Europe catches up on clean tech venture investment


Venture capital investment in clean technology continued strongly in 2009 despite the financial crisis, with European investment declining by just 12% as opposed to 42% in North America, according to market researchers Cleantech Group and Deloitte.

Last year’s clean technology venture investments in Europe, North America, China and India totalled $5.6 billion in 557 deals, a preliminary report compiled by the companies shows. They expect the figures to increase by 5 to 10% once investors have announced all their activities from the past year, making 2009 a record year for the sector in terms of the number of deals struck.

The economic decline took its toll on total venture investment, which was down 33%, but cleantech investment suffered less than other sectors, declining only to 2007 levels. 

Europe has been trailing behind the US when it comes to attracting venture capital for clean technologies (EURACTIV 30/03/09), but it raised its global share to a five-year high of 29% in 2009. The US was still the world leader in attracting cleantech venture capital, but its percentage fell from 72% in 2008 to 62%.

The strength of green investment offers reason for optimism in the wake of the disappointing climate agreement reached at Copenhagen, as investment is going ahead regardless of the absence of an ambitious global treaty.

“Record levels of activity from investors, governments and corporations in 2009 demonstrated that the market for clean technologies continues to strengthen regardless of any non-binding global climate change agreement,” said Nicholas Parker, executive chairman of Cleantech Group. “In parallel to trying to reach carbon agreements, governments spent the year earmarking hundreds of billions of dollars for clean technology in pursuit of economic growth.”

With changed policy priorities, the private sector is becoming more optimistic about green business opportunities, which translated into increased corporate and utility investment despite the global downturn. Last year, the sector attracted around a quarter of all global venture investment capital, outdoing all others including software and biotechnology, according to the research.

Solar was the most popular clean technology among venture investors with a 20% share. It was followed closely by transportation and energy efficiency, which received a major boost from Europe, where efficiency more than doubled its share to 19%.

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