By Shannon Power, 19th December 2022
Global warming is arguably humanity’s biggest crisis and with consumers becoming more climate-conscious when it comes to where they shop, there is a growing demand for a larger variety of green start-ups. 74% of investors plan to increase their investments in ESG Funds, which includes businesses fighting climate change from every conceivable angle. Meaning there is money up for grabs to help eco-entrepreneurs bring their visions to life. This blog will provide you with the multiple paths which you can take to obtain funding for your green start-up.
Different Ways to Obtain Funding
There are many different avenues you can take to obtain the funding you need for your new eco-friendly business. However, entrepreneurs can sometimes be unaware of how or where to begin their journey. So, we have put together some of the best options.
- Make connections with other sustainable business founders. Other green start-ups can sometimes open up new doors for you and introduce you to contacts from their own VC backs and accelerator programs who may be interested in your new business idea.
- Apply to sustainability-focused accelerators. An accelerator will give you the resources to help you launch your business. Joining accelerators can most often than not leads to access to mentor coaching, equipment, and even investors who will welcome your pitch.
- Consider a small business loan. If you would prefer to not involve any court investors, a small-business loan may be right for you. Small-business funding is usually a great fit for eCommerce companies capturing important eco trends and local businesses with zero-waste stores.
- See if you qualify for government funding. Most government grants and funds are aimed at companies that help address the fight against climate change or businesses looking to make a change to an eco-friendlier business model.
Types of Government Funding
You may be eligible for many EU funding programmes if your new green start-up is registered within a European State. The European Commission finances projects and other initiatives for the implementation of the European Union policies and legislation throughout the European Union and further afield.
There are TWO types of funding available: grants and contracts.
Grants are given to specific projects that relate to EU policies. You may apply for a grant if you run a business or a related organisation that runs projects that further the interests of the EU, or if you contribute to implementing an EU programme or policy.
Contracts are issued by EU institutions to buy services, goods, or work that they need for their operations. This includes studies, training, conference organisations, or IT equipment.
EU Funding Programmes for Green Start-Ups
With the adoption of the European Green Deal, the EU aims to be a global leader in the move to a greener future, offering opportunities for EU funding for green projects for the period 2021-2027.
Green EU funding programmes:
The LIFE programme is a European funding programme dedicated to environmental, climate, and clean energy objectives. It has a dedicated budget of around €5.4bn for green start-ups alone for the whole programming period.
It provides support for projects in areas such as:
- Nature and biodiversity
- Circular economy and quality of life
- Climate change mitigation and adaptation
- Clean energy transition
The Horizon Europe programme has a budget of over €95.5bn allocated for European research and innovation. This makes it the largest and most significant EU funding programme for green innovations. The programme supports top researchers, innovators, and citizens who aim to develop innovative ideas to support a sustainable, fair, and prosperous move to a greener future.
Innovation Fund (IF)
The Innovation Fund, financed by the EU Emissions Trading System, provides EU funding of up to €10bn until 2030. The fund was created for green start-ups and projects that contribute to greenhouse gas reduction.
This financing programme takes on projects that focus on:
- Innovative low-carbon technologies and processes in energy-intensive industries (steel, cement, glass, chemicals, paper, etc.)
- Carbon capture and utilization (CCU)
- Construction and operation of carbon capture and storage (CCS)
- Innovative renewable energy generation
- Energy storage
To apply for any of the aforementioned funding programmes, you must do so through the Funding and Tenders portal which is managed by the European Commission. If you have any additional questions regarding funding for green start-ups, the team at Euro Company Formations would be delighted to assist you. Contact us today on + 353 (0) 1 6461627 or fill out our contact form!