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Climate tech boom in UK: A beacon of hope in the against climate change

Tue 4 Apr 2023

In an era when climate change increasingly dominates global conversations, the UK is emerging as a powerhouse in the climate tech sector. Tech Nation’s Climate Tech Report 2022 revealed that despite a challenging investment environment, the UK has experienced significant growth in climate tech investments, bolstering its green economy.

Investment Surge in Climate Tech

With £6.54 billion invested in 2022, a significant increase from £3.48 billion in 2021, the UK now ranks second globally in climate tech investments, trailing only the United States. This rapid expansion demonstrates the potential for the UK to become a global leader in sustainable technologies and renewable energy solutions.

Major investors, including venture capital firms and impact funds, have recognised the potential in the UK’s climate tech sector. Their backing is essential in fueling the growth of innovative startups and established companies working on groundbreaking solutions to tackle climate change. Some of the most prominent investors in the UK climate tech space are Breakthrough Energy Ventures, Draper Esprit, and Legal & General.

Growth Projections and Promising Innovations

Should this level of growth persist, it’s projected that UK-based climate tech companies will raise close to $20 billion annually by 2030. As investments in climate tech slow down in countries like the US and Germany, the UK is bucking the trend and attracting significant attention, creating a hotspot for innovation and green technology.

Sammy Fry, Net Zero Lead at Tech Nation, cautioned against complacency, emphasising the importance of continued action and support.

“There has never been a more crucial time to take action, and while we should be encouraged by the immense growth of the UK’s climate tech sector – along with the high carbon reduction potential of climate tech companies and the resilience of the sector in the midst of difficult economic times – this is certainly no time to be complacent,” said Fry.

Promising firms, like Bristol’s Vertical Aerospace, are also making strides with cutting-edge projects like their £30 million endeavor to develop a prototype propulsion battery system for aerospace applications, showcasing the UK’s commitment to clean energy advancements.

> Read more: Importance of sustainable tech grows, as BeZero Carbon raises £42m

Government Support and Challenges

However, the future of the UK’s climate tech sector hinges on sustained government policy and support. Initiatives like the UK government’s Net Zero program, which aims to scale up 30 innovative startups focused on addressing climate change, are crucial to the sector’s continued growth and the nation’s progress towards carbon neutrality.

As the sector continues to grow, so too does the need for a skilled workforce. The UK must invest in education and training programs to equip the next generation with the necessary skills to drive innovation in climate tech. By providing opportunities for internships, apprenticeships, and professional development, the UK can foster a talent pool that will sustain the sector’s growth in the long term.

Nevertheless, concerns around the country’s commitment to research and development could hinder its progress, especially as European nations compete to attract investments in their climate tech firms. With Brexit in the rearview mirror, the UK must work diligently to maintain its competitive edge in the race for green innovation.

The UK’s climate tech sector has shown immense potential in recent years, attracting billions in investments and fostering innovative solutions. However, continued success will depend on sustained government support, collaboration between stakeholders, and investment in the workforce. By building on its current momentum, the UK can emerge as a global leader in the fight against climate change.

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