What is unique about green innovation?

The urgency of climate change and environmental degradation underscores requires green innovations to reduce greenhouse gas emissions, minimise pollution, and preserve natural resources and biodiversity. Encompassing both technological and non-technological advancements, these innovations often face underinvestment and structural lock-ins to existing technologies. Developments, however, are highly sector- and technology-specific. This paper examines the distinct characteristics of green innovation and explores specific development and diffusion dynamics in four key sectors: green hydrogen, green steel, batteries, and electric vehicles (EVs). While green hydrogen and green steel remain nascent due to high costs and limited market adoption, batteries and EVs are more mature but challenged by overcapacity and infrastructure gaps. Addressing existing challenges and maximising the potential of green innovation requires mobilizing the entire innovation ecosystem, targeted policy support and changes in consumption patterns.