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Israel - the Cleantech King

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Applied CleanTech Chief Executive Refael Aharon stands next to pellets made from cellulose fibers picked out from the firm's sewage mining system in the town of Safed in northern Israel, October 2013.Credit: Reuters

Leading environmental organizations last month ranked Israel first in the world in cleantech – an industry based on “environmentally friendly” technologies that make use of recycling and renewable energy and minimize pollution.

The Economy Ministry rushed to publish congratulatory ads, stressing the government’s support for this industry. But officials familiar with the industry raise doubts as to its ability to continue to develop and succeed without adequate government backing.

Every year Cleantech Group and the World Wildlife Fund publish the global cleantech index, based on innovation and the ability to commercialize various technologies. After Israel come mainly Scandinavian states, headed by Denmark and Finland.

The cleantech index defines cleantech industry as based on “getting more from less” and profitably. It means using less raw materials, water and energy, but also dealing with soil pollution and sewage treatment, food production, irrigation and fertilization.

Until recently, the main development of cleantech was in the energy field, but the industry has now expanded to a spectrum of environmental issues. Within a few years the industry’s scope of activity is expected to involve hundreds of billions of dollars.

Israel was ranked first among 40 countries for the innovation of its industrial developments and the large number of its start-up companies. Today 19 Israeli companies are listed in the world’s 100 most promising cleantech companies. The index report says Israel has made accomplishments despite its small domestic market and sensitive geopolitical situation.

““The country generates the culture, education and ‘chutzpah’ necessary to breed innovation, plus it has the survival instincts to manage a resource-constrained geography,” the report said. 

The report cites as examples for Israel’s success Emefcy, a company that develops methods to treat sewage and the seed technology firm Kaiima Bio-Agritech. To this one may add the drip irrigation system developed several decades ago by Netafim, which was advanced by innovative methods requiring the addition of smaller amounts of chemical fertilizers than in ordinary irrigation. The UN recently classified drip irrigation as one of the five most important resource-efficient technologies in the world.

Cleantech in Israel has won the government’s recognition and financial support. But it has yet to pass its main test — achieving commercial application. According to the report, Israel is eighth in the world in this category.

One of the main bodies set up to advance cleantech industry is the Capital Nature investment firm, headed by Avi Feldman. The firm, based on a partnership with research institutions, and local authorities, also operates the Israeli National Renewable Energy Center in the Arava. So far the firm has given about a third of its 114-million-shekel budget to support various cleantech companies.

Capital Nature is currently involved, among other projects, in developing technology to enable locating roofs suitable for solar panels and developing an urban electric car.

Feldman says the relevant ministries grant support to developing projects in the early stages, but that is not enough. He says the ministries should provide initial assistance to more projects.

“If we had 15 projects, rather than the eight we now have, the chances of more companies succeeding would be greater,” he says.

He says the government should earmark more money to facilities that demonstrate the cleantech technology’s efficiency, thus providing significant backing to companies with commercial potential. “It’s important to remember that cleantech development and implementation is slower than high-tech in general,” he says.

One example of Israeli cleantech’s unrealized potential is the ongoing lag in meeting objectives of producing energy from renewable sources such as the sun and wind. Israel has plenty of solar radiation and a variety of technological developments, but the government cannot meet the ends it has set, such as producing 5 percent of the electricity from renewable sources by 2014. One of the reasons for this is the discovery of the natural gas fields in the sea, which diminished the government’s interest in renewable energy.

In the coming years the ability to implement Israel’s cleantech technologies will be tested both in the world and domestic markets. Israel already has an association to advance the use of renewable energies and a special Knesset committee has recently been set up for this purpose, headed by MK Hanna Swaid (Hadash).

Feldman says the state must increase the quotas for producing solar and wind power and grant financial perks to those who use this energy. Israeli cleantech could provide the technological backing to this process.

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