The technologies of the future lack capital

Berlin CO2 storage, synthetic kerosene, chargers for e-cars – many political hopes rest on the technologies of the future. Fighting climate change describes the exploratory paper by the Greens, FDP and SPD as “one of the greatest challenges of our time”. Above all, the FDP relies on innovations instead of bans: party leader Christian Lindner, for example, propagates “German engineered climate protection”.

But above all, a lot of money would be needed to really exploit the potential of the new technologies. The German Energy Agency (Dena) has calculated exactly how much: by 2030, more than 200 billion euros in risk capital would have to flow into climate technology in order to achieve the German climate targets – to reduce greenhouse gases by 65 percent compared to 1990. So annually 22.7 billion euros for the establishment and development of air conditioning start-ups.

However, less than five percent of this is currently made available. The “German engineered climate protection” is chronically underfunded. “The immense investment deficit shows the challenge for politicians to set effective incentives and well-thought-out regulatory frameworks for decarbonisation technologies,” says the Dena report.

The necessary investments in new climate technologies calculated by Dena are only part of the financing of the climate targets: Overall, the implementation of the climate protection measures decided by politicians by 2030 will require additional investments of around 860 billion euros – i.e. 100 billion euros annually – like one Study by the Federation of German Industries (BDI) and the Boston Consulting Group (BCG) determined.

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The need for climate-friendly technologies is great, as a current representative survey by the digital association Bitkom, which is available to the Handelsblatt, shows. The vast majority of the individuals surveyed (86 percent) therefore demand a funding program for the sustainable digitization of the economy from politicians. At the same time, 71 percent of those surveyed miss clear political strategies to exploit the potential of digital technologies for climate protection.

Politicians have definitely recognized the biggest construction sites. For example, a possible traffic light government wants to “drastically accelerate the expansion of renewable energies”, promote solar energy and also increase capacities for wind power on land and offshore. Areas in which Dena also sees particularly great investment opportunities.

Wind turbines

Dena sees particularly great investment opportunities in the expansion of renewable energies.

(Photo: imago images / Olaf Döring)

To this end, the traffic light parties want to promote investment security in order to “activate private capital for transformation projects”. However, there are still no more concrete plans on how to cope with the huge investment needs.

The Handelsblatt asked start-ups whose business models are helping to achieve the climate goals whether and which measures they are actually missing. The result: The engineers of “German engineered climate protection” complain about the strict risk culture of German investors and demand faster and simpler approval procedures.

Torsten Becker is the managing director of Carbonauten, which produce CO2-storing carbon from biomass. He says that the first industrial pilot plant was financed with 3.6 billion euros, but that “further capital is still missing”. For the next four locations alone, around 20 million euros would be needed, “then we can finance the scaling ourselves from the cash flow without external capital”.

Risk averse investors

Becker is bothered by the fact that German investors do not like to take risks, which would mean that his business would take longer and would be “more improvised and piecemeal”. If he had enough capital, he could accelerate the time from idea to investment by three years.

On the way from idea to implementation, climate start-ups need more start-up help than other start-ups. Andreas Kuhlmann, Managing Director of Dena, points out the challenges that air-conditioning technology start-ups have with the market launch of their products. “Hardware-based climate innovations in particular require high investment costs, even in the early phase, such as for the construction of demonstration systems,” emphasizes Kuhlmann.

To this end, technologies that are about to be launched on the market should be promoted in a targeted manner. The future fund, with which start-ups could get more venture capital, should therefore be restructured. “For this purpose, this should be extended to the early financing phase,” said Kuhlmann. Another useful instrument are so-called matching grants, in which the state uses public funds to double the privately collected investments.

Emanuel Heisenberg from Ecoworks, who are renovating buildings in a CO2-neutral way, also thinks that there are too few cleantech investors in Germany: “In fundraising directly after the establishment, here in Germany there are simply no investors who are brave enough for climate innovations.” That He sees the problem with state funding in the fact that it primarily supports research.

But not only in the early phase, there is also a lack of money for growth. The start-up Ineratec from Karlsruhe produces, among other things, synthetic gas and sustainable e-kerosene for air traffic in special systems. In a current financing round, the start-up primarily wants to raise money for new systems.

“So far, the construction of large production plants to cope with the market ramp-up has fallen by the wayside,” explains Ineratec on request. “There, up to 10,000 tons of CO2 could then be recycled into synthetic fuels.” In order to be able to scale, the company would need 50 to 100 million euros.

With sufficient capital, the climate targets could be formulated even more ambitiously – the target of two percent e-kerosene by 2030, for example. “We are convinced that the target quotas can be achieved in 2026 with sufficient capital,” says Ineratec. In addition, the start-up believes that politicians would need higher admixture quotas for synthetic fuels for existing aircraft.

Climate investors would not accept any losses

The e-mobility start-up ChargeX is also feeling that too little money is being received by innovators. Their main product is a multiple socket for e-cars, which they finance with pre-seed financing and crowd investment. “Unfortunately, in our current financing situation, there is no way to develop innovations around the product,” explains Tobias Wagner, CEO and co-founder of ChargeX.

On the one hand, it is difficult to find investors for hardware and IoT (Internet of Things) solutions in Germany, on the other hand, climate investors would not accept any losses compared to traditional investments, says Wagner.

For example, the CEO wants politicians to have easy access to funds from EU funding programs for innovation. “If you finance 100 start-ups with five million euros each quickly and easily in the late early phase, you can definitely achieve more than throwing 500 million euros after an automotive company, which only goes to the shareholders.” Innovation comes from SMEs, the CEO is convinced.

“In addition, our administrative structures urgently need to be streamlined,” emphasizes Wagner. “Because of every little thing to the notary, the postal contact by the authorities, the list is unfortunately very long.”

All in all, the upcoming government needs an ambitious climate and energy policy, also demands Andreas Kuhlmann from Dena, which provides incentives for investments in climate-friendly alternatives, such as emissions trading and the abolition of subsidies for fossil fuels.

More: The world is investing too little in climate protection technology

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