{"id":845189,"date":"2026-03-23T15:34:18","date_gmt":"2026-03-23T15:34:18","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/845189\/"},"modified":"2026-03-23T15:34:18","modified_gmt":"2026-03-23T15:34:18","slug":"the-european-clean-tech-moment-that-wasnt","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/845189\/","title":{"rendered":"The European clean tech moment that wasn\u2019t\u00a0"},"content":{"rendered":"

When President Trump took office for the second time, rolling back climate rules and vowing to \u201cunleash<\/a>\u201d oil and gas drilling, some said Europe\u2019s clean energy moment had come. With its steadfast climate-friendly policy and its already strong ties with the U.S. market, the continent was in a good position to turn Trump\u2019s hostility into opportunity. It could, the theory went, start attracting more climate tech investments, taking on a sector leadership role that had historically belonged to the U.S.\u00a0<\/p>\n

Over a year later, however, this hasn\u2019t happened. In 2025, the U.S. saw nearly $21 billion in climate investment, a 27% increase compared to 2024, according to Sightline Climate data. That\u2019s more than double the $10 billion recorded in Europe, which actually saw a 13% dip.\u00a0<\/p>\n

That said, the U.S. growth was bolstered by megadeals aligned with the Trumpian quest for energy and AI dominance, such as Crusoe\u2019s $1.4 billion raise in October 2025, which seemed to offset any slowdown in other climate sectors. Europe outpaced the U.S. in terms of total deal volume, with 621 climate deals versus 574, reflecting an active ecosystem of smaller startups. And Sightline data shows that dry powder is accumulating, with 61 new climate tech European funds closed with a total value of $56 billion in 2025. By comparison, the U.S. saw only 31 new funds totaling $16 billion.\u00a0<\/p>\n

\"\"Image credit: Sightline Climate<\/p>\n

In 2026 especially, Europe as a market for fossil fuels is looking precarious, trapped as it is between wars in both Ukraine and Iran. Against that backdrop, these numbers suggest that we may still see a surge in climate investment \u2014 that is, if the continent can clear the structural hurdles that have hindered its progress so far.\u00a0<\/p>\n

Policy stability<\/p>\n

Sebastian Heitmann is the co-founder of climate-focused venture capital firm Extantia, which is based in Europe. He says that, for an investor, Europe\u2019s main advantage over the U.S. is policy stability.\u00a0<\/p>\n

\u201cThe U.S.\u2019s biggest problem is the back and forth; it\u2019s not a consistent policy,\u201d he told Latitude Media. \u201cThat\u2019s what investors don\u2019t like\u2026.And being very consistent in their [policy] strategy is something that both Europe and China have done really well.\u201d\u00a0<\/p>\n

Additionally, he added, Europe has focused on incentivizing demand rather than supply. \u201cAnd that\u2019s a good way to make sure that climate technologies come to maturity and stay there. Otherwise, once you kill the incentives on the supply side, it might just go away again, like we\u2019re seeing in the U.S,\u201d Heitmann said.\u00a0<\/p>\n

\"\"Image credit: Sightline Climate<\/p>\n

The benefits of this approach are particularly evident when it comes to clean hydrogen. In the U.S., the Inflation Reduction Act offered generous tax credits for clean hydrogen production through the 45V provision, spurring big investments; meanwhile, the Bipartisan Infrastructure Law funded seven regional clean hydrogen hubs across the country.\u00a0<\/p>\n

But that momentum fizzled once the GOP\u2019s One Big Beautiful Bill stripped the credits in July of last year. In the months since, companies like Topsoe have abandoned U.S. projects<\/a> and retrenched to Europe, while others like Monarch Energy have pivoted toward other opportunities<\/a>, including AI power infrastructure.<\/p>\n

The European Union, meanwhile, actively created policy-backed demand. The continent introduced legislation in 2023 requiring that, by 2030, at least 42% of the hydrogen consumed in industry come from renewable sources. Since then, European blue and green ammonia projects have grown from a cumulative capacity of zero to 8.5 megatons per year today. By 2030, Sightline expects that total to increase to 48 MT per year.<\/p>\n

\"\"Image credit: Sightline Climate<\/p>\n

But Jules Besnainou, founder and executive director of policy advocate Cleantech for Europe, said that policy stability alone is far from enough for Europe to take the lead.\u00a0<\/p>\n

\u201cPolicy stability is good if the status quo is good, and the status quo for clean tech in Europe is certainly not where it needs to be, and Europe is certainly not as attractive of a market as the U.S. is,\u201d Besnainou told Latitude Media. The regulatory framework, he added, is still \u201cincredibly complex and convoluted,\u201d and one consequence is that it\u2019s hard for a company to scale from one country to another.\u00a0<\/p>\n

\u201cThere\u2019s a lasagna between the EU level, the member state level, the regional level,\u201d he said. \u201cAnd if you\u2019re a company looking to scale your technology\u2026 you\u2019d maybe rather take a bit more political risk in the U.S., but have access to one market, with, in many cases, strong demand signals and willingness to pay.\u201d\u00a0<\/p>\n

Money problems\u00a0<\/p>\n

This brings us to the next problem facing Europe \u2014 perhaps the most important one. In Heitmann\u2019s words: \u201cEurope is really good at turning euros into knowledge, but very poor at turning knowledge into euros.\u201d<\/p>\n

It\u2019s what some call Europe\u2019s innovation paradox<\/a>: Europe excels at research and development, outpacing both the U.S. and China when it comes to research output, but the country has so far failed to meaningfully commercialize this potential, with the vast majority of its patents sitting inactive. That\u2019s because for systemic reasons, in Europe, there\u2019s not enough capital being invested in climate tech, both private and public.\u00a0<\/p>\n

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On the public side, EU funding instruments are largely failing to deploy money at any meaningful scale. Take the Innovation Fund, which was established in 2020 and has a \u20ac40 billion budget to deploy in clean tech projects by 2030: Only 5% of companies that have applied have been successful, according to Besnainou. And for those that were successful, the money is not really flowing.\u00a0<\/p>\n

\u201cIt\u2019s so complex to unlock the funding once you\u2019ve been awarded a project that it\u2019s been five, six years, and we\u2019re still at below 5% total disbursement rate,\u201d Besnainou said.\u00a0<\/p>\n

A report published last week<\/a> by the European Court of Auditors puts the number even lower, at less than 1% of the fund having been deployed as of June 2025.\u00a0<\/p>\n

And when it comes to private capital, the European market has the issue that its deals are often too small and fragmented across different countries to attract the multi-billion-dollar tickets that pension plans, insurance, and infrastructure funds operate with. Additionally, different national regulations for pension funds and insurance companies make investments in innovative, higher-risk technologies more capital-intensive to hold.\u00a0<\/p>\n

Security concerns\u00a0<\/p>\n

As challenging as it is to overcome these problems, Heitmann thinks that the current energy crisis Europe is experiencing as a consequence of the war in Iran, coming so soon after the energy crisis created by Russia\u2019s war in Ukraine, could push things along. It has the potential to force the bloc to reckon with the fact that energy resiliency, for a region with no meaningful oil and gas resources, comes from clean technologies.\u00a0<\/p>\n

\u201cIn climate tech, security concerns drive sustainability measures faster than environmental concerns,\u201d Heitmann said. \u201cFrance\u2019s move to nuclear was based on the 1970s oil crisis, for example\u2026 It\u2019s a good time right now for climate because sustainability can take on higher strategic relevance.\u201d<\/p>\n

That is, Besnainou added, it could be a good time if Europe focuses on the long-term rather than on short-term fixes.\u00a0<\/p>\n

\u201cWe tend to go for short-term fixes, like trying to buy LNG in the U.S. versus investing in our own system,\u201d he said, noting that much of the political debate focuses on subsidizing oil and gas, rather than future-proofing the system with renewables and batteries, which highlights the issue. \u201cUntil we understand that we\u2019re just creating new dependencies and get to the hard work of deploying the technologies we have, we\u2019re just going to go from one crisis to the next.\u201d\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"When President Trump took office for the second time, rolling back climate rules and vowing to \u201cunleash\u201d oil…\n","protected":false},"author":2,"featured_media":845190,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5174],"tags":[16108,67213,2000,299,5187,22668,1197,3141],"class_list":["post-845189","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eu","tag-cleantech","tag-climate-tech","tag-eu","tag-europe","tag-european","tag-global-markets","tag-investment","tag-venture-capital"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/116279225000912090","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/845189","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=845189"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/845189\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/845190"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=845189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=845189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=845189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}