Since greenhouse gas emissions are a leading cause of global warming, the 2015 UN Paris Agreement set a very ambitious goal of achieving worldwide net-zero emissions by 2050. Last November, the UN Climate Change Conference in Glasgow reaffirmed this target and encouraged the world to accelerate the translation of these good intentions into measurable actions. Unfortunately for the world, there are still numerous fields where emission-reducing technologies are inadequate or even non-existent. It is therefore not surprising that Climate Tech – defined as technologies that reduce greenhouse gas emissions or address the impacts of global warming – has taken center stage within the science and tech community.
Dr. Ami Appelbaum, Chairman of the Israel Innovation Authority, believes that “there is a great opportunity for Israeli companies to take a bite of the Climate Tech pie.” However, he points out that in order for Israel’s start-up ecosystem to fully embrace this challenge, the necessary infrastructure and support must be provided. This is where the Israel Innovation Authority steps in: uniquely positioned to analyze the strengths and weaknesses of Israel’s current and potential Climate Tech environment, the Innovation Authority has devised a strategic five-year plan designed to bolster local entrepreneurs and researchers.
Mapping Israel’s Climate Tech sector
The Authority’s first step was to collect data on existing Israeli companies that are developing technologies contributing to decarbonization, mitigation and adaptation. This mapping project was recently completed by a joint undertaking of the Israel Innovation Authority and PLANETech, a nonprofit joint venture of the Israel Innovation Institute and Consensus Business Group that serves as an innovation community for climate change technologies. Israel's State of Climate Tech 2021 report identified 637 Climate Tech companies, most of which are less than seven years old and have fewer than ten employees. Since 2014, the number of Israeli start-ups in the Climate Tech field has been growing and their share of all newly founded start-ups has been consistently increasing.
The largest number of companies fall into three main categories: Climate Smart Agriculture, Clean Energy Systems, and Sustainable Mobility. In the last three years, however, the most significant growth has been seen in the Alternative Proteins and Green Construction sectors, while several emerging fields are showing a considerable increase in the number of new start-ups, including Transparent and Agile Supply Chains, Novel Materials, Circularity, and Food Loss and Waste.
The Israel Innovation Authority and PLANETech's report also divulged that between 2018 and 2020, total investments in Israeli Climate Tech companies reached $2.97 billion, of which less than 1% came from dedicated late-stage funds. The Israeli government provided an additional $280 million to support various stages of product development.
The report also confirmed Israel's global dominance in specific climate technologies, such as cultivated meat, irrigation systems and water desalination. Despite demonstrating a growing ecosystem, the Innovation Authority and PLANETech's report clearly indicated that Israel has yet to exhaust its potential for innovation, commercialization and scaling up of Climate Tech solutions.
As a result of the report’s findings, one of the main pillars of the Authority’s newly launched five-year Climate Tech plan is to proactively accelerate the process of developing new technologies. “Rather than our usual bottom-up work model, we decided to adopt a more top-down approach for Climate Tech,” Dr. Appelbaum explains. “We are encouraging Israeli academia to engage in applied research in this field together with partners in industry. We will actively connect scientists with industry sponsors.”
The Authority will also serve as a bridge between Israeli entrepreneurs and groundbreaking research being carried out in research centers around the world. “We can offer foreign scientists to bring their innovative projects to Israel, as long as the start-ups are based here,” Dr. Appelbaum elaborates, adding that, “We are trying to accelerate the technology transfer process.”
To this effect, the Authority is substantially increasing the financial package offered for Climate Tech projects. Qualified entrepreneurs from all sectors pursuing Climate Tech initiatives will receive from the Authority double the average amount, and the loan will be for a two-year period rather than the usual one year.
The Authority is also investing in market education: encouraging entrepreneurs and researchers to address climate challenges. Many are interested in developing technologies with a global impact but often are unaware that they can pivot to Climate Tech issues. They must be encouraged to explore this direction despite the high risks involved.
Incubators devoted to climate change
One of the essential ways that the Israel Innovation Authority supports Israel’s start-up ecosystem is through its generous financing of dozens of high-tech incubators. Following the Innovation Authority’s strategic decision to boost Israel’s Climate Tech sector, several incubators are now exclusively devoted to nurturing start-up companies involved in this field. Spread out all over Israel, these incubators provide the facilities, expertise and funding necessary to optimize the chances that these early stage projects will in fact succeed.
The Environmental Sustainability Innovation Lab (ESIL), based in Haifa, is one of the Climate Tech incubators supported by the Israel Innovation Authority. Founded in July 2020, the incubator is a partnership between three international corporations: Bazan Group (Israel), EDF Renewables (France) and Johnson Matthey (UK). Bazan is interested in developing and implementing new technologies that will mitigate polluting emissions from its oil refineries and, in the future, will enable them to comply with international regulations. “Bazan understands that they must change in the next 20 years, and they are interested in finding ways to switch to a manufacturing process that uses ‘green’ hydrogen, which is non-polluting,” explains Eli Cymbalista, the incubator’s CEO. “Thanks to our corporate partners, we have a strong advantage in the fields of hydrogen production, energy storage and carbon capture.”
The four start-ups currently taking part in the ESIL incubator are indeed developing promising, groundbreaking technologies. RepAir CO Capture seeks to capture CO from the air at Gigaton scale using a unique, ultra-low-cost solution. Since more than 40 Gigatons of CO is released into the atmosphere every year, pulling CO from the air in an economically viable manner is key to mitigating global warming. HydroX is developing a green hydrogen energy storage technology which enables storing and transporting hydrogen in a cost and energy efficient way. MicroGrid Israel, another start-up in the ESIL incubator, is optimizing the design of micro electric grids using artificial intelligence, and Soltrex Automation Ltd. has invented robots that can autonomously clean solar panels for an entire field.
Thanks to the Israel Innovation Authority’s important new strategy, these start-ups and many others now have a real opportunity to help heal our planet. By providing the necessary conditions for local Climate Tech entrepreneurs, the Israel Innovation Authority will ensure that Israel becomes a chief player in this critical field.
The government is fully on board
The Israel Innovation Authority would like as many Climate Tech start-ups as possible to carry out their pilot projects in Israel rather than abroad. Right now, Israel does not offer advantageous conditions. Since most pilots are large-scale undertakings that require significant infrastructure, the Authority has committed to providing substantial resources in order to persuade local start-ups to choose Israel. In addition to considerable financing, these projects necessitate extensive infrastructure and expedient regulations. The Authority is working closely with the Ministry of Energy, Ministry of the Environment and other government entities to facilitate this goal.
In fact, the Israeli government is fully on board when it comes to Climate Tech – starting from the Prime Minister himself and including all the relevant ministers. “The government is very interested to collaborate with us on this. There is a consensus regarding the importance of this subject on a global scale, and everyone understands that there is an opportunity to promote groundbreaking Israeli technologies,” says Dr. Appelbaum, adding that the government is eager to ease the procurement system and create a more inviting regulatory environment.
Unlike most Israeli high-tech innovations, which tend to be rooted in either software or hardware, Climate Tech calls for a new high-tech pillar involving “deep tech” – technology solutions based on substantial scientific or engineering challenges. They generally require lengthy research and development phases and extensive capital investment before successful commercialization. Without substantial support from the government and the Israel Innovation Authority, these deep tech initiatives could easily be lost to other countries.
For more information about the Israel Innovation Authority, click here