Connecting the Israeli Innovation to the World
Connecting the Israeli Innovation to the World
Climate-Tech, Innovation

Innovative Ecosystem

Israel: The Climatech Nation

Israel has pledged as a matter of national policy, to promote its climatech capabilities worldwide and essentially become a “Climatech Nation”

Credit: Dr. Ruth Dagan

 

Over the course of several decades, Israel has become practically synonymous with transformative innovation in numerous technology sectors, including cyber security, Artificial Intelligence (AI), life sciences, digital health, renewable energy and of course agriculture and water. With tens of billions of dollars invested annually in the Israeli high-tech space and multinational corporations frequently setting up R&D centres in Israel, it has cemented its status as a global technology powerhouse.  

This has also been increasingly true in the past several years in the climatech space. Israel’s climatech ecosystem is booming and is host to hundreds of start-ups and tens of VC investment funds, all dedicated to the global fight against climate change. 

This comes as no surprise as Israel’s history is deeply rooted in climate-related innovation which came about as a direct result of the country’s challenging geographical attributes and limited natural resources. These factors, together with ideological and economic motivation, have all contributed to the significant strides being made by Israeli entrepreneurs and investors towards the development of innovative technologies to address climate and sustainability challenges. 

Israel has pledged as a matter of national policy, to promote its climatech capabilities worldwide and essentially become a “Climatech Nation”. This fact alone has done much to advance climatech companies originating in Israel. This government-backed agenda has helped to create a flourishing ecosystem of entrepreneurs, investors and experts, all working together towards a mutual goal.

In fact, market research by Start-Up Nation Central for the years 2021-2023 has identified an ecosystem of over 850 Israeli start-ups and growth-stage companies developing technologies that either promote decarbonization or address adaptation efforts to climate change.

According to Planetech data, the most dominant area of climatech activity in 2022 has been climate-smart agriculture, including technologies for reducing land footprint and GHG emissions, improving resilience of livestock and aquaculture. An additional key area which has been identified as growing rapidly is the alternative proteins sector, which includes numerous innovative companies developing milk, meat and fish alternative proteins. These join two historic climatech areas which Israel has championed over the years, namely: water conservation and renewable energy generation and storage.  

 

Dr. Ruth Dagan

Photo by: Ofer Vaknin

 

Leveraging Carbon Markets to Fund Climate Technologies and Decarbonization Projects

In recent years, the overall value of global carbon markets has skyrocketed. Projections through 2030 and beyond remain consistent and predict exponential growth in both voluntary and compliance market transactions, creating unlimited potential for collaborations and financial investments in decarbonization projects, through carbon trading. 

 Looking to 2030 and 2050, net zero targets set by business sector corporations and financial institutions are seeing market elements being increasingly incorporated into decarbonization strategies. As a result, business sector corporations are looking to identify both short-term and long-term investments which could potentially produce credible and measurable future carbon offsets and credits. 

 With innovative contractual structures being implemented to allow for advance funding of innovative decarbonization technologies and projects, this market can be significantly leveraged by climatech start-ups and allow for both early-stage funding and for long-term project financing.   

 As such, Israeli climatech companies are increasingly becoming involved in carbon markets as a financing tool to promote their R&D efforts and commercial growth and eyeing carbon market- related collaborations globally.  

 

Dr. Ruth Dagan is a Partner, Head of Environment & Climate Change, in Herzog Law Firm daganr@herzoglaw.co.il

 

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