In recent years, there has been an increase in patents related to technologies aimed at environmental sustainability and the energy transition. This trend is underscored in a recent report by the European Patent Office, which highlights the resulting opportunities and challenges.
Cleantech patents are seeing a global surge. This growth is driven by the need for energy solutions and climate considerations: the transition from fossil fuels to renewable sources is essential, and equally critical is the need to cut greenhouse gas emissions and the environmental impact on air, water, and soil.
Innovation plays a key role in devising and developing effective technological solutions across various sectors. Both research institutions and corporations recognize this necessity. Supporting this, over 750,000 International Patent Families now exist in the clean and sustainable technology sector, making up nearly 12% of the total. These findings are detailed in the report “Financing and Commercialisation of Cleantech Innovation,” recently published by the European Investment Bank (EIB) and the European Patent Office (EPO).
International Patent Families (IPF) are collections of patent applications filed across multiple countries to protect the same invention. The report notes a substantial increase in IPFs related to energy and climate, stating that over the last 25 years, «IPFs in clean and sustainable technologies have grown more rapidly than overall patent activity in this timeframe».
The scope of innovations spans low-emission energy production and storage, sustainable building and transport solutions, smart grids, and the treatment of waste and wastewater. These clean and sustainable technologies are at the forefront of research and innovation.
Between 2017 and 2021, as analyzed in the EIB and EPO report, 244,000 international patent families were registered in this specific field. In 2021 alone, nearly 55,000 cleantech innovations were disclosed, representing approximately 15% of all technological inventions globally, with a near 33% increase from five years earlier.
This upward trend is further confirmed by the latest figures from the European Patent Office: in 2023, a record 199,275 patent applications were filed. Among these, applications within the cleantech category, under “electrical machines, apparatus and energy,” showed a notable increase of 12.2%, the most significant rise reported. It is crucial that innovative ideas are transformed into marketable solutions.
The potential is vast: Lise McLeod, director of the World Intellectual Property Organization (WIPO) Knowledge Center, estimates that by 2030, the global market for clean energy technologies could reach approximately 650 billion dollars annually, more than triple the current value, provided that international energy and climate commitments are fully implemented.
TAKEAWAYS
Clean and sustainable technologies: definition and classification of patents
Cleantech, also known as greentech, covers a wide array of processes, products, and services designed to diminish or negate environmental impacts.
As delineated in the EIB and EPO report, these technologies «are engineered to improve energy efficiency, harness sustainable resources, safeguard the environment, and decrease pollution and waste, thereby helping to counteract the detrimental effects of climate change».
The European Patent Office divides cleantech patents into six categories: low-carbon energy; climate change mitigation technologies (CCMT) related to transport and buildings, in manufacturing and ICT; climate change adaptation solutions; smart grids; waste and wastewater treatment technologies; and CO2 capture and storage solutions.
The analysis also considers solutions for plastic recycling, alternative methods, and hydrogen-related technologies.
Most developed cleantech patents
Low-carbon energy technologies, including those for generating power from renewable sources and energy storage solutions, are the most prevalent in the cleantech patent landscape, accounting for 78,000 of the total 244,000 patent families recorded between 2017 and 2021.
This dominant trend is also evident in the EPO patent applications registered in 2023, which have shown the highest percentage growth in this category.
Coming in second are innovations focused on clean and sustainable mobility solutions, with 47,000 patent families. These are closely followed by international patent families dedicated to plastic recycling and the development of alternatives, totalling over 46,000.
Patent families within the clean and sustainable manufacturing sector are also notable, with more than 43,000 registered between 2017 and 2021, including over 9,500 in the most recent year analysed.
Additional significant sectors include clean technology solutions related to buildings, ICT, and climate change adaptation, each represented by approximately 18,000 patent families over the five-year span. Other categories count fewer than 10,000 patent families, but it is noteworthy that technologies for wastewater treatment and waste management have demonstrated the most rapid growth, with an annual compounded growth rate nearing 18%.
The future of cleantech patents: opportunities
Cleantech patents not only hold substantial potential for shaping future energy and climate scenarios but also currently offer strategic economic and production advantages. Although large companies (with over five thousand employees) file more than 75% of international cleantech patent families in the EU and the US, a considerable proportion of patenting in this domain is undertaken by small and medium-sized enterprises (SMEs).
This proportion is even more significant in the European Union, where over 70% of the entities filing for cleantech patents are production and industrial businesses with fewer than five thousand employees. These companies play a crucial role in the vibrant ecosystems of the cleantech sector. The report underscores that these companies «are more likely to encounter challenges as they navigate the realms of innovation, patenting, and industrialisation».
Cleantech patents greatly enhance value during the commercialisation stage for smaller firms. In the EU, these companies have successfully commercialised approximately 60% of the technologies for which they filed patent applications from 2011 to 2022, with an additional 28% approaching market introduction. Smaller firms filing patent applications particularly stress the importance of patents in forging external partnerships, facilitating technology transfers, and attracting investment.
The patenting propensity among SMEs is corroborated by 2023 data from the European Patent Office (EPO): 23% of European patent applications were submitted by either a single inventor or a company with fewer than 250 employees. Moreover, 8% of these applications originated from universities and public research institutions.
The European Patent Office has introduced new measures to support SMEs and research centres, aiming to foster their innovation trajectory. As a result, it has implemented further reductions in fees from last April for microenterprises, individual inventors, non-profit organizations, universities, and public research institutions.
The new unified patent system
In the overarching innovation landscape, opportunities are accompanied by challenges. The most considerable of these is the funding disparity between cleantech innovators in the EU and their US counterparts. Over 30% of EU companies pinpoint the lack of funding as a significant hurdle to commercialising clean and sustainable technologies. This challenge is even more acute for smaller enterprises: 43% of micro and small businesses report difficulties related to this issue.
It should be noted, however, that the landscape of European patents, both cleantech and beyond, is poised for change. In June 2023, a new unified patent system was introduced, offering a simplified and more economical option for patent protection across 17 EU member states.
Unitary patents can now be applied for or challenged centrally through the new Unified Patent Court. According to the EPO, in an article about European patent applications in 2023:
«this system has already achieved considerable success among holders of European patents: a unitary effect was requested for 17.5% of the European patents granted throughout 2023 (over 18,300 applications), and for 22.3% of those issued in the second half of 2023 after the system’s implementation. Patent holders from the 39 EPO member states exhibited the highest uptake rate at 25.8%, followed by those from the United States and China (both at 10.9%), the Republic of Korea (9.7%), and Japan (4.9%). Nearly two-thirds of those converting their European patents to unitary patents are European».
Glimpses of Futures
The imperative to implement effective solutions to mitigate the ongoing climate crisis underscores the essential role of new technological innovations in both the production and management of sustainable energy, and in the substantial reduction of emissions. This necessitates refining production methods to be as circular and sustainable as possible. In this endeavour, cleantech patents are set to assume an even more critical role than before.
Utilising the STEPS framework, we aim to predict future scenarios and evaluate the impacts that such solutions, grounded in research and innovation, might have from various viewpoints.
S – SOCIAL: clean technologies are designed to reduce pollution in the air, water, and soil, thereby improving the quality of air and water, and consequently diminishing health risks linked to pollution. Reducing healthcare costs, alongside increasing the proportion of energy generated from renewable sources, enhances the quality of life. Moreover, cleantech serves as a substantial employment catalyst. In terms of green jobs, the EU saw an increase to 4.5 million in 2019 from 3.2 million in 2000. According to a report by Climate Power, Climate Energy Boom, the clean energy tech projects launched following the Inflation Reduction Act have created over 211,000 direct jobs in 45 states and Puerto Rico.
T – TECHNOLOGICAL: the pace of innovation driven by cleantech patents is expected to accelerate, aided by advances in artificial intelligence techniques. The global demand for AI-enhanced cleantech solutions is anticipated to rise steadily. In the past six years, these solutions have constituted 12% of the investment and transactions in all greentech-related deals, amassing nearly $30 billion in venture capital [source: Cleantech Group].
E – ECONOMIC: cleantech acts as a powerful economic engine. Investments in clean energy technologies alone are projected to near $800 billion by 2024 and are expected to reach $1 trillion by 2030, according to the Top Ten Cleantech Trends in 2024 report by S&P Global Commodity Insights. This year, approximately 150 green hydrogen projects and 65 carbon capture, utilization, and storage (CCUS) projects are set to be commissioned. Notably, the 2023 call for proposals by the EU Innovation Fund for zero-emission technologies attracted 337 submissions from 27 countries, competing for a budget of €4 billion intended to foster the proliferation of clean and innovative technologies using proceeds from the Emissions Trading System (ETS). Regarding research and development investments, the European Commission recently earmarked €720 million for seven renewable hydrogen projects in Europe via the European Hydrogen Bank, a financial instrument launched to expedite the creation of a comprehensive hydrogen value chain across Europe.
P – POLITICAL: there is a strong global drive to enhance cleantech patent pathways, as noted in a report by the EIB and EPO. Numerous patent offices around the world have introduced expedited procedures for cleantech patent applications, available in countries such as Australia, Brazil, Canada, China, Israel, Japan, South Korea, Malaysia, the UK, and the USA. As of June 2023, the United States Patent and Trademark Office has broadened eligibility requirements to encompass more technologies aimed at advancing towards the Net Zero emission goal, with this initiative scheduled to continue until 2027. In the EU, since last April, there have been tariff adjustments for European patent applications, including reductions for small businesses and the abolition of certain fees [source: European Patent Office]. It should also be noted that the European Parliament has given its final approval to the Net-Zero Industry Act, which aims to produce 40% of its annual requirements for net-zero emission technologies by 2030, based on national energy and climate plans, and to capture 15% of the global market value for such technologies.
S – SUSTAINABILITY: cleantech is fundamentally focused on significantly lessening the environmental impact caused by human activities across various sectors and on facilitating the transition to forms of clean energy. Technologies that enable a circular economy for plastics, from recovering post-consumer plastic waste to various recycling processes, are under development, as well as sustainable alternatives and technologies for wastewater treatment and solid waste management. European climate legislation requires EU countries to cut their greenhouse gas emissions by at least 55% by 2030, aiming for the EU to become climate neutral by 2050. In this context, clean and sustainable technologies «are deemed crucial as they can significantly help achieve this goal and mitigate climate change».
