Ag-tech, food-tech, water-tech, clean-tech. These well-established fields in Israel, along with a few others, can be grouped under a new umbrella: the climate-tech ecosystem.

Now we have the first mapping of Israeli companies developing technologies aimed at climate change mitigation and adaptation.

“Israel’s State of Climate Tech 2021,” a first-of-its-kind report, was released October 18 by the Israel Innovation Authority and the Israel Innovation Institute’s PLANETech.

The five main challenge areas in climate-tech identified in the report are agriculture, clean energy, mobility and transport, water infrastructure and alternative proteins.

Alternative proteins and green construction display the most rapid growth of startups in the last three years.

Emerging domains showing a significant increase are transparent and agile supply chains, novel materials, circularity and food loss and waste.

Dror Bin, CEO of the IIA, said the climate crisis is the most significant global threat facing humanity.

“While a number of activities are taking place at an international level, the eyes of the entire world are looking to the technology sector to produce innovative and groundbreaking solutions to reduce greenhouse gas emissions and deal with the consequences of the crisis,” Bin said.

“Climate innovation is not just an important stage in the war against the climate crisis, but also a significant business opportunity for the growth of an innovative, diverse and sustainable technological industry.”

Energy storage is king

The IIA-PLANETech report found a leap in the number of new startups dealing with climate issues in Israel already in 2014.

Today, Israel has nearly 1,200 companies that provide solutions to climate challenges, including 637 startups and growth companies established in 2000 or later. Nine percent of Israeli companies established in 2020 develop technological solutions that could ameliorate the climate crisis.

There are 235 companies developing clean energy systems, with energy storage identified as a field with especially high potential based on investments.

There are 212 developing climate-smart agriculture systems, with precision agriculture identified as high potential; 127 in sustainable mobility and transport, with new mobility having especially high potential; and 45 companies developing alternative proteins, of which cultivated meat has the highest potential.

Uriel Klar, director of PLANETech at the Israel Innovation Institute. Photo courtesy of PLANETech

“The report we compiled positions Israel as a global leader in climate tech and throws a spotlight on the areas that have unique potential in Israel,” said PLANETech Director Uriel Klar.

Klar predicts that climate solutions and technologies will lead to a new generation of unicorns in Israel while helping to solve a huge challenge for humanity.

“The vision of PLANETech and its partners is to transform Israel into a global center for climate technologies that helps reduce greenhouse gas emissions in Israel and around the world,” Klar said.

Cultivated meat, irrigation, water desalination

Other highlights of the “Israel’s State of Climate Tech 2021” report:

  • Israel is at the top of the list of G20 countries operating in the fields of cultivated meat, irrigation systems, precision agriculture and water desalination.
  • More than 560 private investment entities, mostly foreign venture capital funds, invested a total of $2.97 billion in Israeli climate companies between 2018 and 2020.
  • The total investments in the first half of 2021 amounted to 40% of the total investments in the three previous years.
  • The Israeli government, led by the IIA, invested $280 million in climate startups from 2018 to 2020.
  • Of 200 surveyed Israeli climate companies, 72% said their most significant challenge is securing funding. This is partly due to a lack of any single Israeli investment entity dedicated to this field. And most of the largest global climate-tech funds have not invested in Israel thus far.

Nevertheless, the future appears bright for Israel’s climate-tech ecosystem.

“An AI-driven analysis of global climate innovations identifies Israel’s competitive advantage in comparison to other climate innovation ecosystems around the world,” the report’s authors write.