As a ‘scale-up’ climate technology business, Levidian is acutely aware of the challenging UK investment landscape. This is broadly a reflection of the global picture where investment dropped significantly in 2023 due to geopolitical turmoil such as events in Ukraine and the Middle East, inflation and high interest rates.

But investors’ aversion to risk – driven in part by what was, until recently, a cloud of uncertainty hanging over the UK political landscape – is also hindering innovation.

To ensure the UK can restore its status as a global technology leader, we need a more balanced investment approach to support mid-stage companies. Without this, many great technologies will be slowed down or stopped before they can have a real impact.

The UK has a rich history of innovation but has often lagged in terms of commercialising new technologies. To address this, we need a clear strategy, fostering an ecosystem where businesses, academia, and government can collaborate to attract investment.

Barclays plc, along with JPMorgan Chase & Co. and KKR & Co., have identified a significant issue within capital markets – that businesses developing the critical technologies needed for the low-carbon transition often struggle to secure funding.

These firms typically demand large investments, deterring venture capitalists, while their early-stage nature and lack of track record make them unattractive to infrastructure investors. As a result, many climate tech companies find themselves caught in a funding gap creating a ‘valley of death’.

The National Wealth Fund (NWF) offers a promising solution. By committing to support companies through the critical growth phase, the fund has the potential to stimulate private investment. However, it is crucial that the fund is willing to take some risks. It shouldn't just support established technologies such as solar and wind, but also invest in innovative solutions that can make a significant impact but are not yet mainstream.

Government-backed funds often lean towards conservatism, but for meaningful progress in climate technology, a bold approach is essential. This willingness to embrace risk will help drive the breakthroughs needed for a low-carbon future.

There is also the potential for win-wins, with innovative business models disrupting traditional economic dynamics in climate tech. For example, Levidian’s patented LOOP technology captures carbon from methane gas from a variety of industrial sources and turns it into clean hydrogen and high-quality graphene, which itself can be sold on as a valuable, emissions-saving additive.

This all-round solution – turning what’s traditionally viewed as a liability and cost into a source of revenue and competitive advantage – provides a critical piece of the jigsaw in the race to Net Zero that has been missing until now.

Levidian spends a significant part of our revenue on R&D because it enables us to continue pushing at the boundaries of what we can deliver for our customers around the world. This enables LOOP to be deployed in new and different ways, facilitates continued learning about graphene’s application into other materials, and helps identify which industries can benefit most from this unique technology.

Our ambition is to invest over £70 million into the development of our UK base and international hubs in the Middle East and North America up to 2030. To power this British success story, we plan to spend >£10 million on the development of our Cambridge Technology Centre and a new UK manufacturing hub.

In two years, Levidian has attracted millions of pounds of foreign investment into the UK’s green economy, and by investing over half of our revenue into R&D, we have improved our technology’s capacity and efficiency ten-fold. We have also doubled our headcount in a year, creating over 100 UK-based clean tech jobs.

Current signs in the UK investment landscape are very positive. Political stability often leads to economic stability and there is now a growing consensus that the UK economy is back, and the world wants a piece of it. As recently as August 15^th, figures from the Office for National Statistics showed gross domestic product continued to grow in the second quarter, after a rise of 0.7% in the first three months of 2024.

A recent Deloitte survey of UK Chief Financial Officers (CFOs) also found that corporate risk appetite has seen its biggest rise in more than four years following the general election. CFO perceptions of external uncertainty have also fallen to the lowest level in more than eight years, and business confidence among finance leaders has risen for the fourth consecutive quarter.

The UK’s economic success hinges on harnessing and investing in game-changing innovations like LOOP. A concerted effort is required to ensure the UK doesn’t miss out on the economic and environmental benefits of leading in climate tech. A more balanced and collaborative approach will be crucial in driving the innovation necessary to secure the UK’s competitive edge in the global market.

John Hartley is CEO of Levidian.