Insights for 2024: 7 Expected European Climate Tech Trends 👀

As the world confronts the impacts of climate change and the urgency to develop a sustainable path forward intensifies, technology is poised to play a pivotal and positive role in driving sustainable solutions. Although global and European climate tech funding experienced a temporary dip in 2023, we anticipate a shift towards growth funding for established climate tech companies and the rise of new players in the field. With a range of promising ventures seeking support and newcomers gaining momentum, the outlook for climate tech is optimistic, demonstrating the resilience and determination of the industry to create a more sustainable future.

Here is a list of the key climate tech trends and solutions expected to drive the attention of investors and customers in 2024.

#1 Carbon Capture, Utilization, and Storage (CCUS)

CCUS technologies have significant potential in mitigating climate change by capturing, utilizing, and storing carbon dioxide (CO2). Direct air capture (DAC) is particularly advantageous as it can remove CO2 independently of emission sources and without deployment restrictions. Despite currently contributing only 0.1% of carbon dioxide removal, CCUS technologies are receiving increased support, with substantial financing and growing political backing. The International Energy Agency (IEA) forecasts DAC technologies removing 90 million tonnes of CO2 annually by 2030, rising to 980 million tonnes by 2050, while countries are developing policy frameworks to evaluate the regulatory, economic, and technological opportunities associated with carbon dioxide removal.

#2 Carbon Accounting Software

Carbon accounting is essential in the fight against climate change as it helps businesses and organizations understand their impact and make improvements. Carbon accounting software enables the measurement, management, and reporting of carbon and greenhouse gas emissions. With advanced analytics and data integration, it allows organizations to track their carbon footprints and set reduction targets. The global carbon accounting software market is projected to grow from $15.31 billion in 2023 to $64.39 billion by 2030, driven by increased AI capabilities and widespread access to these advancements.

#3 Climate Fintech

European startups are seeing climate fintech as a key area of innovation. In 2022, Europe secured $1 billion in climate tech funding, surpassing North America by 56%. Climate fintech platforms are emerging to bridge the gap in sustainable finance, leveraging technologies like AI and blockchain. They facilitate capital allocation to sustainable projects, such as renewable energy and green infrastructure. More players are expected to enter the space, particularly in Central and Eastern Europe, with Estonia leading in climate fintech, often with female co-founders.

#4 Clean Energy

The global transition to clean energy will accelerate in 2024. Investments in clean energy technologies are expected to surpass investments in fossil fuels, with a 24% growth rate compared to 15% between 2021 and 2023. Out of a projected $2.8 trillion energy investment in 2023, $1.7 trillion will be directed towards clean energy. Policy support from the EU and other leaders, along with advancing clean energy technologies, including software optimization, will drive this momentum.

#5 Battery Development

The availability of advanced energy storage solutions, particularly batteries, is crucial for scaling clean energy and electrifying transportation systems. European countries like Poland, Hungary, Sweden, Germany, and France lead in battery manufacturing capacity and are increasing production to meet rising demand. Advancements in lithium-ion batteries optimize energy density, cost, and safety, while emerging technologies like solid-state batteries and flow batteries offer further improvements. The European Commission has allocated €160 million for battery research projects, with over 110 industrial battery projects and 20 battery cell gigafactories underway in EU member states to meet the EU's ambitious battery demand targets.

#6 Precision Agriculture

Precision agriculture is a powerful trend in the modern agricultural industry, aiming to minimize environmental impact while maximizing productivity and resource efficiency. It achieves this through a combination of technologies like satellites, drones, IoT, and artificial intelligence. AI-driven algorithms analyze data on soil conditions, plant health, and weather forecasts to provide insights for precise irrigation, fertilization, and pest management. As climate change intensifies, addressing food security becomes increasingly crucial, making support for farmers a top priority for financiers. The global precision agriculture market is projected to reach $14.61 billion by 2027, growing at a CAGR of 13.12% between 2022 and 2027. Investors continue to show interest in agritech solutions such as crop analytics, AI, IoT, and farm management software, as seen in recent success stories like the acquisition of Greek precision agritech startup Augmenta for €101 million.

#7 Alternative Protein

Conventional animal agriculture faces challenges due to its significant greenhouse gas emissions. Livestock farming contributes 14.5% of GHG, including carbon dioxide, methane, and nitrous oxide. The alternative protein industry is growing due to ethical concerns, health risks of meat consumption, and a rising population. By 2031, the global plant-based dairy and meat alternative market is expected to reach $166 billion, driven by factors like increased availability, reduced prices, and advancements in production. Cellular agriculture, including cell-based meat, is gaining traction. Alternative protein startups raised $2.9 billion in investments in 2022, representing 21% of all-time investment.

Data from: The Recursive