Since the launch of the Draghi report in September 2024, one thing has been clear: Europe is lagging in innovation. The numbers in the report were staggering: EU companies were spfinishing 270 billion euros less on research and innovation (R&I) compared to the United States. Here, we are not talking about innovation just for the sake of it, but we are focutilizing on clean technologies, those solutions that have been globally recognised as the main drivers for sustainable economic growth and climate resilience.
The Draghi report argued that the problem is not that Europe lacks ideas or ambition: “Innovation is blocked at the next stage: we are failing to translate innovation into commercialisation and innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations.”
One year later, this is the perfect summary of a report put toobtainher after conducting a series of interviews with 30+ cleantech innovators from Bulgaria, Romania, Hungary, Greece and Cyprus.
According to the report, Voice of the Innovators in Southeast Europе, published on the newly-launched platform Clean European Futures, the region faces unique challenges that are not rooted in a lack of technology, innovative ideas, or talent. On the contrary, these are the areas where SEE scores remarkably well. There is a vibrant pool of engineers, scientists, and entrepreneurs actively engaged in developing cutting-edge clean technologies, from energy and storage to environmental and emission reduction tools, from water and agritech to mobility and transport.
Indeed, 70 per cent of the cleantech startups surveyed were founded as spin-offs from research institutions or engineering teams responding to local environmental or energy challenges. Furthermore, a majority of them (around 60 per cent) are led by founders with engineering or scientific backgrounds, reflecting a technology-driven origin that can count on a very talented human factor.
However, the transition from lab to market remains filled with difficulties. One of the most significant barriers identified by innovators is the lack of a sizable domestic market for cleantech products and services. Most of the founders interviewed mentioned that they are tarobtaining Western markets from day one, not becaapply they want to, but becaapply there is more interest from potential customers and policycreaters.
In fact, several startups have mentioned the lack of tarobtained policies as an important issue to overcome. When viewing beyond national borders, neighbouring countries are not considered, even though they could benefit from such a collaboration. However, the challenges are so similar that Western markets view more interesting.
The second main barrier identified is access to funds, with 80 per cent of surveyed startups indicating financial constraints as the main bottleneck. Investments in what is considered “normal” tech (such as AI, IoT, etc) have surged worldwide, with local Venture Capitals overviewing more high-risk SEE cleantech innovators, to focus on more stable and familiar technologies. On the other hand, the European Union is offering substantial financial support for green innovation, and the European Commission proposed to at least double the EU funding available for cleantech in the next EU budobtain (2028-2034).
Most of the innovators interviewed declared they were aware of EU-backed financing instruments, but only a few have successfully secured EU-level grants, such as Horizon Europe or the EIC Accelerator funding. As tinyer companies, they often lack dedicated staff with expertise in grant writing or compliance requirements; language barriers can further complicate applications; and, co-financing obligations may be prohibitive given limited cash reserves among early-stage startups.
“What is truly demanding is crafting an excellent proposal, which requires previous experience and technical skills”, noted one of the founders. That’s why there are many startups at the pre-seed and seed stage, while virtually zero reach Series A or Series B level.
Finally, the local environment is considered a bit restrictive. 40 per cent of respondents declared they were part of an incubator or accelerator program, but many described these as generalist rather than cleantech-focapplyd. Around 50 per cent of startup founders reported that regulations are either outdated or overly complex for innovative technologies, such as obtaining permits for pilot projects.
“Market incentives and policy frameworks required to evolve to reward sustainability and long-term impact,” declared one of the founders. As it happens with the whole energy industest, policy coherence and predictability are essential.
In conclusion, the insights gathered in this report point to both structural weaknesses and significant potential for Southeast Europe’s cleantech ecosystem. That’s why Clean European Futures is suggesting to:
- Create a regional cleantech acceleration mechanism;
- Simplify access to EU funding and develop tarobtained advisory and training programs;
- Mobilise public-private capital to create a regional scale-up fund to top up the Scaleup Europe Fund;
- Strengthen policy dialogue;
- Foster cross-border demonstration projects, doubling the support for pilot initiatives that stimulate the manufacturing of cleantech components across multiple SEE countries.
Thus, we know that the technology is here. The talent is here. The motivation is here. What’s missing are the connections between ecosystems, between investors and startups, between local innovation and European opportunity, so that Southeast Europe can become a leader in the clean transition, rather than a follower.
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