Any process, product, or service that reduces negative environmental impacts
Fully electric car charging its battery at a public charging station.Renewable transportation fuel composed of organic waste. Alternative fuel strategies drastically lowers carbon emissions and air pollution.
Clean Edge, a clean technology research firm, describes clean technology "a diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes." Clean Edge notes that, "Clean technologies are competitive with, if not superior to, their conventional counterparts. Many also offer significant additional benefits, notably their ability to improve the lives of those in both developed and developing countries."
Wind turbines in a field in Spain.
Investments in clean technology have grown considerably since coming into the spotlight around 2000. According to the United Nations Environment Program, wind, solar, and biofuel companies received a record $148 billion in new funding in 2007 as rising oil prices and climate change policies encouraged investment in renewable energy. $50 billion of that funding went to wind power. Overall, investment in clean-energy and energy-efficiency industries rose 60 percent from 2006 to 2007.[1] In 2009, Clean Edge forecasted that the three main clean technology sectors, solar photovoltaics, wind power, and biofuels, would have revenues of $325.1 billion by 2018.[2]
According to an MIT Energy Initiative Working Paper published in July 2016, about a half of over $25 billion funding provided by venture capital to cleantech from 2006 to 2011 was never recovered. The report cited cleantech's dismal risk/return profiles and the inability of companies developing new materials, chemistries, or processes to achieve manufacturing scale as contributing factors to its flop.[3]
Clean technology has also emerged as an essential topic among businesses and companies. It can reduce pollutants and dirty fuels for every company, regardless of which industry they are in, and using clean technology has become a competitive advantage. Through building their Corporate Social Responsibility (CSR) goals, they participate in using clean technology and other means by promoting Sustainability.[4]Fortune Global 500 firms spend around $20 billion a year on CSR activities in 2018.[5]
According to data in 2024, there are over 750,000 international patent families (IPFs) focused on clean and sustainable technologies worldwide. This represents approximately 12% of the total number of IPFs globally.[6][7] From 1997 to 2021, over 750,000 patents for clean and sustainable technologies were published, making up almost 15% of all patents in 2021, compared to just under 8% in 1997.[8] Japan and the US each account for over 20% of clean technology patents, though their annual numbers have stabilized at around 10,000.[9][10]
Between 2017 and 2021, European countries accounted for over 27% of international patent families (IPFs) in clean technology globally. This places Europe ahead of other major innovators, such as Japan (21%), the United States (20%), and China (15%).[6]
There are two major stages when cleantech patenting has advanced. The first is from 2006 to 2021, driven by the EU and Japan (27% and 26% of overall increase in IPFs). The next stage is from 2017 to 2021, led by China, which accounted for 70% of the increase in IPFs. [11][12]
Definition
Farmer using crops for biofuel
Cleantech products or services are those that improve operational performance, productivity, or efficiency while reducing costs, inputs, energy consumption, waste, or environmental pollution. Its origin is the increased consumer, regulatory, and industry interest in clean forms of energy generation—specifically, perhaps, the rise in awareness of global warming, climate change, and the impact on the natural environment from the burning of fossil fuels. Cleantech is often associated with venture capital funds and land use organizations. The term has historically been differentiated from various definitions of green business, sustainability, or triple bottom line industries by its origins in the venture capital investment community and has grown to define a business sector that includes significant and high growth industries such as solar, wind, water purification, and biofuels.[13]
Nomenclature
While the expanding industry has grown rapidly in recent years and attracted billions of dollars of capital, the clean technology space has not settled on an agreed-upon term. Cleantech, is used fairly widely, although variant spellings include ⟨clean-tech⟩ and ⟨clean tech⟩. In recent years, some clean technology companies have de-emphasized that aspect of their business to tap into broader trends, such as smart cities.[14]
During the last twenty years, regulatory schemes and international treaties have been the main factors that defined the investment environment of clean technologies.[15] Investments in renewable sources as well as the technologies for energy efficiency represent a determining factor in the investments made under the context of the Paris Agreement and the fight against climate change and air pollution. Among financing of the public sector, the government has been using financial incentives and regulations that are targeted at the private sector. This collectively move is the cause of the continued increase in the clean energy capacity. The investments in renewable electricity generation technologies in 2015 were over $308 billion USD and in 2019 this figure rose to $311 billion USD.[16]
Startups with new technology based innovation are considered to be an attractive investment in a clean technology sector. Venture capital and crowdfunding platforms are crucial sources for developing ventures that lead to the introduction of new technologies. In the last decade, startups have significantly contributed to the increase in installed capacity for solar and wind power. The trendsetting firms that design new technologies and devise strategies for the industry to excel and to be more resilient in the face of threats.[17][18]
Annual cleantech investment in North America, Europe, Israel, China, India
In 2008, clean technology venture investments in North America, Europe, China, and India totaled a record $8.4 billion. Cleantech Venture Capital firms include NTEC, Cleantech Ventures, and Foundation Capital. The preliminary 2008 total represents the seventh consecutive year of growth in venture investing, widely recognized as a leading indicator of overall investment patterns.[19] Investment in clean technology has grown significantly, with a considerable impact on production costs and productivity, especially, within energy intensive industries. The World Bank notes that these investments are enhancing economic efficiency, supporting sustainable development objectives, and promoting energy security by decreasing dependence on fossil fuel.[20]China is seen as a major growth market for cleantech investments currently, with a focus on renewable energy technologies.[21] In 2014, Israel, Finland and the US were leading the Global Cleantech Innovation Index, out of 40 countries assessed, while Russia and Greece were last.[22] Renewable energy investment has achieved substantial scale with annual investments around $300 billion. This volume of investment is fundamental to the global energy transition and remains in spite of an R&D funding plateau, representing the sector’s healthy expansion and appreciation of renewable technology’s promise. Several journals offer in-depth analyses and forecasts of this investment trend, stressing its significant role in attainment of the world energy and climate targets.[23] With regards to private investments, the investment group Element 8 has received the 2014 CleanTech Achievement award from the CleanTech Alliance, a trade association focused on clean tech in the State of Washington, for its contribution in Washington State's cleantech industry.[24] Strategic investments in clean technologies within supply chains are increasingly influenced by sustainable market forces. These investments are vital for manufacturers, enhancing not only the sustainability of production processes, but, also encouraging a comprehensive transition towards sustainability across the entire supply chain. Detailed case studies and industry analyses highlight the economic and environmental benefits of such strategic investments.[25] According to the published research, the top clean technology sectors in 2008 were solar, biofuels, transportation, and wind. Solar accounted for almost 40% of total clean technology investment dollars in 2008, followed by biofuels at 11%. In 2019, sovereign wealth funds directly invested just under US$3 billion in renewable energy .[26]
Comparative Growth in Energy Capacity by Source from 2000 to 2020: A Surge in Renewable Energy Investments
The 2009 United Nations Climate Change Conference in Copenhagen, Denmark was expected to create a framework whereby limits would eventually be placed on greenhouse gas emissions. Many proponents of the cleantech industry hoped for an agreement to be established there to replace the Kyoto Protocol. As this treaty was expected, scholars had suggested a profound and inevitable shift from "business as usual."[28] However, the participating States failed to provide a global framework for clean technologies. The outburst of the 2008 economic crisis then hampered private investments in clean technologies, which were back at their 2007 level only in 2014. The 2015 United Nations Climate Change Conference in Paris is expected to achieve a universal agreement on climate, which would foster clean technologies development.[29] On 23 September 2019, the Secretary-General of the United Nations hosted a Climate Action Summit in New York.[30]
In 2022 the investment in cleantech (also called climatetech) boomed. "In fact, climate tech investment in the 12 months to Q3 2022 represented more than a quarter of every venture dollar invested, a greater proportion than 12 of the prior 16 quarters."[31]
US leads in carbon capture technologies, with nearly 30% of patents. It also leads in plastic recycling and climate change adaptation technologies, but has a lower share in low-carbon energy (13%).[32] Japan excels in hydrogen-related (29.3%) and low-carbon energy technologies (26.2%).[33][34][35] Chinese applicants dominate the field of ICT-related clean technologies, accounting for more than 37% of patents between 2017 and 2021. Meanwhile, South Korean applicants make notable contributions in ICT with 12.6%, in hydrogen technologies with 13%, and in low-carbon energy with 15.5%.[36]
About half of the EU’s clean technologies are in the launch or early revenue stage, 22% are in the scale-up stage, and 10% are mature or consolidating.[37][38][39]
Implementation worldwide
India is one of the countries that have achieved remarkable success in sustainable development by implementing clean technology, and it became a global clean energy powerhouse. India, who was the third-largest emitter of greenhouse gases, advanced a scheme of converting to renewable energy with sun and wind from fossil fuels. This continuous effort has created an increase in the country's renewable energy capacity (around 80 gigawatts of installed renewable energy capacity, 2019), with a compound annual growth rate of over 20%. India’s ambitious renewable energy targets have become the model for a swift clean energy shift. The government aimed to reach a 175 GW capacity of renewable energy up to 2022. Thus, included a big contribution from wind (60 GW) and solar energy (100 GW).[40] By steadily increasing India's renewable capacity, India is achieving the Paris Agreement with a significant reduction in producing carbon emissions.[41] Adopting renewable energy not only brought technological advances to India, but it also impacted employment by creating around 330,000 new jobs by 2022 and more than 24 million new jobs by 2030, according to the International Labour Organization in the renewable energy sector.[42]
In spite of the global successes, the introduction of renewable energy is confronted with hurdles specific to the country or the region. These challenges encompass social, economic, technological, and regulatory. Research shows that social and regulatory barriers are direct factors affecting the deployment of renewable energy, economic barriers however have a more indirect, yet substantial effect. The study emphasises the need for removing these obstacles for renewable energy to become more available and attractive thus benefiting all parties such as local communities and producers.[43]
Despite the prevalence of obstacles, emerging economy countries have formulated creative approaches to deal with the challenges. For example, India, has shown significant progress in the sector of renewable energy, a trend showing the adoption of clean technologies from other countries. The special approaches and problems that every country experiences in the course of the sustainable growth promote useful ideas for further development.[43]
The creation of clean technologies such as battery storage, CCS, and advanced biofuels is important for the achievement of sustainable energy systems. Uninterrupted research and development is critical in improving the productivity of renewable energy sources and in making them more attractive for investment. These developments are a part of the wider goals related to sustainability and addressing climate change.[44]
A further factor that determine the success of clean technology is how it is perceived by public and its social impact. Community involvement and observable benefits of these technologies can influence their adoption and popularity. The idea of shared benefits is created by making the renewable energy solutions environmentally friendly, cost-effective, and beneficial to producers.[45]
Germany has been one of the renewable energy leaders in the world, and their efforts have expedited the progress after the nuclear power plant meltdown in Japan in 2011, by deciding to switch off all 17 reactors by 2022. Still, this is just one of Germany's ultimate goals; and Germany is aiming to set the usage of renewable energy at 80% by 2050, which is currently 47% (2020).[46] Energiewende in Germany is a model of a devoted effort to renewable energy aimed at decreasing the greenhouse gas (GHG) emissions by 80% by 2050 through the rushed adoption of renewable resources. This policy, aimed at addressing the environmental issues and the nationwide agreement on nuclear power abolition, illustrates the essential role of government policy and investment in directing technological adoption and providing a pathway towards the usage of sustainable energy. Obstacles to making the Energiewende a model for the transportation and heating sectors include the integration of renewable energies into existing infrastructure, the economic costs associated with transitioning technologies, and the need for widespread consumer adoption of new energy solutions.[47] Also, Germany is investing in renewable energy from offshore wind and anticipating its investment to result in one-third of total wind energy in Germany. The importance of clean technology also impacted the transportation sector of Germany, which produces 17 percent of its emission. The famous car-producing companies, Mercedes-Benz, BMW, Volkswagen, and Audi, in Germany, are also providing new electric cars to meet Germany's energy transition movement.[48]
Africa and the Middle East has drawn worldwide attention for its potential share and new market of solar electricity. Notably, the countries in the Middle East have been utilizing their natural resources, an abundant amount of oil and gas, to develop solar electricity. Also, to practice the renewable energy, the energy ministers from 14 Arab countries signed a Memorandum of Understanding for an Arab Common Market for electricity by committing to the development of the electricity supply system with renewable energy.[49] Sustainability when combined with clean technology focuses on the central environmental issues of learning how to fulfill the need of Earth’s resources and the requirement for fast industrialization and consuming of the energy. The role of the technological innovations in the development of sustainable development across different fields, such as energy, agriculture, and infrastructure is paramount. The sustainability initiatives utilize contemporary science as well as green technologies of renewable energy sources and efficient energy conversion systems to minimize the environmental effects and promote economic and social welfare. This approach is consistent with sustainable development objectives since it offers measures that do not deplete natural resources but, instead, supply low-emission forms of energy. [50]
United Nations: Sustainable Development Goals
United Nations: 17 Sustainable Development Goals
The United Nations has set goals for the 2030 Agenda for Sustainable Development, which is called "Sustainable Development Goals" composed of 17 goals and 232 indicators total. These goals are designed to build a sustainable future and to implement in the countries (member states) in the UN. Many parts of the 17 goals are related to the usage of clean technology since it is eventually an essential part of designing a sustainable future in various areas such as land, cities, industries, climate, etc.[51]
Goal 6: "Ensure availability and sustainable management of water and sanitation for all"[52]
Various kinds of clean water technology are used to fulfill this goal, such as filters, technology for desalination, filtered water fountains for communities, etc.
Goal 7: "Ensure access to affordable, reliable, sustainable and modern energy for all"
Promoting countries for implementing renewable energy is making remarkable progress, such as:
"From 2012 to 2014, three quarters of the world’s 20 largest energy-consuming countries had reduced their energy intensity — the ratio of energy used per unit of GDP. The reduction was driven mainly by greater efficiencies in the industry and transport sectors. However, that progress is still not sufficient to meet the target of doubling the global rate of improvement in energy efficiency."[53]
Goal 11: "Make cities and human settlements inclusive, safe, resilient and sustainable"[54]
By designing sustainable cities and communities, clean technology takes parts in the architectural aspect, transportation, and city environment. For example:
Global Fuel Economy Initiative (GFEI) - Relaunched to accelerate progress on decarbonizing road transport. Its main goal for passenger vehicles, in line with SDG 7.3, is to double the energy efficiency of new vehicles by 2030. This will also help mitigate climate change by reducing harmful CO2 emissions.[55]
Goal 13: "Take urgent action to combat climate change and its impacts*"[56]
Greenhouse gas emissions have significantly impacted the climate, and this results in a rapid solution for consistently increasing emission levels. United Nations held the "Paris Agreement" for dealing with greenhouse gas emissions mainly within countries and for finding solutions and setting goals.
Renewable energy is energy from renewable natural resources that are replenished on a human timescale. The most widely used renewable energy types are solar energy, wind power and hydropower. Bioenergy and geothermal power are also significant in some countries. Some also consider nuclear power a renewable power source, although this is controversial. Renewable energy installations can be large or small and are suited for both urban and rural areas. Renewable energy is often deployed together with further electrification. This has several benefits: electricity can move heat and vehicles efficiently, and is clean at the point of consumption. Variable renewable energy sources are those that have a fluctuating nature, such as wind power and solar power. In contrast, controllable renewable energy sources include dammed hydroelectricity, bioenergy, or geothermal power.
The International Energy Agency (IEA) is a Paris-based autonomous intergovernmental organisation, established in 1974, that provides policy recommendations, analysis and data on the global energy sector. The 31 member countries and 13 association countries of the IEA represent 75% of global energy demand.
Energy is sustainable if it "meets the needs of the present without compromising the ability of future generations to meet their own needs." Definitions of sustainable energy usually look at its effects on the environment, the economy, and society. These impacts range from greenhouse gas emissions and air pollution to energy poverty and toxic waste. Renewable energy sources such as wind, hydro, solar, and geothermal energy can cause environmental damage, but are generally far more sustainable than fossil fuel sources.
Renewable energy in Australia is mainly based on biomass, solar, wind, and hydro generation. Over a third of electricity is generated from renewables, and is increasing, with a target to phase out coal power before 2040. Wind energy and rooftop solar have particularly grown since 2010. The growth has been stimulated by government energy policy in order to limit the rate of climate change in Australia that has been brought about by the use of fossil fuels. Pros and cons of various types of renewable energy are being investigated, and more recently there have been trials of green hydrogen and wave power.
Renewable energy commercialization involves the deployment of three generations of renewable energy technologies dating back more than 100 years. First-generation technologies, which are already mature and economically competitive, include biomass, hydroelectricity, geothermal power and heat. Second-generation technologies are market-ready and are being deployed at the present time; they include solar heating, photovoltaics, wind power, solar thermal power stations, and modern forms of bioenergy. Third-generation technologies require continued R&D efforts in order to make large contributions on a global scale and include advanced biomass gasification, hot-dry-rock geothermal power, and ocean energy. In 2019, nearly 75% of new installed electricity generation capacity used renewable energy and the International Energy Agency (IEA) has predicted that by 2025, renewable capacity will meet 35% of global power generation.
China is both the world's largest energy consumer and the largest industrial country, and ensuring adequate energy supply to sustain economic growth has been a core concern of the Chinese Government since the founding of the People's Republic of China in 1949. Since the country's industrialization in the 1960s, China is currently the world's largest emitter of greenhouse gases, and coal in China is a major cause of global warming. However, from 2010 to 2015 China reduced energy consumption per unit of GDP by 18%, and CO2 emissions per unit of GDP by 20%. On a per-capita basis, China was only the world's 51st largest emitter of greenhouse gases in 2016. China is also the world's largest renewable energy producer, and the largest producer of hydroelectricity, solar power and wind power in the world. The energy policy of China is connected to its industrial policy, where the goals of China's industrial production dictate its energy demand managements.
Fossil fuel phase-out is the gradual reduction of the use and production of fossil fuels to zero, to reduce deaths and illness from air pollution, limit climate change, and strengthen energy independence. It is part of the ongoing renewable energy transition, but is being hindered by fossil fuel subsidies.
Renewable energy in Finland increased from 34% of the total final energy consumption (TFEC) in 2011 to 48% by the end of 2021, primarily driven by bioenergy (38%), hydroelectric power (6.1%), and wind energy (3.3%). In 2021, renewables covered 53% of heating and cooling, 39% of electricity generation, and 20% of the transport sector. By 2020, this growth positioned Finland as having the third highest share of renewables in TFEC among International Energy Agency (IEA) member countries.
Clean Energy Trends is a series of reports by Clean Edge which examine markets for solar, wind, geothermal, fuel cells, biofuels, and other clean energy technologies. Since the publication of the first Clean Energy Trends report in 2002, Clean Edge has provided an annual snapshot of both the global and U.S. clean energy sector markets.
The renewable-energy industry is the part of the energy industry focusing on new and appropriate renewable energy technologies. Investors worldwide have paid greater attention to this emerging industry in recent years. In many cases, this has translated into rapid renewable energy commercialization and considerable industry expansion. The wind power, solar power and hydroelectric power industries provide good examples of this.
Energy subsidies are measures that keep prices for customers below market levels, or for suppliers above market levels, or reduce costs for customers and suppliers. Energy subsidies may be direct cash transfers to suppliers, customers, or related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates, price controls, trade restrictions, and limits on market access.
Renewable energy in developing countries is an increasingly used alternative to fossil fuel energy, as these countries scale up their energy supplies and address energy poverty. Renewable energy technology was once seen as unaffordable for developing countries. However, since 2015, investment in non-hydro renewable energy has been higher in developing countries than in developed countries, and comprised 54% of global renewable energy investment in 2019. The International Energy Agency forecasts that renewable energy will provide the majority of energy supply growth through 2030 in Africa and Central and South America, and 42% of supply growth in China.
The Climate Investment Funds (CIF) was established in 2008 as a multilateral climate fund in order to finance pilot projects in developing countries at the request of the G8 and G20. The CIF administers a collection of programs with a view of helping nations fight the impacts of climate change and accelerate their shift to a low-carbon economy. Through contributions from 14 donor countries, CIF supports more than 350 projects in 72 low and middle-income countries on the frontlines of the climate crisis.
Renewable energy in Canada represented 17.3% of the Total Energy Supply (TES) in 2020, following natural gas at 39.1% and oil at 32.7% of the TES.
Cleantech Finland is a Finnish national project, backed by the Government of Finland and created as part of Finland's National Action plan to develop the country's environmental business. The network aims to bring together expertise from Finland's clean technology industry and research and to support clean technology companies internationally. Cleantech Finland is owned by the Confederation of Finnish Industries.
Neil Z. Auerbach is a private equity investor known for his leadership role in clean energy investment. He co-founded Hudson Clean Energy Partners, a global private equity firm that invests exclusively in clean energy, and co-founded the U.S. alternative energy investment business within the Special Situations Group at Goldman Sachs & Co.
An energy transition is a major structural change to energy supply and consumption in an energy system. Currently, a transition to sustainable energy is underway to limit climate change. As much sustainable energy is renewable it is also known as the renewable energy transition. The current transition aims to reduce greenhouse gas emissions from energy quickly and sustainably, mostly by phasing-down fossil fuels and changing as many processes as possible to operate on low carbon electricity. A previous energy transition perhaps took place during the Industrial Revolution from 1760 onwards, from wood and other biomass to coal, followed by oil and later natural gas.
Thomas H. Stoner Jr. is lead director and a co-founder, along with Nobel laureate David Schimel of the Jet Propulsion Lab (NASA) and other leading climate experts, of Entelligent, a global provider of Smart Climate indexes, predictive equity portfolio analytics and advanced data on climate risk and climate transition. He served as CEO of Entelligent from 2017 to October 2023. Prior to Entelligent, Stoner founded Project Butterfly, a research organization that advocates primarily for the global capital markets as a solution to climate change. The research produced by Project Butterfly led to the creation of Entelligent and ultimately yielded two climate risk patents issued by the USPTO. Stoner is also the author of the 2013 book, "Small Change, Big Gains: Reflections of an Energy Entrepreneur," which includes research about transforming the global energy supply to be more reliant on sustainable fuel sources by the end of the century. Stoner has been a promoter of sustainable development for over 30 years, having built, financed and owned and operated renewable energy projects throughout the Americas. He has led three companies in the clean technology space, including one of the original cleantech venture funds backed by international development banks, including the Multilateral Investment Fund, a division of the Inter-American Development Bank.
Liquid Light is a New Jersey-based company that develops and licenses electrochemical process technology to make chemicals from carbon dioxide (CO2). The company has more than 100 patents and patent applications for the technology that can produce multiple chemicals such as ethylene glycol, propylene, isopropanol, methyl-methacrylate and acetic acid. Funding has been provided by VantagePoint Capital Partners, BP Ventures, Chrysalix Energy Venture Capital, Osage University Partners and Sustainable Conversion Ventures. Liquid Light's technology can be used to produce more than 60 chemicals, but its first targeted process is for the production of monoethylene glycol (MEG) which has a $27 billion annual market. MEG is used to make a wide range of consumer products including plastic bottles, antifreeze and polyester fiber. Liquid Light is a spiritual concept not the monopoly of a business company only
Green recovery packages are proposed environmental, regulatory, and fiscal reforms to rebuild prosperity in the wake of an economic crisis, such as the COVID-19 pandemic or the Global Financial Crisis (GFC). They pertain to fiscal measures that intend to recover economic growth while also positively benefitting the environment, including measures for renewable energy, efficient energy use, nature-based solutions, sustainable transport, green innovation and green jobs, amongst others.
↑ Shi, Xiutian; Dong, Ciwei; Zhang, Chi; Zhang, Xiaoli (2019-04-01). "Who should invest in clean technologies in a supply chain with competition?". Journal of Cleaner Production. 215: 689–700. doi:10.1016/j.jclepro.2019.01.072.
↑ Shi, Xiutian; Dong, Ciwei; Zhang, Chi; Zhang, Xiaoli (2019-04-01). "Who should invest in clean technologies in a supply chain with competition?". Journal of Cleaner Production. 215: 689–700. doi:10.1016/j.jclepro.2019.01.072.
↑ Varadi, Peter F.; Wouters, Frank; Hoffman, Allan R. (2018-03-26), "Local Value Creation", The Sun is Rising in Africa and the Middle East, Jenny Stanford Publishing, pp.187–198, doi:10.1201/9781351007320-8, ISBN9781351007320
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