Published on February 20th, 2012 | by Silvio Marcacci1
Carbon Trust, GE Launch $5-Million Clean Tech Business Incubator Fund
February 20th, 2012 by Silvio Marcacci
The UK-based Carbon Trust announced today it would work with General Electric (GE) to establish a $5-million business incubator fund designed to boost low-carbon infrastructure technologies. The fund is targeted toward European clean tech start-up businesses, and will not have a cap on the size of possible investments.
Both companies will work together during the initial 18-month partnership to selectively identify promising companies, offer management advice, and allocate capital funding. Carbon Trust will administer the program, and the funding will come from GE’s $200 million ecomagination Challenge. GE has committed $134 million from the fund to date in start-up investments and commercial partnerships across the globe since it launched in 2010.
Carbon Trust is a non-profit organization that provides guidance and finance to businesses seeking to reduce carbon emissions reductions, and says it has helped its customers prevent 38 million tons of carbon emissions and save £3.7 billion in energy costs.
“Clean tech has the capacity to be a strong growth driver for Europe given its strong research capability and track record,” said Tom Delay, chief executive of Carbon Trust. “However, there is increasing evidence that other parts of the world are catching up and overtaking the region.”
Recent data seems to support the imperative for new sources of clean tech capital in Europe. In 2007, 42 percent of the world’s clean energy investment took place in Europe, compared to just 25 percent today, according to a recent report from Bloomberg New Energy Finance. By comparison, Asia Oceania has nearly doubled its share of clean tech investment during the same period, and North America accounted for almost 66 percent of total clean tech venture capital investment during fourth quarter 2011.
Austerity measures by governments across Europe have also taken their toll on the clean tech industry. Renewable energy powerhouses like Germany, Spain, and the United Kingdom have all recently announced feed-in-tariff reductions, and Carbon Trust will lose its core government grant funding this April.
Cutbacks may be most acute in the UK, but could ironically create partnership opportunities for the private sector. GE’s Innovation Barometer, a survey of 2,800 businesses in 22 global markets, found one of two businesses saw the UK as a challenging environment for innovation but 84 percent of UK businesses said partnerships and collaboration with a combination of organizations was key to success. And, almost 90 percent of UK businesses think start-up businesses can maintain their innovative edge as bigger companies – provided they receive seed funding and business support.
Considering this environment, GE’s funding could be a shrewd investment in the future of Europe’s clean tech industry. “We are increasingly focused on identifying new businesses, technologies, and human talent in this area,” said Mark Elborne, chief executive of GE UK. “GE sees the business benefit but also the potential these new technologies offer in delivering overall economic growth and improved resource efficiency.”
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