Strategic clean technologies for transition and competitiveness

They are crucial tools for decarbonisation and, at the same time, a strategic lever on which Europe’s global competitiveness hinges. But they also represent an opportunity within Italia’s grasp: the time has come to establish a national cleantech supply chain so as not to be left behind.

Globally, the outlook is bright. Whilst start-ups and scale-ups in the sector have raised a total of over 480 billion dollars over the last ten years, “our recent analysis,” explains Fabrizio Bacchini, senior partner at McKinsey & Company – estimates that, if the current growth trajectory continues, annual capital expenditure on fifteen cleantech technologies (related to clean energy, electrical systems, the decarbonisation of buildings, electric mobility, green materials and carbon-negative solutions) —could reach 5,000 billion euros globally by 2035. Expenditure on this scale could contribute between one and two percentage points to global gross value added and create job opportunities for 25–30 million people.” But that is not all. The recent report by the consultancy firm, ‘Cheaper, faster, better: a formula for cleantech scaling success’ – based on a sample of 11,000 private start-ups and scale-ups in the sector that have raised equity at least once in the last ten years – identifies three stages of development at a global level: the pre-boom period from 2015 to 2020, the boom of 2021–22, and the post-boom phase from 2023 to 2025, each with a different allocation of investment. Mobility (electric vehicles, shared mobility and logistics software) dominated in the early years and retains the broadest base of established companies, but has given way to a more diversified portfolio, with growing investment in batteries and energy storage, renewables and industrial decarbonisation.

“For EU businesses,” Bacchini points out, “the greatest opportunities lie in electric vehicles, zero-emission heavy-duty vehicles, electricity grids and green chemistry. In the US, solar power continues to grow, driven by falling costs and rapid installation.” Energy storage is also gaining momentum across all the areas analysed, but the project pipeline is not yet sufficient to meet the 2030 targets. “Offshore wind and green hydrogen,” he continues, “are, on the other hand, experiencing greater delays in development at a global level.” Competition from Asia looms large across all segments, with China at the forefront.

In the final phase, from 2023 to 2025, the start-ups and scale-ups analysed in the report raised an average of around 70 billion dollars a year: around 10 per cent less than during the boom, but almost four times the average for the pre-boom period. “The data,” Bacchini emphasises, “point to a shift towards a more mature and selective market, in which capital tends to concentrate on companies with the most solid prospects: the companies that will attract capital and grow are those capable of offering economically competitive solutions, able to reach the market more quickly and differentiate themselves not only through environmental benefits, but also through performance, functionality and business model. Artificial intelligence is one of the forces that will help shape the next phase of cleantech and is already playing a cross-cutting role throughout the entire value chain: from research into new materials to process optimisation, from predictive maintenance to commercial support.” Public policy can also help create the conditions for cleantech innovation to reach industrial scale. In Europe – as Bacchini points out – this role is particularly significant: around 30 per cent of venture capital funding in the sector comes from public sources, compared with 4 per cent in the US.

And in Italy? “The areas in which clean technologies will be able to take the lead in production are materials and green chemistry, biomanufacturing, energy storage – particularly long-term storage – and agri-food,” explains Federico Cuppoloni, director of Cleantech for Italia, an initiative launched in 2024 with the support of Breakthrough Energy – Bill Gates’ climate foundation – and the European Climate Foundation, which brings together various players from the Italian clean technology ecosystem. From 2019 to 2026 – as shown by data from Cleantech for Italy compiled in collaboration with Mito Technology – 1.4 billion in investment has been channelled into new ventures in Italy (at an annual growth rate of 70.2 per cent), of which 130 million was invested in the first eight months of the year. In total, more than 300 start-ups have been funded to date. Significant progress has been made, but Italia still lags behind other European and global competitors. ‘This asset,’ warns Cuppoloni, ‘also risks being lost at the crucial moment of the transition to the industrial phase. The Italian funding trajectory, in fact, comes to a halt on the threshold of initial industrialisation, when a company builds its first full-scale plant. There is a gap between innovation and industry that needs to be bridged: without the right tools, there is a risk that technologies developed and validated in Italia – often using public funds – will be scaled up elsewhere, in jurisdictions equipped with tools better suited to capital-intensive phases.”