.
The new consultation document on Europe in 2020 sets out the new Commission's desire for a "smarter, greener social market" economy (EurActiv 25/11/09).
On top of this, the EU's Competitiveness and Innovation Framework Programme (CIP) includes an intelligent energy initiative targeted towards SMEs.
Despite the concerted effort from Brussels to drive green growth, the picture across Europe is mixed, with some national governments backing companies in the renewable energy sector and others focusing on a broader range of green technologies.
Industry leaders in the UK have been ramping up the pressure on the government to set a clear policy and regulatory framework to encourage investment in green industries, fearing Europe is falling further behind the US and China.
The Sunday Times newspaper, which runs an annual 'Rich List' of wealthy businesspeople, has now published a 'Green Rich List'. It shows Britain is home to just 10 of the world's top 100 entrepreneurs in new industries, including clean coal, electric cars and wind energy. The US, by comparison, has 35, while China has 17.
Critics say the UK has sent conflicting signals to industry on key energy issues like the future of nuclear power.
However, there have been some success stories. The wave energy industry in Scotland and Wales has been growing, and this month Scotland's First Minister Alex Salmond launched a new hydro-electric device known as Oyster. The demonstration project is already feeding the national grid with power for homes in the Orkney Islands. The project was developed with support from enterprise and research councils in Scotland, in an effort to provide capital to young green companies.
Funding remains a barrier to green industry in the UK and elsewhere. The opposition Conservative party, which analysts suggest will be in power after next year's general election, is promising to set up a "green investment bank". This is designed to help finance environmentally-friendly technologies and businesses, and reward households for recycling.
The French national recovery plan includes €45 billion in green economic growth. This represents 35% of the planned investment between now and 2020. Projects in the transport, building and energy sectors have been prioritised.
A study by the Boston Consulting group, published in June 2009, estimated the plan would create 600,000 jobs in new green sectors over the next decade.
However, critics note that the study was commissioned by the government and say it is difficult to envisage how SMEs will fit into the plan. French MEP Corinne Lepage has called for the evolution of green industries to foster the development of small businesses in France. She said opportunities should not be the preserve of multinational corporations.
In Germany, old factories that once made mining equipment have been revamped to manufacture parts for wind-power generators, subsidise by public funds. Higher taxes on energy help support the transition to a greener economy.
Greener buildings and fuel-efficient cars are also priorities for the German government as it embarks on one of the more ambitious national efforts to go green.
Other small projects have also helped, such as an SME set up by biologist Peter Krost which produces cosmetics from algae. The company has been supported by the Enterprise Europe Network (EEN) which helps SMEs develop their businesses and find partners.
Krost has also devised a system for certifying products produced through sustainable and organic aquaculture, a move that could spur growth in a new niche market.
The Polish government has supported green energy development through its National Fund for Environmental Protection and Water Management. The fund will provide more than one billion zlotys (€241 million) this year in loans to companies that invest in renewable sources of energy.
The move is part of the government's stimulus package aimed at boosting businesses during the downturn. The first phase of the loan programme took place earlier this year, with the next round starting next month (December).
The programme will help entrepreneurs seeking investments for at least 10 million zlotys (€2.4 million), with the maximum loan to one company reaching 50 million zlotys (€12.05 million). Firms benefiting from the scheme can get a reduction in repayments of up to 50%.
Witold Maziarz, spokesman for the National Fund, says that the programme is meant to support small and medium-sized investment projects. "Bigger projects will not run under this project because we assume that big investors do not have problems with raising capital," says Maziarz.
He added that the National Fund plans to start a loan programme to individuals wishing to build household sources of renewable energy. These loans should be available in mid-2010.
By the year 2020, Poland plans to achieve a 15% "green energy share" in its total production of electricity. In September this year the first biogas power plant was opened in the village of Liszkowo in northern Poland. The plant was built by a company called Agrogaz from Poznań and processes mainly waste from the food industry.
The Kozloduy International Decommissioning Support Fund provides support for Bulgarian companies willing to raise their energy efficiency or to produce renewable energy. The fund was established as a support instrument for the decomissioning of part of a Bulgarian nuclear power plant.
Contributors of the fund include Austria, Belgium, Denmark, France, Greece, Ireland, the Netherlands, Spain, Switzerland and the United Kingdom. More than €170 million has been committed in contributions from the European Union and a portion of this money is in the form of credits to SMEs in Bulgaria. The credit line is operated by the European Bank for Reconstruction and Development.
At the start of 2009, new facilities for saving energy in a medium furniture producer in central Bulgaria were built. The project cost €200,000, and was financed by a loan of €180,000. As a result, the company will save about 2,600 megawatthours in electricity and heat annually. This represents a 400 tonne reduction in annual carbon emissions.
A spokesperson for the Ministry for Industry and Trade (MIT) in Prague, Tomáš Bartovský, told EurActiv that SMEs' green investments are mostly financed using EU money. In particular, the Operational Programme 'Enterprise and Innovation' (OPPI) and its subprogramme on ECO-ENERGY have been harnessed for this purpose.
The Czech government budget is contributing some eight billion crowns (around €300 million) to the programme from 2008 to 2013, representing 15% of its expenses. According to Bartovský, MIT focuses more on co-financing projects based on EU funds than on creating its own programmes.
In the Czech Republic, SMEs can also benefit from the Green Savings programme, based on funds raised from selling Kyoto permits to Japan and other countries. The Green Savings programme focuses on support for heating installations utilising renewable energy sources but also investment in energy savings in refurbishments and new buildings.
The Romanian government currently has no strategy for investing in green projects for SMEs. The political crisis has even affected the implementation of a government decision which would make possible the sale of emissions certificates, with resulting funds earmarked for investment in large energy plants.
Ionut Purica, an expert in energy and environmental problems at the Romanian Academy, told Green Report: "At one moment even on the website of the Ministry of Economy there was a government decision that mentioned sales of AAUs [Assigned Amount Units], in order for green investments to be made, so this money would be used for several projects to which Romania agreed to in the Accession Treaty."
One of the main objectives of the current innovation policy of the Slovak Republic is to create a national innovation system including regional innovation structures, incubators, innovative centres, consulting centres and other elements. The Slovak government considers this as a way to bring support activities as close to entrepreneurs as possible, particularly to SMEs.
Measures adopted to ease the impact of the financial crisis on companies include several green initiatives, such as the reduction of energy consumption and air pollution, and support for R&D and eco-innovation.
The private sector is also expected to benefit from a technology transfer scheme, which will provide SMEs with the tools to cut energy consumption.
€500,000 is also available for innovation start-ups as part of a plan to support around 300 businesses per year. A further €72 million has been set aside to support the improvement of building insulation.
The president of the Slovak association of small enterprises, Vladimír Sirotka, stressed that the programme is not designed for big firms but for about 400 SMEs. Other schemes include subsidies for solar panels and biomass boilers, as well as measures to simulate R&D in SMEs.