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Climate entrepreneurs are coming for Europe’s money 

Climate entrepreneurs are coming for Europe’s money 

by host

BRUSSELS — Stefan Borgas already runs a multibillion-dollar Austrian company that supplies iron and steel factories. But that’s not exactly why he was in Brussels. 

Borgas was in the capital of the European Union seeking millions for a pet project that doesn’t yet exist: solid carbon. 

The 60-year-old industry titan has become an evangelist for a new technology that, he claims, will trap carbon emissions into solid form, storing away the planet-warming gasses before they hit the atmosphere.

The upside could be massive — if the product works, that is. The world is saddled with carbon-belching factories that can’t easily switch to renewable energy alternatives, creating a demand to capture the gas instead. Yet thus far, no product has hit the scale, price point or effectiveness needed to develop a true market.

So Borgas packed his schedule full of meetings with high-level EU officials to try and convince them that his product might be the one.

“If that works on a large scale,” Borgas said of his make-carbon-solid idea, “then we can decarbonize everything — the whole value chain and that of our competitors.” 

The business exec said he was willing to pump €50 million into the project, but needs double that to build the first plant. 

Enter Brussels — and its newly ample pocketbook.

The EU is preparing to hand out €40 billion to turbocharge carbon-slashing projects as part of its effort to reach climate neutrality by mid-century. The push has brought a coterie of entrepreneurs and big business executives like Borgas to the halls of EU power, all claiming to have a solution that deserves the bloc’s money. 

Ecocem, a cement maker headquartered in Ireland, is multiplying its Brussels visits to proselytize. Verkor, a French battery-maker, is similarly intensifying its presence with an eye on EU money.

Yet the road to climate neutrality is paved with more head-spinning promises than sober-minded investment opportunities. That presents the EU with an existential question: How much risk is it ready to take when taxpayer money is at stake? 

Most carbon capture ideas are “built on the whims and dreams more than reality,” said Eadbhard Pernot, who works with the organization Zero Emissions Platform that advises the EU.

When lobbying pays off

Borgas, CEO of RHI Magnesita, began scouting for novel ways to curb CO2 emissions when he realized that existing methods wouldn’t cut it for his businesses — a series of small refractory plants across the Continent that make heat-resistant materials.

The idea he settled on has caught the attention of some Brussels heavyweights, revealing the benefits of his pavement-pounding in the EU capital.

Last month, EU energy chief Kadri Simson carved out a few hours of a trip to Australia to tour the pilot plant Borgas is building with a local startup. | Aris Oikonomou/AFP via Getty Images

Last month, EU energy chief Kadri Simson carved out a few hours of a trip to Australia to tour the pilot plant Borgas is building with a local startup.

“In the pursuit of our climate goals, embracing diverse technologies is paramount,” Simson said in a statement at the time.

Whether Simson’s curiosity turns into EU cash, however, remains to be seen.

Other entrepreneurs have similarly piqued Brussels’ curiosity with their wares — but have yet to see a financial reward.

Ecocem bills itself as a “low-carbon” cement-maker. Its pitch: If we reduce one type of glue in the production process, we could erase half of the concrete industry’s carbon output. And the EU can help make this happen, the company argues in promotional materials noting Brussels has given “little or nothing” to such efforts. 

The firm has taken this message to Brussels in recent years. Between 2020 and 2022, Ecocem quadrupled its lobbying budget, according to LobbyFacts, which tracks corporate EU lobbying expenses. And in 2022, executives held six meetings with high-profile officials at the European Commission, the EU’s executive.

In February, Ecocem founder and managing director Donal O’Riain met with the cabinet of EU climate chief Maroš Šefčovič to discuss his vision. O’Riain recalled the meeting as “very encouraging.”

“They were bubbling over with enthusiasm and wanted to help us as much as possible,” he told POLITICO.

Verkor, the French battery-maker, has already broken through. 

Its (winning) pitch: Digitization and better recycling techniques can help us make electric vehicle batteries right here at home. The EU bought it. In 2023, Brussels approved a €659 million grant to cover the company’s research and development costs until the end of 2026.

These firms see themselves as the Davids competing against an array of Goliaths for the EU’s resources. | Oliver Hoslet/EFE via EPA

The decision came only three years after the company was founded and two years after it started lobbying Brussels, spending between €100,000 and €199,999 on its efforts in both 2021 and 2022, according to LobbyFacts.

Biblical battle

These firms see themselves as the Davids competing against an array of Goliaths for the EU’s resources.

They describe a biblical effort to even qualify for EU money, let alone get it. The process, they say, takes administrative firepower, legal prowess and time … lots of time.

“A rainforest of paperwork,” recalled Roeland Baan, CEO of Topsoe, a Danish firm making electrolyzers, a key component in hydrogen production. The process, he said, took nearly eight months. Meanwhile, an application for green subsidies in the United States, he said, took just a few weeks.

“A total jungle,” agreed Jacqueline van den Ende, co-founder of Carbon Equity, an Amsterdam-based company that invests in funds backing more than 100 climate-friendly startups.

“You need to hire specialist advisers who are really well-versed in raising grant funding to help you navigate the process, and often that is so time-consuming that a lot of companies don’t even start,” she added.

That gives an advantage to more established companies, startup advocates argue, given their extensive legal compliance departments and history of navigating the byzantine Brussels bureaucracy. 

The battleground for these fights is the EU’s so-called Innovation Fund, created to dole out money to potentially game-changing technologies that might not yet have a great business case to catch a bank’s interest. 

Yet after four years, the bulk of money given out from the fund has gone to large companies. Cleantech for Europe, which lobbies in Brussels for climate-friendly tech firms, calculated that only nine of the 72 projects selected for financial help were led by smaller, next-generation firms. 

Baan’s Danish firm, Topsoe, also scored more than €90 million. 

Investing in startups means taxpayer money will go to a few flops. | Georges Gobet/AFP via Getty Images

“If you look at the list of the successful projects, it’s basically very large industries that, honestly, might need some of the money a little bit less,” said Jules Besnainou, who heads up Cleantech for Europe.

Asked about the criticism, a Commission spokesperson noted that the fund is “not an instrument for startups” and added that “one can be an incumbent and yet still have innovative ideas.” 

Balancing act

The EU will, of course, never please everyone. 

Investing in startups means taxpayer money will go to a few flops. Making only safe bets will leave revolutionary ideas languishing. Realistically, it’s a balancing act. And the perfect equilibrium is never clear.

Pernot, the policy specialist advising the EU on carbon-cutting tech, said he cautions Eurocrats to be “quite measured” when deciding how to allocate public funds.

“I’ve met a lot of tech startups that have lofty ambitions,” he said.

Besnainou, the Cleantech for Europe chief, conceded that “taking risk is hard, especially if you’re a public entity” exposed to “a lot of scrutiny.”

Yet asking startups to display solid finances — a key strategy to avoid public money from being burned — often stands in the way of critical investments, he argued. 

Predictably, van den Ende — the Carbon Equity executive investing in startups — felt similarly.

The EU can’t be “wasteful,” she said. But, she stressed, it must be “willing to take risks where there is a serious risk of losing money.”

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