Israel Innovation Authority and PLANETech present: 2023 Climate-tech Innovation Report
Enormous Potential with Complex Challenges for Implementation
Number of Climate-Focused Startup Companies Has Increased by 13% in Past Year
Israel’s innovation ecosystem boasts diverse technological offering and breakthrough solutions to address various challenges posed by the climate crisis
Climate technologies as a driver of global growth: One out of every six startups established in 2022 is a climate-tech company
14 cents of every dollar invested in Israeli high-tech is directed towards the climate sector
In 2022 the climate sector was 400% more resilient than other technologies in Israel
The Israel Innovation Authority and PLANETech, a joint initiative of the Israeli Innovation Institute and the Consensus Business Group of Vincent Cheng, published today the “Climate Technologies in Israel – 2023 Status Report”.
The report highlights Israel’s significant potential in the climate tech sector, despite facing three central barriers: funding, regulation, and challenges in transitioning to mass production. It provides an overview of Israel’s innovative stance in the global climate crisis, its current contribution, and future potential. Additionally, the report maps out innovative technology companies offering solutions to various climate challenges faced by the world.
Based on mapping all climate-related companies in Israel established since 2003, the report identifies 784 companies developing technologies or products addressing climate challenges, either in crisis mitigation (reducing emissions, greenhouse gas elimination) or climate adaptation (adaptation in agriculture, extreme temperatures, water, infrastructure, and natural resource utilization). The report also includes survey results from 210 climate entrepreneurs and companies, identifying specific barriers in climate technology development.
Dror Bin, CEO of the Israel Innovation Authority, said, “Now, more than ever, it is crucial to focus on the development of future technologies that will lay the foundation for our future. The climate crisis is the most significant global threat facing humanity today, and we are already feeling its impact. Israel has immense potential in the climate tech sector, and it is our duty to continue supporting relevant players to ensure they have the necessary tools for continued growth and prosperity. Climate technological innovation is not only a significant contributor to combating the climate crisis but also a substantial opportunity for the growth of the Israeli technology industry, with the potential for tremendous success on the global stage.”
Referring to the challenges the sector faces due to ongoing war between Israel and Hamas, Bin added, “The current war draws attention away from immediate challenges and difficulties. However, the development of additional growth engines will provide a solid foundation for the sustainable recovery of affected regions, in a green and sustainable manner. Hand in hand with addressing climate challenges, this will advance the economic and social resilience of the State of Israel.”
Shani Zanescu, Climatech Investor, Chairperson at PLANETech and Consultant at Consensus Business Group, said, “One of the most encouraging findings in the report reveals that in 2022, amid a global economic crisis, the climate tech sector in Israel was 400% more resilient than other high-tech sectors, signifying the clear importance of addressing climate challenges and the vast business potential therein. Even in challenging times, we witness the resilience demonstrated by our people and our high-tech industry, proving that we can rely on them to tackle any challenge, at any scale. PLANETech was founded on a genuine belief in the potential of the Israeli high-tech industry, and as we begin to collect the pieces and work towards the recovery of society and the economy in Israel, it is essential to recognize that Israel has significant potential to lead the global climate tech field. I call on all interested and relevant stakeholders to invest in the Israeli climate tech industry and work towards its acceleration, as it has the ability to lead a technological revolution that will save the Earth and all of humanity.”
Key Findings of the Report:
- In 2022, private market investments in Israeli climate companies amounted to $2.3 billion.
- One in six startups established in 2022 falls under the climate tech category.
- 14 cents of every dollar invested in Israeli high-tech are directed towards climate-related ventures.
- In 2023 there is a 13% increase in Israeli companies developing various technological solutions to address climate challenges, compared to 2022 (an increase of 90 companies). Amounting to a total of 784 climate tech companies.
- The leading sectors today in Israel, with the highest number of companies, are climate-adapted agriculture, clean energy systems, sustainable and smart transportation, alternative proteins, and climate-adapted water infrastructure.
- Focusing on companies established in the last five years, risk management and carbon capture and removal show the most significant annual increase. Climate-adapted water infrastructure dropped from fifth to eighth place in the overall rankings, alongside clean construction.
- Approximately 66% of climate companies established since 2003 employ fewer than 10 people.
- In 2022, the climate tech sector was 400% more resilient than the other existing technologies in Israel.
- 48% of all climate tech investments in 2022 were from foreign sources.
- $71.4 million, constituting 16% of the Innovation Authority’s budget for 2022, was invested in climate tech projects. Throughout the year, the Authority supported 273 technological initiatives in this field.
- More than 20% of Israeli climate tech companies operate in at least 10 other countries.
- The main global markets for Israeli climate technologies include the United States and Canada in North America, and Germany, Spain, and Italy in Europe.