How to fund breakthrough ideas?
Many of the disruptive technologies, which can decouple production from process emissions, have not yet reached significant levels of market penetration due to a large number of market and non-market barriers. Most importantly, the gap between needed and available financing is unprecedented. Moreover, the success of the European Green Deal and a cost-efficient transition ground on the rapid and effective mobilisation of investments.
Companies are typically reluctant to finance activities where risks are high and technologies and processes have yet to be developed. Nevertheless, we still need to bring together different sources of public and private capital in technology-specific financing blueprints. Additionally, studies argue that a new conception of the “risk-reward nexus” would be required, where a stronger public authority should control the allocation of resources in riskier (and socially desirable) green investments.
Therefore, we are exploring the public funding possibilities, and to begin with in this blog, we are focusing on the European programs designed to create innovation.
Horizon 2020 has been the financial instrument implementing the Innovation Union, a Europe 2020 flagship initiative aimed at securing Europe's global competitiveness. Horizon 2020 has been the EU's research and innovation funding programme from 2014-2020 with a budget of nearly €80 billion. It combined all research and innovation funding provided through the Framework Programmes for Research and Technical Development, the innovation related activities of the Competitiveness and Innovation Framework Programme (CIP) and the European Institute of Innovation and Technology (EIT).
From all the calls in the work programme 2018-2020 the one that resonates most with the vision we advocate for is the competitive, low carbon and circular industries. This call addresses research challenges related to the Circular Economy, a priority since the 2015 Circular Economy Action Plan, as well as to reaching carbon neutral industries. Within this call several funded projects can bring along a positive impact to the decarbonisation of the chemical industry, although the purpose of the projects in most cases is defined in a generic approach.
It is important to reflect that 0.15% of the programs’ budget is dedicated to research breakthroughs with potential applications in a future competitive, low-carbon and circular chemical industry.
Moving on in time, Horizon Europe program is the successor of Horizon 2020. With a larger budget than its predecessor, the pillars of the programs are somehow else organized. Specifically, pillar II focuses on Global challenges and European Industrial competitiveness.
Based on the overarching EU policy priorities, the strategic plan sets out four key strategic orientations and 15 impact areas, which are based on 32 expected impacts that have been defined in an inclusive and ambitious strategic planning process. Each expected impact is targeted via dedicated packages of actions in the work programme.
Calls related to industry can be found in Cluster 4. Proposals under this cluster aim to build a competitive, digital, low-carbon and circular industry, ensure sustainable supply of raw materials, develop advanced materials and provide the basis for advances and innovation in global challenges to society. There is parallelism with the predecessor program, while the later clearly includes the digitalization as part of the destination.
Horizon Europe has a budget of €95.5 billion for the period 2021-2027. This includes €5.4 billion from the Next Generation EU instrument, to particularly support a green and digital recovery from the COVID crisis, from which the Global Challenges and European Industrial Competitiveness pillar will receive €53.5 billion budget, which is significant portion of the budget, highlighting its relevance.
There are two destinations that provide applicable topics to the future of the chemical industry. Destinations such as climate neutral, circular and digitized production and increased autonomy in key strategic value chains for resilient industry, both contained several applicable calls with plenty of topics to apply for grants. In fact, the array of topics has tremendously increased and they have also become more specific.
In 2021 within the climate neutral, circular and digitized production there were 30 calls available and under the increased autonomy in key strategic value chains for resilient industry the amount of possible calls went up to 44. This is an encouraging trend. On one hand, trying to create a compelling overview of granted projects becomes an herculean job for me, but on the other hand, in a compressed timespan the amount of proposals submitted to this innovation program has sky-rocketed, which will provide a project pipeline, hopefully robust enough to fund game changing ideas.
