Finding the climate-smart path to funding

Leif Lyckebäck works with innovative SMEs that are developing solutions for the bioeconomy or climate and energy in general.

– These companies often only have access to regional funding, So, our job is to help them discover the funding opportunities that are available for climate-related and circular bioeconomy solutions, both in Sweden and in the EU.

Many companies that IB:ACCEL engages with have a positive climate impact, in some cases without knowing it themselves. Capital-raising is crucial for developing and commercializing innovative solutions.

- Innovations with climate potential have completely different opportunities to get funded. The currency is the ‘carbon equivalent’. Companies are expected to demonstrate that their innovation, fully implemented, reduces emissions of carbon dioxide, methane or nitrous oxide.

Show the technology and the market

Funding opportunities within climate change have emerged over the past ten years. There are four main types of funding for climate innovations:

• National grants – Here, the Swedish Energy Agency is a major funder.
• National public venture capital – For example through ALMI Greentech Invest, which provides funding conditional on reducing climate impact.
• Private venture capital – From investors who have become aware of the new business opportunities of climate innovation.
• EU funding – From sources like the EU Innovation Fund and the European Investment Bank, which provides substantial funds for climate-related projects.

For all these types of funding, you need to demonstrate that your innovation shows both technical and business potential for reducing carbon dioxide or other greenhouse gas emissions. Companies must therefore demonstrate the potential of the innovation to scale up and achieve global market penetration with solutions that are better than the ones we have today. The assessment can include factors like risk level, investment amount, and the outcome in carbon dioxide equivalent in five years and ten years. Often a mix of funding types is involved, such as private funding and public grants.

 - I meet companies that are taking the next step in their development, Lyckebäck says. -  usually have a 45-minute conversation with them. If the link to climate change is strong enough, then I can point in the direction of funding sources and later support them in formulating an application so that they express themselves in a way that captures their solution’s climate potential.