Transatlantic investments in clean energy technologies have been rising over the last decade, yet more needs to be done to stimulate the cross-border market, according to a recent report by the Cleantech Group, a global climate advocacy organization headquartered in San Francisco, California.

Between 2012 and 2022, American investors’ participation in European Union cleantech deals increased sevenfold, while European participation in cleantech deals in the United States increased threefold, according to the report.

This increase shows there is an appetite for cross-Atlantic deals. But the report also notes cross-border investments suffer from administrative barriers and would-be investors face challenges understanding how to comply with differing practices and legal obligations across countries.

Plus, a lack of coordination between the U.S. and EU on research and development could hinder innovation breakthroughs, the report states.

The report highlights transatlantic dealmaking at a time of heightened tension. Over the last year, policies in the 2022 Inflation Reduction Act law in the U.S. that promote domestic cleantech manufacturing have frustrated EU leaders. It remains to be seen what impact the law, and the EU’s corresponding Net Zero Industry Act, could have on these dynamics.

To create a green transatlantic marketplace, the study authors write, the EU and the U.S. should harmonize their policies and incentives and create more dialogue between cleantech leaders and policymakers.

Editor’s note: The Transatlantic Cleantech report was commissioned by Breakthrough Energy, which also supports Cipher.