TNW: What’s in Store for Europe’s Climate Tech Ecosystem in 2024
In 2023, climate tech faced challenges with a 40% decrease in venture and private equity investment, reaching a five-year low. Despite this, positive developments included the EU’s Green Deal Industrial Plan, offering over €1 trillion for various eco-friendly technologies. The rise of AI presents opportunities for enhanced efficiency in clean tech, particularly in hard-to-decarbonize sectors.
Looking ahead to 2024, funding challenges persist, but optimism remains. AI’s growth in climate tech applications is anticipated, focusing on specific AI applications rather than large language models. AI’s potential spans energy efficiency, climate forecasting, and innovative solutions in traditionally polluting industries.
However, concerns arise regarding the substantial energy consumption of AI systems, with potential legislation addressing greener computing. The push for sustainability intensifies with the Corporate Sustainability Reporting Directive (CSRD), making ESG reporting stricter.
Investment is expanding beyond energy and mobility into challenging-to-decarbonize sectors like industry and agriculture. The Carbon Border Adjustment Mechanism (CBAM) and increased focus on decarbonizing manufacturing further drive demand for eco-friendly solutions.
Carbon removal technologies gained traction in 2023, with advancements in direct air capture and innovative approaches like enhanced weathering. Transparency and evidence-backed claims become critical in the carbon removal credits market.
The conversation in climate tech is evolving to prioritize adaptation technologies, addressing the impacts of climate change. Water-recycling tech, AI-powered weather forecasting, and solar-powered sensors contribute to climate resilience.
Despite facing challenges, the climate tech sector anticipates increased action in 2024, emphasizing both mitigation and adaptation measures in the face of climate change.
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