Authors Charlie MercerPolicy Director AboutStartup Coalition Startup Coalition, formerly the Coalition for a Digital Economy (Coadec), is an independent advocacygroup that serves as the policy voice for Britain’s technology-led startups and scaleups. Startup Coalitionwas founded in 2010 by Mike Butcher, Editor-at-Large of technology news publisher TechCrunch, andJeff Lynn, Chairman and Co-Founder of online investment platform Seedrs. Startup Coalition works Acknowledgements We are grateful to all of the startup founders who contributed to this report, and to the experts whosupported us by providing insight. Thanks also to Beauhurst for the underlying datasets to identify TheNet Zero Innovation In November 2020, the then Conservative Government launched a new Ten Point Plan for a GreenIndustrial Revolution - alongside this plan, it committed a new pot of money to invest in the underlying NZIP was the successor to the £505 million Energy Innovation Programme (EIP), which ran between2015-2021. In contrast to the EIP, the NZIP was designed to support a broader range of technologies, NZIP included a wide range of competitions, including funds to invest innovative solutions to decarbonisethe production of Scotch Whiskey, through to grants to support early stage Direct Air Capture of carbon In February 2025, DESNZ Minister Kerry McCarthy responded to a parliamentary question stating thatthe Government had committed £1.3bn to the Net Zero Innovation Portfolio (NZIP) and AdvancedNuclear Fund (ANF), supporting over 600 projects. The investment supported 5,500 jobs and had led to NZIPInvestment in NZIP was not explicitly targeted at UK ClimateTech startups - it was designed to fund innovation tocombat climate change across the whole economy, with competitions open to firms of all sizes. This hasmeant that firms as diverse as Volkswagen to Royal Mail have been beneficiaries of NZIP funding, Basedon publicly available information about recipients of NZIP grant funding,Startup Coalitionestimatesthat£208m-£250m of NZIP funding went to 199 UK ClimateTech startups, equating to Collectively,the 199 ClimateTech recipients have raised between £500m-£900m in venture capitalinvestment after they received NZIP funding. This suggests that startups have been the source of the For every £1 of NZIP funding between November 2020 and January 2025, between £2.40 and £3.60was raised in private investment. NZIP de-risked private investment in climate innovation. These 199ClimateTechs employ over 8,400 people, and three of the ClimateTechs that received NZIP funds have TheCase for Extending NZIP The Labour government should renew the Net Zero Innovation Portfolio (NZIP) to align with its manifestocommitments toboost green industries, create high-skilled jobs, and accelerate the transition to a In the election campaign, Labour pledged to make the UK a global leader inclimate innovation andgreen technology, with policies focused onclean energy investment, industrial decarbonisation,and sustainable economic growth. NZIP has already demonstrated its effectiveness, attracting at least£2.40of private investment for every£1 of public funding in UK ClimateTechs,supporting Cutting this funding would undermine the UK's ability tolead in net-zero innovation, jeopardisingeconomic opportunities and delaying critical advancements in the technologies of alow carbon, lowenergy bill future. Many of these technologies increase energy and food security, and reduce relianceon unreliable international sources of fossil fuels. Against the current backdrop of geopolitical uncertainty, NZIP2.0 Startup Coalition advocates that the second iteration of NZIP follows two key principles: 1.NZIP 2.0 should be targeted at startups and scaleups. Our analysis demonstrates that the first round of NZIP delivered value to the planetandthe public pursewhen it funded startups and scale-ups. DESNZ has publicly stated that the entire £1.3bn committed todate has secured £750m in follow-on funding. Our estimates suggest that startups and scale-ups alonehave secured £500m-£900m, meaning they constitute the majority, if not all, of this follow-on investment. 2.NZIP 2.0 should prioritise technologies that will accelerate the Government’s missions. Of the Government’s five missions, NZIP 2.0 could be a key catalyst in supportingeconomic growth,unlocking opportunityand makingthe UK a clean power superpower by 2030. Growth & Opportunity:Climate innovation is occurring across the UK, with the nation’s coasts, hills andforests ensuring climate entrepreneurship is not confined to London. According to our ClimateTechIndex, there are five unicorn regions home to startups within the Index that were collectively valued at Clean Power 2030:To achieve Labour’s audacious 2030 goal, we will need new technologies, at scale.According to NESO, we need first-of-a-kind clean dispatchable technologies, innovative energy flexibility,and the massive acceleration in supply-side te