Water Alliance has sent a letter to the European Commission drawing attention to the impact of current financial assessment and funding rules on innovative SMEs in the water technology sector. In the letter, Water Alliance calls for a review of regulations which, according to the organisation, do not sufficiently reflect the development pathways of deep-tech innovations.
Innovation takes time
Water technology plays an important role in addressing societal challenges such as climate adaptation, the circular economy, water quality and the security of raw material supplies. At the same time, many innovations in this sector involve lengthy development and validation processes. New technologies often need to undergo extensive testing, comply with strict regulations and be integrated into existing infrastructure before large-scale deployment becomes possible.
According to Water Alliance, these processes can take ten years or more. As a result, some existing financial assessment frameworks do not always align with the realities faced by innovative technology companies that are still in the development or scale-up phase.
Specific challenges for the water sector
The letter emphasises that the water sector faces a number of sector-specific challenges. For example, applications in the drinking water sector are subject to stringent reliability and safety requirements, meaning that market introduction often takes longer. Circular innovations within the wastewater chain also face challenges relating to regulation, market development and the need to operate at sufficient scale before a viable business case can be achieved.
In addition, many young technology companies depend on a combination of public and private funding to bridge the gap between research, demonstration and market introduction.
Call for revision
Through the letter, Water Alliance calls on the European Commission to take greater account of the characteristics of deep-tech sectors such as water technology when developing future regulations and funding instruments. This includes, among other things, adapting assessment frameworks to longer innovation cycles and recognising the specific circumstances of companies investing in research, development and scale-up activities.
According to Water Alliance, an appropriate funding and regulatory framework is essential to enable innovative SMEs to contribute to European ambitions in the areas of water, climate, circularity and strategic autonomy..
Read the full letter
The full letter sent by Water Alliance to the European Commission can be read below.
