AI boosts Europe’s cleantech, but investments still lag

, Chief Europe Correspondent
Source: Cleantech for Europe: Q1 2025 Briefing • Cleantech investments cover venture and growth investments in the report and refer largely to the initial equity funding rounds a company goes through to grow and scale up.

Rising electricity demand from artificial intelligence data centers is boosting the share of European investments in early-stage clean technologies that focus on power and energy, according to a recent report from lobby group Cleantech for Europe. 

More than half (53%) of the investments into early- and mid-stage EU cleantech companies in the first quarter of 2025 were in the energy and power sector, up from 34% in the last quarter of 2024. The report focuses specifically on venture and growth investments, referring largely to the initial equity funding rounds a company goes through to grow and scale up.  

The big picture is not so bright, however: EU investments into early- and mid-stage cleantech companies dropped to $2 billion (€1.8 billion) in early 2025, down 18% from the last quarter of 2024. 

The total number of investment deals also declined from 182 to 153 during the same period, “erasing late 2024’s short-lived recovery and reinforcing the fragility of investor confidence,” according to the report. 

The results reflect the global uncertainty that has marked the beginning of 2025, with a trade war brewing between the United States and the rest of the world causing turmoil in global financial markets and upending corporate planning. 

At the country level, Germany led the number of cleantech deals in the first quarter of this year, a continuation of last year’s trend. The Netherlands, France, Spain, Italy and Sweden also topped the list.  

Overall, though, cleantech venture-capital deals took place in only 17 of the EU’s 27 member countries. “Broadening participation remains a key challenge for the EU’s industrial ambitions,” the report notes.  

Developments for the rest of the year will depend on the success of the EU’s recently announced Clean Industrial Deal and whether investors will shift their attention to the EU as a more stable and predictable place for cleantech companies.  

Editor’s note: Cleantech for Europe is supported by Breakthrough Energy, which also supports Cipher.