Image by Petra Leary
ClimateTech presents an opportunity to solve the greatest environmental challenges of our time – while creating a dynamic, high-value export industry to boot.
Aotearoa New Zealand has an abundance of problem solvers and innovators, as shown by the ever-growing Kiwi ingenuity across all sectors, including innovations to solve climate problems. If such ideas are turned into commercial ideas – including on the back of research – there’s incredible potential to lift the economy and New Zealanders’ wellbeing. But, in many cases, these innovative concepts aren’t translating into commercial ClimateTech opportunities – so what’s holding us back?
James Muir is an entrepreneur, enthusiast of identifying solutions to environmental problems, and Callaghan Innovation Business Innovation Advisor, Energy and Environment. He’s currently leading some of the most in-depth research to date into NZ’s ClimateTech sector.
Early findings suggest a lack of investment in NZ-created solutions to environmental problems could be contributing to fewer innovative Kiwi ClimateTech concepts being commercialised, compared with other similarly sized economies.
For example, Sweden – a similarly sized advanced economy to NZ –receives 1000x the investment into ClimateTech innovation that NZ does.
“Plenty of clever Kiwis are developing incredible tech solutions for tackling climate change and CO2 emissions,” says Muir. “A few Kiwi businesses have struck gold in the ClimateTech innovation space, including LanzaTech, with their CO₂ emission-reducing technology turning industrial gas into ethanol which can be used as jet fuel.”
“On the other hand, we have Fonterra – one of NZ’s largest companies – partnering with Dutch multinational corporation, Royal DSM, to create methane-reducing technologies for the agriculture sector,” says Muir. “This is the kind of technology we’d like to see attracting investment in NZ.”
Kiwi ClimateTech funding at a glance
Currently, public sector funds are the main source of investment for ClimateTech innovation in NZ, such as through the R&D Tax Incentive (RDTI) and Callaghan Innovation’s R&D Loan Scheme and Project Grants.
While these public sector funds are important, we need to do more to attract private sector capital, Muir says.
“NZ tends to focus on national R&D and tech opportunities, and we have strong public sector funding schemes and grants to support this,” says Muir. “However, to create a more resilient ClimateTech industry, we must ensure that NZ is well connected to international investors to help the sector become less reliant on public funds.”
A global outlook will attract investment
Muir says that NZ companies in the ClimateTech innovation space must ensure they have a global outlook to provide greater opportunities for international ClimateTech investment in NZ.
“Simply put, there are vast investment opportunities abroad that we hope to see Kiwi businesses tapping into. Climate change is a global problem, and Kiwi solutions can contribute to the global mission to address it.”
New research to explore ClimateTech innovation opportunities
Muir’s current ClimateTech research aims to identify leading global ClimateTech trends within the key subcategories of agriculture, transport, energy, and construction to highlight potential growth areas.
While NZ ClimateTech currently has relatively low levels of private investment, Muir says his research has unveiled plenty of exciting innovations in the works, and he’s confident they’ll boost ClimateTech business opportunities.
“NZ has seen many exciting Kiwi companies in the ClimateTech space launch over the past few years, including Geo40, ArcActive, SolarCity, Vortex, and IntDevice.”
Muir says that collaboration and capital were key to the success of these businesses.
“Each of these businesses were able to combine expertise from previously unconnected fields or industries, source capital, and break through with their innovative ideas.”
“Greater private sector investment would supercharge the sector, and could help secure NZ’s place as world leaders in ClimateTech innovation.”
Muir will explore these issues in more detail – particularly around the challenges to investing in ClimateTech –as part of a Techweek TV panel during Techweek 2021 (24-30 May).
James Muir, Business Innovation Advisor - Energy & Environment