Today, SET Ventures joined a climate coalition of 102 investors, startups and other stakeholders led by Cleantech for Europe in signing an open letter addressed to key members of the European Commission. The letter, which was addressed to Commission President, Ursula Von der Leyen and other important ministers, calls on the Commission to deliver an ambitious Clean Industrial Deal.
This initiative marks a demand by the signing organisations to increase the focus and funding available for climate technologies and sends a signal to the governing body of Europe that we are truly at an inflection point regarding our climate.
Read the letter in full below:
OPEN LETTER: FOR AN AMBITIOUS CLEAN(TECH) INDUSTRIAL DEAL – BUILDING MARKETS TO UNLEASH INVESTMENTS
To:
European Commission President Ursula Von der Leyen Executive Vice-President and Commissioner for a Clean, Just & Competitive Transition, Mrs. Ribera; Executive Vice-President and Commissioner for Prosperity and Industrial Policy, Mr. Séjourné; and Commissioner for Climate, Net-Zero and Clean Growth, Mr. Hoekstra
Cc:
Executive Vice-President for Social Rights and Skills, Quality Jobs and Preparedness, Mrs.
Mînzatu; Commissioner for Trade and Economic Security, Interinstitutional Relations and
Transparency, Mr. Šefčovič; Commissioner for Economy and Productivity, Implementation
and Simplification, Mr. Dombrovskis; Commissioner for Environment, Water Resilience and
a Competitive Circular Economy, Mrs. Roswall; Commissioner for Financial Services and the
Savings and Investments Union, Mrs. Albuquerque; Commissioner for Energy and Housing,
Mr. Jørgensen; and Commissioner for Sustainable Transport and Tourism, Mr. Tzitzikostas
RE: For an Ambitious Clean(tech) Industrial Deal – building markets to unleash investments
Dear Madam President Von der Leyen, Executive Vice-President Ribera, Executive Vice-President
Séjourné, Commissioner Hoekstra,
We, the undersigned, 102 cleantech start-ups, scale-ups, investors and ecosystems from across Europe are writing to express support for a strong and ambitious Clean Industrial Deal. The European Union is facing a perfect storm with a dangerous geopolitical environment, structurally higher energy costs than economic competitors and looming threats of physical and trade wars. In these moments, it is easy to lose sight of our strengths and assets: one of the world’s most highly skilled workforce, strong research and innovation – particularly in cleantech, a strong industrial base specialised in high-quality manufacturing and potentially the world’s largest – but crucially incomplete – single market.
2024 was the year of diagnosis with the Draghi and Letta Reports. 2025 needs to be the year of bold and decisive action to do whatever it takes for the EU’s competitive decarbonisation. The full arsenal of policy tools must be geared towards this shared common objective: creating a compelling business case for competitive decarbonisation.
The Clean Industrial Deal’s success rests on its ability to send two decisive market signals to cleantech industries of the future that are scaling-up and traditional industries whose path to competitive decarbonization relies on integrating cutting-edge cleantech solutions. First, a strong demand surge for cleantech. Second, a strategic focus on public de-risking, which will act as a
signal to mobilise part of the EUR 38 trillion of European private capital and international investors towards cleantech.
Creating an ‘industrial cleantech’ demand surge will require four key pillars which should be driven as much as possible in a coordinated way at EU level to create scale, underpinned by a strong focus on strengthening the single market. First, several strategic industrial sectors essential to Europe’s long-term competitiveness and resilience – automotive, steel, aluminium, chemicals
– are facing significant headwinds and will likely get significant public support. Ensuring this support stimulates the use of the most advanced cleantech solutions in their processes, preferably made in Europe, presents a unique opportunity to create a strong demand signal for European cleantech. It will require allowing under the EU state aid rules in some cases support for both upfront Capital Expenditure and initial higher Operational Expenditure costs to bolster the business case. Second, the EU Emissions Trading System (ETS) together with the Carbon Border Adjustment Mechanism (CBAM) form a critical demand signal for cleantech. Diluting or delaying this signal through regulatory instability will only delay critical final investment decisions or undermine existing business cases. Third, creating European lead markets for specific clean technologies through technology-specific targets and mandates. These must be combined with the inclusion in public procurement rules of sustainability and resilience criteria to stimulate demand at scale for European cleantech. Finally, while cleantech scale-up and traditional industries are transitioning, we need a more assertive trade policy that is fast and decisive in correcting unfair practices by competing jurisdiction creating an unlevel playing field to ensure European demand delivers European prosperity.
The deployment of many cleantech solutions is contingent on abundant and affordable clean electricity. These demand signals will only work if we manage to drastically increase investments in the grid, massively long-duration energy storage and provided target support to dampen the volatility of electricity prices.
The demand surge must be supported with more targeted and effective public financing mechanisms to de-risk cleantech. First, we need to ensure scale and accessibility in EU funding programs. This requires funding dedicated to Cleantech, mindful of the specific challenges to each value chain and technology, that are large enough to de-risk the late-stage scaling-up of cleantech were financing needs become far larger. Second, funding instruments from the EU and EIB must as much as possible seek to de-risk and crowd-in private capital on a much larger scale. For example, public guarantees and counter guarantees (such as those under the Wind Package) are helping to unlock private financing and working capital for cleantech manufacturing while being fiscally efficient. Dramatically expanding the scope and scale of these tools will act as a strong signal for private capital. Third, the ETS and CBAM are forecasted to generate a significant source of fiscal revenues for Member States in the next years. The EU and member states should
direct these revenues towards European cleantech in a jointly coordinated way at EU level. Finally, the EU and EIB should prioritise creating blended finance vehicles pooling institutional investor capital on a much larger scale to unlock credit instruments that are critical to scaling industries.
To conclude, we call for an unprecedented demand surge, combined with targeted public funding that will dramatically improve the business case for cleantech scale-ups and transitioning industries, unlocking some of the trillions of private wealth in Europe, reducing the overall public funding needed in a time of fiscal constraints for many governments. This can only be successful if underpinned by a stable and predictable carbon pricing framework.
The geopolitical and economic uncertainty of 2024 saw a slowdown in the volume of cleantech investments in the EU. So, the urgent need for decisive and bold actions cannot be understated. We have European successes like green steelmaker Stegra (Sweden), electrolyser manufacturer Sunfire (Germany) or battery gigafactory developer Verkor (France), proving the EU is able to scale up the new industries of tomorrow. But we need many more. At stake is nothing less than the future prosperity of European citizens. We stand ready to partner with you in delivering this ambitious plan for Europe.
Yours sincerely
