This chapter assesses the availability and appropriateness of public support schemes for green start-ups in Portugal. It examines the suite of approaches used, including awareness raising and the provision of information, financial support measures, training programmes, integrated support schemes that offer a combination of finance and training or coaching, and actions to support procurement readiness of green start-ups. The chapter makes recommendations and includes an action plan with international case study examples that can serve as models for implementing the recommendations.
The Green Transition of SMEs and Entrepreneurship in Portugal
Abstract
Mitigating climate change is a critical issue on the global policy agenda. Many governments, and sub-national governments, have committed to ambitious policy targets for moving towards a greener and sustainable economy. Green start-ups play a role in driving this agenda.
A universally agreed definition of green entrepreneurship has not yet emerged. Green entrepreneurship can be considered as the development and deployment by new start-ups of green products, services and processes, i.e. those that either: i) reduce or prevent any type of environmental damage; or ii) emit less pollution and waste, and/or are more resource-efficient than equivalent products, services and processes.
Data from Crunchbase, an international dataset on start-ups and early-stage firms seeking investment, suggests that about 4% of start-ups in Portugal seeking investment between December 2011 to December 2021 operate in at least one sector where reducing environmental impacts is a core consideration and feature of the goods or services being developed. This proportion ranked Portugal in the top ten OECD countries over this period.
There is a high level of awareness of environmental issues, suggesting that businesses and consumers are open to products and services that address environmental challenges including for example energy usage. For example, about 95% of respondents to a 2020 Eurobarometer survey reported that climate change affected their daily life. This is likely due in part to the substantial media coverage of the Recovery and Resilience Plan and the Mobilising Agendas, which promote and support green innovation and entrepreneurship. Green entrepreneurship has also been promoted with awards programmes and events in recent years, which have strong role model effects.
A range of measures are implemented to support green start-ups. Overall, they appear to be having the intended impacts. These include Vouchers for Startup – New Green and Digital Products, which provides a non-repayable grant of EUR 30 000. More than 750 entrepreneurs received it last year.
Financing remains a challenge for most early-stage firms, green ones included. Compared to other OECD countries, public financial measures in Portugal offer small amounts of funding. While larger amounts of funding are available for commercialising innovation, including through the Mobilising Agendas fund, entrepreneurs do not appear to be involved in these types of projects to the extent that they are in other countries such as Israel.
Governments can also play an important role in expanding markets for green start-ups through the circular economy and public procurement markets. Some preliminary actions have been implemented in Portugal, namely the development of high-level strategies. This has helped raise awareness of the potential role that government authorities can play but implementation has been slower than anticipated.
Priority policy actions for strengthening support for green start-ups include the introduction of larger grants for advanced projects that are closer to market and to expand the capacity of the current incubation system to support green start-ups. The Government is pushing Vouchers for Incubators in order to tackle this challenge.
Entrepreneurs hold great potential for driving the green transition given their ability to develop and propagate innovative green technologies, products and services, create new markets and drive change in the business sector. Stimulating and supporting green start-ups is therefore an important lever that governments can use to meet their targets for moving towards a greener and more sustainable economy.
Although green entrepreneurship is a term used widely in academic and policy contexts, there has yet to be convergence on a clear definition. This can hinder policy development since it is difficult to target actions to a subset of start-ups that are not clearly defined. Moreover, monitoring and reporting the impacts of green start-up policy measures would be similarly difficult. In practice, governments often design interventions around specific types of technologies (e.g. cleantech, greentech, climate tech). The OECD Committee on SMEs and Entrepreneurship works with a concept of green entrepreneurship that considers the development and deployment of green products, services and processes by new start-ups and early-stage firms (OECD, 2022[1]), i.e. those that either:
Reduce or prevent any type of environmental damage. These products and activities generate a net environmental benefit, such as carbon capture and storage projects or environmental restoration schemes.
Emit less pollution and waste or are more resource-efficient than existing equivalent products, services and processes that have the same result. These products or activities generate a net environmental cost, but one that is smaller than established alternative approaches to producing the same result. To take the example of renewable electricity production, the act of constructing and installing wind turbines or solar panels involves an environmental cost through the consumption of energy and materials. However, what makes these activities “green” is that they are less environmentally damaging than established alternative approaches for producing the same good or service (in this case fossil fuel combustion for electricity generation).
Governments in OECD countries have introduced a range of policies and schemes to stimulate and support green start-ups. These often seek to address regulatory and market barriers and inefficiencies, notably to overcome the mismatch between investor timelines and the timelines for developing new environmental technologies and taking them to market. This includes, for example, dedicated financial instruments; specialised training, incubator and accelerator programmes; coaching and mentoring; and networking with specialised professional service providers. In addition, governments can help create and expand markets for green start-ups, including through the expansion of green public procurement markets and regulatory measures (e.g. energy efficiency standards) that shift business operating practices.
The number of green start-ups can be measured in different ways using a range of datasets. However, national statistical systems are still being adapted to demands related to the environmental economy, including the production of business dynamics data that could be used to identify “green start-ups”. In practice, private databases such as Crunchbase are commonly used to identify green firms and start-ups. This is a private database of start-ups and early-stage firms seeking equity investment. It defines green start-ups as those operating in at least one sector where reducing environmental impacts is a core consideration and feature of the goods or services being developed. However, classifying start-ups with this approach is not perfect and has limitations because each sector encompasses a wide range of activities, products and services, some of which reduce environmental impacts, while others may not. To partially account for this issue, a fairly conservative approach has been adopted in selecting the sectors included in the list of “green” sectors, which means that it is likely that some green start-ups are not counted when they operate in sectors that are not considered green. The Crunchbase dataset contains firm-level information on the founding date, location, sector of operation, funding details, workforce and founder characteristics of more than one million companies. It is important to note that the Crunchbase dataset is not a census of global start-ups and typically includes companies that are seeking or have already received venture capital funding, which has the potential to lead to a higher representation of firms in markets in which venture capital investors are concentrated (e.g. United States). However, previous analysis by the OECD compared the geographical distribution of funding volumes in the Crunchbase dataset with that of the OECD Entrepreneurship Financing Database and found comparable results in most countries. The exceptions include the United Kingdom which appears to be over-represented in the Crunchbase dataset and Japan which appears to be heavily under-represented (Dalle, den Besten and Menon, 2017[2]).
Between December 2011 and December 2021, about 4% of new start-ups launched in Portugal met this definition of green. This proportion ranked Portugal in the top ten OECD countries over this period (Figure 6.1).
Share of start-ups that are green over the period 2011-21
Note: Figure covers start-ups in the Crunchbase dataset that were founded in the 10-years to December 2021.
Source: (OECD, 2024[3])
Green start-ups in Portugal receive little external funding relative to green start-ups in other OECD countries. Over the ten-year period December 2011 to December 2021, green start-ups in Portugal received about EUR 560 000 in external investment (Figure 6.2). This is consistent with the relatively limited availability of finance for start-ups and SMEs more broadly in Portugal (OECD, 2024[4]). (See Chapter 4 for further discussion).
Total funding per green start-up (USD) over the period 2011-21
Note: Figure covers start-ups in the Crunchbase dataset that were founded in the 10-years to December 2021.
Source: (OECD, 2024[3])
Green start-ups in Portugal appear to be less concentrated geographically than in most other OECD countries. Comparisons of the concentration of green start-ups can be made across countries using the Herfindahl-Hirschman Index (HHI). The HHI is the sum of the squared city-shares and the dispersion of green start-ups increases as the HHI moves from 0 towards 1. A value of 1 would indicate that all green start-ups are located in a single city. The HHI for Portugal over the decade December 2011 to December 2021 was 0.11, indicating a fairly wide dispersion of green start-ups across cities and regions (Figure 6.3).
Regional concentration of green start-ups measured by Herfindahl-Hirschman Index over the period 2011-21
Note: Figure covers start-ups in the Crunchbase dataset that were founded in the 10-years to December 2021.
Source: (OECD, 2024[3])
6.3.1. There is a high level of awareness of the potential of green start-ups
Government communications have been strengthened in recent years
Population surveys consistently demonstrate a high level of awareness in Portugal regarding environmental sustainability issues. For example, approximately 95% of respondents to a 2020 survey reported that climate change affected their daily life (European Commission, 2020[5]). This high level of awareness may be due in part to growing media attention on environmental sustainability issues with recent events (e.g. forest fires, record temperatures) and new economic policies (e.g. Recovery and Resilience Plan). In addition, the government has improved the availability and communication of information and data on climate change risks (OECD, 2023[6]), including supporting the development of a suite of specialised websites that are operated by organisations such as the Portuguese Institute for Sea and Atmosphere (IPMA). Other examples include the Portuguese Insurers Association and the Faculty of Science of the University of Lisbon, which have developed a high-resolution mapping of flood risks and vulnerabilities.
Moreover, entrepreneurship stakeholders that were interviewed all demonstrated a high level of knowledge about the advantages and opportunities in Portugal in key sectors such as renewable energies, as well as the main public support initiatives. This can likely be explained by the high visibility given to the Mobilising Agendas, which are used to implement Portugal’s Recovery and Resilience Plan. One of the four high-level agendas is on climate transition and resource sustainability. Projects supported through the Mobilising Agendas receive substantial media attention as all partners actively promote their successes. In addition, several public entities such as Portuguese Agency for Competitiveness and Innovation (IAPMEI) have campaigns to promote the need for entrepreneurs and businesses to adopt more sustainable business practices.
Green entrepreneurship awards showcase inspiring role models for new start-ups
There have been several award programmes for green entrepreneurs and start-ups in Portugal in recent years, including some that are linked to EU-level programmes. The Born from Knowledge (BfK) programme, promoted by the National Innovation Agency (ANI), currently has three programmes to give visibility to scientific and technological research and innovation (ANI, 2024[7]): BfK Awards, BfK Ideas and BfK Rise. The BfK Awards programme provides recognition and a small cash prize to projects and companies for R&D projects. One of the award evaluation criteria is impact on society, including economic, social, environmental or cultural terms, so winning firms often work on sustainability issues; (ii) BfK Ideas programme recognises business ideas in higher education and BfK Rise is an acceleration programme for selected projects or start-ups with commercialisation potential. There are five BfK Award winners each year, each receive a cash prize of EUR 2 500. While the cash prize is largely symbolic, winners report that the awards gave them a high level of visibility and led to new market opportunities.
Another well-known award programme is the National Defence and Environment Award (Prémio Defesa Nacional e Ambiente), which recognises good environmental practices in the defence sector. The award was created in 1993 by the Ministers of National Defence and Environmental and Natural Resources. Winners are selected by a jury that includes actors such as the Portuguese Environment Agency (Agência Portuguesa do Ambiente, APA). Winners receive recognition for their work, including media attention.
One of the longest-running initiatives (2007-17 but currently inactive) was the Green Project Awards (GPA), which was a joint initiative of the Portuguese Environment Agency, Quercus (National Association for Nature Conservation) and GCI (a private sector brand strategy agency). Businesses, non-governmental organisations, associations, co-operatives, educational and research institutes, public administration, local administration and individual citizens could apply for a GPA for projects, products, services, campaigns or actions aimed at sustainable development. The awards programme sought to promote good practices and public debate around sustainability issues. Each edition had a theme, such as “Citizenship and the Future of Sustainability”, which was the theme in 2017. Awards were given in several categories such as Agriculture; Cities and Sustainable Mobility; Efficient Resource Management; Industry 4.0 – Digital Transformation; Youth Initiative; Mobilisation Initiative; Research and Development; Sea; and Tourism. Over eleven years, more than 1 200 applications were submitted, and 120 awards were given. This has had an impact on the entrepreneurship ecosystem as more than 1 200 entrepreneurs have been engaged over the past 15 years.
There are also examples of where Portuguese actors participated in EU-level awards such as the European Business Awards for the Environment (EBAE). The Portuguese Environment Agency (APA) is the National Co-ordinating entity in Portugal and is also a member of the EBAE Steering Committee. The EBAE awards recognise policies, practices, processes and products from all sectors in EU Member States and candidate countries that help to make economic and social development compatible with environmental protection. While there is a selection process to identify a Portuguese nominee for consideration each year, none have won an award at the EU-level.
Current awards programmes in Portugal clearly seek to showcase good practices and innovative entrepreneurs, inspiring others to follow suit. The focus on generating publicity through recognition for winners so that they can grow their networks and potentially access new business opportunities is a common approach used in many OECD countries (e.g. Start Up Energy Transition (SET) Awards in Germany). In the long-term, this type of approach likely has a greater potential impact for green start-ups since small cash prizes will not likely make a significant contribution towards business investments, including purchasing new technologies or specialised equipment. This also helps to increase reach as more potential entrepreneurs can be impacted.
One area where Portuguese award programmes differ from those in many other OECD countries is that they do not commonly use juries with international representatives. The use of juries with international representation could help strengthen linkages with specialised actors in other countries and transfer knowledge to green start-ups through both formal (e.g. feedback provided to award applicants) and informal channels (e.g. discussions among jury members and through interactions with stakeholders at events).
Public events also seek to inspire greener entrepreneurs
One of the most renowned entrepreneurship events in the world is Web Summit, held annually in Lisbon. This conference stands as one of the largest technology and start-up gatherings in the world, attracting virtually all Portuguese entrepreneurship actors, as well as a large number of entrepreneurs, investors and networks from Europe and beyond. This private sector-led conference helps to raise awareness of current start-up and technology issues, including how technology can support the green transition. For example, the 2023 Web Summit covered themes such as climate change, energy, sustainability and cleantech. It can have an enormous impact by disseminating information through the ecosystem and influencing the attitudes of entrepreneurs and support providers. In addition, showcasing start-ups and entrepreneurs can have a role model effect through demonstrations of inspiring innovations that could be adopted by others.
There are also smaller sector-specific events that focus on sustainability issues within different sectors, including non-technology-based sectors. One example is the annual Green Summit Portugal, which is organised by the legal profession. The Summit started in 2021 and is now in its fourth year. This short event (approximately 2.5 hours) is organised around panels of speakers who discuss issues and pressures faced in the lawyers due to the green transition.
6.3.2. A growing number of green start-ups are benefiting from public funding measures
One of the common challenges faced by green start-ups is securing financing, which is often more difficult than for other entrepreneurs given the risks associated regulatory uncertainties and uncertain demand relative to other types of technologies (e.g. digital, medical). Consequently, there is a strong rationale for government intervention, both to address the gap and offer incentives for greater levels of investment in early-stage businesses. Governments in OECD countries are using a range of financial instruments to support green start-ups and lessons are emerging from these experiences.
Vouchers for Startups are well-known and offer funding to many green start-ups
The main financial instrument used to support green start-ups is the Vouchers for Startup – New Green and Digital Products. This measure offers non-refundable grants of up to EUR 30 000 for entrepreneurs and start-ups to support projects in the green and digital areas (Startup Portugal, 2024[8]). To be eligible, start-ups must be incorporated in Portugal and be less than 10 years old. They must also operate in one of the defined technology- and knowledge-intensive sectors. Applications for the vouchers are assessed on three criteria, namely the relevance of the project for the programme’s objectives, the capacity of the beneficiary to implement the project and the likely impact of the project on the beneficiaries’ competitiveness. The selection of projects is done upon the closure of the call, and vouchers are paid in instalments with the number and timing of payment varying across the different calls. For example, a 2022 call (No. 10/C16-i02/2022) provided payments for eligible expenses of EUR 5 000 as pre-financing, two quarterly payments of EUR 10 000 and a final payment of EUR 5 000 after completion of the project. A more recent call (No. 16/C16-i02/2023) provides an initial advance of EUR 7 500, followed by a payment of EUR 15 000 after four months and a final payment of EUR 7 500 upon completion of the project. The vouchers measure is co-financed by the Recovery and Resilience Plan (RRP) and by the European Union. The total budget allocation for the vouchers is EUR 90 million from the RRP (IAPMEI et al., 2023[9]). Under the first call in 2022, 756 applications were granted and nearly EUR 21.8 million was disbursed (Startup Portugal, 2024[8]).
The primary rationale for providing grants over another type of instrument is that green start-ups often report that repayable instruments are not well-adapted to their needs given the higher levels of risk faced and long development timelines. Moreover, equity investments are often not sought by many very early-stage entrepreneurs because their equity would be diluted. Public equity schemes for green start-ups across the OECD have therefore had mixed success (IEA, 2022[10]).
There is a very high awareness about the Vouchers for Startups among entrepreneurs and other actors in the entrepreneurship ecosystem. The amount of funding provided by the vouchers is relatively small (i.e. up to EUR 30 000), so they are only appropriate for very small projects that do not require substantial capital investment. Moreover, there are no directly related business development services offered alongside the vouchers as is done in many countries. Other OECD countries such as Canada and Sweden offer multiple grants of different sizes that are aimed at projects at different stages of development and link the grants to a suite of business development services.
The application process for the vouchers is not too onerous and the share of applications receiving funding is relatively high. Some stakeholders noted a relatively long selection process that can take several months. This potentially creates challenges for many small-scale projects that do not have the resources to maintain operations while waiting for the funds to be disbursed. However, the evaluation process helps to ensure that supported projects and applicants are financially viable. Another potential challenge for some entrepreneurs is that applications are accepted through quarterly calls. This could potentially create a further challenge for start-ups that need to wait for applications to be accepted. A common approach in other OECD countries is to use continuously open calls so that the timing of funding can align more closely with the needs of entrepreneurs (IEA, 2022[10]). For example, most of the financial instruments offered by Innovation Norway are continuously open.
Some green start-ups leverage grants from Call INNOV-ID into private investments
The Call INNOV-ID initiative seeks to support early-stage firms with growth potential so that they can secure venture capital investment (Portugal Ventures, 2024[11]). It supports projects or firms that contribute directly or indirectly to decarbonisation; process, product and material sustainability; energy efficiency and sustainability; and the circular economy in technology sectors (i.e. digital, industrial, health and tourism). Applicants must have growth potential in the pre-seed, seed or early stages that are still working on prototypes, proof of concept, product (MVP) or product-market-fit validation phase. Start-ups (i.e. less than 8 years old1) can receive EUR 100 000. The initiative is managed by Portugal Ventures, a venture capital firm that is part of Portuguese promotional bank Grupo Banco Português de Fomento, launched, in partnership with National Innovation Agency Agência Nacional de Inovação (ANI) with support from Startup Portugal. Three editions have run since May 2020 and EUR 4.8 million has been invested in 48 start-ups (Portugal Ventures, 2023[12]), although not all would be considered green start-ups. Of these 48 start-ups, 11 received additional private investments of EUR 10.1 million and 18 had funding rounds in progress that were expected to raise EUR 16.4 million (as of March 2023). A fourth edition of the call INNOV-ID was launched in October 2023.
Overall, the initiative appears to be meeting its objectives as nearly one-quarter of funded start-ups have secured additional private funding and another 37% were on their way to securing additional investment (as of March 2023). Combined, this is more than half of the supported firms securing additional investment. While not all of these start-ups are green start-ups, some are. Yet despite the success of the scheme, it does not appear to be very well-known as interviewed entrepreneurship stakeholders did not identify it as an option for financing. This calls for increasing promotional efforts. Another area for improvement would be to strengthen the linkages between the grant and non-financial business supports such as business advice and coaching. Facilitating access to non-financial support could further increase the impact of the grant scheme.
SIFIDE tax incentive system for business R&D offers potential relief but few use benefit
This tax incentive offered by the National Innovation Agency (ANI) seeks to support R&D to increase the competitiveness of Portuguese firms, including start-ups (National Innovation Agency, 2024[13]). The SIFIDE credit includes a base rate for tax deduction from taxable profit of 32.5% of R&D expenses and an incremental rate of 50% of the increase in this expense in relation to the average of the previous two years applies, up to a limit of EUR 1.5 million. This support could help firms recover up to 82.5% of investment in R&D. Moreover, unused tax credits can be carried forward for up to 8 years. This is critical for new innovative firms that are typically not generating profits during their early years so tax credits could not be used. This credit could be used to support green R&D undertaken by start-ups but stakeholders report that few green start-ups are using this measure. While this may suggest a potential awareness issue, experience in other countries suggests that there may be other potential issues. One is that the time taken to complete the forms and provide documentation may be too costly for very small firms. Another potential issue is that start-ups do not expect to be able to use the credit within the 8-year time period. Similar tax credits in other OECD countries such as Belgium, Italy and the United Kingdom allow unused credits to be carried forward indefinitely
Research funding can boost the green ecosystem, but start-ups largely excluded
There is a large amount of research funding available for green innovation and technology development. These come from the national government, EU as well as philanthropic and private sector sources. Nearly all of these funding opportunities require projects to be implemented by multi-stakeholder consortia. This approach has clear benefits for all actors, including knowledge transfer across partners and the strengthening of linkages between research institutes and industry. However, the projects in Portugal appear to be undertaken largely by universities and large corporations and there are very few examples of consortia that have the participation of start-ups. In Israel, for example, the Innovation Authority funds research projects through innovation labs that are centred on start-ups. The Environmental Sustainability Innovation Lab in Haifa brings together 12 start-ups with corporate partners, public actors, regulators and investors. Comparatively, the approach in Portugal appears to offer fewer direct benefits for early-stage companies. There may, however, be future benefits such as the development of new technologies that spin-outs could commercialise.
6.3.3. There are few training programmes to support green start-ups
Entrepreneurship training is one method governments use to help entrepreneurs acquire skills related to green and circular economy. Specialised programmes in OECD countries cover issues such as drafting business plans with long development timelines and regulatory uncertainty, working with impact investors, and sector-specific technical training and assistance. Training programmes play a crucial role in building a pipeline of green start-ups by stimulating interest among students and entrepreneurs. This is particularly relevant in Portugal where a high level of public engagement on environmental issues creates an opportunity to provide green entrepreneurship education and training by embedding sustainability into entrepreneurship training programmes. However, these types of programmes are quite rare in OECD countries, although there have been examples in Spain (e.g. training offered by Red Emprendeverde, a green entrepreneurship network) and Switzerland (e.g. Green and Digital Entrepreneurship for Women training offered by ITU Academy).
There is some experience in Portugal with green entrepreneurship training programmes. In the 2010s, the Youth for Green Entrepreneurship and Employability (JEVE) initiative was funded by the EEA Grants (Norwegian Helsinki Committee, 2021[14]). The Project was developed by the Portugal Entrepreneurship Education Platform (PEEP) and K-Evolution and was implemented in partnership with Nordland Research Institute of Norway, Bifrost University of Iceland, Universidade Aberta and ACM (High Commission on Migrants) of the Portuguese Government. It aimed to transfer good practices in green entrepreneurship to Portugal from Norway and Iceland, provide training to technicians in community-based organisations so that they could train young people, and more. The initiative trained about 300 young people and 120 technicians from NGOs, as well as an additional 800 young people who took an online course.
Despite this early experience with green entrepreneurship training in Portugal, there are currently very few offers outside of the higher education system. While entrepreneurship is largely excluded from broader green skills training programmes such as the Green Skills and Job Programme offered by CEDEFOP (CEDEFOP, 2024[15]), IEFP is currently working to adapt entrepreneurship training programmes such as Green Skills and Jobs (IEFP, 2024[16]) and Empreende XXI (IEFP and Startup Portugal, 2024[17]). Instead, entrepreneurs can access training, as well as coaching, through integrated support programmes that also often offer finance and technical support (see next section). While the use of integrated schemes can be very effective for supporting green start-ups, the reliance on integrated schemes for delivering training can have a much more limited reach so they will be less effective at building a pipeline of future green start-ups.
There is also currently a gap in the area of training entrepreneurs and start-ups in the circular economy. Short training schemes for entrepreneurs can be used by governments to raise awareness about the benefits of circular and sustainable business practices, including how to identify opportunities. Many examples are organised by local waste management authorities such as the Public Waste Agency of Flanders or the chambers of commerce such as the Glasgow Chamber of Commerce in the United Kingdom.
Integrated support packages for green start-ups have not yet reached their full potential
Many governments in OECD countries offer integrated support packages to green start-ups, often delivered through business incubators. The services provided typically include workshops, specialised business consultancy, networking, access to finance, as well as access to labs and testing facilities in some programmes (e.g. American-Made Challenges programme operated by the US Department of Energy). This type of specialised support can be critical to the success of new start-ups because access to technical expertise and external resources can help entrepreneurs overcome experience and resource gaps. In addition, some governments have developed their integrated programmes and/or incubators into recognised brands that can provide a boost to the reputation of supported entrepreneurs and projects.
Integrated support programmes play an important role in supporting green start-ups because they offer a range of interconnected services (e.g. workshops, finance, coaching) that collectively strengthen the performance of new start-ups and early-stage firms by addressing experience gaps and a lack of technical knowledge. There are a wide range of effective integrated support offers in Portugal, including a network of business incubators and accelerators, technology centres, and business parks.
Specialised incubation and acceleration programmes have limited capacity
The RNi - Portugal Incubators connects existing incubators of all natures, including those established by universities, scientific and technological centres, municipalities, private companies or foreign entities. The network’s role is to facilitate knowledge exchange and resource sharing across incubators to improve the services offered to entrepreneurs. The approximately 140 incubators and accelerators offer services such as co-working spaces, networking events, mentoring, financial support, strategic consulting, marketing and communication support, accounting and legal services, prototyping support and more. Some of these incubators offer sector-specific services, with several developing support suited for green start-ups. Further, there is a new measure to create Innovation and Incubation Centres (CII) under the IEFP in partnership with other institutions (Portugal, 2023[18]). The CIIs will be centres equipped to support new businesses and some will have specific sectoral specialisations, potentially including specialised support for green start-ups.
The non-government organisation Casa do impacto supports start-ups through incubation, acceleration and investment programmes. Its programmes are focussed on supporting impact start-ups, many of which working on projects that promote sustainability and circularity. Their offers include a two-year incubation programme that supports entrepreneurs who promote innovative solutions to solve social and environmental challenges. The programme offers office space, shared space and facilities and services (e.g. meeting rooms, dining space), events and workshops, access to networks and experts, and consultancy and business support services. The call is always open, and programme managers note that demand far exceeds the number of spaces available. Casa do impacto also operates an acceleration programme called Triggers that supports high-potential entrepreneurs working on sustainable solutions. The three-month programme offers sessions twice per week. Participants are also eligible for financial support under the +PLUS 2024 Programme. In addition, several competitions are organised each year. The themes of the challenges change and some have been related to sustainability. There is one winner per challenge, and they receive EUR 5 000 plus free entry into the two year incubation programme.
While some of the incubators such as Casa do impacto are well-known across the entrepreneurship ecosystem, some of these actors report facing constraints in their ability to offer specialised support packages for green start-ups. Some of integrated support offers provide specialised services needed by green start-ups and there is room for the capacity to grow. For example, programme managers at Casa do Impacto report a high level of unmet demand for specialised services as they are only able to support a part of the applicants.
An important element of integrated support schemes for green start-ups that is under-developed in general is networking. Most incubators offer networking opportunities as a cornerstone of their programmes, linking entrepreneurs with peers, technical specialists, business professional support providers (e.g. lawyers, accountants), investors and potential customers. Developing these types of relationships are particularly important for green start-ups given their need for specialised technical support and financial instruments that are suitable for higher levels of risk and longer development timelines. Incubators such as Casa do impacto do an effective job at making connections for supported entrepreneurs but as noted earlier, the current capacity is limited. There is scope for incubators and other support actors to organise “matchmaking events” to gather start-ups, investors and professional support providers. These could be local events or even online as done by the Start Up Energy Transition platform by the German Energy Agency (Dena). There is a strong rationale for engaging well-known public actors such as Startup Portugal in such events because the brand attaches credibility to the network and can help with promotion.
Moreover, growing attention is placed on building international networks for green start-ups by relevant public actors across the OECD. Knowledge sharing across countries can help align small and niche markets and also enable cross-border allocation of risk capital to stimulate and support innovation. This could help increase the speed of the transition to net zero (IEA, 2022[10]). Different approaches to building international networks for green start-ups are used across OECD countries. The Polish Agency for Enterprise Development (PARP) in Poland, for example, operates the Poland Prize to attract foreign start-ups and firms. This approach has similarities to the StartUP Visa in the goal of attracting foreign talent. In addition, it is common for incubator and accelerator programmes to help incubated start-ups build international networks. OECD countries such as Sweden and Norway are active in this respect. The Swedish Energy Agency, for example, has market entry programmes in six countries and Innovation Norway helps start-ups registered in Norway undertake global market research through their international offices. There is currently less experience in Portugal in supporting green start-ups in this way, but Casa do Impacto has identified this as a priority for the short-term for its acceleration and incubation programmes.
Another area for improvement in the current system is to increase the availability of specialised support services for green start-ups such as intellectual property protection and consultations on regulatory compliance and tax law.
Specialised labs and technology centres offer specialised equipment and services
Collaborative Laboratories (CoLABs) are entities that seek to produce and disseminate knowledge through research and innovation agendas (ANI, Collaborative Laboratories (ANI, 2024[19]). CoLABs may be established as companies or private non-profit associations and must include at least one company, and an R&D unit evaluated and financed by the FCT or a State Laboratory. Services provided vary across labs, but often include research support, lab facilities, technology transfer supports and more. There are 41 CoLABs, each awarded this status by the Foundation for Science and Technology (FCT). These collaborative laboratories are under the responsibility of the National Innovation Agency (ANI) and 35 of them are funded through the Recovery and Resilience Programme (RRP). Of these, five are working in the areas of energy and sustainability and another four are working in the areas of climate, space and ocean. These CoLABs have not yet created many jobs, but they appear to be generating revenue as the volume of sales are high relative to many other thematic areas (ANI, 2024[20]).
Centres for Technology and Innovation (CTIs) are research and technology organisations that are dedicated to the production, dissemination and transmission of knowledge (ANI, 2024[21]). These centres are under the responsibility of the National Innovation Agency (ANI) and seek to create economic value out of research for Portuguese companies and support innovation through the Recovery and Resilience Programme (RRP). There are currently 31 CTIs that work with 2 720 firms and 318 non-business entities (as of the end 2023). About 10% of CTI budgets are from public funding. Base public funding for the period 2022 to March 2026 is EUR 92.8 million and approximately 9% had been disbursed by June 2023.
CTIs have several areas of focus, including several subjects that are relevant for green start-ups. This includes, for example, Space, ocean, energy and sustainability, which is the smallest thematic area as firms report low levels of sales and no patents granted (ANI, 2024[22]). Yet sustainability and circular economy issues are covered by most of the CTIs. For example, the CITEVE is a CTI that offers companies in the Textile and Clothing Sector, mainly SMEs (90%), a range of services including laboratory tests, product certification, technical and technological consultancy, R&D + Innovation, training, and fashion and design. Their main subjects of research include sustainability and circular economy, notably mechanical and bio-chemical recycling of fabrics.
One of the strengths of the current system is that green start-ups can access labs and testing equipment through CoLABs and the CTIs. This is a critical support because many entrepreneurs cannot afford to purchase specialised equipment, so a good solution is to offer access to equipment. The Portuguese approach often relies on providing access to specialised labs and equipment through research consortia. This has the benefit of transferring market knowledge to laboratorial technical as well as university researchers. However, more could be done to open up access to entrepreneurs. Different approaches are used internationally and could be considered in Portugal, including distributing vouchers to purchase lab services as done in the American-Made Challenges programme by the US Department of Energy, or to offer lab services through awards programmes as done in the Green Innoboost scheme in Morocco (IEA, 2022[10]).
EU programmes also offer dedicated support and networks but few start-ups benefit
The EIC Accelerator programme, which is a Horizon Europe instrument, can be used by green start-ups. The offer includes funding to start-ups and SMEs that have a highly innovative and disruptive product, service or business model and has the ambition and commitment to scale. Funding is open to all technology areas. The programme offers both grant funding for innovation activities of up to EUR 2.5 million as well as a dilutive investment of up to EUR 15 million for market deployment. It is also possible for applicants to seek both types of funding. Winners are selected by an international jury and are offered a range of non-financial services such as access to coaching, mentoring, consulting and training. In 2022, the programme 1 091 proposals from 35 countries, of which 74 were approved for funding. Three of the seven Portuguese firms that reached the interview stage were funded.
6.3.4. There are untapped opportunities to open up market opportunities for green start-ups
Improving measurement of the circular economy can track progress and help green start-ups identify new opportunities
The existing framework for policies to promote and support the circular economy are based on the National Action Plan for the Circular Economy 2018-20 as a follow-up strategy remains in development. It outlines national ambitions, but also considers sectoral and regional levels of the economy. Several successful projects have been implemented, including many efforts to raise awareness about the circular economy through the sharing of information. Examples of initiatives include the ECO.NOMIA portal, which is an initiative of the Ministry of the Environment. It was launched in 2016 and provides case studies and information on policies to consumers and entrepreneurs to encourage them to transition to more sustainable consumption and production practices.
Some financial instruments have also been introduced to support the development of the circular economy. These include the Environmental Financial Fund and Vale Economia Circular. However, take-up of these funds remains somewhat limited. For example, the first call of Vale Economia Circular was launched in 2019. It received 99 applications and 61 were funded. In 2020, only seven projects were approved and received direct investments totalling EUR 76 300 (European Environment Agency, 2022[23]).
An evaluation of the progress achieved noted that communication efforts have been strong, but also identified a number of areas where little progress was made against the circular economy action plan’s goals. These mainly include goals related to increasing the introduction of secondary raw materials into the economy, reducing waste productions, and developing a system to monitor processes at the product level for stakeholders (European Environment Agency, 2022[23]).
Public procurement could be used to a greater extent to create markets for green start-ups and early-stage firms
Governments across the OECD are starting to use public procurement as a tool for creating green markets by increasing demand for more sustainable goods and services. Public authorities in the EU collectively spend approximately EUR 1.8 trillion per year, representing about 14% of the EU’s GDP (European Commission, 2021[24]). In Portugal, this marketed is estimated to be between EUR 637 million and EUR 1.3 billion (ANI, 2021[25]). Incorporating sustainability criteria into the selection process holds great potential for facilitating access to new markets for green start-ups. In addition, government procurement practices can influence purchasing practices and decisions by private firms, particularly in sectors where public authorities account for a large share of purchases (OECD, 2022[1]).
Procurement legislation in EU Member States is highly shaped by European Law, namely Directive 2014/24/EU on public procurement and Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services. Moreover, as a Member of the European Union, Portugal is bound by the World Trade Organization’s Agreement on Government Procurement. At the national level, the legal framework is set forth in the Portuguese Public Contracts Code, approved by Decree-Law no. 18/2008, of 29 January 2008, as amended (de Oliveira and Pinto Correia, 2024[26]). The following types of contracts are considered to be subject to competition, among other:
Public works contracts.
Public works concessions.
Public services concessions.
Acquisition or lease of goods.
Acquisition of services.
Company contracts.
National law2 outlines a range of value thresholds that indicate the levels of competition that are required. The law indicates that the only award criteria is the most economically advantageous bid, which could be mono-factor (e.g. only one aspect of the performance is considered, namely price) or multifactor (e.g. a set of factors or sub-factors related to the execution of the contract). The multifactor processes can consider range of criteria including for example, quality, technical merit, aesthetic and functional characteristics, and environmental or social sustainability.
The Portuguese Strategy for Green Public Procurement 2020 - Towards Green Growth was launched in 2018. It called for expanding the use of ecological criteria, new categories of framework contracts and the development of a technical strategy (eSPap, 2018[27]) This new strategy has been followed by a number of initiatives such as PROCURE+I, launched by ANI and INTEC. This initiative is producing a platform for obtaining information, guidance and support on strategic procurement, notably in the areas of green, sustainable and circular procurement (ANI, 2021[25]). It aims to build a national innovation public procurement community and have an impact on national procurement practices by 2026. To date the initiative has created training materials (i.e. online training modules) and is providing some one-on-one consultations with individual public entities. However, progress has been slow. Green public procurement as a percentage of all public procurement is among the lowest in the EU with less than 2% of public contracts being issued using sustainability criteria (Rosell, 2021[28]).
Despite the benefits of opening up procurement opportunities for green start-ups, public authorities in OECD countries have been slow to implement concrete steps. This is particularly true among EU Member States because of the legal complexity stemming from EU public procurement directives (Sapir, Schraepen and Tagliapietra, 2022[29]). Some progress can be observed in a limited number of countries such as Germany and Spain, while in others such as Portugal actions remain in their infancy. The barriers faced in many countries include the challenge of balancing cost-effectiveness with other objectives and a lack of practical tools to implement environmental criteria in procurement processes.
A specific tool that some governments are using to facilitate green public procurement is eco-labelling. The use of eco-labels helps public authorities specify the technical needs of the products and services being purchased and verify compliance with these requirements. The use of third-party verification can also reduce time in assessing bids and boost the credibility of these processes. The EU has been working to support its Member States – including Portugal – with technical support and tools such as the Buying Green Handbook (European Commission, 2016[30]).
Moreover, green start-ups would benefit from procurement readiness programmes to help them take advantage of new procurement opportunities. This could include easy-to-access information portals on green tenders and training that covers bidding processes, pooling resources through consortia and exchanging expertise.
Overall, the support system for start-ups in Portugal is strong. The government has invested heavily in building up the ecosystem, supporting technology development and attracting talent. These investments have increased the availability and quality of support for entrepreneurs, contributing to boost the performance of entrepreneurs.
Green start-ups in Portugal can access a full suite of dedicated support services, including grants and integrated support programmes such as incubation and acceleration programmes that offer specialised consultancy, networking and in some cases, finance. These support schemes are led by both the public sector and non-government organisations, and often leverage the expertise of one or more organisations in the selection of participants and beneficiaries and/or in the delivery of support.
As in many OECD countries, the delivery of specialised supports for green start-ups is a relatively new activity and none of the initiatives are well-established. Yet the ecosystem has many strengths, including a strong collaborative approach that all actors embrace, a large infrastructure of specialised labs and equipment that can often be easily accessed by green start-ups, and a growing availability of early-stage funding for green start-ups.
There are a number of areas where direct support programmes for green start-ups could be improved. Relative to other OECD countries, the suite of public funding schemes in Portugal offers fewer options. Prizes are used to a limited extent in Portugal and financial awards are largely symbolic. Several other OECD countries such as Canada (e.g. Women in Cleantech Challenge awards) Germany (e.g. German Energy Agency’s (Dena) Start Up Energy Transition Award) use award programmes to provide more substantial financing to green start-ups (IEA, 2022[10]). For example, the Women in Cleantech Challenge awards provided CAN 1 million (approximately EUR 678 000) to the grand prize winner. Other finalists (approximately six) receive non-financial support and an annual stipend for two years of more than CDN 100 000 (approximately EUR 68 400). The main advantage that prizes offer is that they are much less restrictive in terms of eligible expenses and the process can, in some cases, be much more streamlined. (Large prizes would benefit from a strong due diligence and assessment process). In addition, the branding and competitive process can help the successful entrepreneurs network and promote themselves in the market.
Furthermore, an area for improvement across the range of financial measures (e.g. Vouchers for Startups and Call INNOV-ID) is to strengthen the linkages with business development or technical support services. This is done in many grant programmes in OECD countries, including for example the grants for green start-ups offered by the Chilean Economic Development Agency.
A second area for improvement is to re-introduce some short, tailored training programmes. While green entrepreneurship training programmes can have many objectives including awareness raising, the main objective would be to provide basic skills (e.g. leveraging tax benefits, adhere to regulatory requirements, managing policy and regulatory risk) to those operating non-tech green start-ups. There is currently very little support for non-tech green start-ups, so a training programme would enable them to make a stronger contribution to the green transition.
Finally, some progress has been made in creating new markets for green start-ups by adopting sustainable procurement practices and by supporting procurement readiness for green start-ups. This includes setting out a new strategy and taking some initial steps to developing a new platform to support public authorities. However, much more can be done and there are several OECD countries that could offer lessons for Portugal in how to advance quickly in supporting both public contracting authorities and green entrepreneurs and start-ups.
6.4.1. Policy recommendations
Facilitating access to finance
Expand the current grants for green start-up projects to offer more targeted funding opportunities for projects and start-ups at different stages of development. This could be achieved by reducing the number of “Startup Vouchers - New Green and Digital Products” awarded and instead awarding a small number of large grants to high potential projects that are close to market.
Boosting green skills of all entrepreneurs
Strengthen training programmes for green entrepreneurs and start-ups, aiming to reach the wider population of start-ups, including non-tech green start-ups that currently have little access to support services.
Strengthening integrated supports
Increase the availability of specialised incubation programmes for green start-ups, notably in the energy sector, considering the development of programmes that can also support non-tech green start-ups.
Increase networking opportunities for green start-ups with early-stage projects by adding networking activities to existing programmes. A first step could be to create regular (e.g. bi-annual) networking events for recipients of the “Startup Vouchers - New Green and Digital Products” and the “Vouchers for Incubators and Accelerators”.
Creating new markets for green start-ups
Create new tools to help policy makers monitor progress towards increasing circularity in the economy. This could initially be a tool with reduced scope, but the aim should be to construct an online tool that is easily accessible for all stakeholders. This could also help entrepreneurs identify new opportunities for introducing new products, services and/or processes that are more circular.
Offer training to green start-ups to boost procurement readiness. This could be a short training module that covers identifying public contracting opportunities, preparing bids, accessing opportunities in other EU Member States and effectively using labels and certifications.
Offer training to public authorities on all levels on how to increase the use of environmental sustainability criteria in public procurement processes to facilitate access to procurement markets for green start-ups.
Rationale and description of the initiative
The main financial instrument currently used to provide financial support to green start-ups is the “Vouchers for Startups – New Green and Digital Products” programme, which offers grants of EUR 30 000. This programme currently provides funding to a large number of green start-ups (i.e. the budget allocation of EUR 90 million could support 3 000 projects). However, the amount of funding provided is neither sufficient to invest in specialised equipment nor to scale up operations when products are ready to go to market. Other OECD countries have grant systems with larger grants available for more advanced projects.
The Vouchers for Startup – New Green and Digital Products could be adjusted with the introduction of two larger grants of up to EUR 250 000 and EUR 500 000 for more advanced projects. These larger grants could be introduced in a budget neutral manner to the current programme by reducing the number of EUR 30 000 grants provided. For example, a budget of EUR 90 million (i.e. the current budget) could be used to provide 2 865 grants of EUR 30 000, ten grants of EUR 250 000 and three grants of EUR 500 000.
The selection process could generally remain the same but the applicants for the larger grants would need to be able to demonstrate that their projects are more developed and closer to the market. For example, start-ups applying for the mid-size grants should be able to demonstrate that they have a concept that is ready for validation (i.e. technology readiness levels 3 and 4) and the large grant should be aimed at projects that are taking a validated concept to market (i.e. at least technology readiness level 5).
The introduction of larger vouchers would also require several other changes to the measure. First, the selection process would need to have a more robust assessment process. It is recommended to use a jury comprised of international experts, including representatives from public innovation agencies, to assess the proposed concepts, their market potential and other potential spillover benefits for Portugal. Second, it would be beneficial to link voucher recipients with business development services. This could be done through a systematic needs assessment by Startup Portugal experts, who could then refer the entrepreneurs to relevant incubators and labs. Third, the programme should use continuously open calls so that entrepreneurs can apply for the larger grants when they are most needed, free from the constraints of a cycle.
Expected results
Expanding the voucher measure to include larger grants could provide a higher level of support to selected promising projects to take their innovations closer to market and help them attract follow-on investment from private investors. The proposed approach is a reallocation of current budget levels across three levels of grants. With this approach, 13 start-ups per year could receive more intensive funding. International experience suggests that start-ups and early-stage firms created through such schemes are successful in securing substantial private sector investment.
Key performance/monitoring indicators
Performance and monitoring indicators for this initiative include:
Number of projects supported per type of grant (and number of applications).
Total value of funds granted.
Types of projects supported (e.g. prototyping, research).
Sector of projects supported.
Location of projects supported.
Amount of follow-on investment generated.
Number of projects launching IPO.
Estimated CO2 avoided.
Key authorities
This expanded version of the voucher measure would be managed by Startup Portugal. However, a number of partners would need to be engaged, notably to serve on the selection juries, such as private sector actors, researchers, NGOs and international partners.
International policy example: Grants offered by the Swedish Energy Agency
Description of the approach
The Swedish government has invested in energy technology entrepreneurs for decades. The rationale for supporting energy start-ups is that they face disproportionate regulatory and market barriers, a lack of awareness among investors, and the need for patient capital that is compatible with the timelines for developing energy hardware.
The current approach focuses on grant funding due to lessons learned from previous experiences with conditional loans. The two challenges faced with conditional loans were that the grace periods were too short (i.e. the payback trigger was too early for some of the recipients) and the loans contributed to a less favourable balance sheet for the recipients, which hinder their ability to seek additional investments.
The grants are awarded through regular calls, typically opened twice per year. Three different grants are currently offered to meet the needs of start-ups at different stages of development:
Concept development: a grant of up to SEK 300 000 (approximately EUR 26 870) to define and develop a technology concept.
Verification of customers: a grant of up to SEK 3 million (approximately EUR 268 700) to develop a technology prototype, covering up to 45% of the eligible costs of a project.
Pilot and demonstration: a grant of up to 45% of the eligible costs of a project that has capital costs of at least SEK 7 million (approximately EUR 627 000). The technology must be at least at technology readiness level 5 and through the project aim to reach levels 6-8.
The Swedish Energy Agency has supported 250 start-ups and provided approximately EUR 90 million to a portfolio of companies with an aggregated valuation of approximately EUR 3 billion and an estimated impact of one billion tonnes of CO2 avoided. Four out of five supported companies have received follow-on funding and 25 have launched initial public offerings. On average, the follow-on investment has been 15 times higher than the public funding.
Factors of success
The government has recognised that the role of the public sector is most needed during the most capital-intensive phases of product development. However, clean energy technology start-ups rely on a range of public funding sources and supports such as university incubators and prizes until they reach the stage where they are eligible for grants from the Swedish Energy Agency.
Obstacles and responses
Once the decision was made to shift expenditures away from loans to a non-repayable instrument, no significant obstacles have been encountered.
Relevance to Portugal
The example offers a model for how the Vouchers for Startups – New Green and Digital Products programme could be adjusted to have a greater impact by funding larger projects that are closer to the market. The Swedish approach was developed after some experimentation with different types of repayable and non-repayable instruments.
For further information
Swedish Energy Agency website: www.energimyndigheten.se/en/
Rationale and description of the initiative
Current support for green start-ups includes financial measures such as “Vouchers for Startup – New Green and Digital Products” and a range of research and innovation grants. Financial measures are complemented by specialised lab services and incubators. There are currently few training programmes offered to green entrepreneurs, start-ups and early-stage firms, although several training offers by IEFP are being reviewed for possible updates to make them more relevant for the green and digital transitions.
This gap in the support system could be addressed by introducing a series of training locally-tailored workshops and peer-learning sessions that cover different issues, ranging from identifying market opportunities, entering supply chains and accessing financial resources. These training modules could be organised as monthly events and could be designed to allow for flexible participation by start-ups, i.e. they attend sessions that are relevant. Each session could be managed by one or two expert speakers from the ecosystem (e.g. industry experts, business incubators, researchers, investors), or by entrepreneurs that are willing to share lessons with others. The events could last about 2 hours, followed by an informal networking session.
These sessions could be a standalone set of events, or they could be developed as a subseries of the Above and Beyond Hangouts that Startup Portugal operates on a monthly basis.
Expected results
A series of events such as seminars, masterclasses and peer-learning workshops would help disseminate knowledge within the ecosystem. Each event would focus on a specialised topic. A secondary benefit would be to offer informal networking opportunities and to strengthen the relationships between ecosystem actors.
Key performance/monitoring indicators
Performance and monitoring indicators for this initiative include:
Number of workshops and peer-learning events organised.
Number of start-ups participating.
Number of business support actors participating (e.g. incubators).
Number of research organisations participating.
Key authorities
A standalone series of events could be organised jointly by RNi - Portugal Incubators and interested incubators with the cooperation of Startup Portugal. Alternatively, it could be organised as a subset of the Above and Beyond Hangouts that Startup Portugal manages. The success of this type of activity would be dependent on voluntary contributions from specialised actors working with green start-ups (e.g. lawyers, researchers, investors) and entrepreneurs.
International policy example: Start-ups Are Us, Poland
Description of the approach
The Polish Agency for Enterprise Development (PARP) implements economic development programmes to support innovation and research activities in SMEs to drive regional development, export growth, human resource development and the adoption of new technologies by businesses. Its activities include support for entrepreneurship and start-ups, and it is working to align its activities to support the green and digital transitions.
The Start-ups Are Us project aims to strengthen the Polish start-up ecosystem, notably by creating training and learning opportunities for start-ups and other actors. The goal is to increase the chances of success of new start-ups and to help teams working towards a new start-up, existing start-ups and early-stage companies integrate more effectively into the Polish ecosystem, thereby strengthening the system as a whole. The project does this through a number of activities, including:
Training and workshops that provide basic support services and information for start-ups, offering an opportunity for start-ups to learn and meet each other.
Sharing innovative solutions and promoting new business models.
Peer-learning and networking events to help connect start-ups with other relevant actors in the national ecosystem.
Creating short-term ventures to facilitate international co-operations with foreign partners.
Since its launch in 2024, many events have been organised such as:
“Best Practice” meetings for start-ups to showcase the successes of new start-ups.
Business Mixer meetings bringing together start-ups and accelerators to identify opportunities for learning and collaboration.
Networking meeting for accelerators to exchange good practices, knowledge, experience and developing solutions to defined challenges for client start-ups.
While many of these activities are open to all start-ups, several have been organised specifically for GreenTech start-ups.
Factors of success
The main success factor will be the participation of start-ups in the project’s activities. This will require sufficient promotion and visibility of the activities, as well as ensuring that there is a demand for the activities.
Obstacles and responses
The project launched in September 2024 and no clear challenges have emerged so far.
Relevance to Portugal
This project offers a model of how training session and peer-learning could be organised for start-ups and other actors. The approach could be applied generally or targeted at green start-ups and relevant support actors. This would increase the availability of support for those working on pre-start-ups and holds potential for strengthening the entrepreneurship ecosystem more generally.
For further information
Website Start-ups Are Us – PARP – SME Development Centre: https://www.parp.gov.pl/component/site/site/start-ups-are-us#oprojekcie
Rationale and description of the initiative
The National Action Plan for the Circular Economy 2018-20 has framed circular economy policies in recent years and a new strategy is anticipated. Although a range of initiatives have been implemented to achieve the objectives of the action plan, there has been a heavy focus on actions that promote the circular economy. Only a select number of small measures are focussed on implementing actions. The development of a monitoring and good practice exchange tool could help advance the agenda by mapping initiatives, facilitating good practices exchanges, and tracking the amount of circularity in the economy. This type of tool could also help entrepreneurs and new start-ups identify new opportunities.
A new monitoring tool could leverage existing tools used in other countries. Moreover, some of these tools are based on an open methodology so there could be a low-cost template available for Portugal to adapt. The primary purpose of the tool is to report on inputs, throughputs and waste so that stakeholders can assess the extent to which a product is circular. This would help governments (national and local) measure progress towards their objectives, and also help entrepreneurs identify products and sectors where there are opportunities to introduce new processes to improve circularity. An initial version of the monitoring tool could collect a core set of indicators at the product level in three areas: inputs (e.g. value of raw materials used in production, CO2 emissions per product), throughputs3 (e.g. frequency of building renovation, frequency of purchase of new goods vs. second hand good) and waste management (e.g. volume of household waste collected, volume of industrial waste collected). These metrics could be expanded over time. Furthermore, the tool could initially focus on a selection of sectors that are significant sectors with strong potential to become more circular (e.g. tourism, textiles and food and beverage). This could be expanded over time to increase sector coverage.
The tool could also include case studies of effective and emerging practices to inspire others about the types of actions that could be taken. This would include a collection of case studies and users could have the opportunity to provide inputs. This would require some kind of review system to assess the quality of inputs.
Expected results
The development of a monitoring tool could help advance the agenda because it could be designed to fill some of the gaps in the 2018-20 action plan. The monitoring tool could be developed in stages. An initial tool could be prepared as a report using existing data for a limited part of the economy. The tool could be iteratively refined and improved. While initial stages could be produced as a report, its use and relevance would likely be higher if it were developed as an online platform.
Key performance/monitoring indicators
Performance and monitoring indicators for this initiative include:
Production of a monitoring tool.
Use of the monitoring tool by different stakeholder groups: i) government; ii) entrepreneurs; iii) established and large firms; iv) consumers; v) researchers.
Number of actions introduced that were directly inspired by the tool.
Key authorities
The development could be led by the Ministry of Environment and Energy, with strong involvement from the Ministry of Economy, Startup Portugal, leading universities and private IT and data companies. This would help to ensure that there is sufficient expertise in the required areas, including environmental, economic and social impacts, and would help identify any existing data that could be leveraged in an initial version of the tool. Engaging a wide range of actors also increases the chances of success because a tool cannot implement change on its own. Several policy actions would be needed to provide incentives for implementing circular processes, including tax incentives, regulatory changes and increased use of green procurement.
International policy example: Amsterdam Circular Monitor, Netherlands
Description of the approach
In 2020, the City of Amsterdam committed to becoming a 100% circular economy by 2050. It is the first city in the world to outline such an ambitious agenda. The plan includes halving the use of new materials by 2030 in three sectors: food and organic waste; consumer goods; and construction. This work has been recognised by the Earthshot Prize, for which it was a 2022 finalist in the WasteFree World category.
One of the key initiatives implemented as part of this plan is the Amsterdam Circular Monitor, which is a database and dashboard on how materials flow through the city. It is intended to help policy makers identify areas for action but also help entrepreneurs identify new opportunities to introduce new processes to improve circularity.
The tool was developed by Amsterdam’s Research and Statistics department and the Chief Technology Office in co-operation with other partners including Statistics Netherlands, TNO (an applied science and technology organisation) and GeoFluxus (a private data firm that spun-out of Delft University of Technology). The methodology was developed to be open access so that other cities and municipalities in the Netherlands can use it.
The Circular Monitor currently has five sections:
Input indicators, which measure material inputs. These indicators are based on life cycle analyses of used materials in product groups with the largest carbon footprint.
Throughput indicators, which report on the way that materials are used and include the predicted reduction of CO2 emissions based on circular projects in the three selected value chains (i.e. food and organic waste; consumer goods; and construction).
Indicators for waste collection by public authorities, which measure the public authorities’ performance in regard to waste collection (e.g. separating waste and collecting bulk waste).
Indicators for the waste treatment processes of regional industries, which present general indicators for industrial waste streams, broken down by value chain and processing form.
Indicators for the social foundation, which report on general welfare of a society, such as housing, income and wealth inequality and health.
Development work is ongoing in two main areas. First, there is ongoing work to increase the granularity of the data in each theme. This includes making use of data that construction contractors are required to report (e.g. material use and associated environmental impacts at the product level). Once data are more comprehensive, the ambition is to link the five sections together. This will help the city track progress towards increasingly specific targets and potentially identify new opportunities for entrepreneurs. Second, the social impacts of material use will be added in a future iteration of the tool. Finally, research on topics related to the circular economy will is continually being added. This covers issues such as circular jobs, waste statistics, and residents’ attitudes towards the circular transition.
Factors of success
Several lessons were identified through the pilot phases of the project. One of the main success factors of this tool is that it uses an open methodology that can be adopted elsewhere in the Netherlands or in other countries. This approach is expected to accelerate progress in advancing towards circular economy goals and targets since other cities can benefit from this existing tool.
Second, the tool uses a robust but continuous learning approach. Development is ongoing to make improvements and lessons are recorded and presented in a structured way so that they can be applied in the future or in other contexts.
The impact of the tool is expected to be greater once it includes more indicators on social and economic impact. This will allow for better-informed decisions as more factors such as labour market impacts and social needs are considered.
Obstacles and responses
The main challenge faced in developing and maintaining this type of tool is to ensure that there are enough resources available. This includes developing data, building and maintaining and easily accessible platform and constructing mechanisms measure and report on the experiences of individuals, entrepreneurs and projects. The approach used to overcome this challenge was to build a public-private group that provides financial and in-kind resources. A strong public sector commitment is needed to provide financial resources in the medium- and long-term.
Relevance to Portugal
The circular economy is one strategic area identified for developing green start-ups. Although strategies have been in place for several years and several successful projects have been implemented, there is not yet a way to measure and report on progress, nor to spread the knowledge gained. Building such a tool could help entrepreneurs, start-ups and early-stage firms identify opportunities. This holds great potential for increasing the level of green entrepreneurship throughout the economy and advancing towards an increased level of circularity.
For further information
Website Circular Economy Policy – City of Amsterdam: https://www.amsterdam.nl/en/policy/sustainability/circular-economy/
Rationale and description of the initiative
Several OECD countries are starting to use public procurement as a vehicle for creating new markets for green start-ups. The law allows for public authorities to consider environmental sustainability when assessing bids but there are currently few practical tools to support green start-ups and public contracting authorities.
Building on the experience of PROCURE+I, Portugal could develop training modules for entrepreneurs so that they have the skills and knowledge to submit bids. This training could cover how to navigate the online portals and how to register for alerts. It could also cover the preparation of bids and how to seek feedback on unsuccessful bids and use this knowledge in future bids.
Furthermore, there is a need to develop training for public authorities at national and local levels so that purchasing officers have the knowledge and skills to i) understand the legal framework; ii) develop and assess environmental criteria (e.g. calculate the total cost of ownership or life-cycle costs) and when to apply them. It would also be important for training to provide information on good practices and innovations in other EU Member States.
There is also a need to create a technical support centre to provide advice and respond to questions from public authorities on how to embed environmental and sustainability criteria into calls for tender. The technical support centre could develop guidebooks and other tools for employees of contracting agencies.
Expected results
Increasing the application of environmental sustainability criteria will help Portugal advance towards the objectives outlined in the Strategy for Green Public Procurement 2020 - Towards Green Growth.
Key performance/monitoring indicators
Performance and monitoring indicators for this initiative include:
Share of public contracts that are awarded on environmental sustainability criteria.
Share of SMEs and entrepreneurs that are awarded green procurement contracts.
Key authorities
The main authority to be engaged is eSPap, but there is also a need for Startup Portugal to be involved so that they can provide the entrepreneurs’ perspective.
International policy example: AVV Klima, Germany
Description of the approach
The new General Administrative Regulation for the Procurement of Climate Friendly Services (Allgemeine Verwaltungsvorschrift zur Beschaffung energieeffizienter Leistungen, AVV Klima) is a regulation that came in force on 1 January 2022. It recognises that public procurement can have a role in driving demand for green solutions. Each year, public procurement in Germany amounts to EUR 350 billion.
The Regulation stipulates that procurement processes should give preference to climate-friendly options, including that procured products and services meet the highest possible energy efficiency class. It requires procurement officers to always purchase goods and products that have the highest energy efficiency class available on the label, as defined by EU’s regulation on energy labelling. In instances where this is not possible because there are no such products, the product with the highest achievable level of energy efficiency is to be bought. This rule applies irrespective of whether a contract is awarded as part of a purely national or European tender procedure. In addition, there is a list of products and services that are not permitted for procurement for environmental reasons. Where possible, forecasts of the lifecycle greenhouse gas emissions caused by the procured goods and services must be developed.
The new regulation was accompanied by the creation of the Competence Centre for Sustainable Procurement. It is situated within the Procurement Office of the Federal Ministry of the Interior, Building and Community and is a central contact point for federal departments, states, municipalities and other public procurement offices. The Centre offers training on sustainable procurement practices to public sector clients and information such as potential legal grounds for excluding bidders from a procurement process. Since October 2020, the new nationwide procurement statistics have recorded data on whether procurement offices are making use of the newly created scope for taking sustainability criteria into account.
Factors of success
Developing common tools and practices may be particularly important for clean energy start-ups because investors and customers are increasingly using environmental, social and governance (ESG) reporting metrics to underpin their strategic decisions. However, many young companies often do not have adequate resources to measure and document their performance to the required standards. Targeted tools or support to ensure that start-ups meet standards may therefore be needed, so that this does not become an additional barrier to market entry.
Obstacles and responses
Despite the myriad of benefits of green procurement, governments continue to face a range of barriers to expanding the use of green procurement. These barriers include low levels of awareness among public authorities and a lack of political support. One of the main challenges is that public procurement typically uses cost as a dominant criterion for awarding contracts and green procurement is perceived as increasing costs. Moreover, public authorities often lack practical tools to implement environmental criteria in procurement processes and legal expertise to define environmental criteria.
Relevance to Portugal
Some initial activities have been launched in Portugal to allow procurement officers to award contracts based on criteria that consider environmental sustainability (e.g. energy efficiency, reduction of waste). However, progress has been slow and other countries are advancing at a greater pace. This is a missed opportunity to open up markets for green start-ups and for the government to act as a role model for the corporate sector.
For further information
Regulation (in German): avv-eneff.pdf (bmwk.de)
Competence Centre for Sustainable Procurement (overview): 150615_Broschuere_KNB_engl.pdf (nachhaltige-beschaffung.info) and https://www.koinno-bmwk.de/en/koinno/network/detail/competence-center-for-sustainable-procurement/
Website of the Competence Centre for Sustainable Procurement: https://www.nachhaltige-beschaffung.info/DE/Home/home_node.html
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← 1. This differs from the official definition of start-up, which are new firms that are less than 10 years old (Startup Portugal, 2024[31]).
← 2. The two autonomous administrative regions of Madeira and Azores have their own adapted regional public procurement rules to meet the needs of the territories.
← 3. Throughput indicators are difficult to measure so some tools have not yet included these types of indicators.