Transforming Challenges into Opportunities
Climate tech stands at a pivotal crossroads for Israel’s economy. As the world grapples with the climate crisis, the Israel Innovation Authority (IIA) is spearheading a strategic initiative to position Israel as a global Climate tech powerhouse. This effort aims to generate significant economic opportunities while addressing pressing environmental challenges. Rather than perceiving climate change solely as a crisis, Israel is seizing this opportunity to build a thriving industry that will contribute substantially to economic growth. Leveraging its proven technological capabilities, Israel aims for a 10% share of global investments, underscoring the immense potential of Climate tech as a transformative force for Israel’s economic and environmental landscape.
Israel’s ClimaTech Ecosystem: A Fertile Ground for Innovation
The Climate tech ecosystem in Israel is dynamic and growing, boasting 946 startups developing cutting-edge solutions across sectors such as energy, water, agriculture, food, carbon capture, and green construction. Recognizing its strategic significance, the Israel Innovation Authority has invested $257 million over the past three years to empower Israeli companies in developing breakthrough technologies and competing in global markets.
Key Programs Driving Innovation
1. Technological Infrastructure Programs
- R&D Labs:
Establishing state-of-the-art research facilities, including
- Academy-Industry Partnerships: Fostering collaboration between academia and industry to accelerate technological advancements.
- Consortiums: Forming partnerships to address shared technological challenges, such as advanced materials and energy solutions. Recent initiatives include:
› Approved MAGNET consortia focused on Cultivated Meat, The Black Soldier Fly, Bio Plast, and Sustainable Aviation Fuel (SAF).
› Two additional consortia under Assessment: Reinforced Superior Concrete and Green Soil.
2. Startup Division Programs
- Innovation Centers: in order to promote entrepreneurship in Israel’s peripheral areas, the government initiated a $27.6 million program to establish nine innovation centers across the country, 8 of them in Climate related themes, promoting high tech solutions for a range of topics such as foodtech, renewable energy, built environment, agriculture, and more.
- Technology Incubators: Supporting early-stage companies through funding and strategic guidance. Notable incubators driving ClimaTech venture creation include:
- Human Capital Development programs: Strengthening Israel High-tech industry by creating new upskill & Reskill programs for Tech-talents in Climate-Tech arena through specialized programs, to name just a few:
› WOMEM IN MOBILITY: A CEO academy Deep-tech initiative focusing on creating the future CEO women in mobility, energy, and green manufacturing.
› FoodTechies Program by Elevation in cooperation with Israel Agri-Foodtech Valley& Tel-Chai: an innovative human capital program increasing techtalents for the food-tech industry.
› Climate Tech Talent Accelerator by Kinneret Academic College: A unique program for human capital and incubation tracks in AI, cyber, agritech, and water-tech, with a special emphasis on soft skills, industry connections, mentorship, and placement in high-demand tech fields.
3. Growth and Advanced Manufacturing Programs
- Investment in early-stage startups through Startup Fund, fast track and R&D fund: over $50 million invested in breakthrough technology ventures.
- MOFET and R&D-to-Production Initiatives: New product development in Manufacturing industry or developing manufacturing process to bridge the gap between research and production to build new manufacturing facilities. $20 million invested and over 50% of Mofet and R&D to production applications are in climate technologies.
- Pilot Programs: Facilitating the testing and deployment of new ClimaTech solutions. In 2024, $15 million invested in the Pilot Program, in collaboration with other government ministries and entities such as the Ministry of Environmental Protection, the Ministry of Energy, the Ministry of Agriculture, the Ministry of Transportation to support late-stage R&D pilots.
4. International Collaborations
The Israel Innovation Authority, through its International Division, launched the ‘International ClimaTech Program’ to foster collaboration between Israeli startups and global corporates in climate-related fields. The program aims to help Israeli Climate Tech startups validate their solutions and scale efficiently while strengthening their global impact. In 2024, the Israel Innovation Authority co-founded the EARTH Global Climate Tech Alliance (E5), a pioneering initiative to advance climate innovation through global collaboration. This alliance, formed in partnership with Vinnova (Sweden’s Innovation Agency), Enterprise Singapore, Business Finland, and FFG (the Austrian Research Promotion Agency), brings together leading innovation agencies from the world’s premier Climate Tech hubs. By sharing expertise and resources, the alliance will serve a mean to accelerate the development and scaling of transformative climate technologies.
A significant partnership between the Israel Innovation Authority, the Ministry of Energy, and the US Department of Energy (DOE) under the BIRD Foundation continues to drive innovation in clean energy. With an annual contribution of $6 million from each government, this initiative supports joint R&D projects and Energy Excellence Centers, fostering technological breakthroughs, strengthening US-Israel collaboration, and promoting economic growth.
Additionally, The Israel Innovation Authority led several Israeli tech delegations to some of the world’s leading climate events, including COP29 in Baku and New York Climate Week, in collaboration with ecosystem partners. These initiatives highlight groundbreaking Israeli climate technologies, showcase innovative solutions, and support the international expansion of Israeli Climate Tech startups.
5. ISERD and Horizon Europe
Israel’s participation in Horizon Europe, the largest global climate funding and R&D initiative, reflects its engagement with critical global challenges in climate innovation. This program provides a platform for advancing solutions in areas like renewable energy, sustainable agriculture, and urban resilience, aligning with Israel’s expertise in research and development.
All data hereafter is sourced from Horizon Dashboard on the European Commission’s Funding and Tenders Portal. The analysis focuses on Clusters 5 and 6 of Pillar 2, titled “Climate, Energy, and Mobility” and “Food, Bioeconomy, Natural Resources, Agriculture, and Environment,” respectively. It also incorporates climate-related Missions associated with these Clusters, including Soils, Ocean, Climate, and Smart Cities.
A Snapshot of Recent Trends Horizon Europe grants approved to Israeli Climate tech companies was €105 million (2021-2023), out of which 40% granted under pillar 2, for consortia.
Between 2021 and 2022, Israel doubled its submissions to Horizon Europe, driven by new initiatives such as partnerships under Clean Hydrogen, CBE JU, PRIMA, and a growing emphasis on climate-focused Missions like Smart Cities and Ocean Health (Figure 12). However, geopolitical challenges in 2023, including the war outbreak in Q4 of that year, contributed to a 20% decline in submissions and a drop in Israel’s share of total EU submissions from 1.05% in 2022 to 0.57% in 2023.
Encouragingly, early indicators from 2024 suggest signs of recovery, reflecting the ongoing commitment of Israeli researchers, startups, and public entities to global collaboration.
While success rates for Israeli applicants decreased from 29% in 2022 to 18% in 2023, this mirrored broader EU-wide trends driven by increased competition. Notably, Israeli beneficiaries secured higher-than-average funding per project, demonstrating efficiency in leveraging available resources to maximize impact.
Public bodies, including municipalities, made up 16% of beneficiaries, researchers from academia or research institutions accounted for 40%, and for-profit organizations represented 39%. This mix highlights the collaborative approach necessary for tackling complex climate challenges.
The challenges of 2023 serve as a reminder of the importance of resilience and adaptability. Despite a temporary dip in participation and success rates, Israel remains an active player in Horizon Europe. Its involvement underscores the value of fostering partnerships and tapping into the program’s opportunities to advance climate innovation.
By continuing to engage with Horizon Europe, Israel contributes to collective efforts aimed at addressing the world’s most pressing climate issues. Strengthening international collaborations and maintaining momentum will be crucial for future participation in this vital program.
Strategic Growth and Future Plans
The overarching goal is to position Israel as a global hub for ClimaTech innovation, delivering groundbreaking solutions to the climate crisis while driving significant economic growth. For the Innovation Authority, developing the ClimaTech sector is a national mission of the highest priority. Beyond economic benefits, it’s an opportunity to place Israel at the forefront of the global fight against climate change and contribute to a sustainable future. To ensure continued growth and impact, the Israel Innovation Authority is focusing on several strategic initiatives:
- New Venture Creation – Facilitating the emergence of new startups through dedicated technology incubators, innovation centers and the startup fund, that leverage cutting-edge knowledge and technologies.
- Barrier Removal – Streamlining regulatory and technological pathways to accelerate commercialization and market adoption.
- Integration of AI and Bio-Convergence – Applying artificial intelligence for predictive climate solutions, optimizing renewable energy deployment, and enhancing carbon capture efficiency. Bio-convergence will play a critical role in revolutionizing synthetic biology, sustainable materials, and carbon-neutral chemical production.
- Deepening International Collaborations – Expanding global investment in Israeli climate tech, fostering international technology partnerships, and increasing market access.
The Israel Innovation Authority’s unwavering commitment to ClimaTech showcases Israel’s proactive, forward-thinking approach. By investing in innovation, nurturing human capital, and fostering strategic partnerships, Israel is poised to emerge as a global leader in ClimaTech.