Policy Recommendations
Our research-driven, science-based policy recommendations aim to address pressing challenges and opportunities in hard-to-abate sectors. Based on our own analysis and workshops and aligned with industry trends, we aim to identify specific steps that will remove roadblocks and bridge the innovation gaps to reach net zero by 2050. You can find our different recommendations, supporting evidence, and open letters below.
Future Cleantech Architects' Key Policy Recommendations
Policy Recommendations for Innovation
The EU should provide comprehensive support for cleantech and enhance its industrial decarbonization efforts through the implementation of existing policies and initiatives such as the European Green Deal and the Fit for 55 package. Research and innovation, increased investment in cleantech, and ensuring effective, coherent and stable regulatory frameworks will help facilitate rapid cleantech deployment. Policies must support all stages of cleantech innovation, from early research to intellectual property protection, testing, industrial exploitation on site, and product development and commercialization. Emphasis should be placed on harder-to-abate sectors, where emissions are still high and difficult to reduce, to drive the transition to a net zero society.
Challenge addressed: Achieving climate neutrality by 2050 requires significant CO2 emissions reductions, with 35% of these reductions needing solutions and technologies currently in early development stages (IEA). Extensive research, innovation, and demonstration projects are essential to make these solutions viable and competitive in the global and European green market.
Resources allocated to Horizon Europe, the Innovation Fund, and the European Innovation Council (EIC) should be increased to support the development of a wide portfolio of cleantech solutions that will deliver significant emissions reductions through grants, loans, and guarantees. Access to financing for cleantech projects should be expanded by offering a variety of financial solutions, such as public credit guarantees to derisk investments in cleantech ventures (including first-of-a-kind projects) as well as facilitating access to capital markets in order to bridge financing gaps and enable large scale project developments.
Challenge addressed: High-risk cleantech ventures often find it difficult to secure (affordable) financing. Public support can mitigate financial risks, encourage private investment, and accelerate innovation.
The regulatory framework should be simplified to facilitate the commercialization of university research, streamline the transfer of intellectual property rights from universities to spin-off companies, ensure fair compensation for all parties involved, and accelerate access to financing.
Challenge addressed: Complex regulations impede university spin-offs and the commercialization of innovations, which can slow down the process of bringing new technologies to market.
Policies should promote energy efficiency principles and the adoption of circular economy practices by incentivizing the reuse and recycling of materials, fostering innovation in sustainable practices, and promoting the use of low carbon alternatives and more durable solutions through a life cycle assessment approach.
The new cleantech economy will also generate significant waste and increased use of rare earth raw materials, which are limited and can create new dependencies for Europe.
Transparent, evidence-based journalism should be encouraged to manage public expectations, maintain support for ambitious climate policies, and counter misinformation. Emphasis should be placed on conveying that the clean energy transition requires behavioral change, new practices, and may involve short-term higher costs.
Challenge addressed: Public misinformation and misunderstanding can undermine support for urgent climate policies.
For more information see our Future Cleantech Priorities Report.
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Policy Recommendations for Aviation
Giving priority to new rail infrastructure on high-traffic air routes, implementing fair pricing mechanisms, and ensuring seamless alternative travel options.
Impact of the recommendation: shifting just 17% of flights <1500 km to rail (including night trains) will help eliminate 5% of the sector’s emissions globally. With its high rail connectivity, 80% proportion of electric trains, and 69% traveler willingness to use night trains for flights <1500 km, Europe is a perfect example of the potential for even larger emissions savings by shifting short-haul air traffic to rail.
Removing aviation’s hidden subsidies through proper taxation and reducing the cost gap with alternative solutions.
Impact of the recommendation: A study by Transport & Environment
(T&E) revealed that in 2022, European governments lost out on €34.2 billion of tax revenues from aviation due to inadequate taxation. These actions, if correctly reinvested in innovation, would help accelerate the deployment of sustainable solutions. By way of comparison, the European Innovation Fund’s call for proposals amounted to €4 billion in 2023.
Reinvesting carbon pricing revenues into advancing electric and hydrogen-powered aircraft and boosting SAF production.
Impact of the recommendation: ambitiously deploying all-electric and hydrogen aircraft on feasible flights <4000 km by 2050 will help reduce the sector’s total warming impact, which includes in-flight CO2 and non-CO2 emissions as well as upstream emissions, globally by 17%. As the share of emissions from flights within this range is similar between the EU and globally, this measure is expected to achieve similar levels of emissions savings within the EU.
Implementing strict compliance measures and ensuring target feasibility considering limited resource availability (from renewable electricity to green hydrogen and sustainable biomass).
Impact of the recommendation: deploying SAFs to the levels outlined in ReFuelEU Aviation, if achievable, will help cut the sector’s total warming impact on the planet by ~38% by 2050.
By advancing weather monitoring systems and integrating flight rerouting measures into air traffic management.
Impact of the recommendation: As we saw in recommendations 3 and 4, ambitiously deploying all electric, hydrogen and SAFs together could reduce aviation’s total warming impact by 55% by 2050. Additional contrail avoidance measures will help cut the sector’s total warming impact by another 15%. The combined impact of these measures is a total 70% reduction by 2050. Remaining warming impact is associated with upstream and other non-CO2 emissions.
For more information see our Aviation Policy Brief, our Policy Brief on Book and Claim, and our Aviation Factsheet!
Policy Recommendations for Structural Efficiency and Green Construction
There is vast and neglected potential for structural efficiency to significantly reduce demand for construction materials by optimizing the performance while minimizing the amount needed for concrete, steel, or timber. Enhancements should include improving energy efficiency in cement production processes, designing durable structures that require less maintenance over their lifespan, and considering the entire lifecycle of buildings and infrastructure, from material extraction and production to construction, maintenance, and demolition. Reducing material use throughout the value chain significantly cuts costs and emissions. Systematic collection and reporting of data on structural efficiency for buildings should be encouraged, leveraging modern tools such as algorithms, robotics, and off-site manufacturing with on-site assembly, to reduce labor costs and construction times.
Challenge addressed: Cement production is among the largest emitters of CO2 (5% of global emissions), and demand is expected to continue to increase. Concrete, and therefore cement, is essential for public infrastructure (41%), residential buildings (31%) and public and commercial buildings (21%), and assets in the sector have a long lifetime (around 60 years). Historical examples, like cathedral vaults, demonstrate that durable buildings can be achieved with less material.
Stimulating low carbon product demand and derisking investment in innovation will be crucial. At a European level, research and innovation programs and schemes (Horizon Europe, the Innovation Fund) should support a broad spectrum of technology innovation, from carbon capture and storage, to high temperature heat for industrial processes (through electrification combined with thermal energy storage), and circular economy, as is the case under the pathfinder challenges of the European Innovation Council. Revenues from the end of the free allowances under the ETS will be crucial to further innovate in the sector and decarbonize the industry quickly.
Challenge addressed: As of 2026, he CBAM will gradually replace free allocation under the EU’s Emissions Trading Systems (ETS), to avoid carbon leakages which are somehow limited in the sector that uses mostly local material. The ‘polluter-pays’ principle will also apply to the sector, avoiding heavy industry carbon emissions being exempted from ETS obligations.
Minimize waste by focusing on dismantling for reuse, extending the lifespan of structures, optimizing construction processes, and using lower carbon alternatives for new materials.
Challenge addressed: Construction materials constitute 40% of European waste. Shifting to a circular economy reduces inefficiencies and environmental impact.
The transition from prescriptive to performance-based standards should be encouraged to foster innovation in low-carbon materials and structural efficiency. Additionally, clear sustainability criteria and quotas should be established for publicly funded construction projects to drive market demand for green products and cleantech. It is important to note that, even with a high premium on the cost of “green” materials, the impact on the total cost of the final building is actually low, making it feasible for the wider market to absorb this premium. Building administrative capacity at the local level is necessary for the effective implementation of these new criteria and standards.
Challenge addressed: Prescriptive standards limit innovation, whereas performance-based standards open the market to a wider range of solutions, promoting sustainability throughout the building lifecycle. Furthermore, public procurement can create significant market pull for sustainable products, helping to scale up cleantech and green materials.
Carbon Contracts for Difference (CCfDs) should be implemented to de-risk low carbon technologies by providing firms with a fixed CO2 price, thereby encouraging large-scale industrial investments. Carbon Capture, Utilization, and Storage (CCUS) and Carbon Dioxide Removal (CDR) could also be included in future auctions to test their feasibility and effectiveness in real-world conditions.
Challenge addressed: CCfDs reduce financial risk for innovative technologies, facilitating their adoption and scaling. Ensuring a two-way mechanism and addressing both capital expenditure (CAPEX) and operational expenditure (OPEX) are critical for their success.
For more information see our Cement Factsheet.
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Policy Recommendations for Future Energy Systems
Decarbonizing the power generation sector requires a comprehensive strategy that assesses all components of the future energy system, which goes beyond expanding intermittent renewables. This strategy should integrate flexibility tools such as long duration energy storage (including thermal storage for heat applications), clean firm power sources (e.g. hydropower, geothermal, and concentrated solar power), and enhanced grid infrastructure.
Challenge addressed: The increased penetration of variable renewable energy has created challenges in balancing power systems. Consequently, some countries rely on clean firm power from neighboring countries for grid stability (e.g., Germany partially relies on nuclear power from France).
A holistic approach should be adopted to enhance grid infrastructure, ensuring efficient energy transport from generation sites to consumption areas. This includes strengthening interconnectors between countries to manage a higher share of renewable energy and enhance grid security. Coordination amongst stakeholders such as Transmission System Operators (TSOs) and Distribution System Operators (DSOs) is necessary to maintain grid frequency and stability. To create more responsive and resilient grid systems and to reduce the need for overbuilding new grids, it is necessary to integrate digital tools to manage energy flow more efficiently.
Challenge addressed: The grid consists of multiple national grids interconnected to form a larger, synchronous grid at the EU level. The increasing penetration of variable energy sources such as wind and solar presents challenges for grid stability, requiring flexibility and agile grid management.
A diverse range of energy storage technologies, beyond Li-ion batteries (which are limited to a few hours of storage), should be promoted, ranging from electrochemical (e.g. redox flow), to thermal (sensible heat), mechanical (e.g. pumped hydro), and chemical (e.g. hydrogen). This diversity is crucial to fully cover the multi-faceted needs of grids, from intra-day storage (e.g. day/night cycles with solar) to longer durations of days, weeks, and seasons. There is no one-size-fits-all technology.
Challenge addressed: Energy storage technologies will play a critical role in addressing the challenges posed by increased renewables penetration into the power system. Different storage technologies are needed to manage varying durations of energy storage needs.
Market demand for flexibility tools should be created, and innovative financial models that reward investment and de-risk projects developed. Long term revenue streams with 24/ clean PPAs, Contracts for Difference, and capacity mechanisms must be encouraged, including knowledge exchange between Member States. This de-risking strategy pays off later by creating new markets, both within and outside of Europe, via technology exports, increasing competitiveness. Strong policy support and a combination of public and private funding are necessary to ensure the economic viability of mid to long duration energy storage solutions. Moreover, the permitting process should be streamlined to make it efficient and clear for startups and companies. It is also important to design energy markets that abolish perverse incentives that punish flexibility tools, such as double taxation of energy storage facilities, and instead value and reward flexibility and energy storage solutions, thereby encouraging investment and innovation in these areas.
Challenge addressed: The lack of a positive business case for energy storage technologies hinders their development and deployment. The current permitting or licensing process is also widely reported as inefficient and unclear for start-ups and companies looking to bring their new cleantech to the market.
Thermal energy storage should be integrated into industrial decarbonization and heating plans to unlock cost-effective decarbonization potential for the industrial sector’s heat demand. Energy stored as heat can be converted back into electricity, or used in high temperature processes, delivering high energy density and efficiency. Challenges such as the commercial scaling of prototypes need to be addressed to fully benefit from TES in industrial applications.
Challenge addressed: Industrial processes and buildings require heat,the production of which represents over 25% of global greenhouse gas emissions. There are multiple TES technologies and materials, covering a wide range of temperatures, storage durations, and applications; While some TES technologies require further support for RD&D, many others are mature and ready to deploy to support the growth in renewables.
For more information see our Long Duration Energy Storage Factsheet and our Thermal Energy Storage Factsheet.