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Israel, long celebrated as a global hub for tech innovation, is now facing a stark and urgent question: Why is it falling behind in the climate-tech raceâespecially in clean energy? A new report by the Israel Innovation Authority reveals a troubling drop in investment and activity in one of the worldâs most important sectors. While countries globally are racing to fund climate solutions and cut greenhouse gas emissions, Israel has seen its climate-tech investments drop dramatically. Even more troubling: in 2024, not a single clean energy startup was founded in the country.
This downturn comes at a critical time. With climate change accelerating, the world is leaning heavily on technological innovation to offer scalable, sustainable solutions. From decarbonization and energy storage to alternative proteins and agricultural resilience, climate-tech represents not just environmental responsibility but also a trillion-dollar economic opportunity. And yet, despite its immense tech potential, Israel is losing momentum.
This article breaks down the findings of the Innovation Authorityâs report and analyzes whatâs going wrongâand how Israel could still reverse course.
The State of Israeli Climate-Tech in 2024
Investment Decline: Climate-tech investment in Israel fell to \$613 million in 2024, down from \$1 billion in 2023 and \$2.27 billion in 2022âa 73% drop over two years.
Global Alignment: This drop mirrors a global 41% decline in climate-tech investment but is more severe locally.
Government Support: The Israel Innovation Authority contributed \$105 million in 2024, up from \$82 million in 2023âstill not enough to offset the broader downturn.
Clean Energy Crisis: No new clean energy startups were founded in Israel in 2024, despite the sector being a key focus for global climate funding.
Startup Landscape: Israel has 946 active climate-tech companies, many in early development stages. About 58% are in Pre-Seed or Seed stages.
Sector Breakdown:
38% are focused on food-tech.
13% on climate-smart agriculture.
13% on sustainable mobility.
Global Trends: In contrast, climate-tech globally attracted \$32 billion in 2023, with projections reaching \$2 trillion by 2030.
Investor Confidence Falling: Only 14 Israeli climate-tech funding rounds exceeded \$10 million in 2024. Over 90% were led by foreign investors.
Food-Tech Struggles: Global food-tech investment dropped sharply from its \$61.2 billion peak in 2021 to \$15.1 billion in 2023. Israeli strengths like alternative proteins suffered, with plant-based protein down 64%, and cultivated meat down 40%.
Lack of Infrastructure: Israel lacks a regulatory âsandboxâ where startups can pilot and scale technologies.
Governmental Neglect: Promises to build such infrastructureâmade under former PM Naftali Bennettâwere never fulfilled.
Industry Weakness: Government and private-sector entities, such as Noga (Israelâs grid operator), lack strong innovation leadership.
Talent Is Not the Issue: Israel boasts academic strength and entrepreneurial energyâbut lacks institutional support and demand.
Global Shift: As Trumpâs U.S. presidency undermines climate action, China and Europe may take the lead in funding and policy.
Energy Security as a Catalyst: Global blackouts, such as the recent one in Spain, highlight the critical need for energy resilienceâan area Israel can contribute to.
What Undercode Say:
Israel is at a critical inflection point in climate-techâespecially clean energyâand the current trajectory is alarming. The data is clear: the countryâs climate-tech sector is shrinking both in investment volume and startup creation. But numbers only tell part of the story.
There are deeper systemic issues:
Strategic Misalignment: Israel has placed significant bets on food-tech and protein alternatives over the past decadeâmarkets now contracting due to global saturation and changing investor priorities. This leaves the nation exposed, having missed the global surge in clean energy investment.
Infrastructure Deficit: Startups need more than seed moneyâthey need space to test, scale, and implement. Israel lacks âsandboxes,â smart-grid infrastructure, pilot programs, and supportive regulation. The absence of a functioning ecosystem deters founders and foreign investment alike.
Policy Inertia: Promised structural reforms never materialized. Innovation is high on rhetoric but low on execution. No major governmental body, with the partial exception of the Electric Corporation, is actively championing energy innovation.
Brain Drain Risk: Entrepreneurs with energy-related ideas increasingly look to the U.S. or Europe for support and scaling. With incentives in the U.S. under the Biden administration (before Trump returned), many Israeli founders were already targeting American markets. Under Trump, those doors are closingâbut Israel hasnât opened new ones.
Global Isolation: If Israel doesnât strategically realign, it risks being sidelined in whatâs poised to become a \$2 trillion global market by 2030. Thatâs more than cybersecurity, fintech, and food-tech combined. The opportunity cost is enormous.
No Energy Culture: Unlike fields like cybersecurityâwhere Israel excels thanks in part to military-driven tech cultureâenergy innovation isn’t seen as âcool,â and lacks grassroots momentum. It’s not integrated into national service pipelines, elite units, or educational priorities.
Corporate Apathy: Local corporations do not collaborate with startups. When foreign firms see this lack of institutional enthusiasm, they withdraw too, creating a negative loop. Without corporate partners to test and deploy technologies, most ideas stall post-R\&D.
Black Swan Potential: Climate-tech innovation can save lives and ensure national resilience. In the age of cyber warfare and climate shocks, robust energy systems are not just economic assetsâtheyâre strategic imperatives.
Silver Linings: Despite these setbacks,
Global Positioning: As the U.S. under Trump becomes more hostile to green investment, countries like Israel must step up and capture the vacuum. China is investing massively. Europe is recalibrating. Israel, with its agility and tech history, has the tools to riseâbut only if it chooses to.
This isnât just a missed opportunityâitâs a strategic failure in progress. But itâs also reversible.
Fact Checker Results:
Climate-tech investment in Israel did fall by 39% in 2024, and no new clean energy startups were founded.
The global climate-tech market remains strong, with \$32 billion raised globally in 2023, affirming worldwide demand.
Israeli food-tech is in decline, aligned with global trends of reduced investment in alternative proteins.
Prediction:
Unless Israel rapidly shifts its strategic prioritiesâby building energy startup infrastructure, engaging corporates, and committing public fundingâthe country will remain a spectator in the global climate-tech transformation. If new policies support sandbox programs and demand-side engagement, Israel could rebound by 2026, leveraging its research talent and startup culture to become a leading hub for grid innovation, energy storage, and sustainable tech export. The window is closing, but not yet shut.
References:
Reported By: calcalistechcom_8b9e6fd95d979b78e40a6d9d
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