Israel Awakening to Cleantech

by Richard T. Stuebi

In early November, I  participated in a week-long delegation concerning energy in Israel, at the invitation of Project Interchange, an educational program of the American Jewish Committee. 

In addition to learning a tremendous amount about Israel’s history, culture and political situation, my fellow travelers and I were fortunate to talk with many leaders active in various aspects of Israel’s cleantech sector.  From a cleantech standpoint, the key takeaways I gained from our tour were:

At present, Israel is not really that far ahead of the U.S. on proactive policy to drive energy innovation.  This is especially true for adoption of energy efficiency and renewables.  To the extent that environmental trends are improving, this has to date been due mainly to conversion of coal-fired generation owned by the Israel Electric Corporation to natural gas, in the wake of discovering natural gas in neighboring Egypt and more recently the major find by Noble Energy (NYSE: NBL)  offshore in the Mediterranean Sea.However, Israeli policy is awaking to the cleantech challenge and opportunity.  The Israeli government has recently committed to increasing emphasis on encouraging R&D on technologies to reduce the requirement and hence strategic value for oil in transportation (in the words of Gal Luft, “turning oil into salt”), in the hopes of becoming a catalyst for other countries to do the same, thereby weakening the geopolitical strength of the hand held by nearby Saudi Arabia, Iraq, Iran and other petro-archies.  The focus is on next-generation biofuels, unconventional hydrocarbon recovery/processing (for instance, leveraging Israel’s own shale resources) and technologies to improve gasoline efficiency (e.g., vehicle electrification, lighter-weight vehicle materials).Israel’s forces for innovation are beginning to turn to cleantech — especially in the areas of oil-reducing technologies (due to the reasons discussed above), solar energy (due to the fact that much of Israel is desert), and water (due again to the fact that much of Israel is desert).  However, Israeli venture capital investment in cleantech hasn’t kept apace, suggesting an opportunity for US-Israel cleantech VC collaboration –  perhaps leveraging an expanded BIRD Energy program run by the Binational Industrial Research & Development (BIRD) Foundation, which provides grants to stimulate joint industrial R&D efforts involving the US and Israel.

Even with a population of only 7 million people, Israel can nevertheless be an important force in cleantech, given that Jews have consistently played a disproportionately influential role in scientific and social advancement of the human race throughout history.

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