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With a deal on the global stocktake yet to emerge from Dubai, we asked an expert to fill us in.

This year’s United Nations Climate Change Conference, COP28, has been broadly defined by two facts. The first is that the conference is headed by the CEO of the United Arab Emirates’ state-owned oil company. The second is that this is the year of the first global stocktake, a document that should, in theory, set the world on a path to achieve the goals laid out in the Paris Agreement of 2015.
Perhaps unsurprisingly, that combination has not produced tremendous results. The latest draft of the stocktake dropped language calling for a fossil fuel phase-out. The condemnation was swift: “We will not sign our death certificate,” said the Association of Small Island States in a statement. “We think there are elements in the text that are fully unacceptable,” Spain’s environment minister said.
I was curious: How, exactly, does a global stocktake come to be? To find out, I called up Tom Evans, a policy advisor and climate negotiations specialist at the climate change think tank E3G, who is currently on the ground in Dubai. Our conversation, which has been lightly edited for length and clarity, is below.
Catch me up. How are things going on the ground?
It’s … going along. There’s a lot of discussions at the moment around the text that came out yesterday. Many, many parties are dissatisfied with the level of ambition in that text. It didn’t have the fossil fuel phaseout, it wasn’t strong enough on things like finance or adaptation, so that has triggered this big backlash. It’s all happening behind closed doors at the moment with ministers and politicians talking about the text, and the rest of us are kind of in a black box with regards to what’s going on. But it’s all really on a knife’s edge.
What is happening behind those doors, as best as you can tell?
The process is somewhat unclear. COPs don’t have any strict procedures; the presidency can choose how to do this diplomacy to get to the outcome it needs. At the moment, we’re in the phase of basically bilateral consultations being led by the UAE. The presidency is bringing people together behind the scenes. Everyone’s kind of slowly talking to each other.
What do you mean by bilateral consultations, exactly?
The UAE sitting down with a party — let’s say India, for example — and hearing their concerns and understanding what their red lines are, what they’re looking to change in the text. And then with that knowledge they’ll have another meeting, sitting down with, say, the U.S., having the same conversation and trying to map out where people sit based on these conversations.
They don’t have a big meeting room where everyone is at the table. They haven’t done a plenary yet. Last night they did a heads of delegation meeting, which brought all parties together. It was a closed meeting, and it started at 10 p.m. and finished at about 2 a.m. last night, which we hadn’t seen before.
Of course, at the same time, countries are talking to each other in different configurations. So there are different groups who will come together, such as the regional groups [who might have common goals]. And the U.S., I’m sure, is talking to China and Saudi Arabia.
The UAE has other tools at their disposal — earlier this week they hosted an informal ministerial circle where they talked about the issues together — but at the moment, they’re choosing to do this very closed or bilateral diplomacy, probably because the stakes are high and they need to act sensitively around what this next iteration of text looks like. Because an awful lot hinges upon it.
There must be some real power dynamics at play here. Are there some countries that the UAE is more inclined to listen to than others?
The UNFCCC is weird because some of the times those power dynamics are different from what you might expect. Small island states and other countries have an awful lot of power compared to [the regular UN framework], where they’re not the geopolitical shapers. But in this space, they have much more power because of their moral authority.
This word, “stocktake,” implies a kind of mathematical act. Is there an emissions reckoning happening?
Stocktake is definitely a bad name — we’ve already done a lot of the stock-taking. The past two years had the process of technical dialogues among parties and experts and non-party stakeholders, and we had reports including the IPCC which fed into that. Those conclusions were published back in September, and that report kind of tells us what we already know: Action is growing but inadequate, finance is not there at the scale needed, it’s not going to the right people in the right places at the right time. We think we know what we need to do, we just have to find the ways to do it. How do we commit [to] things here in Dubai that will bend the emissions curve and make sure that actions are implemented on the ground?
Before this COP, I had the impression that the stocktake is going to be some sort of big reckoning of past and future emissions. But it sounds like what’s happening now is similar to how past COP negotiations have gone. Is there something that makes the stocktake stand out from the agreements that were negotiated at previous COPs?
One big difference is that this is the central mechanism of the Paris Agreement, where we take stock and assess how to close gaps to meeting those goals. And that hasn’t happened in a formal way before.
The Paris Agreement was designed to have a stocktake so that we could make sure that our successive action, as the years go by, was ratcheting up, making sure that we’re not just coasting along but really delivering stronger and stronger progress. So that’s an important part of this. We are engaging with the Paris Agreement and saying, “okay, can we make sure it fulfills its goals in that formal way?”
The other part of it is that the stocktake, because it’s had this two-year process, has clearly identified the gaps. No one can deny that we’re not doing enough on finance and that adaptation is massively neglected. We’ve acknowledged that there’s been some progress on emission reductions, but it’s just an incremental push towards what's needed. Those conclusions have a certain weight that we can draw from.
What happens if there is no agreement? Is that an option?
I don’t think that is an option. No agreement would be a failure, a clear sign of an inability of the parties to rise to the challenge of what’s needed. There’s obviously a difficult question about what level of agreement is not good enough, but that’s the reason why the parties are working so hard right now to rescue this — because the deal on the table at the moment was clearly falling below that line. That’s why we saw the backlash.
The UAE certainly will be aware that that is what’s at stake. It’s their presidency, they need to deliver what they set out to do. They need to be able to show the final success. After a year of many pledges and announcements, new money, new initiatives — all of that is important, but it doesn’t count unless you negotiate this final outcome.
And every party has to agree to the final outcome?
It has to be consensus, though what exactly consensus means can be debated. Everyone would have to not object. The weird state of the UNFCCC process means that sometimes there have been things which aren’t necessarily fully agreed 100% but still reached consensus.
Consensus isn’t perfect. It’s a political call, it's not a mathematical number game where you tally up votes. For example, even this year, when the parties agreed [to] the loss and damage fund, the U.S. said in that meeting that they didn’t agree to it. But they said they weren’t in the room when consensus was reached, because the negotiator had left the room temporarily, so an agreement was reached and they approved it here in Dubai.
So there’s ways you can play with the system and survive. There have been instances in the past I’ve heard many years ago where decisions have been gaveled through despite objection because the presidency felt confident that the objections were not sufficient to obstruct the outcome.
This is the first stocktake process. Do you think part of what’s making it so hard is that there is no previous framework?
To an extent we’re creating something new, trying to do this for the first time. But I think also, it’s the politics. We are looking at the hardest issue, and for the first time in years getting on the edge of agreeing [to] something like a fossil fuel phaseout. And that brings up deep challenges for countries who are extremely dependent on fossil fuels. That’s true on all sides — not just producers, but also consumers.
We’re talking about initiating a model for the world which doesn’t have fossils in it. And that’s never been done — even in countries who have decarbonized to a great degree, they have not been able to show how that works at an international level.
So it is a huge ask, and there is no doubt that there can be challenges when trying to do that. And that’s what we’re seeing. We’re seeing the pains of trying to get something that’s useful. We’re no longer negotiating a treaty like we were in Paris. We’re no longer agreeing on a rulebook, which we did for five years up until COP26. We’re now really firmly talking about implementation. What does it mean to deliver the Paris Agreement? What does it mean to actually reduce emissions, not just pledge targets? So obviously it’s going to be a painful conversation, but it’s a difficult and important one.
Is there a misconception or something frustrating about this process that you wish people knew more about?
I think the biggest frustration is that this isn’t about just a technical exercise where you’re like, “oh, we need to phase out fossil fuels, because that's what is needed.” I mean, that’s true. But there’s a deeper question here of “how does the Paris Agreement work?”
The Paris Agreement works on the basis of a deal that if we have finance, if we have cooperation, if we have means to deliver action, [then] we can do more ambitious things, we can raise and accelerate action. That is what is at stake here. So when we’re talking about phasing out fossil fuels, we should also be asking, where’s the financial pathway to do that? When we’re talking about trying to make sure that countries have more adaptation, where is the money on the table to do that? And at the moment, we know it’s a drop in the ocean. These are the contours of the deal that we need to really examine.
And it won’t be all sealed here. It goes on and on until COP30 and after that. But the global stocktake is, I think, like a marriage vow renewal. You need to kind of renew the trust and the faith that that deal, that system’s working. And right now it’s looking like maybe a shaky marriage.
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On Trump’s gas boom, Germany’s fusion push, and Meta’s Canadian complex
Current conditions: Sandusky, Ohio, just saw 17 inches of rain in one day, smashing the previous state record of just under 11 inches and blowing past the 1-in-1,000-year threshold of less than 9 inches • Another heat dome is forming over the western United States, threatening landlocked desert cities such as Phoenix, Las Vegas, and Palm Springs with temperatures over 110 degrees Fahrenheit • An extremely rare tornado touched down in Alaska’s Susitna Valley, one of just 11 recorded in the state since 1950.

The record-shattering heatwave that roasted Europe last month killed thousands — and potentially far more than initially estimated. Last week, the French government released its estimate for the death toll from the elevated temperatures: 2,025 people died who wouldn’t have under average weather conditions. But Le Monde, the nation’s newspaper of record, suggested the tally was undercounting. On Tuesday, Carbon Brief published a new analysis by two scientists suggesting the actual figure surpassed 2,700 deaths. To calculate the difference, the two American researchers compared the observed temperatures from June 12 to 29 with their baseline average from 1980 to 2025 to understand the disparity between the number of deaths during heat waves then versus now. “We found that France experienced around 2,700 heat-related deaths above the average baseline,” the report concluded. “Day-to-day heat-related mortality rates rose from less than 100 to almost 300 on the hottest days of June 24 to 25.” In Germany, meanwhile, the Federal Statistical Office’s preliminary data shows more than 5,000 excess deaths during the late-June heat wave, Bloomberg reported. During the last full week of June, the agency known as Destatis recorded 5,486 more deaths than during the median from the same period from 2022 to 2025. Now yet another extreme heat wave is forming in Europe this week, the third so far this year.
The lethal heat has raised the volume and temperature of Europe’s ongoing debate over air conditioning. Much ink has been spilled over why, exactly, Europeans eschew the cooling appliances Americans adore. My colleague Robinson Meyer offered one of the most interesting explanations I have seen yet: Europe’s otherwise superior window design makes traditional AC units difficult to place. Either way, Europe’s surging far-right parties see a political opportunity in championing AC. France’s Rassemblement National, led by Marine Le Pen, has begun campaigning on expanding access to cooling. Germany’s far-right Alternative für Deutschland, meanwhile, has accused the country’s center-right government of “abstaining from air conditioning” due to “climate hysteria,” leaving people to be “sacrificed on the altar” of energy austerity, per The Guardian.
When President Donald Trump took office at the start of 2025, the U.S. Energy Information Administration predicted that 23 gigawatts of new gas plant capacity would be built in the U.S. between 2026 and 2030. The agency’s latest forecast for that same period is now 66 gigawatts. The boom reflects what E&E News described as both Trump’s energy policies and the rise of artificial intelligence. At the same time, a new International Energy Agency analysis suggests that Trump’s war against Iran dampened forecasts for global gas consumption for only the third time in seven years. Worldwide demand is expected to drop by 0.5% this year in response to major disruptions of liquified natural gas shipments from Qatar and the United Arab Emirates. Gas demand in Asia in particular softened amid higher prices and government efforts to switch from LNG to other fuels, such as coal. Fresh fighting in the Strait of Hormuz suggests the contraction could continue if the fragile ceasefire signed last month breaks. On Tuesday, two tankers were struck by projectiles while passing through the narrow waterway at the mouth of the Persian Gulf. The U.S. military accused Tehran of the attacks and launched new strikes on Iran, according to Al Jazeera. Trump told reporters at the NATO summit in Turkey this morning that the ceasefire was “over.”
In a more direct analysis of the effect of Trump’s energy policies on actual prices Americans pay, the think tank Energy Innovation found that the administration’s overall spending cuts and changes would force U.S. households to pay an additional $650 billion for energy between 2026 and 2040. That’s an average of $460 per household in 2035 and $490 in 2040. By eliminating incentives for electrification and green-energy manufacturing, the report concluded, the administration’s policies cost the U.S. a cumulative $2.3 trillion in lost gross domestic product through 2040.
Germany may have infamously abandoned nuclear fission, sending electricity prices soaring and making the country more reliant on coal and Russian gas imports. But Berlin wants fusion. On Tuesday, the Germany-based Proxima Fusion announced that it had raised nearly $469 million in its latest funding round, increasing its valuation to nearly $2.9 billion and establishing the startup as Europe’s best-funded fusion company. Among the backers were Google and the German utility giant RWE. “Google’s investment underscores continued interest in fusion as a potential source of abundant, carbon-free, firm energy over the long-term,” Proxima said in a press release. “One of the largest private investments in European technology this year — and the largest ever in European fusion — the round reflects growing recognition of fusion power as a strategic technology for energy security, economic resilience, and industrial competitiveness.”
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A major new mining project in Arizona that promises to increase the domestic supplies of at least five critical minerals just received final approval of its environmental review. On Tuesday, the U.S. Forest Service gave the developer South32’s Hermosa Critical Minerals Project the green light on the last step of its yearslong National Environmental Policy Act study. The completion of the NEPA process paves the way for the project to build key infrastructure beyond privately held property onto the federal land that’s part of the Coronado National Forest, including a primary access road, a tailing facility, and allowing the local utility to build a portion of a 138-kilovolt power line. It’s also a symbolic win for the Trump administration. The project was the first mine included in the federal FAST-41 permitting program to speed up approvals for key projects. South32 secured its place on that list due to the mine’s potential to generate zinc, silver, and manganese — all of which are needed for modern energy and military technologies. “From the beginning, we designed Hermosa to be a different kind of mine, and the federal review process helped make it even better,” Pat Risner, South32’s president in charge of Hermosa, said in a statement. Arizona Senator Ruben Gallego, a potential contender for the Democratic presidential nod in 2028, praised the project for “producing critical minerals that will power our 21st Century energy economy.”
Meanwhile, the American lithium-mining startup EnergyX just pulled in a significant new investment to complete its giant project in Chile. Already a top global producer of the metal needed for batteries and electric vehicles, the South American nation’s new right-wing government is trying to draw in more private investment as it rethinks the country’s domestic energy policies, as I reported last week. On Monday, EnergyX unveiled a $225 million strategic investment from the Italian oil giant Eni. As I told you last year, Eni has bucked other oil majors’ downsizing the ambitions of their greener ventures, even investing $1 billion into Commonwealth Fusion Systems last fall.
New Jersey Governor Mikie Sherrill approved a suite of legislation Tuesday to overhaul the process for siting data centers in the state, placing a new tariff on large loads, requiring companies to disclose water and energy use, and scaling back tax credits for server farms themselves. It’s no surprise: Sherrill, a Democrat, won last year after campaigning on cracking down on soaring power rates in a state Heatmap’s Matthew Zeitlin described last week as “ground zero for the political backlash to high electricity prices.” In a statement, Sherrill blamed “poor oversight, outdated policies, and rising demand on our electric grid by unchecked actors” for the price spike. “This is a breakthrough moment,” Rewiring America cofounder Ari Matusiak, who served on Sherrill’s transition team, said in a statement. “For the first time, a state has created a policy pathway for data centers to fund verified demand flexibility, including energy efficiency, demand response, behind-the-meter storage, and managed electrification. That means rising electricity demand can become an opportunity to invest in homes, businesses, and communities instead of shifting costs onto families and small businesses.
Hyperscalers, meanwhile, are now looking northward. On Tuesday, the Canadian outlet Juno News published a scoop identifying Meta as the mystery developer behind a $10 billion data center complex in Alberta, the western province of Canada also known for its tar sand oil fields. The Facebook parent company’s project is tied to a 932-megawatt gas-fired power plant.
The UAE’s oil and gas shipments are just starting to flow again — a reality that could remain tenuous as fighting renews in the Strait of Hormuz. But one thing has changed for sure: Abu Dhabi’s crude production is now unleashed. Since quitting the OPEC oil cartel in April, the UAE’s output of oil topped 3.8 million barrels per day, unnamed sources told Reuters. That’s a six-year high, apparently vindicating Abu Dhabi’s push against OPEC’s restrictions on pumping.
The EV maker appears to be poised to start construction on its second factory.
Rivian’s stock fell 18% on Monday, but it’s hard to imagine the company’s executives are too upset. Why? Because the automaker seems to be on the verge of starting work on its long-awaited second factory, 45 miles east of downtown Atlanta.
Let’s do some reading between the lines. Rivian has had a great few weeks. The EV maker announced last week that it is on track to sell about 3,000 more cars this year than expected, and its stock has been on a tear, rising more than 37% from close on June 25 to close on Monday.
The company’s CEO, RJ Scaringe, evidently decided it was time to capitalize on the run-up. The company announced on Monday evening that it would offer another 75 million shares of its stock this week, diluting existing investors. That raise would be used to fund “general corporate purposes,” according to a federal filing, including “the funding of certain equity contributions” related to an Energy Department loan.
Back in April, the company came to new terms with the Department of Energy’s in-house bank over a nearly $6.6 billion loan to build its new Georgia factory, which is supposed to manufacture the company’s new line of cheaper R2 SUV and R3 crossovers. That federal loan — initially negotiated in the Biden administration’s final days — was downsized to $4.5 billion under the new Trump-era terms, but also rewritten to let the automaker draw more money from the deal faster. (Rivian is already making the R2 at its existing factory in Normal, Illinois, but the Georgia factory should have about 40% more capacity than that plant.)
As part of any Energy Department loan — as in any project finance transaction — borrowers have to hold a certain amount of cash in escrow and reserve accounts to secure against a deal failing. Now Rivian can fund that money without tapping its cash on hand further. The new share offering is supposed to price this evening, suggesting that despite today’s slide, the company could raise more than $1 billion from the sale. Rivian’s stock is now trading roughly where it stood a month ago.
The upshot of all of this: With the loan secured, serious building efforts could finally start soon on the automaker’s second factory. (The automaker technically broke ground in September, but has yet to begin meaningful construction.)
“We’re setting up to go vertical in the second half of this year (a.k.a. steel sticking out of the ground) but we have said previously that we expect to draw on the loan for the first time by early 2027,” Peebles Squire, a Rivian spokesman, told me in an email. “Factory timeline is production of vehicles to begin in late 2028.”
(Energy Department loans work on a reimbursement basis, so the automaker will need to begin spending on the factory before it can claim the money.)
Though Rivian is among the most successful of the U.S. electric vehicle startups, it wasn’t completely clear after President Trump took office whether the automaker would survive its trek through the valley of death. It’s still not certain, of course. But positive reviews for the R2, a $6 billion deal with Volkswagen, and its significant Sun Belt factory nearing construction all augur well for the country’s most famous EV startup not run by Elon Musk.
“It’s got nothing to do with technology. It’s nothing to do with execution capability. It’s purely due to access to capital.”
Ever since Trump reentered the White House, Europe has been a safe haven for U.S. climate tech companies fleeing an increasingly hostile policy environment. Through strong carbon pricing and stable regulations, the bloc has created demand for still-experimental technologies such as green hydrogen, thermal energy storage, low-carbon building materials, and sustainable fuels.
And yet at the same time, Europe has struggled to finance many of its own climate tech startups as they enter the capital-intensive scale-up phase. What gives?
The problem is not a lack of startups or capital. European firms raised $61 billion for climate-focused funds last year, far outpacing those in the U.S., which brought in $37 billion, according to Sightline Climate. The problem is that almost all of that European money flows to infrastructure and private equity investors backing more mature technologies. Early-stage startups also enjoy relatively strong backing, but the market starves the growth-stage middle.
The issue is both cultural and structural: Most of the bloc’s investors are unaccustomed to making the high-risk, high-reward bets required to scale climate tech. They also often can’t access tools like loan and equity guarantees, which remain limited in Europe, nor are there the institutional limited partners and growth-stage co-investors that could help de-risk those investments.
“It’s got nothing to do with technology. It’s nothing to do with execution capability. It’s purely due to access to capital,” Craig Douglas, a founding partner at the Berlin-based multi-stage venture firm World Fund, told me. That means companies that have outgrown early-stage financing but are still considered too small or too risky for larger institutional investors often either shutter or seek capital abroad. Logically, if given the chance, most startups choose the latter.
“You’re allowing U.S. investors to cherry pick European assets,” Douglas told me. The result? “European technologies and European companies that are successful end up enriching American pension funds rather than European pension funds.”
Ioannis Ioannou, an associate professor of strategy and entrepreneurship at the London Business School, told me that the consequences extend beyond the purely financial, emphasizing that Europe runs a strategic risk by relying on foreign capital for its climate tech scale-up. “It means you lose the supply chains. You lose the skills. You lose the fine manufacturing capabilities. You lose the so-called green jobs.”
Douglas and the other specialists in European climate finance I spoke with emphasized that the ever-ominous “missing middle” funding gap is particularly pronounced in Europe. A report Douglas co-authored earlier this year, aptly titled “The Series B Funding Gap In European Climate Tech,” quantifies the problem. While 25% of U.S. climate tech companies that raised a seed round from 2010 to 2020 had moved on to secure a Series B by the first half of last year — regardless of what country the capital came from — only 15% of European companies were able to do the same. That has created a growing backlog of startups stuck in a financing limbo: The lineup of European companies looking to raise a Series B grew from 220 in 2020 to 533 in the first half of last year.
While smaller climate tech funds in Europe and the U.S. have raised similar amounts of funding for early-stage startups — $18.5 billion in Europe versus $20.2 billion in the U.S. from 2020 through the first half of 2025 — the gap at the larger end of the market is stark. The U.S closed 29 funds of at least $500 million or more, compared with just 11 in Europe. These larger funds are the ones capable of writing the $25 million to $100 million checks companies desperately need to commercialize and scale. As Douglas’ report notes, fewer than 20% of European climate funds are pursuing a growth strategy, with over 70% making early-stage investments only.
“When we raised World Fund One, we were the largest [debut] climate fund in Europe, and we’re a €300 million fund. That’s nuts,” Douglas told me. World Fund aims to help companies “reach growth-investor readiness” by supporting startups from their seed through Series B, a model Douglas would like to see replicated throughout the region. “We need another 20 World Funds out there in the market to start filling this capital shortfall,” he told me. The firm announced last February that it’s raising a second, €500 million fund, but that’s yet to close.
One of the primary reasons European growth-stage investors have less capital to deploy comes down to the structure of European financial markets, which remain heavily reliant on bank lending rather than higher-risk equity investments. As a result, institutional investors like pension funds, insurers, and endowments never built the habit of investing in venture capital, which shows up when comparing the LP bases across the two regions: In the U.S., about 72% of VC funding comes from private institutional investors, compared with just 30% in Europe. Public money, much of it from the European Investment Fund, helps bridge the gap, but it simply cannot match the scale of private institutions.
Pension funds are a telling case. They’re among the largest sources of venture capital in the U.S., allocating nearly 2% of their assets to VC. But in the EU, they allot just 0.018% — roughly 100 times less. And because the U.S. also has far more money sitting in pension funds than Europe does, this makes the gap in actual dollars reaching startups wider still. Without that deep pool of institutional funding, Europe struggles to support the $500 million- to $1 billion-plus funds that would have the wherewithal to lead growth-stage rounds.
The result is a self-reinforcing cycle. Large growth funds require large institutional backers, but precisely because European pension funds and other institutional investors haven’t stepped up, the venture market remains too small to absorb the kinds of $100 million-plus commitments pension investors managing billions of dollars typically want to make. “They don’t see [venture] as an asset class that they can invest in,” Douglas told me. “But the reason that it doesn’t exist is because they’re not investing themselves in that asset class.”
If there’s one thing I learned from my reporting, it’s that white these problems run deep, Europe is hardly standing still. Policymakers and investors are well aware of the disconnect and are now experimenting with strategies to close the scale-up gap and affirm the region’s position as a leader in climate innovation.
To attract more institutional investment, for example, a growing number of initiatives aim to create “funds of funds” and other government-backed structures that pool money from pension funds, insurers, banks, foundations, and other large investors. The fund-of-funds structure lets an institution make a single, large commitment; then, intermediary asset managers break that capital into smaller chunks and invest it across multiple venture funds. This gives large-ticket investors the scale and diversification they want without requiring them to conduct due diligence on dozens of small venture funds; venture managers, in turn, gain access to much larger pools of capital.
Germany’s Wachstumsfonds Deutschland, for example, is a €1 billion fund-of-funds backed by more than 20 investors — including insurers, pension funds, and large family offices — that invests across the German and broader European VC ecosystem, with a focus on growth-stage capital. The EU’s European Tech Champions Initiative follows a similar model. The European Investment Bank and six member-states launched the initiative in 2023 with €3.9 billion to back regional growth-stage VC funds. Now it’s raising a second tranche of money — targeting €15 billion — and is bringing in private institutional capital for the first time.
Europe’s member states have also pushed institutional investors toward coordinated capital commitments in recent years, with France’s Tibi initiative serving as the model. Launched in 2019, it tasks the French government with vetting venture and growth funds, with those that qualify becoming eligible for backing from initiative’s signatories, primarily insurers and some pension funds. The program has attracted about €31 billion in commitments to date. Germany adopted a similar approach with its WIN initiative, which has now secured €12 billion in pledges from more than 30 major corporations — including Deutsche Bank, BlackRock, and Henkel — to invest in the country’s venture ecosystem by 2030.
The Irish Venture Capital Association has proposed a similar model, while Tibi’s founder — the economist Philippe Tibi himself — has been on a tour essentially pitching the idea across the bloc. But Ioannou isn’t convinced that creating country-specific Tibi-style commitments is the most efficient way for the region to scale climate tech.
“I’m not sure that fragmentation will actually solve the problem,” he told me. “Maybe it will be better if all that capital came into one larger fund, whereby the scale-ups wouldn’t have to deal with country level fragmentation, regulations, jurisdictions, legal, and all that kind of stuff.”
That’s the idea behind the new €5 billion pan-EU Scaleup Europe Fund, which is designed to invest directly in European deep-tech startups — climate tech very much included — rather than through venture funds. Announced last year, the fund has already secured roughly €2.5 billion in capital commitments from both the European Commission and private institutional investors, with a second fundraising round planned for the second half of this year. EQT, Europe’s largest private-markets investor, will manage the funds, ultimately deciding which growth-stage companies to back.
“Everything happened so quickly, from agreeing to it to executing on it to allocating it,” Douglas told me. “In effect, it happened in less than a year, which in the European context is crazy.”
The idea is to replicate what the combination of U.S. federal support and deep private capital markets has accomplished, Dimitri Colin, a policy officer at the cleantech policy and advocacy group Cleantech for Europe, told me. “The whole idea is to bring what worked in the U.S. into European public financing policies,” he said. Colin extolled the virtues of the Biden-era Loan Programs Office, as well as the efficacy of other Inflation Reduction Act-fueled efforts such as generous production tax credits when it comes to derisking investment in first-of-a-kind tech.
In our interview as well as in a recent report, Colin argued that EU funding should move from prioritizing grants to loan and equity guarantees in its forthcoming budget for the years 2028 through 2034. That’s because guarantees have proven far more effective than government grants at bringing private investors into climate tech, Colin told me. According to his report, every euro of grants or equity capital channeled through the VC arm of the European Innovation Council yields about €3 in additional investment. That’s nothing to scoff at, but it pales in comparison with InvestEU, the bloc’s €26.2 billion investment guarantee program. Every euro of guarantees from the latter attracts nearly €14.80 in private follow-on capital.
“The main idea behind the whole budget should be to focus on the leverage effect,” Colin told me, referring to how much additional private funding government backing generates. “How can the little public money that we have in Europe — because the fiscal environment is, of course, very constrained — more easily mobilize private money? That’s what the LPO did well.”
Colin also wants to change the EU’s public funding rules to make it easier to subsidize ongoing operational expenses for early-stage cleantech facilities, similar in effect to U.S. production tax credits. Currently, European policymakers often structure public support for these projects as capex grants paid out after construction is complete. This type of support is more difficult for private investors to underwrite since it doesn’t directly improve the plant’s ongoing operating economics, one of the risks investors care about most.
Getting these financing structures right is a matter of life or death for many of Europe’s most promising climate tech industries. Douglas points to batteries, critical minerals, semiconductors, and green molecules as sectors with the technological readiness to scale domestically — but not yet the capital. “One of the major risks in every sector we know is who’s going to be there, who’s going to be able to go with us on that journey to make sure the company has the capital to be successful,” he told me. Still, he sees reason for optimism. Because if there’s one thing that can be said about the E.U. at this moment, it’s that “they’re definitely taking it seriously.”
“The perfect solution doesn’t exist,” Colin told me. “We need to align the funding models, we need public de-risking tools, but we need also a true industrial strategy, China has done that, the US has done that with the IRA,” he explained. Now it’s Europe’s turn.