Introduction to the workshop
On 16 December 2024 the OECD Working Party on Innovation and Technology Policy (TIP) organised a workshop at the OECD in Paris on the competitiveness and co-operation imperatives of green innovation. The event brought together more than 100 participants, including academics, policymakers, and industry representatives with the aim of examining the interplay between competitiveness and co-operation in green innovation.
The workshop explored how tensions between competitiveness and the need for cooperation affect the speed and direction of the green transition and the implications for science, technology, and innovation (STI) systems and policymakers in this field This theme builds directly on the TIP’s international policy work on the challenges of green innovation and technology development. As part of the 2023-24 project “Making technology investments succeed: What should STI policies do for skills and capabilities,” the TIP has analysed the dynamics of green innovation development and diffusion across the battery, electric vehicles, hydrogen, and steel sectors in different countries and their practical implications for the design and implementation of STI policy.
The workshop is also relevant for implementing the CSTP’s Agenda for Transformative STI Policies, which is concerned with reconciling policy agendas that target green transitions, competitiveness, and resilience and security goals.
Background to the workshop
There are debates across the OECD on the question of securing future economic competitiveness in a context massive transformations, brought by digital technologies, the push for green transitions, and geopolitical and economic tensions around trade, technological leadership, and access to minerals. Changes in regulatory frameworks, consumer preferences and consumption habits further drive changes. As a result, many established firms across various industries that have long thrived – supported by a symbiotic relationship with their STI ecosystem – are now assessing the need for change and taking steps to maintain their market positions. In part this is about actively participating in the innovation of the technologies that will define future competitiveness, and in part it is about ensuring that firms can adopt and deploy such technologies. Whether in electric vehicles or heavy industry, the green transition is creating new winners and new losers, both within and across national economies.
Despite the importance of competitiveness, success in the green transition implicitly requires a significant need for co-operation between firms, sectors, and countries. Certain countries may excel scientifically and technologically in a section of a value chain of an emergent green industry, have an industry that is well suited to adopt and benefit from green technologies, or have the critical material inputs for their production, but fewwill excel
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in each or have access to all the inputs they require. There are also proven benefits from co-creation between industry, research, civil society groups and government – for the development and diffusion of technological innovation.
International STI co-operation in the field of green innovation also builds new opportunities for emerging and developing economies. Trends in the developments of critical minerals and low-carbon fuels such as hydrogen are already demonstrating that OECD countries are thinking strategically about the relationship between STI and international co-operation. These significant developments are taking place in a context – for competitiveness and the climate – where time is short. It is well recognised that for the global economy to transition to a more sustainable model, it is imperative that countries accelerate the development of technologies to abate the most difficult of carbon and environmental externalities, and to deploy those that are already technologically viable but where the market remains underdeveloped and imperfect. Beyond climatic considerations, those economies andfirms that most quickly and effectively navigate this transition may, much like the firms and countries that led in the industrial revolution to which the green transition responds, shape the global economy in the generations to come.
The workshop explored what these dynamics mean for STI systems and the policymakers that shape them in theory and in practice. It brought together experts and practitioners to discuss how tensions between competitiveness and the need for co-operation inform the speed and direction of the green transition, and what firms andthe STI systems that support them are doing to ensure competitiveness going forward. Participants considered, for example, how targeted technology and industrial policies could accelerate innovation in critical technologies for a competitive green economy while remaining open to collaboration and co-operation. Through its sessions and activities, the workshop provided the TIP community with an opportunity to exchange on pressing STI policy, practice and theoretical questions, and to reflect on what they mean for specific technologies and industries of interest.
Key questions discussed:
• How do policymakers and practitioners balance the need to support national economic competitiveness with the international imperatives of advancing green innovation?
• What role should targeted technology and industrial policies play in accelerating innovation in critical technologies for a green economy, and how can this be reconciled with the need for co-operation and collaboration?
• What practical and policy lessons can be derived from ongoing practice at the frontier of green innovation as regards development and deployment?
• Which international STI initiatives are critical to advancing the green transition globally to support competitiveness at a national or regional level?
Discussions during the workshop explored STI policy, competitiveness, and collaboration issues across a wide range of technologies, including batteries, hydrogen, semiconductors,
quantum technologies, and solutions for biodiversity protection. They highlighted the different competitiveness and co-operation dynamics and implications for a variety of critical green technologies at different levels of commercial readiness and technological maturity. While there are undoubtedly challenges to fostering and deepening co-operation in green innovation, there is a broad consensus that achieving the ultimate goals of this type of innovation – reconciling global economic activity with more environmentally sustainable outcomes at a global scale – will only be possible with international cooperation.
Six key takeaways from the workshop
(1) This highly dynamic and potentially disruptive period for international STI co-operation will likely have implications on green technologies and innovations.
Many participants discussed and reflected on how 2025 will be a complex and pivotal year for STI co-operation in green technologies and innovations In 2025, the OECD is facing an increasingly complex geopolitical and economic landscape, which will challenge international STI co-operation for green innovation. There is increasing uncertainty around how best to advance and scale green technologies amid growing pressures for strategic autonomy, resource security, and fiscal pressures.
An uncertain international political and trade environment: While international STI cooperation for green innovation remains crucial, shifting geopolitical tensions and the possibility of intensifying trade barriers could slow (joint) R&D efforts and technology diffusion Moreover, policy uncertainty as regards the trade environment - whether related to tariffs, export controls, or shifting bilateral relations - may deter firms from expanding green technologies due to the unpredictability of future markets for these products.
Policy focus on strategic autonomy and resource vulnerabilities: Governments are increasingly treating a number of green innovation technologies, such as battery storage, hydrogen production, and critical mineral processing, as vital for national competitiveness and security, leading to greater emphasis on building domestic capabilities. Efforts to secure supply chains and critical raw materials (e.g. rare earth metals, battery components) can create friction if they reduce cross-border collaboration. These dynamics underscore a fundamental tension: securing national interests can inadvertently slow the global flow of knowledge and technology needed to address climate goals.
Macroeconomic headwinds for R&D, technology adoption and infrastructure: Although inflation is beginning to ease in many OECD economies, interest rates remain relatively high, and public budgets are still under pressure from the pandemic response. This reduced fiscal space makes large-scale investments in research, pilot projects, and green infrastructure more difficult. Private sector actors, facing higher borrowing costs and lingering economic uncertainty, may also delay or scale back green innovation initiatives. At the same time, the urgency for developing and deploying cleaner technologies is increasing, creating a
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mismatch between the need for rapid progress and the financial constraints facing governments and firms alike.
(2) Scale – whether of countries, industries, and firms – affect the direction and depth of green innovation and STI policy choices.
Different issues related to scale are important in shaping green innovation decisions in the public and private sector: what to support, how to support it, and with what level of public or private backing, all are linked to the size of countries, markets, incumbents, and resources. In sectors such as batteries or green steel, achieving commercial manufacturing viability depends on having enough demand to sustain the large capital investments and R&D necessary to retain an internationally comparative advantage; in large economies it may be possible to internalise this demand, but in smaller economies – in the uncertain trade environment outlined above –this may be difficult specifically where trade restrictions are applied.
Countrysize: Larger economies can often leverage substantial domestic capacities – financial as well as technological – to develop, sustain and lead in emerging green industries, such as low-carbon steel or battery manufacturing. The situation is different for smaller countries, which may not be able to internalise the investments and capacities necessary to compete at all points of new green value chains. In such contexts, strategies that focus on specialised niches or that build regional alliances for shared resources and infrastructure become important
Market size and structure: The mix of upstream and downstream industries, the number of consumers and their preferences, the regulatory framework of business and investment and international linkages shape the conditions for green technology to be developed, adopted, and scaled In a large domestic market with many industrial and residential consumers, policymakers may be able to stimulate regulatory conditions that drive down the cost of green technologies, and by extension improve their competitiveness on external as well as internal markets. In smaller economies that are more reliant on external demand for output, achieving these domestic economies of scale for green innovation may be more challenging unless global regulatory conditions provide for scale beyond national borders.
Firm size and capacities: The capacity for green innovation also varies among firms of different sizes. Large incumbents often have the resources to undertake high-risk fronter technology projects in green innovation and also more opportunities to develop competitive production capabilities, while operating their traditional and safer production fields. Smaller firms, by contrast, may excel at specialised innovation or product development in value chains that are being transformed by the innovation activities of larger peers, and may struggle to keep pace with technological change. The latter may be a function of support for SMEs to catch up to the frontier, addressing the inclusiveness of innovation activities but also competitiveness by broadening the innovation capacities.
There may emerge parallels between the future international STI system for green technologies and, for example, the history and current trends of microelectronics. While not every OECD member may be able to sustain a semiconductor fabrication industry, several countries have positioned themselves at key nodes within the specialised tools, services, and infrastructure necessary for that production to happen Doing so was critical to the rapid industrialisation and
technological advancement of many economies, for example, in East Asia. Drawing on the successful experience for lessons in today’s context requires critically reflecting on how the specificities of green technologies and the different dynamics in the international environment come into play.
(3) Supply-side STI policy interventions need to be aligned with demand-side interventions for the successful commercialisation and scale-up of green innovations.
Discussions at the workshop emphasised that supply-side STI policy interventions will not be sufficient to develop and scale green innovation on their own, and that there may even be a competitiveness and resilience risk in not situating STI interventions for green innovation in a more systemic package of supply and demand measures. Even the most transformative technological solutions can stall ifthere is no supportive marketpull - such as targeted subsidies or carbon pricing, and if the pull (or production support) is stronger in an external market, governments risk seeing the benefits of their STI support accrue to another country.
Conversely, demand-side interventions must be matched by adequate supply-side support, such as financing and capacity building, to meet the demand for green products where major costs for transformations arise. For instance, the production of green steel requires substantial investments in new technologies and infrastructure. Without sufficient supply-side support, industries may struggle to meet the growing demand for sustainable materials, potentially hindering the transition to a greener economy.
Directed demand-side and supply-side interventions require sectoral alignment and integration into a broader investment framework that mobilises private finance towards green technologies Broader ecological impacts of those technologies in production and consumption stages are also important in those frameworks This requires concerted efforts from regulators, industry stakeholders, and financial institutions. By incorporating these measures into direct (e.g., purchase mandates or quotas) and indirect (e.g., carbon pricing) demand-side measures into a broader policy framework, governments can guide private investment toward greener options, accelerate the commercialisation of transformative technologies while ensuring the delivery of environmental benefits
Aligning demand- and supply-side policies requires careful balancing as excess supply and the inability of supply to meet demand are obstacles to green transitions. Public investments in demand-side interventions may yield limited returns if supply cannot scale swiftly enough to meet production needs. Conversely, substantial supply-side investments without corresponding demand can lead to overcapacity, rendering green technology projects unsustainable without significant subsidies. Experiences of oversupply may well affect business incentives to engage in green innovation going forward, the exact reverse of needed private sector engagement.
(4) With the strategic visions & roadmaps for green innovation and technology set, succeeding in their implementation faces complex challenges.
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It was clear throughout the workshop that many governments have articulated detailed roadmaps to guide the transition toward more sustainable economies, outlining the role for STI and green innovation therein Strategic approaches vary, with some governments pursuing technology-neutral but ambitious emissions targets, others adopting mission-driven initiatives, while others still look to explicitly support specific technological and industrial priorities.
What each approach has in common is that translating high-level visions into implementation remains a challenge. In large part this reflects the complexities set out above, and the need to align the goals of different ministries, balance national ambitions with regional or local realities, and reconcile sector-specific needs with cross-cutting frameworks (e.g., the impact of carbon pricing on the competitiveness of key industries vs. the need to stimulate investment in lowcarbon technologies)
The interplay of domestic and international dynamics adds significant complexity to policy design and execution in green technology innovation. As numerous countries engage in green innovation efforts, the context becomes increasingly dynamic, with shifting developments and external factors beyond national control. In industries requiring large-scale infrastructure or critical raw materials, the pace of progress can hinge on external factors that individual governments cannot easily control. Moreover, uncertainties around technology performance, market conditions, and geopolitical shifts pose challenges for policy implementation.
Despite these challenges, the workshop discussions underscored that well-coordinated and targeted efforts can deliver significant progress Past examples of successfully implemented technology development sectors, including Korea’s success in developing a competitive battery industry by scaling up manufacturing and industrial capacity, were provided to illustrate success in building technology leadership was possible. Moreover, discussions around sectoral cluster and industrial policy initiatives highlighted how OECD countries are implementing packages of policies that support steering the STI ecosystem around key industries towards a green, sustainable transformation.
(5) A massive mobilisation of private finance in R&D and technology diffusion, supported by public policy actions is challenging but necessary for green transitions.
In capital-intensive industries such as steel, cement, and heavy-duty transport, where both the global importance of carbon emissions abatement and the transition costs are high, the investment challenge is daunting. These industries often have fixed assets with long lifespans and therefore face asset stranding risks, while also generally operating in low margin but highly tradeable and competitive markets. There may be a clear technological pathway in the cement or steel sector to displace coal with green hydrogen, but mobilising the investment necessary to make that happen requires a compelling and predictable business case given the present cost difference between the low-carbon fuel and its ‘brown equivalent’.
In the earlier stages of scaling technologies such as green hydrogen, both at the production level and in its adoption in key hard-to-abate sectors, projects often require a balance of publicsector support – grants, tax incentives, loan guarantees – and private investment to be bankable and reach a final investment decision. In the few cases where green hydrogen has
been used for steel production, projects have used a combination of publicly backed or derisked off-take agreements. While these public interventions are critical to derisking the private investment, ultimately these projects also need credible long-term policy signals that the market will, over time, sustain these green technologies without subsidy.
Regardless of the supply and demand STI policy mix, discussions emphasised that achieving a truly transformative impact of green innovation will require a massive mobilisation of private capital. While public investment can play a crucial role in de-risking early-stage R&D and commercially immature but potentially high impact green technologies and industries, it cannot do it alone. The scale of investment required to achieve net-zero emissions is higher than public resources can afford, specifically in a context of substantive fiscal constraints The private sector possesses the necessary expertise and efficiency to scale and commercialise green technologies effectively.
(6) International co-operation is critical for the development and diffusion of green innovations
Many of the emerging technologies discussed at the conference and the industries that they are transforming are developing at a rapid pace, but that development is spread unevenly across and beyond the OECD. While certain countries are consolidating innovative capacities in narrowly defined sections of emerging technology value chains, others focus on industrialisation or the enabling infrastructure for diffusion. Conditions for engaging in green innovations, including the availability of capabilities and other required inputs also differ
The global dispersion of innovation and technological capacities points to the benefits of further collaboration to reach green development goals. Where green innovation capacities are most advanced in one location is not necessarily where they will be most impactful for climate and environmental objectives globally The countries where hard-to-abate activities are most technologically ready to adopt transformative green innovations are not necessarily those where the inputs necessary for those innovations are best produced.
Moreover, several specific examples were provided to show that effectively tackling climate challenges often involves pooling resources in large-scale collaborative innovation projects –whether on hydrogen infrastructure, battery research, or carbon capture, utilisation, and storage (CCUS). This requires international co-operation to have access to the knowledge, technological innovations, and infrastructure necessary to align economic output with green outcomes. While technology transfer mainly occurs trough market-led adoption and industrial upgrading, workshop discussions highlighted that international co-operation with emerging countries can also play a complementary role. During the conference, several examples were highlighted to illustrate how international co-operation can advance green innovation and support the global green transition.
At the same time, international co-operation in STI faces a range of geopolitical and traderelated constraints that can slow or complicate progress. Frictions over technology transfer and intellectual property rights can undermine trust among partners, while shifts in diplomatic relations may impact how easily knowledge or components cross borders. Moreover, efforts to secure strategic autonomy in certain green industries or the green innovations necessary for the future competitiveness of extant industries may hamper the efficient international
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coordination and resource allocation needed for fast and widespread adoption of green solutions. Choices that policymakers take on where to support STI in green innovation also reflect considerations around whether the country can internalise all or only certain parts of the value chain in a given targeted industry or technology. Finally, the importance of international co-operation was also pointed out as critical if countries are to avoid duplicative efforts which will only slow the development of and cost improvements in critical green technologies for the green transition.
Next steps for the OECD-TIP
The workshop raised a number of practical and theoretical considerations for green innovation in the context of heightened geopolitical competition and constrained international co-operation. Key themes included considerations of scale, at both the firm and national level, the need for a policy mix that effectively balances demand-side and supply-side interventions to accelerate commercialisation and direct innovation, and the challenges of translating strategic vision to actual implementation. Finally, the workshop highlighted the large investment needed to de-risk R&D and develop new technological solutions as well as making the necessary capital investments in new green infrastructure. These key themes will inform TIP’s activities in 2025 – 2026 on technology diffusion and development. An update on the activities will be published on the TIP’s webpage
The specific nature of planned outcomes for 2025 is outlined next.
Conferences, workshops and webinars:
Throughout 2025: The TIP will continue its Moonshot Webinar Series, which will provide an opportunity for delegates and associated experts to discuss key technology and innovation policy questions relevant to both immediate events and ongoing trends.
• An updated timeline of Moonshot events can be found on the seminar’s webpage
June 2025: A conference will be held on 18 June 2025 ahead of the TIP meeting on 19-20 June 2025. The workshop will deepen questions raised in the December 2024 workshop on the role of country and market size in determining green innovation trends and the direction of STI policy intervention, as well as looking at issues and practical experience around regional clusters and their integration into international STI ecosystems for green innovation.
• A Workshop Agenda can be found on the TIP’s webpage.
Documents for the June 2025 TIP meeting:
An analysis of green innovation that builds on discussions around balancing supply and demand-side interventions for green innovation and the implications of country and market size for green innovation and STI policy direction.
• Initial insights from the analysis will be discussed as part of the June TIP meeting.
An analysis of innovation ecosystems for industrial transformation that draws upon the discussions around policy mixes and implementation for technology development and diffusion, and draws on work conducted by the TIP on the Canadian Global Innovation Clusters initiative and the UK’s Advanced Propulsion Centre.
Two case studies on the Next Generation Advanced Manufacturing Cluster (Canada) and the Advanced Propulsion Centre (UK).
• Delegates are invited to provide country examples of policy initiatives that support the development and diffusion of green and advanced digital technologies within sectoral or regional clusters.
Draft chapters from the 2025 STIOutlook that explore questions of inclusion and excellence in green innovation and on policy experimentation for green innovation.
Workshop summary
Introductory remarks
Welcome remarks were provided by the Chair of the TIP, Göran Marklund, Deputy Director General at Sweden’s innovation agency VINNOVA. Mr. Marklund welcomed participants to the workshop on “Competitiveness and Co-operation Imperatives of Green Innovation,” highlighting its relevance in the context of global efforts to accelerate the green transition. Mr. Marklund emphasised the challenge of national competitiveness, noting the importance of aligning STI policies with sustainable economic outcomes. Mr. Marklund further outlined the role of the TIP Working Party in addressing these themes, informed by its recent projects on technology investments, skills, and sectoral clusters.
Jerry Sheehan, Director of the OECD Directorate for Science, Technology, and Innovation acknowledged the critical role of STI systems in the green transition. Mr. Sheehan emphasised the need for governments to adopt a strategic approach that balances targeted industrial policies with international co-operation. Mr. Sheehan also reflected on the interdisciplinary and cross-sectoral collaborations within the OECD, highlighting TIP’s unique contributions to advancing these discussions.
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Caroline Paunov, Head of the TIP Secretariat, Directorate for Science, Technology and Innovation, OECD, provided an overview of the workshop, highlighting its relevance for the TIP group’s current and future work.
Session 1. Strategic planning for green technology development and the role of international co-operation
Session 1 explored how governments and industries use targeted STI strategies to advance green innovations, focusing on critical technologies such as batteries and hydrogen. The session examined the role of international co-operation in balancing strategic and commercial objectives, highlighting the opportunities and challenges in aligning national priorities with global sustainability goals. The speakers (see Figure 1) provided insights into policy frameworks, industrial strategies, and the practical measures needed to foster competitiveness and collaboration in the green economy
Figure 1. Session 1 speakers
Erik Canton, Acting Chief Economist, Directorate General for Research and Innovation at the European Commission
Mr. Canton outlined several European Union (EU)’s strategies for advancing critical green technologies (see Figure 2). Mr. Canton emphasised the key objectives of these initiatives, which include reducing environmental harm, achieving energy independence, positioning the EU as a global leader in next-generation green technologies, driving economic growth and creating new jobs in both existing and new industries He argued that the development and scaling of these industries offer an opportunity to build competitive industries. He also emphasised the importance of building resilient industrial supply chains across the EU.
Figure 2. Main EU strategies for critical green tech
Source: Erik Canton’s presentation (European Commission)
Mr. Canton also pointed to the existence of significant challenges that need to be addressed in a coherent and accelerated way to further strengthen the EU’s competitiveness in this field. Among these is regulatory complexity, as the regulatory landscape for deploying green technologies, such as renewable energy systems (e.g. solar panels and wind turbines), electric vehicle charging infrastructure and energy storage solutions is fragmented across EU Member States, potentially, creating high administrative burdens for firms Mr. Canton also noted the need for the EU to secure access to critical raw materials essential for clean technologies. Another key challenge
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highlighted by Mr. Canton is the skills gap, with insufficient numbers of workers trained in fields such as renewable energy, battery technology, and green manufacturing. This shortage of expertise, he argued, was a barrier to the rapid deployment of clean technologies. Additionally, Mr. Canton highlighted investment gaps in critical infrastructure and innovation, compounded by financial and regulatory bottlenecks that hinder the largescale deployment and uptake of available green technologies.
To address these barriers, Mr. Canton highlighted four key action points, which are also put forward in the Green Deal Industrial Plan:
1. The importance of speeding up access to finance for green innovation by simplifying funding mechanisms and increasing investment incentives for green innovation and deployment.
2. The diversification of critical inputs to reduce dependency on single external sources, thereby enhancing supply chain resilience and ensuring secure access to essential raw materials.
3. Simplifying regulatory environments to reduce administrative burdens and create a more conducive atmosphere for innovation and industrial scaling.
4. The support of skills and capabilities for green innovation. In this context, Mr. Canton underlined the importance of initiatives like the EU-led net-zero academies, which were announced in 2023 as part of the Net-Zero Industry Act to address workforce preparedness. These academies are tasked with developing learning and education programmes for net-zero technologies, which are then to be implemented through local education and training providers across Europe The first of these academies, the European Solar Academy, was established in 2024, focused on solar technologies
Ola Hansén, Public Affairs Director at STEGRA, Sweden
Mr. Hansén shared insights on the efforts of STEGRA in developing the world’s first commercial-scale green steel mill in Boden, Sweden. This project represents an important development in the decarbonisation of hard-to-abate industries, as carbon emissions may be reduced by 95% compared to traditional steel production methods.
Mr. Hansén highlighted the importance of the financing model, which combines significant public and private investment, for the project’s development. Public funding played a crucial role in triggering private investment, creating the confidence for private stakeholders. Demonstrating demand for green steel was equally important in securing these investments. This was achieved through take-up contracts for the mill’s production output in its initial phase, where long-term agreements with a green premium ensured the
financial viability of the project. These contracts, he pointed out, were critical to showcase to investors the market’s willingness to invest in sustainable materials, helping to establish green steel as a commercially viable product.
Mr. Hansén also stressed the importance of the EU’s carbon pricing mechanism within the Emissions Trading System. Carbon pricing was instrumental in accounting for the price premium of green steel He also mentioned the importance of quotas and mandates for low-carbon production input materials. These policy tools, he emphasised, were important for industries to transition toward greener technologies and to build, progressively, the competitiveness of sustainable alternatives like green steel
Sarah Marie Jordaan, Associate Professor at the Institute for Sustainability in Engineering and Design (TISED) at McGill University, Canada,
Ms. Jordaan highlighted the role of aligning innovation policy aimed at supporting earlystage research to full commercialisation with sustainability objectives. She pointed to large global investment in clean energy that now surpasses fossil fuel-related investments Ms. Jordaan also acknowledged significant challenges, including rising environmental shocks, large material demands for green innovations, major infrastructure needs, and the unequal impacts of the climate challenge and, potentially, its solutions across different groups in society
Moreover, she argued for the importance of integrating life-cycle assessments (LCAs) and eco-design principles into early-stage technology development and investment strategies and policies. These tools, which consist of analysing the environmental impacts of a product throughout its entire lifecycle, optimising resource efficiency, minimising waste, and prioritising sustainability and circularity metrics in the design process, contribute to focusing research and innovation activities on achieving comprehensive environmental benefits. In this context, Ms. Jordaan emphasised the need for industrial ecosystems and technology hubs to reduce reliance on new materials and minimising waste generation by engaging in recycling She pointed to the role of STI policy in setting incentives by embedding LCA metrics into funding mechanisms for green innovations.
Mr. Kim highlighted factors driving Korea’s success in building a globally competitive battery innovation ecosystem, which, as of 2021, made Korea the world’s second-largest battery producer Mr. Kim traced Korea’s progress over decades, beginning with small rechargeable batteries in the 1990s, followed by a shift to green growth policies in the
Sunkyo Kim, Research Fellow at the Korea Institute of S&T Evaluation and Planning (KISTEP)
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2000s that prioritised eco-friendly R&D investments. These efforts have solidified Korea’s position as a global leader in battery manufacturing, with high brand recognition.
Mr. Kim emphasised that success came from strong public-private collaboration, and supportive government policies. Support policies included financial incentives, tax credits, infrastructure development and regulatory flexibility to scale up production and enhance global competitiveness. Mr. Kim also stressed that Korea’s successful experience in building a battery industry was based on long-term policy efforts based on robust government-industry coordination.
Going forward, Mr. Kim discussed Korea’s ambitions to expand its global sales, increase its recycling capacity, and commercialise next-generation batteries. To achieve these goals, Korea also focused on global partnerships in the electric vehicles (EV) sector, and on building resilient supply chains to address critical mineral shortages and geopolitical concerns.
Stephen Roper, Professor of Enterprise at Warwick Business School, United Kingdom
Mr. Roper spoke about challenges faced by the UK in implementing strategic goals on green innovation and frontier technology developments and their diffusion
Mr. Roper drew attention to tensions within the UK’s domestic policy landscape, where ambitious targets are often constrained by limited infrastructure and production capacity relevant to the hydrogen, heat pump, and critical minerals sectors. For instance, using heat pumps as an example, Mr. Roper noted that while there are ambitious installation targets, limited local production capacity creates tensions with domestic manufacturers, who feel insufficiently supported. This reliance on imports exacerbates these tensions, as it prioritises external suppliers over building robust local supply chains. These challenges play out in many countries striving to meet decarbonisation targets while balancing domestic industrial capabilities with reliance on external markets for key low-carbon technologies.
Moreover, Mr. Roper spoke about the challenges of stakeholder engagement around green missions. Taking the example of the green hydrogen sector, he suggested that while broad policy alignment had been achieved, local stakeholders often felt the targets failed to adequately reflect UK-specific realities, leading them to disengage from the mission.
Session 2. Accelerating green technology innovation and diffusion for competitiveness: Lessons from practice
Session 2 focused on practical approaches to advance green innovation at different stages of technological development and maturity in key industries for competitiveness. Global experts from different institutions and backgrounds (see Figure 3) discussed industrial cluster policies, demand-side policy toolkits, governance mechanisms to coordinate different policy areas, and lastly improving the inclusion of innovation outcomes in labour
Mu Rongping, Director-General and Professor of the Institute of Policy and Management, and Director-General of the Chinese Academy of Science’s (CAS) Centre for Innovation and Development, and Jingjing Guo, Professor at CAS, China
Mr. Rongping and Ms. Gu provided an overview of the evolution of green innovation policies in China. They traced these efforts back to 1994 with the introduction of a series of national policies and highlighted the adoption of the new industrialisation path in 2003, which marked the start of a more systematic inclusion of innovative practices within the industrial landscape. Mr. Rongping noted that by 2006, China had established clear objectives that not only aimed at achieving global competitiveness but also incorporating social and environmental dimensions. Mr. Rongping also emphasised the alignment of low-carbon and green technologies with China’s vision of its future development.
Figure 3. Session 2 speakers
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Mr Rongping also emphasised two important aspects of China’s innovation policy. First, he noted that policy support measures adopt an important sectoral approach tailored to the specific needs of different industries. Second, he pointed to four key pillars of China’s STI policies in this domain. These are (i) technology innovation i.e. building marketoriented green technologies, (ii) technology demonstration i.e. at experimenting green and low carbon technologies, (iii) energy saving and environmental protection and (iv) scale up and transformation technology adoption i.e. accelerating the adoption of green technologies in the manufacturing industry.
Stephen Fertuck, Senior Director for Innovation, Science and Economic Development (ISED), Canada and Jayson Myers, Chief Executive Officer the Next Generation Manufacturing Cluster (NGen), Canada
Mr. Fertuck discussed Canada’s Global Innovation Cluster (GIC) initiative and its core dimensions. The GIC comprises five sector support programmes: on digital technologies, protein industries, advanced manufacturing, artificial intelligence, and ocean technologies. Each cluster is managed by an industry-led independent entity and is tasked to promote innovation through the provision of collaborative R&D grants for consortiums. By the end of March 2024, NGen (see below) invested a total of approximately USD 165.9 million (CAD 224.8 million) to support projects that bring together SMEs with large firms to commercialise and scale up advanced manufacturing innovations. Additionally, NGen provides support to the wider ecosystem through IP management services, sponsoring firms in international trade fairs and provision of skill development initiatives
Mr. Fertuck spoke about key goals set for those initiatives, emphasising that scaling up is central to the programme – helping new technological solutions develop by means of collaborative R&D projects, including efforts aimed at supporting greener development The programme does so by supporting the specific sectoral innovation systems
Jayson Myers, Chief Executive Officer of one of Canada’s Global Innovation Clusters, the Next Generation Manufacturing (NGen), Canada, highlighted that from the inception of the cluster initiative, there was a strong focus on green objectives. He then highlighted several projects aimed at supporting green technology development among manufacturing firms. This included a funding scheme for the electric vehicle (EV) manufacturing value chain, which allocated up to USD 24 million (CAD 35 million) to support innovative manufacturing solutions in EV supply chains Reflecting on outcomes of these types of projects, Mr. Myers noted that their focus on supporting green manufacturing through collaboration – fostering partnerships between firms capable of
develop technological solutions within Canada, thereby strengthening domestic supply chains and upgrading SME capacities - has been key to their success.
Reinhilde Veugelers, Senior Fellow at Bruegel and Professor at Katholieke Universiteit Leuven, Belgium
Ms. Veugelers explained that the EU’s goals have evolved to become increasingly multidimensional and consequently more complex by encompassing, in addition to the goal of developing greener economies, social, competitiveness, geopolitical, and security dimensions. This complexity, she noted, challenged the required EU-level policy design, also in view of the persistent fragmentation as member countries conduct national strategies. The latter affects opportunities for creating a single market with common regulations and the standards needed to build scale including for green innovators.
Ms. Veugelers also spoke about the importance of standards for green products, and effective trade policy that builds market opportunities for the EUs green products Moreover, Ms. Veugelers highlighted the Emissions Trading System (ETS), the EU’s carbon pricing mechanism, as a key instrument to increasing the relative competitiveness of EU green products by internalising the cost of carbon emissions, making low-carbon technologies and sustainable alternatives more attractive, and redirecting investments towards cleaner industries Ms. Veugelers noted that there was still a gap in evaluating which policies work effectively, making accelerated policy learning an essential priority for the EU moving forward.
Ms. Veugelers emphasised the importance of leveraging the private sector to innovate, adopt, and develop new technologies, where policy has a critical role to play in reducing the perceived risk of investing in green technologies and innovations This requires providing clear signals to industry of long-term commitments to creating markets for green products, for instance, by supporting renewable energy generation or greener forms of transport, as well as supporting research and development in this field. The latter may take the form of providing specific funding support for private sector activities in the field of green technology and innovation
Mr. Rimini and Ms. Gu presented the steel ecosystem as illustrative examples of the policy mix and framework conditions necessary for the decarbonisation in highly emission intensive, hard-to-abate industries. Mr. Rimini highlighted the potential of new technologies such as hydrogen, carbon capture, utilisation, and storage (CCUS), and
Michele Rimini, Head of Steel Decarbonisation at the OECD, and Danhak Gu, Economist at the OECD
AND CO-OPERATION IMPERATIVES OF GREEN INNOVATION
scrap recycling in transforming the sector. He also pointed to major sunk investment costs in this sector, and long investment cycles combined with limited demand for green steel that challenged progress as steel producers did not face strong incentives to engage in greening their production processes.
Ms. Gu complemented the intervention by emphasising the critical importance of considering just transitions, including the need to account for the labour dimension when adopting greener technologies. As an example, Ms. Gu highlighted how the shift from basic oxygen furnace (BOF) technology to electric arc furnace (EAF) technology could lead to job losses, and how it was crucial to quantify and evaluate the specific impacts on the workforce and what actions to take in that regard Ms. Gu noted that this balanced approach was necessary to ensure that the transition not only advances sustainability goals but also supports economic and social dimensions effectively.
Mika Härkönen, Professor at VTT Technical Research Centre of Finland
Mr. Härkönen discussed how collaboration with research centres can be instrumental to supporting companies scaling up advanced technologies. Mr. Härkönen argued that scaling up technology required de-risking mechanisms at every stage, and that openaccess technology infrastructures could play a role in this process. It could do so by supporting companies test and develop innovations and consequently reduce costs they need to incur to innovate.
Mr. Härkönen emphasised the need for public support and the benefits of cross-country collaboration to leverage research centres in support of green transition. In this regard, he noted the financial viability of these infrastructures, which include pilot centres, specialised facilities that allow testing new technologies before they are fully commercialised, depend on stable public funding. Additionally, Mr. Härkönen highlighted the need for greater collaboration across countries regarding costly piloting infrastructures where costs are large and benefits from wider access are major.
Session 3. Keynote on competitiveness and the green transition in the United States
Robert Atkinson, Founder and President of the Information Technology and Innovation Foundation (ITIF) gave a keynote on the policy actions the United States has undertaken regarding green technologies and innovations.
Mr. Atkinson outlined the United States’ recent policy approaches to fostering green innovation, with a focus on the Inflation Reduction Act (IRA). The Act, enacted in 2022, allocates USD 400 billion in funding towards clean energy, with key provisions such as tax credits for renewables and EVs extending through 2032. The IRA combines grants and tax credits to incentivise clean energy transitions, with a strong emphasis on supporting domestic production capacities Mr. Atkinson explained that the latter focus addressed lessons from past policies, such as those enacted during the 2008-09 financial crisis, which, he argued, had provided subsidies supporting foreign-based manufacturing rather than strengthening the United States’ production base. Moreover, the focus on supporting production over simply subsidising demand represents a shift toward industrial policy aimed at economic competitiveness and scaling up technologies such as batteries and renewable energy systems.
Mr. Atkinson highlighted that the IRA has already led to USD 89 billion in clean energy investments. Going forward, Mr. Atkinson noted the need to assess whether subsidised technologies can achieve cost-competitiveness at scale. If not, Mr. Atkinson argued, it would be imperative to direct efforts toward research and development (R&D) to alternative clean technologies.
Mr. Atkinson expressed concern about current R&D investment levels, noting that public R&D funding has not been increasing at the pace necessary to address the green transition across OECD countries. Mr. Atkinson highlighted the fact that several of the countries who had committed to doubling clean energy R&D funding by 2020, as measured as direct government R&D expenditure on clean energy, had not done so.
In the United States, most clean energy spending under the IRA focuses on tax expenditures for mature technologies. While this approach may boost domestic production and industrial capacity, Mr. Atkinson cautioned that it may fall short in fostering the development and deployment of cutting-edge clean technologies essential for achieving net-zero emissions.
Mr. Atkinson outlined several challenges confronting the United States’ green transition. Policy stability was highlighted as a major concern Mr. Atkinson emphasised that bipartisan support is critical to ensure continuity amidst a shifting political landscape, with uncertainties stemming from the Republican-controlled Congress potentially rolling back key IRA provisions. Additionally, Mr. Atkinson pointed to a lack of global and domestic investments in green R&D as a barrier to developing transformative technologies like green hydrogen, which currently lacks a cost-competitive pathway.
International collaboration was presented as a significant opportunity between the United States and the EU to foster innovation in green technologies. Mr. Atkinson emphasised the need for countries to identify areas of comparative advantage and align their efforts to leverage these strengths globally. However, Mr. Atkinson acknowledged geopolitical complexities, including constrained collaboration with China, which has complicated the landscape of international co-operation.
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The keynote concluded with a call to prioritise innovation over incremental policy changes. Mr. Atkinson stressed the importance of strategic investments in advanced industries and scalable technologies, arguing that these are essential to achieving meaningful progress in addressing global climate challenges. While the IRA may succeed as an industrial policy to increase production, its impact on advancing clean technologies critical for a successful green transition remains uncertain without enhanced R&D investments.
Session 4. Policy and practice round robin
In this interactive session, participants formed five discussion groups led by speakers from previous sessions. The discussions centred on the following topics:
➢ EU’s strategy and practice on green innovation
➢ Korea’s approach to building its competitive battery industry
➢ Building a green steel factory: An industry perspective
➢ Industrial cluster policies: an example from Canada
➢ Scaling new technologies and unlocking their potential
The discussions are summarised below (See also Figures 4-8)
EU’s strategy and practice on green innovation
Erik Canton, Acting Chief Economist at the European Commission, led this breakout group discussion, which explored efforts under the European Green Deal to achieve climate neutrality by 2050. The discussion focused on the Horizon Europe initiative, which has an approximate budget of USD 100 billion, and its aim of transforming scientific breakthroughs into sustainable solutions through the implementation of targeted funding measures and leverage private investments for emerging technologies and high-potential start-ups (see Figure 4).
COMPETITIVENESS AND CO-OPERATION IMPERATIVES OF GREEN INNOVATION
Figure 4. EU’s strategy and practice on green innovation (Horizon Europe)
Source: Input from Erik Canton (European Commission).
OF GREEN INNOVATION
Key points discussed included the importance of smart specialisation strategies and the need for coordination among EU member states to ensure spatial differences do not translate into unequal access to innovation benefits. The discussion also explored the complexity of green technologies, and the critical role of establishing networks at EU level in their development. The competitiveness imperatives highlighted in the Draghi Report were also discussed.
Korea’s approach to building its competitive battery industry
Sunkyo Kim, Research Fellow at the Korea Institute of Science & Technology Evaluation and Planning, and Sang-Min Park, Director of the Science and Technology Strategy Division at the Korean Ministry of Science and Information, Communication and Technology, discussed Korea's globally competitive battery industry, which excels in lithium-ion, solid-state, and next-generation technologies, supported by strong publicprivate collaboration and government incentives, including financial aid, tax credits, and infrastructure investments (see Figure 5)
The discussion focused on the plans to build a competitive Korean battery industry that would offer high-quality products. The discussion highlighted that, over the past two decades, Korea has built on its manufacturing base to expand its battery industry. Despite this growth, the sector faces significant challenges, including competition from China's low-cost battery production. To tackle this, it was mentioned that Korea is prioritising R&D in next-generation batteries to offer advanced, high-value technologies. These nextgeneration batteries, such as solid-state batteries and other innovative chemistries, would offer superior energy density, safety, lifespan, and environmental benefits, and be a way for Korea to differentiate itself and target premium products.
The discussion also emphasised the crucial role of the Korean government, which not only funds R&D but also acts as a strategic coordinator. By facilitating collaboration between universities, research institutes, and industries, the government aims to promote more effective collaborations and progress.
Building a green steel factory: An industry perspective
Michele Rimini, Head of Steel Decarbonisation at the OECD Steel Unit, Danhak Gu, Decarbonisation Analyst at the OECD Steel Unit, and Ola Hansén, Public Affairs Director at STEGRA, led the breakout group discussion on the opportunities and challenges of advancing green steel production (see Figure 6). Participants discussed the role of powerful supportive measures for decarbonising the steel industry, including carbon pricing and public procurement policies but also support to improve supply side conditions. The discussion underlined that expanding green steel production also means tackling infrastructure and transportation challenges. For example, regions with well-developed hydrogen infrastructure are better positioned to lead the transition. Moreover, participants discussed the importance of collaboration across the value chain. Countries with
COMPETITIVENESS AND CO-OPERATION IMPERATIVES OF GREEN INNOVATION
abundant renewable energy, like Australia and the Middle East, may be able to produce low-cost green hydrogen, while those with significant scrap steel reserves have much to gain from enhancing circular economy efforts.
INNOVATION
Figure 5. Korea’s approach to building its competitive battery industry
Figure 6. Building a green steel factory: An industry perspective (STEGRA)
Source: Input from Ola Hansén (STEGRA), Michele Rimini (OECD) and Danhak Gu (OECD)
Industrial cluster policies: an example from Canada
Jayson Myers, Chief Executive Officer of Next Generation Manufacturing Canada Cluster (NGen), and Stephen Fertuck, Senior Director at Innovation, Science and Economic Development (ISED) Canada, presented the NGen cluster, which is part of the Global Innovation Clusters initiative (see Figure 7).
The discussion focused on the following features of the programme:
• The collaborative funding model that was at the heart of the NGen cluster. This approach had been adopted to foster broad collaboration while ensuring that both public and private sectors are invested in the cluster’s success.
• Participants explored NGen’s strategic focus on supporting SMEs scaling up and the role of intellectual property (IP) management support, skills development programmes, and feasibility studies in producing better outcomes.
• The technology-open model, which avoids focusing on narrow, specific technologies, was also lauded as enabling flexibility and adaptability to diverse advanced manufacturing needs.
• The cluster’s efforts to integrate smaller, specialised clusters into a cohesive ecosystem and foster international collaboration in AI and quantum technologies, were also mentioned.
Scaling new technologies and unlocking their potential
Sarah Marie Jordaan, Associate Professor at McGill University in Canada, and Mika Härkönen, Professor at the VTT Technical Research Centre of Finland, discussed opportunities for scaling new technologies and unlocking their potential (see Figure 8). They focused on Carbon Capture, Utilisation, and Storage (CCUS), bio-based and circular innovations, and green hydrogen.
The discussion focused on demand and supply-side challenges of green innovations. This included the need for developing market demand, providing infrastructure to deploy green innovations, collaborations in research & development and the need for organisational innovations to promote the circular economy.
Figure 7. Industrial cluster policies: an example from Canada (NGen)
Source: Input from Jayson Myers (NGen) and Stephen Fertuck (ISED)
Figure 8. Scaling new technologies and unlocking their potential
Source: Input from Sarah Marie Jordaan (McGill University) and Mika Härkönen (VTT).
Session 5. International co-operation with emerging economies on green innovation
The discussion in Session 5 focused on how governments and international organisations are developing and implementing STI initiatives to advance green innovation, with an emphasis on emerging economies. Practitioners explored how international initiatives are fostering green technologies and industries, while advancing STI objectives in both OECD countries and developing economies.
Veronika Maria Jablonowski, Project Management at Jülich, Division of Bioeconomy, Germany, and Alexandre Roccatto, Scientific Programme Coordinator at FAPESP, Brazil
Ms. Jablonowski shared insights on Germany's "Bioeconomy International" programme, which aims to fund cross-border R&D in bioeconomy-related fields conducted by German and international partners in collaborative consortia. Launched in 2012, the programme aims to create a framework for fostering international partnerships with non-EU countries and has since enabled consortium-based projects that mandate collaboration between German and international industry and research partners. Ms. Jablonowski highlighted that, to date, the programme has funded 146 projects across 11 calls, allocating approximately USD 90 million (EUR 84 million) to German partners.
A key feature of the programme is its bilateral partnerships, such as those with Brazil, established in collaboration with the São Paulo Research Foundation (FAPESP), a large public research funding agency in Brazil. Projects with Brazil focused on waste reduction, showcasing the bioeconomy’s potential in addressing global challenges such as recycling and sustainable agriculture.
Mr. Roccatto emphasised that the collaboration with Germany aligns well with Brazil's priorities in agriculture, energy, and biofuels. Mr. Roccatto noted that these areas are significant given Brazil's robust domestic sugarcane industry, which plays a role in its bioeconomy and energy sectors. Mr. Roccatto noted that international collaboration has been instrumental in leveraging capabilities beyond FAPESP’s traditional focus on basic research, enabling advancements in applied science and innovation. Mr. Roccatto also highlighted hydrogen as an area of mutual interest with Germany, underscoring the potential for expanding partnerships in this field.
Both speakers pointed to the challenges that successful collaborations needed to overcome, including aligning timelines and international procedural requirements,
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securing funding from different sources to move ahead with projects and ensuring strong industry partnerships to support public policy priorities.
Mlungisi Cele, Head of the National Advisory Council on Innovation, Department of Science and Innovation, South Africa
Dr. Cele discussed South Africa’s commitment to green transitions, highlighting the financing and investment needs along with ongoing initiatives. Dr. Cele highlighted that South Africa would need to invest approximately USD 349 billion to meet its 2050 decarbonisation targets, underscoring the immense scale of the net-zero challenge for the country.
Dr. Cele elaborated on South Africa’s collaboration with the Green Climate Fund, a global initiative established in 2010 by the United Nations Framework Convention on Climate Change (UNFCC) to support developing countries in addressing climate change, to leverage private finance for climate-related investments, and aimed at overcoming market barriers such as the lack of financing for large upfront capital costs and perceived technological risks. Dr. Cele emphasised the opportunity to accelerate green banking and shift private capital toward environmental projects, noting that this approach could serve as a model for replication in other sectors.
Among the initiatives highlighted, Dr. Cele discussed the Hydrogen Society Roadmap, designed to contribute to net-zero carbon economic growth. The roadmap aims to decarbonise heavy-duty transport and energy-intensive industries, establish centres of manufacturing excellence, and position South Africa as a leader in the export market for green hydrogen. Dr. Cele also noted South Africa’s close collaboration with the UK and the EU on the roadmap
Sugimoto Masaya, Principal Deputy Director, International Affairs Office, Innovation and Environment Policy Bureau of Japan’s Ministry of Economy, Trade and Industry (METI)
Mr. Masaya presented Japan’s approach to fostering international collaboration on green innovation, and specifically Japan’s Credit Mechanism (JCM). Launched in 2013, the JCM is a programme aimed at diffusing Japanese decarbonising technologies and infrastructures abroad
The programme engages with various government agencies, firms, and research institutions, to implement projects in sectors such as renewable energy, energy efficiency, waste management, and transport to contribute to decarbonisation across now 29 partner countries. The emission reductions projects achieved are verified and converted into JCM
credits, where a credit represents one metric ton of CO₂ (or equivalent) reduced or avoided. These credits are then shared between Japan and the partner country to achieve carbon reduction commitments made under the Paris agreement.
William F. Maloney, Chief Economist for Latin America and Caribbean (LAC) Region at the World Bank
Mr. Maloney highlighted the potential of the Latin America region in the green transition. Mr. Maloney noted that the region benefited from favourable conditions for supporting green transitions. This includes potential for generating green electricity also to support sustainable manufacturing, vast deposits of critical minerals such as lithium relevant for green technologies, and rich biodiversity.
However, Mr. Maloney emphasised several challenges that the region faces in embracing the green transition. This, he emphasised, included weaknesses in human capital and insufficient linkages between industry and research organisations, which hinder the diffusion and development of technologies for climate mitigation and adaptation. Mr. Maloney also stressed the need for a stable political and business environment to attract investment by local and foreign entrepreneurs.
Moreover, Mr. Maloney pointed to the importance of technical co-operation with developed economies as key for progress in the region. He pointed to the importance of managing discourse between green projects and local communities.
Yongsuk Jang, Research Fellow Emeritus of the Science and Technology Policy Institute (STEPI), Korea
Mr. Jang argued that the green transition was essential for national competitiveness. The main challenges, Mr. Jang pointed out, include building STI capacity and strengthening the linkages between industry and research in the field of green innovation. Bridging the gap between basic research and commercialisation remains a critical hurdle in advancing the green transition and ensuring its contribution to national and global competitiveness.
Drawing from Korea’s experience, Mr. Jang highlighted the importance of long-term public-private partnerships designed to create export-oriented global markets for green products as a cornerstone of successful strategies. He also emphasised the importance of a whole-of-government approach and mission-oriented policies with clear market and technology targets for future green innovation goals. Additionally, Mr. Jang stressed the need for robust policy intelligence to enhance decision-making and ensure effective implementation.
