2023 has been a tough 12 months for the climate industry, with private equity and grants to climate technology startups down more than 40% year-on-year. However, investment levels are expected to increase in 2024 as accumulated public and private capital is deployed and government support across various sectors is strengthened.
Clean energy dominates the investment landscape
Investments in the energy sector totaled approximately $3 trillion in 2023, 50% of which was earmarked for clean energy initiatives.
Jen commented: “Investment trends in clean energy initiatives are likely to continue in 2024, further strengthened by the European Union's unwavering and increasing policy support.
“While investments in clean energy have focused primarily on infrastructure development to date, the next wave is toward software-driven solutions that optimize energy systems and streamline operations through AI, big data, and IoT. In addition, we expect continued growth in investor interest in energy storage solutions due to the proliferation of renewable energy.”
hydrogen
According to Jen, the size of individual investments will increase as hydrogen projects move from the exploration stage to the development stage.
“We expect larger deals and investment as hydrogen projects move from early pilot projects to a stage of growth and expansion. Certain regions of Europe, such as Northern Europe and Scotland, are looking to capitalize on regional advantages and benefit from government support. will benefit from.
“While established projects are slowly growing and looking to scale up, early projects like Waste2H2 and Turquoise Hydrogen are looking to attract potential investment to raise the necessary funding and advance to the next stage. You need to prove your home’s bankability.”
Carbon capture and storage
Carbon capture and storage (CCS) has emerged as an important means to achieve the goal of limiting temperature rise to 1.5 °C, especially when used to produce synthetic fuels.
Jen continued: “To date, the adoption of CCS technologies has been limited due to the lack of scalability of CCS projects, with these technologies removing only 0.1% of carbon dioxide from the atmosphere. However, the potential to reduce technology costs This makes CCS projects more scalable and attractive for investment. Investment in this important area is expected to surge in 2024 as scalability barriers gradually fade. Masu.”
alternative protein
Livestock production accounts for 15% of global greenhouse gas emissions, and investors are considering alternative protein sources that are less damaging to the planet.
“The alternative protein market is poised for significant growth due to several key drivers. Lifestyle changes and the pivotal role of these proteins in the fight against climate change are driving this growth. “This is one of the main driving factors. Alternative proteins are not a passing trend. It has become a key focus for investors.”
Jen concluded: “In today's climate change technology landscape, many companies still operate at a relatively small scale. Given current capital constraints, large strategic companies need a certain level of growth and We are well-positioned to acquire small businesses that have achieved value.
“As the market opens up, it is undeniable that the underlying tailwinds for climate technology companies in the key sectors mentioned above will make this sector increasingly attractive to investors.”