At the United Nations Climate Change Conference of the Parties (COP26) in Glasgow, European Commission President Ursula von der Leyen and Bill Gates, the Founder of Breakthrough Energy, together with European Investment Bank President Werner Hoyer, have officially entered into a pioneering partnership that will boost investments in critical climate technologies. Today’s signing of a Memorandum of Understanding follows up on the initial announcement made in June this year at the Mission Innovation Ministerial Conference.
The partnership between Commission, European Investment Bank and Breakthrough Energy Catalyst will mobilise up to €820 million ($1 billion) between 2022-2026 to accelerate the deployment and rapidly commercialise innovative technologies that will help deliver European Green Deal ambitions and the EU’s 2030 climate targets. Each euro of public funds is expected to leverage three euros of private funds. Investments will be directed towards a portfolio of EU-based projects with high potential in four sectors: clean hydrogen; sustainable aviation fuels; direct air capture; and long-duration energy storage.
“The time for action is now,” Ursula von der Leyen, President of the European Commission, said. “The climate challenge requires us to invest in high-risk innovations and to eliminate the ‘green premium’ involved in commercialising new technologies. I cannot wait to see the technologies coming to the market. The EU-Catalyst partnership is another step on the way to making Europe the first climate neutral and climate innovation continent. I look to Member States, industry and others to join the climate innovation race.”
The EU-Catalyst partnership will target technologies with a recognised potential to reduce greenhouse gas emissions, but which are currently too expensive to get to scale and compete with fossil fuel-based technologies. It will bring together the public and private sectors to invest in large-scale demonstration projects.
“To meet the Paris climate goals we need a global technological revolution and massive investments in game-changing innovations,” Werner Hoyer, president of the European Investment Bank, said. “The European Investment Bank has a strong track record of financing early stage technologies, helping scale them up to become more affordable. Today we are using this expertise to reach the EU’s ambitious climate targets. I am delighted that we can announce today a new partnership with the European Commission and Breakthrough Energy Catalyst to support the green solutions of tomorrow and build a green future for all of us.”
Both the European Investment Bank (using Commission resources) and Breakthrough Energy Catalyst will provide equivalent amounts of grants and financial investments in the projects. As part of its contribution, Breakthrough Energy Catalyst will mobilise partners to invest in projects and/or purchase the resulting green products.
By supporting these technologies in this phase of the demonstration process and creating a market for those green products, the EU-Catalyst partnership will drive down their ‘green premium’, i.e. reduce their costs to a level that is eventually competitive with fossil-fuel based options. This will help to accelerate their global adoption and lead to independence from public support schemes.
“Reaching net-zero will be one of the hardest things humanity has ever done,” Bill Gates, founder of Breakthrough Energy, said. “It will require new technologies, new policies, and new partnerships between the private and public sector at a scale we have never seen before. This partnership with the European Commission and European Investment Bank will help accelerate the widespread adoption of climate solutions, which will build clean industries, and create job opportunities throughout Europe for generations to come.”
EU funding for the partnership will be drawn from Horizon Europe and the Innovation Fund, and will be managed under InvestEU according to established governance procedures. Breakthrough Energy Catalyst will leverage equivalent private capital and philanthropic funds in support of key climate-smart technologies to speed up the transition towards sustainable industrial ecosystems in Europe. The EU-Catalyst partnership will be open to national investments by EU Member States through InvestEU or at project level. The first projects are expected to be selected in 2022.