What are clean technologies? How does 'cleantech' work?

Cleantech is an emerging concept that, in recent years, has moved beyond specialized sustainability circles to reach a wider audience. As with all new terminology, it can lead to some confusion. However, there is a consensus among energy sector experts: 'cleantech' refers to clean technologies. This entails the presence of a technological and innovative component with the key goal of promoting sustainability and decarbonization.

According to the experts consulted, common examples of clean technologies include renewable energies, electric vehicles, recycling and waste management processes, water reuse and the development of bioplastics.

Avaesen, the association of renewable energy companies and other clean technologies of the Valencian Community, specifies the definition. Their general manager, Pedro Fresco, points out that the purpose of 'cleantech' is to "reduce or avoid the environmental damage of processes that we currently perform with other, more impactful technologies." He adds, "When we refer to 'cleantech,' we are not only talking about major technological developments, but also about services or business models that have a technological base."

Efficiency-oriented processes can also be incorporated into this concept. According to Covadonga Pevida, a researcher at the CSIC (Spanish National Research Council) within the Institute of Carbon Science and Technology, the term comes from the clean technologies that were already being used to reduce emissions from fossil fuels. "In the current context of the transition to renewables, the 'cleantech' concept is broadening to include not only technologies that enable cleaner fuel utilization, but also those that focus on the sustainability side.” In her opinion, even circular economy processes qualify as cleantech.

Investment in cleantech

Nuances aside, the sector that seems to encompass this concept is in good health. The Energy Technology Perspectives 2023 report, published by the International Energy Agency (IEA), estimates that the global market for clean energy technologies will be worth around $650 billion by 2030. This means a three-fold increase in the current volume of business, although this is subject to countries implementing the energy and climate plans they have announced.

BBVA has recently joined the alliance 'Cleantech for Iberia,' which has the support of Breakthrough Energy, an initiative founded by Bill Gates. The main goal is to create a global center that consolidates the Iberian peninsula's position as a leader in the cleantech sector.

Investment in clean technologies in the Iberian Peninsula has increased six-fold in the last five years, reaching €676 million in 2022. A total of 160 companies have already invested in the cleantech sector and it is estimated that 600 more will do so in the coming years.

The trend over time is clear. "There is a steady increase in investment in clean energy and decarbonized technologies, which has been growing steadily since the Paris Agreement," says Fresco, who has first-hand knowledge of the subject, as Avaesen leads the Cleantech Climate Launchpad clean technology business idea competition at the national level. "Startups are showing an increasing orientation towards technology and a greater readiness to face the demands of today's market. Clearly, more and more young people are joining cleantech entrepreneurship, bringing a distinctive technological approach to this dynamic landscape," says the association's general manager.

Researcher Covadonga Pevida also notes the rapid progress of cleantech. "Those of us who have worked with coal or fossil fuels see that commercial denitrification (DeNoX) or desulfurization (DeSoX) technologies have been developed for many years to remove nitrogen oxides and sulfur oxides.” But she believes that the discussion around cleantech now goes further than that.

Today, the concept cannot be decoupled from the climate challenge facing the planet. "Cleantech challenges are intimately linked to the climate challenge facing humanity," Fresco points out. "We have to make a radical change in technologies in 30 years and to do that requires a huge amount of investment, far above what we are investing now.”

What is climatetech? Going beyond cleantech

In this connection, there is another term that is emerging, which is even less well known and more recent than cleantech. The new term is 'climatetech,' which is subtly different from cleantech. "Climatetech focuses on technologies and services that reduce the climate impact of our activities, while cleantech is somewhat broader, dealing with broader environmental issues, such as the water cycle, waste treatment or biodiversity protection," explains Fresco.

Climatetech is thus aimed at mitigating the factors that cause climate change. Cleantech encompasses all the above approaches and adds others related to environmental protection. So, all 'climatetech' is 'cleantech,' but not all 'cleantech' is 'climatetech.'

Carbon capture, both from the air and in industry, is a typical case of 'climatetech.' "Some activities have so-called process emissions. They can't avoid emitting carbon. A very clear example is the cement production process, which inherently generates carbon dioxide (CO2). This carbon dioxide is linked to the raw materials themselves. These emissions are going to be generated and this is where carbon capture technologies come in. They add an additional process that selectively separates that carbon dioxide so that it can be stored," says Pevida.

The race is not without its hurdles, however. PwC, the consultancy firm, warns of a slowdown in investment in climatetech startups in 2023. PwC cautions that the planet needs to decarbonize seven times faster than it is doing now to keep the level of warming at 1.5 degrees above pre-industrial levels. However, there are also reasons for hope. The share of private investment and public subsidies for climatetech out of the total grew to 11.4% in the third quarter of 2023. This is certainly not a negligible percentage.